Exhibit
1.2
ERP
OPERATING LIMITED PARTNERSHIP
(an Illinois limited partnership)
Exchangeable Debt Securities
STANDARD UNDERWRITING PROVISIONS
August 16, 2006
ERP Operating Limited
Partnership, a limited partnership organized under the laws of the State of Illinois
(“ERP”), may from time to time issue and sell various aggregate principal
amounts of its exchangeable senior debt securities (the “Securities”), from
time to time, in one or more offerings on terms to be determined at the time of
sale. The Securities will be issued
under an indenture dated as of October 1, 1994 (the “Base Indenture”) between
ERP and Bank One Trust Company, NA, as successor to The First National Bank of
Chicago, as trustee (the “Trustee”), as supplemented by the First Supplemental Indenture
dated as of September 9, 2004 between ERP and J.P. Morgan Trust Company,
National Association (as successor to Bank One Trust Company, NA) (the “First
Supplemental Indenture”), and as supplemented by the Second Supplemental
Indenture, to be effective as of August 23, 2006 between ERP and J.P. Morgan
Trust Company, National Association (together with the Base Indenture and the
First Supplemental Indenture, the “Indenture”).
Each series of Securities may vary, as applicable, as to aggregate
principal amount, maturity date, interest rate or formula and timing of
payments thereof, redemption or repayment provisions, and any other variable
terms which the Indenture contemplates may be set forth in the Securities as
issued from time to time. As used herein,
“you” and “your,” unless the context otherwise requires, shall mean the parties
to whom the applicable Terms Agreement (as hereinafter defined) is addressed,
together with the other parties, if any, identified as co-managers, with
respect to Underwritten Securities (as hereinafter defined) purchased pursuant
thereto.
Whenever ERP determines
to make an offering of Securities through you or through an underwriting
syndicate managed by you, ERP will enter into an agreement (the “Terms
Agreement”) providing for the sale of such Securities (the “Underwritten
Securities”) to, and the purchase and offering thereof by, you and such other
underwriters, if any, selected by you as having authorized you to enter into
such Terms Agreement on their behalf (the “Underwriters,” which term shall
include you whether acting alone in the sale of the Underwritten Securities or
as a member or members of an underwriting syndicate and any Underwriter
substituted pursuant to Section 11 hereof).
The Terms Agreement relating to the offering of Underwritten Securities
shall specify the initial principal amount of Underwritten
Securities to be
initially issued (the “Initial Underwritten Securities”), the names of the
Underwriters participating in such offering (subject to substitution as
provided in Section 11 hereof), the principal amount of Initial Underwritten
Securities which each such Underwriter severally agrees to purchase, the names
of Underwriters acting as co-managers, if any, in connection with such
offering, the price at which the Initial Underwritten Securities are to be
purchased by the Underwriters from ERP, the initial public offering price, if
any, of the Initial Underwritten Securities, the time and place of delivery and
payment, any delayed delivery arrangements and any other variable terms of the
Initial Underwritten Securities (including, but not limited to, current
ratings, designations, denominations, interest rates or formulas, interest
payment dates, maturity dates and redemption or repayment provisions applicable
to the Initial Underwritten Securities).
In addition, each Terms Agreement shall specify whether ERP has agreed
to grant to the Underwriters an option to purchase additional Underwritten
Securities to cover over-allotments, if any, and the aggregate principal amount
of Underwritten Securities subject to such option (the “Option Securities”). As used herein, the term “Underwritten
Securities” shall include the Initial Underwritten Securities and all or any
portion of the Option Securities agreed to be purchased by the Underwriters as
provided herein, if any. The Terms
Agreement, which shall be substantially in the form of Exhibit A hereto, may
take the form of an exchange of any standard form of written telecommunication
between you and ERP. Each offering of
Underwritten Securities through you or through an underwriting syndicate
managed by you will be governed by these Standard Underwriting Provisions as
incorporated by reference into, and as supplemented by, the applicable Terms
Agreement and such Terms Agreement shall inure to the benefit of and be binding
upon each Underwriter participating in the offering of such Underwritten
Securities.
ERP has filed with the
Securities and Exchange Commission (the “Commission”) a registration statement
on Form S-3 (No. 333-135504) for the registration of the Securities
under the Securities Act of 1933, as amended (the “1933 Act”), and the offering
thereof from time to time in accordance with Rule 430A or Rule 415 of the rules
and regulations of the Commission under the 1933 Act (the “1933 Act Regulations”)
and ERP has filed such amendments thereto as may have been required prior to
the execution of the applicable Terms Agreement. Such registration statement and any successor
registration statements (as amended, if applicable) have been declared
effective by the Commission and the Indenture has been qualified under the
Trust Indenture Act of 1939, as amended (the “1939 Act”). Such registration statements and the base
prospectuses constituting parts thereof (including in each case the
information, if any, deemed to be part thereof pursuant to Rule 430A, Rule 430B
or Rule 430C of the 1933 Act Regulations) (the “Base Prospectus”), any
preliminary prospectus supplement (a “Preliminary Prospectus Supplement”), and
the final prospectus supplement (a “Prospectus Supplement”) relating to the
offering of Underwritten Securities pursuant to Rule 415 of the 1933
2
Act Regulations,
including all documents incorporated therein by reference, as from time to time
amended or supplemented pursuant to the 1933 Act, the Securities Exchange Act
of 1934, as amended (the “1934 Act”) or otherwise, are collectively referred to
herein as the “Registration Statement.”
The term “Prospectus” means the Prospectus Supplement relating to a particular
offering of Underwritten Securities and first filed with the Commission
pursuant to Rule 424(b) of the 1933 Act together with the Base Prospectus;
provided
,
that if any revised prospectus shall be provided to you by ERP for use in
connection with the offering of Underwritten Securities which differs from the
Prospectus on file at the Commission at the time the Registration Statement
became effective (whether or not such revised prospectus is required to be
filed by ERP pursuant to Rule 424(b) of the 1933 Act Regulations), the term “Prospectus”
shall refer to each such revised prospectus from and after the time it is first
provided to you for such use;
provided
,
further
, that a
Prospectus Supplement shall be deemed to have supplemented the Prospectus only
with respect to the offering of Underwritten Securities to which it
relates. If ERP files a registration
statement with the Commission pursuant to Rule 462(b) of the 1933 Act
Regulations (the “Rule 462 Registration Statement”), then, after such filing,
all references to “Registration Statement” shall also be deemed to include the
Rule 462 Registration Statement. Any
prospectus included in the Rule 462 Registration Statement shall be deemed to
be part of the Prospectus. All
references in this Agreement to financial statements and schedules and other
information which is “contained,” “included” or “stated” in the Registration
Statement or the Prospectus (and all other references of like import) shall be
deemed to mean and include all such financial statements and schedules and
other information which is or is deemed to be incorporated by reference in the
Registration Statement or the Prospectus, as the case may be; and all
references in this Agreement to amendments or supplements to the Registration Statement
or the Prospectus shall be deemed to mean and include the filing of any
document under the 1934 Act which is or is deemed to be incorporated by
reference in the Registration Statement or the Prospectus, as the case may be.
For purposes hereof, all
references to the Registration Statement, Prospectus, Preliminary Prospectus
Supplement, Prospectus Supplement or any Issuer Free Writing Prospectus (as
defined herein) or to any amendment or supplement to any of the foregoing shall
be deemed to include any copy filed with the Commission pursuant to its
Electronic Data Gathering, Analysis and Retrieval system (“EDGAR”).
The term “subsidiary” or
“subsidiaries,” when used with respect to (A) ERP, shall include (i) each
consolidated subsidiary of ERP, (ii) any entity the operations of which
are included in the consolidated financial statements for ERP for the most
recent fiscal period included in the Prospectus and (iii) any subsidiary
(other than ERP) of Equity Residential, a Maryland real estate investment trust
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and ERP’s sole general
partner (“EQR”), which owns an interest in any entity described in
clause (i) above and (B) EQR, shall include (x) each consolidated
subsidiary of EQR, (y) any entity the operations of which are included in the
consolidated financial statements for EQR for the most recent fiscal period
included in the Prospectus and (z) any subsidiary of EQR that owns an interest
in a consolidated subsidiary of ERP.
At or prior to the
time specified in the applicable Terms Agreement as the “Time of Sale,” the
information designated in the applicable Terms Agreement as the “Time of Sale
Information” (collectively, the “Time of Sale Information”) will have been
prepared.
Section 1.
Representations
and Warranties
.
(a) ERP and EQR jointly and severally
represent and warrant to you and each other Underwriter named in the applicable
Terms Agreement, as of the date thereof (in each case, a “Representation Date”),
as follows:
(i) The Registration Statement and the
Prospectus, at the time the Registration Statement and any post-effective
amendment thereto (including the filing of ERP’s and EQR’s most recent Annual
Report on Form 10-K with the Commission (the “Form 10-Ks”)) became effective,
complied, and as of each Representation Date will comply, in all material
respects with the requirements of the 1933 Act, 1933 Act Regulations and the
1939 Act and the rules and regulations thereunder (the “1939 Act Regulations”);
the Preliminary Prospectus Supplement, at the time of filing thereof, complied
in all material respects with the requirements of the 1933 Act Regulations and
did not contain an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading; the
Registration Statement, at the time the Registration Statement became
effective, did not, and as of each Representation Date, will not, contain an
untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading; the Prospectus, as of each Representation Date and Closing Time (as
hereinafter defined), will not include an untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading;
provided
,
however
, that the representations and
warranties in this subsection shall not apply to statements in, or omissions
from, the Registration Statement or the Prospectus made in
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reliance
upon, and in conformity with, information furnished to ERP and EQR in writing
by any Underwriter through you expressly for use in the Registration Statement
or Prospectus or to that part of the Registration Statement which shall
constitute the Statement of Eligibility and Qualification on Form T-1 under the
1939 Act (the “Statement of Eligibility”) of the Trustee under the Indenture;
and provided further, that the foregoing representations and warranties are
given on the basis that any statement contained in a document incorporated or
deemed to be incorporated in the Registration Statement, the Time of Sale
Information or the Prospectus prior to the Time of Sale shall be deemed not to be
contained in the Registration Statement, Time of Sale Information or the
Prospectus if such statement has been modified or superseded by any subsequent
statement in the Registration Statement, Time of Sale Information or the
Prospectus.
(ii) The Time of Sale Information, at the
Time of Sale, did not, and at the Closing Time will not, contain any untrue
statement of a material fact or omit 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;
provided
that neither ERP nor EQR makes
any representation and warranty with respect to any statements or omissions
made in reliance upon and in conformity with information relating to any
Underwriter furnished to ERP or EQR in writing by such Underwriter through the
Representatives expressly for use in such Time of Sale Information; and
provided further, that the foregoing representations and warranties are given
on the basis that any statement contained in a document incorporated or deemed
to be incorporated in the Registration Statement, the Time of Sale Information
or the Prospectus prior to the Time of Sale shall be deemed not to be contained
in the Registration Statement, Time of Sale Information or the Prospectus if such
statement has been modified or superseded by any subsequent statement in the
Registration Statement, Time of Sale Information or the Prospectus. No
statement of material fact included in the Prospectus has been omitted from the
Time of Sale Information and no statement of material fact included in the Time
of Sale Information that is required to be included in the Prospectus has been
omitted therefrom.
(iii) Other than any Preliminary Prospectus
Supplement and the Prospectus, ERP (including its agents and representatives,
other than the Underwriters in their capacity as such) has not made, used,
prepared, authorized, approved or referred to, and ERP will not make,
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use,
prepare, authorize, approve or refer to, any “written communication” (as
defined in Rule 405 under the 1933 Act) that constitutes an offer to sell or
solicitation of an offer to buy the Underwritten Securities (each such
communication by ERP or its respective agents and representatives (other than a
communication referred to in clause (i) below) an “Issuer Free Writing
Prospectus”) other than (i) any document not constituting a prospectus pursuant
to Section 2(a)(10)(a) of the 1933 Act or Rule 134 under the 1933 Act or (ii)
the documents listed on an annex to the applicable Terms Agreement and other
written communications approved in writing in advance by the Representatives.
Each such Issuer Free Writing Prospectus complied in all material respects with
the requirements of the 1933 Act Regulations, has been filed in accordance with
the 1933 Act Regulations (to the extent required thereby) and, when taken
together with the Preliminary Prospectus Supplement filed prior to the first
use of such Issuer Free Writing Prospectus, did not, and at the Closing Time
will not, contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading;
provided
that ERP makes no representation or warranty with respect to any statements or
omissions made in each such Issuer Free Writing Prospectus in reliance upon and
in conformity with information relating to any Underwriter furnished to ERP in
writing by such Underwriter through the Representative expressly for use in any
Issuer Free Writing Prospectus
(iv) No stop order suspending the
effectiveness of the Registration Statement or any part thereof has been issued
and no proceeding for that purpose has been instituted or, to the knowledge of
ERP or EQR, threatened by the Commission or by the state securities authority
of any jurisdiction. No order preventing
or suspending the use of any Preliminary Prospectus Supplement or the
Prospectus has been issued and no proceeding for that purpose has been
instituted or, to the knowledge of ERP or EQR, threatened by the Commission or
by the state securities authority of any jurisdiction. Any request on the part of the Commission for
additional information has been complied with.
(v) The accountants who certified the
financial statements and supporting schedules included or incorporated by
reference in the Registration Statement, the Prospectus and the Time of Sale
Information are a registered public accounting firm with respect to
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ERP,
EQR and their respective subsidiaries within the applicable rules and
regulations adopted by the Commission and the Public Accounting Oversight Board
(United States) and as required by the 1933 Act and the 1933 Act Regulations.
(vi) The consolidated financial statements
and related notes included or incorporated by reference in the Registration
Statement, the Prospectus and the Time of Sale Information present fairly the
financial position of ERP, EQR and their respective consolidated subsidiaries
as at the dates indicated and the results of their operations specified, and
except as may otherwise be stated in the Registration Statement, the Prospectus
and the Time of Sale Information, have been prepared in accordance with
generally accepted accounting principles (“GAAP”) applied on a consistent basis
throughout such periods. The supporting
schedules included or incorporated by reference in the Registration Statement
present fairly in accordance with GAAP the information required to be stated
therein. The financial information and
statistical data included in the Registration Statement, the Prospectus and the
Time of Sale Information present fairly the information included therein and
have been prepared on a basis consistent with that of the financial statements
included in the Registration Statement, the Prospectus and the Time of Sale
Information. The pro forma financial
statements included in the Registration Statement, the Prospectus and the Time
of Sale Information comply in all material respects with the applicable
requirements of Rule 11-02 of Regulation S-X of the Commission and the
pro forma adjustments have been properly applied to the historical amounts
in the compilation of such statements, and the assumptions used in the
preparation thereof are, in the opinion of ERP and EQR, respectively, reasonable.
(vii) Since the respective dates as of which
information is given in the Registration Statement, the Prospectus and the Time
of Sale Information, except as otherwise stated or contemplated therein, (A)
there has been no material adverse change in the financial condition or in the
earnings, assets, business affairs or business prospects of ERP, EQR and their
respective subsidiaries, considered as a single enterprise, whether or not
arising in the ordinary course of business, (B) there have been no material
transactions entered into by ERP or any of their respective subsidiaries, other
than transactions in the ordinary course of business, which are material with
respect to ERP or EQR, as the case may be, and its respective subsidiaries
considered as a single enterprise, (C) neither ERP, EQR nor any of
7
their
respective subsidiaries has incurred any material obligation or liability,
direct, contingent or otherwise and (D) there has been no material change in
the short-term debt or long-term debt of ERP or EQR, (E) except for
regular quarterly dividends on the Common Shares, 9 1/8% Series C Preferred
Shares, 8.60% Series D Preferred Shares, 7.00% Series E Preferred Shares, 7.00%
Series H Preferred Shares, 8.29% Series K Preferred Shares, 6.48% Series N
Preferred Shares, 7.625% Series J Preference Interests in a subsidiary of ERP,
8.00% Series B Junior Preferred Units of the ERP and regular quarterly
distributions on the common units of limited partnership of ERP (the “OP Units”),
there has been no dividend or distribution of any kind declared, paid or made
by the Company with respect to its shares of beneficial interest or ERP with
respect to its partnership interests, and (F) there has been no material
change in the partnership interests of ERP, or any material decrease in equity
or material increase in the indebtedness of EQR or of ERP.
(viii) ERP, EQR and each of their respective
subsidiaries has been duly formed and is validly existing and is in good
standing as a partnership, corporation, real estate investment trust or limited
liability company (“LLC”) under the laws of its jurisdiction of organization,
with partnership, corporate or LLC power and authority to own, lease and
operate its properties and conduct its business as described in the Prospectus
and to enter into and perform its obligations under the applicable Terms
Agreement.
(ix) ERP, EQR and each of their respective
subsidiaries is duly qualified or registered as a foreign partnership,
corporation, real estate investment trust or LLC and is in good standing to
transact business in each jurisdiction in which such qualification is required
whether by the nature of its business or its ownership or leasing of property,
except where the failure to so qualify would not have a material adverse effect
on the financial condition or the earnings, assets or business affairs of ERP,
EQR and their respective subsidiaries considered as a single enterprise (a “Material
Adverse Effect”).
(x) All of the issued and outstanding
shares of beneficial interest or capital stock, partnership and LLC interests,
as the case may be, of each subsidiary have been validly issued and fully paid
and, with respect to the shares of capital stock, partnership and LLC interests
owned by ERP, EQR, another subsidiary and/or certain affiliated entities, are
owned by ERP, EQR, another subsidiary, and/or certain affiliated entities,
respectively, as described in the Registration
8
Statement,
the Prospectus and the Time of Sale Information, in each case free and clear of
any security interest, mortgage, pledge, lien, encumbrance, claim or
equity. Neither ERP nor EQR owns a
direct or indirect equity interest in any entity other than its respective
subsidiaries, except for such interests as, in the aggregate, are not material
to the condition, financial or otherwise, or the earnings, assets or business
affairs of ERP or EQR and its respective subsidiaries considered as a single
enterprise.
(xi) Except as described in the Prospectus
and the Time of Sale Information, there are no outstanding rights, warrants or
options to acquire, or instruments convertible into or exchangeable for, or
agreements or understandings with respect to the sale or issuance of, any
shares of capital stock of or partnership or other equity interest in ERP, EQR
or any subsidiary of ERP except for OP Units which may be issued pursuant to
multifamily property acquisition agreements which are not material in amount.
(xii) The capitalization of ERP is as set
forth in the Prospectus and the Time of Sale Information and all of the
outstanding partnership interests in ERP have been duly authorized and validly
issued and the capital contributions with respect thereto have been made in
full; the partnership interests in ERP owned by EQR are owned in the percentage
amount set forth in the Prospectus and the Time of Sale Information free and
clear of any security interest, mortgage, pledge, lien, encumbrance, claim or
equity.
(xiii) The capitalization of EQR is as set
forth in the Prospectus and the Time of Sale Information and all of the
outstanding shares of beneficial interest of EQR have been duly authorized,
validly issued, fully paid and are non-assessable.
(xiv) ERP has full partnership power and
authority to enter into and to perform its obligations under the Indenture, the
applicable Terms Agreement and the Delayed Delivery Contracts (as defined in
Section 2 hereof), if any, and as of each Representation Date, the applicable
Terms Agreement and the Delayed Delivery Contracts, if any, will have been duly
authorized, executed and delivered by ERP, and each is or will be a valid and
binding obligation of ERP, enforceable against ERP in accordance with its
terms, except as (A) the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors’ rights generally, (B) rights of acceleration and the
availability of equitable remedies may be limited by equitable principles of
general
9
applicability
and (C) rights to indemnity and contribution thereunder may be limited by state
or federal securities laws or the public policy underlying such laws.
(xv) EQR has
full trust power and authority to enter into and to perform its obligations
under the applicable Terms Agreement, and as of each Representation Date, the
applicable Terms Agreement will have been duly authorized, executed and
delivered by EQR, and will be a valid and binding obligation of EQR,
enforceable against EQR in accordance with its terms, except as (A) the
enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors’ rights
generally, (B) rights of acceleration and the availability of equitable
remedies may be limited by equitable principles of general applicability and
(C) rights to indemnity and contribution hereunder may be limited by state or
federal securities laws or the public policy underlying such laws.
(xvi) The Indenture (A) has been duly and
validly authorized, executed and delivered by ERP, and assuming it has been
duly authorized, executed and delivered by the Trustee, the Indenture
constitutes a valid and binding obligation of ERP, enforceable against ERP in
accordance with its terms, except as (i) the enforceability thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors’ rights generally and (ii) rights of acceleration and the
availability of equitable remedies may be limited by equitable principles of
general applicability; and (B) conforms in all material respects to the description
thereof in the Prospectus and the Time of Sale Information.
(xvii) EQR and ERP have full trust and full
partnership power, respectively, and authority to enter into and to perform
their respective obligations under the Registration Rights Agreement specified
in the applicable Terms Agreement (the “Registration Rights Agreement”) and the
Registration Rights Agreement (A) has been duly and validly authorized, and
when executed and delivered by EQR and ERP and the Underwriters will constitute
a valid and binding obligation of EQR and ERP, enforceable against EQR and ERP
in accordance with its terms, except as (i) the
enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors’ rights
generally, (ii) rights of acceleration and the availability of equitable
remedies may be limited by equitable principles of general applicability and
(iii) rights to indemnity and contribution thereunder may be limited by state
or federal securities laws or the public policy underlying such laws;
and
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(B)
conforms in all material respects to the description thereof in the Prospectus
and Time of Sale Information.
(xviii)
There are no
other contracts, agreements or understandings between EQR or ERP and any person
granting such person the right to require either EQR or ERP to file a
registration statement under the 1933 Act with respect to any securities of EQR
or ERP owned or to be owned by such person, except with respect to (i) unit
redemption or resale shelf registration statements on Form S-3 filed as of the
date hereof by EQR under the 1933 Act relating to Common Shares of EQR (the “Common
Shares”) that are issuable in the redemption of OP Units; (ii) Form S-8
registration statements covering Common Shares filed as of the date hereof by
EQR under the 1933 Act; (iii) agreements granting such registration rights with
respect to securities of EQR issued or issuable upon the conversion of OP Units
or preferred units of partnership interest in a subsidiary of ERP; and (iv) the
Registration Rights Agreement.
(xix) The Underwritten Securities (A) have
been duly authorized by ERP and, when executed, authenticated, issued and
delivered in the manner provided for herein and in the Indenture, against
payment of the consideration therefor specified in the applicable Terms
Agreement or any Delayed Delivery Contract (as defined in Section 2 hereof),
the Underwritten Securities will constitute valid and legally binding
obligations of ERP, entitled to the benefits of the Indenture and enforceable
against ERP in accordance with their terms, except as (i) the enforceability
thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors’ rights generally and (ii) rights of acceleration
and the availability of equitable remedies may be limited by equitable
principles of general applicability; and (B) conform in all material respects
to the descriptions related thereto contained in the Prospectus and the Time of
Sale Information.
(xx)
Upon
issuance and delivery of the Underwritten Securities in accordance with this
Agreement and the Indenture, the Underwritten Securities will be exchangeable
at the option of the holder thereof into Common Shares in accordance with the
terms of the Underwritten Securities and the Indenture; the Common Shares
issuable in exchange for the Underwritten Securities have been duly and validly
authorized and reserved for issuance upon such exchange by all necessary trust
action, and such shares, when issued upon such exchange in accordance with the
terms of the Underwritten Securities and the Indenture, will be duly and
validly issued and will be fully
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paid and non-assessable; such Common
Shares will be offered and sold in compliance with all applicable laws
(including, without limitation, federal and state Underwritten Securities laws)
in all material respects; and the issuance of such shares upon such exchange
will not be subject to the preemptive or other similar rights of any
securityholder of EQR or ERP.
The
Common Shares issuable in exchange for the Underwritten Securities conform in
all material respects to the description thereof set forth in the
Prospectus
and the Time of Sale Information.
(xxi) There is no action, suit or proceeding
before or by any court or governmental agency or body, now pending, or, to the
knowledge of ERP or EQR, threatened, against or affecting ERP, EQR or any of
their respective subsidiaries which is required to be disclosed in the
Prospectus (other than as disclosed therein) or which might result in any
material adverse change in the financial condition, or in the earnings, assets
or business affairs of ERP or EQR and their respective subsidiaries considered
as a single enterprise (a “Material Adverse Change”) or which might materially
and adversely affect the properties or assets thereof or which might materially
and adversely affect the consummation of the applicable Terms Agreement,
Delayed Delivery Contracts or the Indenture or the transactions contemplated
therein; all pending legal or governmental proceedings to which ERP, EQR or any
of their respective subsidiaries is a party or of which any of their properties
or assets is the subject which are not described in the Prospectus or the Time
of Sale Information, including ordinary routine litigation incidental to the
business, could not, considered in the aggregate, reasonably be expected to
result in a Material Adverse Effect; and there are no contracts or documents of
ERP or any of its subsidiaries which would be required to be filed as exhibits
to the Registration Statement by the 1933 Act or the 1933 Act Regulations which
have not been filed as exhibits to the Registration Statement.
(xxii) None of ERP,
EQR
, or any of
their respective affiliates, has taken nor will ERP, EQR, or any of their
respective affiliates take, directly or indirectly, any action which is
designed to, or which has constituted or which would reasonably be expected to
cause or result in stabilization or manipulation of the price of any security of
ERP or
EQR
to
facilitate the sale or resale of the Underwritten Securities.
(xxiii) None of ERP, EQR or any of their
respective subsidiaries is required to own or possess any trademarks, service
marks, trade names or copyrights to conduct the business operated by it as of
any Representation Date, other than those whereby the failure to possess
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or
own would not have a Material Adverse Effect; and none of ERP, EQR or any of
their respective subsidiaries has received any notice or is otherwise aware of
any infringement of or conflict with asserted rights of others with respect to
any trademarks, service marks, trade names or copyrights or of any facts or
circumstances which would render any trademarks, service marks, trade names or
copyrights invalid or inadequate to protect the interest of ERP or EQR or any
of their respective subsidiaries therein, and which infringement or conflict
(if the subject of any unfavorable decision, ruling or finding) or invalidity
or inadequacy, singly or in the aggregate, would result in a Material Adverse
Effect.
(xxiv) No authorization, approval or consent of
any court or governmental authority or agency is required that has not been
obtained in connection with the offering, issuance or sale of Underwritten
Securities hereunder, the issuance of the Common Shares upon exchange for the
Underwritten Securities or the consummation of the other transactions
contemplated by the applicable Terms Agreement or the Indenture, or the
Registration Rights Agreement, except such as may be required under the 1933
Act, the 1939 Act, the 1933 Act Regulations or state securities law.
(xxv) Each of ERP, EQR and their respective
subsidiaries has all consents, authorizations, approvals, orders, certificates
and permits (collectively, the “Governmental Licenses”) of and from, and has
made all declarations and filings with, all federal, state, local and other
governmental authorities, all self-regulatory organizations and all courts and
other tribunals required for it to own, lease, license and use its properties
and assets and to conduct its business in the manner described in the
Registration Statement and the Prospectus, except to the extent that the
failure to obtain or file would not have a Material Adverse Effect; and all of
the Governmental Licenses are valid and in full force and effect, except where
the invalidity of such Governmental Licenses or the failure of such
Governmental Licenses to be in full force and effect would not result in a
Material Adverse Effect; and none of ERP or any of its subsidiaries has
received any written notice of proceedings relating to the revocation or
modification of any such consent, authorization, approval, order, certificate
or permit which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would result in a Material Adverse Effect.
(xxvi) The documents incorporated or deemed to
be incorporated by reference in the Registration Statement, Prospectus, any
Preliminary Prospectus Supplement or, to the extent any other Time of
13
Sale
Information incorporates or is deemed to incorporate documents by reference,
such other Time of Sale Information, when they became effective or at the time
they were filed with the Commission, complied in all material respects with the
requirements of the 1934 Act and the rules and regulations of the Commission
under the 1934 Act (the “1934 Act Regulations”), and, when read together with
the other information in (a) the Registration Statement, at the time the
Registration Statement became effective, did not, (b) any Preliminary
Prospectus Supplement, at the date of such Preliminary Prospectus Supplement,
did not, (c) the Prospectus, at its date, at the Closing Time or during the
period specified in Section 3(g) did not, does not and will not, or (d) any
Time of Sale Information, at the Time of Sale, at the Closing Time or during
the period specified in Section 3(g), did not, does not, and will not, include
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
(xxvii) Each of ERP, EQR and their respective
subsidiaries is insured by insurers of recognized financial responsibility
against such losses and risks and in such amounts as are prudent and customary
in the businesses in which they are engaged; and neither ERP nor EQR has any
reason to believe that it or any of its subsidiaries 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
businesses at a cost that would not have a Material Adverse Effect, except as
described in or contemplated by the Registration Statement, the Prospectus and
the Time of Sale Information.
(xxviii) None of ERP, EQR nor any of their
respective subsidiaries is in violation of its partnership agreement, charter
document, bylaws or LLC agreement, or in default in the performance of any
material obligation, agreement or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other instrument to which
it or any of them is a party or by which it or any of them may be bound, or to
which any of their properties or assets is subject, which default in
performance would result in a Material Adverse Effect; and the execution,
delivery and performance of the applicable Terms Agreement, the Indenture and
the Registration Rights Agreement and the consummation of the transactions
contemplated thereby, including the issuance, sale and delivery of the
Underwritten Securities and the issuance of the Common Shares by
14
EQR
upon the exchange of the Underwritten Securities and the use of proceeds
described in the Prospectus and the Time of Sale Information, have been duly
authorized by all necessary actions and do not and will not conflict with or
constitute a breach of, or default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of
ERP, EQR or any of their respective subsidiaries, pursuant to any contract,
indenture, mortgage, loan agreement, note, lease or other instrument to which
ERP, EQR or any of their respective subsidiaries is a party or by which it or
any of them may be bound or affected, or to which any of their properties or
assets is subject, nor will such action result in any violation of the
provisions of the partnership agreement, charter, bylaws or LLC agreement of
ERP, EQR or any of their respective subsidiaries, or any applicable law,
regulation, ruling, order, judgment, administrative regulation or
administrative or court decree.
(xxix) Neither ERP nor EQR has taken or will
take, directly or indirectly, any action prohibited by Regulation M.
(xxx) Neither the assets of ERP nor those of
EQR constitute “plan assets” under the Employee Retirement Income Security Act
of 1974, as amended.
(xxxi) Except as otherwise described in the
Prospectus and the Time of Sale Information, each of ERP, EQR and their
respective subsidiaries has good and marketable title in fee simple to all real
property, and good title to all personal property (including mortgage
investments), owned by it which is material to the business of ERP, EQR and
their respective subsidiaries, considered as a single enterprise, in each case,
free and clear of all liens, claims, encumbrances and defects except such as
are described in general in the Prospectus and the Time of Sale Information or
such as do not materially affect the value of such property and do not
interfere with the use made and proposed to be made of such property by ERP,
EQR or any of their respective subsidiaries; and any real property and
buildings held under lease by ERP, EQR or any of their respective subsidiaries
are held by it under valid, subsisting and enforceable leases with such
exceptions as are not material and do not interfere with the use made and
proposed to be made of such property and buildings by ERP, EQR or such
subsidiaries, in each case except as described in or contemplated by the
Registration Statement, the Prospectus and the Time of Sale Information.
15
(xxxii) Each
of ERP, EQR and their respective subsidiaries has obtained title insurance on
all of the properties owned by each of them covering risks and in amounts that
are commercially reasonable for the assets owned by them and that are
consistent with the types and amounts of insurance typically maintained by
current owners of similar properties, and in each case such title insurance is
in full force and effect.
(xxxiii) The
mortgages and deeds of trust encumbering the properties and assets described in
general in the Prospectus are not convertible and are not cross-defaulted or
cross-collateralized to any property not owned by ERP or EQR, as the case may
be, or any of their respective subsidiaries; except as disclosed in the
Prospectus and the Time of Sale Information, none of ERP, EQR or any of their
respective subsidiaries holds participating interests in such mortgages and
deeds of trust.
(xxxiv) Each
of the partnership agreements and LLC agreements to which any of ERP, EQR or
their respective subsidiaries is a party has been duly authorized, executed and
delivered by such party and constitutes the valid agreement thereof,
enforceable in accordance with its terms, except as (A) the enforceability
thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors’ rights generally and (B) the availability of
equitable remedies may be limited by equitable principles of general
applicability; and the execution, delivery and performance of any of such
agreements did not, at the time of execution and delivery, and does not
constitute a breach of, or default under, the partnership agreement, charter,
bylaws or other governing documents of such party or any material contract,
lease or other instrument to which such party is a party or by which its
properties may be bound or any law, administrative regulation or administrative
or court decree.
(xxxv) Except
as otherwise stated in the Registration Statement, the Prospectus and the Time
of Sale Information or as would not, singly or in the aggregate, result in a
Material Adverse Effect, (A) neither ERP, EQR nor any of their respective
subsidiaries is in violation of any federal, state, local or foreign statute,
law, rule, regulation, ordinance, code, policy or rule of common law or any
judicial or administrative interpretation thereof including any judicial or
administrative order, consent, decree or judgment, relating to pollution or
protection of human health, the environment (including, without limitation,
ambient air, surface water, groundwater, land
16
surface or subsurface
strata) or wildlife, including, without limitation, laws and regulations
relating to the release or threatened release of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances, petroleum or
petroleum products (collectively, “Hazardous Materials”) or to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of Hazardous Materials (collectively, “Environmental Laws”), (B) ERP,
EQR and their respective subsidiaries have all permits, authorizations and
approvals required under any applicable Environmental Laws and are each in
compliance with their requirements, (C) there are no pending or threatened
administrative, regulatory or judicial actions, suits, demands, demand letters,
claims, liens, notices of noncompliance or violation, investigation or
proceedings relating to any Environmental Law against ERP, EQR or any of their
respective subsidiaries and (D) there are no events or circumstances that might
reasonably be expected to form the basis of an order for clean-up or
remediation, or an action, suit or proceeding by any private party or governmental
body or agency, against or affecting ERP, EQR or any of their respective
subsidiaries relating to Hazardous Materials or any Environmental Laws.
(xxxvi) EQR
has operated and intends to continue to operate in such a manner as to qualify
to be taxed as a “real estate investment trust” under the Internal Revenue Code
of 1986, as amended (the “Code”).
(xxxvii) Each
of ERP, EQR and their respective subsidiaries has filed all federal, state,
local and foreign income tax returns which have been required to be filed and
has paid all taxes required to be paid and any other assessment, fine or
penalty levied against it, to the extent that any of the foregoing is due and
payable, except in all cases for any such tax, assessment, fine or penalty for
which an extension has been granted or that is being contested in good faith
and except in any case in which the failure to file or pay such taxes would not
have a Material Adverse Effect.
(xxxviii) Neither
ERP, EQR nor any respective subsidiary is, or as a result of the transactions
contemplated by the Prospectus or the Time of Sale Information would be,
required to make any filing or to register under the Investment Company Act of
1940, as amended, or is or will become a “holding company” or a “subsidiary
company” of a “registered holding company,” as defined in the Public Utility
Holding Company Act of 1935, as amended.
17
(xxxix) No
labor dispute with the employees of ERP, EQR, or any of their respective
subsidiaries exists, or to the knowledge of ERP or EQR, is imminent.
(xl)
ERP and EQR
maintain a system of internal accounting and other controls sufficient to
provide reasonable assurances that (a) transactions are executed in
accordance with management’s general or specific authorization, (b)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP and to maintain accountability for assets,
(c) acquisition, disposition or other uses of assets are permitted only in
accordance with management’s general or specific authorization and (d) the
recorded accounting for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken
with respect to any differences.
(xli) Each of ERP and EQR has
established and maintains disclosure controls and procedures (as such term is
defined in Rule 13a-15(e) under the 1934 Act); such disclosure controls and
procedures are designed to ensure that material information relating to ERP,
EQR and their respective consolidated subsidiaries, is made known to the
principal executive officer and principal financial officer of EQR and by
others within those entities, and, as of the end of ERP’s and EQR’s most recent
fiscal quarter, respectively, such disclosure controls and procedures were
effective to perform the functions for which they were established; ERP’s and
EQR’s auditors and the Audit Committee of the Board of Trustees of EQR have
been advised by the principal executive officer and principal financial officer
of EQR, the general partner of ERP, of: (a) any material weakness or
significant deficiency in the design or operation of internal controls over
financial reporting which is reasonably likely to have a material adverse
effect on ERP’s or EQR’s ability to record, process, summarize, and report
financial information; and (b) any fraud, whether or not material, that
involves management or other employees who have a significant role in ERP’s or
EQR’s internal control over financial reporting; and since the end of ERP’s or
EQR’s most recently completed fiscal quarter respectively,, there have been no
changes in ERP’s or EQR’s internal controls over financial reporting that has
materially affected, or is reasonably likely to materially affect, ERP’s or EQR’s
internal controls over financial reporting.
(xlii) ERP
meets the eligibility requirements for use of a registration statement on Form
S-3 in connection with the offer and sale of the Underwritten Securities.
18
(b) Any certificate signed by any officer
of ERP or EQR or of any subsidiary of EQR or ERP and delivered to you or to
counsel for the Underwriters shall be deemed a representation and warranty by
ERP, EQR or such subsidiary to each Underwriter participating in such offering
as to the matters covered thereby on the date of such certificate.
Section 2.
Purchase
and Sale
.
(a) The several commitments of the
Underwriters to purchase the Underwritten Securities pursuant to the applicable
Terms Agreement shall be deemed to have been made on the basis of the
representations and warranties herein contained and shall be subject to the
terms and conditions set forth herein or in the applicable Terms Agreement.
(b) In addition, on the basis of the
representations and warranties herein contained and subject to the terms and
conditions herein set forth, ERP may grant, if so provided in the applicable
Terms Agreement relating to the Initial Underwritten Securities, an option to
the Underwriters named in such Terms Agreement, severally and not jointly, to
purchase up to the aggregate principal amount of Option Securities set forth
therein at the same price per Option Security as is applicable to the Initial
Underwritten Securities. Such option, if
granted, will expire 30 days or such lesser number of days as may be specified
in the applicable Terms Agreement after the Representation Date relating to the
Initial Underwritten Securities, 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 Underwritten
Securities upon notice by you to ERP setting forth the aggregate principal
amount of Option Securities as to which the several Underwriters are then
exercising the option and the time and date of payment and delivery for such
Option Securities. Any such time and
date of delivery (a “Date of Delivery”) shall be determined by you, but shall
not be later than seven full business days and may not be earlier than two full
business days after the exercise of said option, unless otherwise agreed upon
by you and ERP. If the option is
exercised as to all or any portion of the Option Securities, each of the
Underwriters, acting severally and not jointly, will purchase that proportion
of the total aggregate principal amount of Option Securities then being
purchased which the aggregate principal amount of Initial Underwritten
Securities each such Underwriter has agreed to purchase as set forth in the
applicable Terms Agreement bears to the total aggregate principal amount of
Initial Underwritten Securities, subject to such adjustments as you in your
discretion shall make to eliminate any sales or purchases of fractional
Underwritten Securities.
(c) Payment of the purchase price for,
and delivery of, the Underwritten Securities to be purchased by the
Underwriters shall be made at such place as shall be agreed upon by you and
ERP, at 10:00 A.M., New York City time,
19
no later than the third
(fourth, if the pricing occurs after 4:30 p.m. (New York City time) on any
given business day) business day (unless postponed in accordance with the
provisions of Section 11 hereof) following the date of the applicable Terms
Agreement or at such other time as shall be agreed upon by you and ERP (each
such time and date being referred to as a “Closing Time”). In addition, if any or all of the Option
Securities are purchased by the Underwriters, payment of the purchase price
for, and delivery of certificates representing, such Option Securities, shall
be made at such place as shall be agreed upon by you and ERP on each Date of
Delivery as specified in the notice from you to ERP. Unless otherwise specified in the applicable
Terms Agreement, payment shall be made to ERP by wire transfer to accounts
designated by ERP of immediately available funds payable to the order of ERP
against delivery to you for the respective accounts of the Underwriters of the
Underwritten Securities to be purchased by them. The Underwritten Securities shall be in such
authorized denominations and registered in such names as you may request in
writing at least two business days prior to the applicable Closing Time or Date
of Delivery, as the case may be. The
Underwritten Securities, which may be in temporary form, will be made available
for examination and packaging by you on or before the first business day prior
to the applicable Closing Time or Date of Delivery, as the case may be.
If authorized by the
applicable Terms Agreement, the Underwriters named therein may solicit offers
to purchase Underwritten Securities from ERP pursuant to delayed delivery
contracts (“Delayed Delivery Contracts”) substantially in the form of Exhibit B
hereto with such changes therein as ERP may approve. As compensation for arranging Delayed
Delivery Contracts, ERP will pay to you at Closing Time, for the respective
accounts of the Underwriters, a fee specified in the applicable Terms Agreement
for each of the Underwritten Securities for which Delayed Delivery Contracts
are made at the applicable Closing Time as is specified in the applicable Terms
Agreement. Any Delayed Delivery
Contracts are to be with institutional investors of the types described in the
Prospectus. At the applicable Closing
Time, ERP will enter into Delayed Delivery Contracts (for not less than the
minimum principal amount of Underwritten Securities per Delayed Delivery
Contract specified in the applicable Terms Agreement) with all purchasers
proposed by the Underwriters and previously approved by ERP as provided below,
but not for an aggregate principal amount of Underwritten Securities in excess
of that specified in the applicable Terms Agreement. The Underwriters will not have any
responsibility for the validity or performance of Delayed Delivery Contracts.
You shall submit to ERP,
at least three business days prior to the applicable Closing Time, the names of
any institutional investors with which it is proposed that ERP will enter into
Delayed Delivery Contracts and the principal amount of Underwritten Securities
to be purchased by each of them, and ERP will advise you, at least two business
days prior to the applicable Closing Time, of the
20
names of the
institutions with which the making of Delayed Delivery Contracts is approved by
ERP and the principal amount of Underwritten Securities to be covered by each
such Delayed Delivery Contract.
The principal amount of
Underwritten Securities agreed to be purchased by the several Underwriters
pursuant to the applicable Terms Agreement shall be reduced by the principal
amount of Underwritten Securities covered by Delayed Delivery Contracts, as to
each Underwriter as set forth in a written notice delivered by you to ERP;
provided
,
however
, that the total principal amount of Underwritten Securities to
be purchased by all Underwriters shall be the total amount of Underwritten
Securities covered by the applicable Terms Agreement, less the principal amount
of Underwritten Securities covered by Delayed Delivery Contracts.
Section 3.
Covenants
.
ERP covenants with you,
and with each Underwriter participating in the offering of Underwritten
Securities, as follows.
(a) Immediately following the execution
of the applicable Terms Agreement, ERP will prepare a Prospectus Supplement
setting forth the principal amount of Underwritten Securities covered thereby
and their terms not otherwise specified in the Prospectus or the Indenture
pursuant to which the Underwritten Securities are being issued, the names of
the Underwriters participating in the offering and the principal amount of
Underwritten Securities which each severally has agreed to purchase, the names
of the Underwriters acting as co-managers in connection with the offering, the
price at which the Underwritten Securities are to be purchased by the
Underwriters from ERP, the initial public offering price, if any, the selling
concession and reallowance, if any, any delayed delivery arrangements, and such
other information as you and ERP deem appropriate in connection with the
offering of the Underwritten Securities; and ERP will promptly transmit copies
of the Prospectus Supplement to the Commission for filing pursuant to Rule
424(b) of the 1933 Act Regulations within the time period required by such Rule
and will furnish to the Underwriters named therein as many copies of the
Prospectus, any Preliminary Prospectus Supplement, the Prospectus Supplement
and any Issuer Free Writing Prospectus as you shall reasonably request and the
Prospectus, any Preliminary Prospectus Supplement, the Prospectus Supplement
and any Issuer Free Writing Prospectus shall contain the same text as any
electronically transmitted copies filed with the Commission pursuant to EDGAR,
except to the extent permitted by Regulation S-T. ERP will file any Issuer Free Writing
Prospectus to the extent required by Rule 433 under the 1933 Act.
(b) ERP will notify you immediately, and
confirm such notice in writing, of (i) the effectiveness of any amendment to
the Registration Statement, (ii)
21
the transmittal to the
Commission for filing of any Preliminary Prospectus Supplement or Prospectus
Supplement or other supplement or amendment to the Prospectus or any Issuer
Free Writing Prospectus or any document to be filed pursuant to the 1934 Act,
(iii) the receipt of any comments from the Commission, (iv) any request by the
Commission for any amendment to the Registration Statement or any amendment or
supplement to the Preliminary Prospectus Supplement or the Prospectus or for
additional information, and (v) 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 the Prospectus or the initiation of
any proceedings for any of such purposes pursuant to Section 8A of the 1933
Act; and ERP will make every reasonable effort to prevent the issuance of any
such stop order and, if any stop order is issued, to obtain the lifting thereof
at the earliest possible moment.
(c) At any time when the Prospectus is
required to be delivered under the 1933 Act or the 1934 Act in connection with
sales of the Underwritten Securities, ERP will give you notice of its intention
to file or prepare any amendment to the Registration Statement (including any
filing under Rule 462(b) of the 1933 Act Regulations), any Term Sheet or any
amendment or supplement to the Time of Sale Information or the Prospectus
(including any revised prospectus which ERP proposes for use by you in
connection with the offering of Underwritten Securities which differs from the
prospectus on file at the Commission at the time the Registration Statement
became effective, whether or not such revised prospectus is required to be
filed pursuant to Rule 424(b) of the 1933 Act Regulations), whether pursuant to
the 1933 Act, 1934 Act or otherwise, and will furnish you with copies of any
such amendment or supplement a reasonable amount of time prior to such proposed
filing or preparation, as the case may be, and will not file or prepare any
such amendment or supplement or other documents in a form to which you or
counsel for the Underwriters shall reasonably object.
(d) In connection with the sale of the
Underwritten Securities, before preparing, using, authorizing, approving,
referring to or filing any Issuer Free Writing Prospectus, and before filing
any amendment or supplement to the Registration Statement or the Prospectus,
ERP will furnish to the you and to counsel for the Underwriters a copy of the
proposed Issuer Free Writing Prospectus, amendment or supplement for review and
will not prepare, use, authorize, approve, refer to or file any such Issuer
Free Writing Prospectus or file any such proposed amendment or supplement to
which you reasonably object.
(e) ERP will deliver to you as many
conformed 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) as you reasonably request.
22
(f) ERP will furnish to each
Underwriter, from time to time during the period when the Prospectus is
required to be delivered under the 1933 Act or the 1934 Act in connection with
sales of the Underwritten Securities, such number of copies of any Preliminary
Prospectus Supplement or the Prospectus (as amended or supplemented) as such
Underwriter may reasonably request for the purposes contemplated by the 1933
Act, the 1933 Act Regulations, the 1934 Act or the 1934 Act Regulations.
(g) ERP and EQR 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 Underwritten
Securities and the Common Shares issuable in exchange for the Underwritten
Securities as contemplated in the applicable Terms Agreement and in the Registration
Statement and the Prospectus. If at any
time when the Prospectus is required to be delivered under the 1933 Act or the
1934 Act in connection with sales of the Underwritten Securities any event
shall occur or condition exist as a result of which it is necessary, in the
opinion of counsel for the Underwriters or counsel for ERP, to amend or
supplement the Prospectus in order that the Prospectus will not include an
untrue statement of a material fact or omit to state any 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 opinion of either such counsel, at any such time
to amend or supplement the Registration Statement or the Prospectus in order to
comply with the requirements of the 1933 Act or the 1933 Act Regulations, then
ERP will promptly prepare and file with the Commission such amendment or
supplement in form and substance reasonably satisfactory to counsel for the
Underwriters, whether by filing documents pursuant to the 1933 Act, the 1934
Act or otherwise, as may be necessary to correct such untrue statement or
omission or to make the Registration Statement and Prospectus comply with such
requirements.
(h) If at any time prior to the Closing
Time (i) any event shall occur or condition shall exist as a result of which
the Time of Sale Information as then amended or supplemented would 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, not misleading or (ii) it is necessary to amend or supplement
the Time of Sale Information to comply with law, ERP will immediately notify
the Underwriters thereof and forthwith prepare and, subject to paragraph (d)
above, file with the Commission (to the extent required) and furnish to the
Underwriters and to such dealers as you may designate, such amendments or
supplements to the Time of Sale Information as may be necessary so that the
statements in the Time of Sale Information as so amended or supplemented will
not, in the light of the circumstances, be misleading or so that the Time of
Sale Information will comply with law.
23
(i) ERP and EQR will endeavor, in
cooperation with the Underwriters, to qualify the Underwritten Securities and
the Common Shares issuable in exchange for the Underwritten Securities for
offering and sale under the applicable securities laws and real estate
syndication laws of such states and other jurisdictions of the United States as
you may designate;
provided
,
however
, that neither ERP nor EQR
shall be obligated to (i) qualify as a foreign limited partnership in any
jurisdiction where it is not so qualified, (ii) file any general consent to
service of process or (iii) take any action that would subject it to income
taxation in any such jurisdiction. In
each jurisdiction in which the Underwritten Securities or the Common Shares
issuable in exchange for the Underwritten Securities have been so qualified,
ERP and EQR will file such statements and reports as may be required by the
laws of such jurisdiction to continue such qualification in effect for so long
as may be required for the distribution of the Underwritten Securities and the
Common Shares issuable in exchange for the Underwritten Securities.
(j) With respect to each sale of
Underwritten Securities, ERP will make generally available to its security
holders as soon as practicable, but not later than 90 days after the close of
the period covered thereby, an earning statement (in form complying with the
provisions of Rule 158 of the 1933 Act Regulations) covering a 12-month period
beginning not later than the first day of ERP’s fiscal quarter next following
the “effective date” (as defined in such Rule 158) of the Registration
Statement.
(k) ERP and EQR, during the period when
the Prospectus is required to be delivered under the 1933 Act or the 1934 Act
in connection with sales of the offering of the Underwritten Securities and the
Common Shares issuable in exchange for the Underwritten Securities, will file
all documents required to be filed with the Commission pursuant to Section 13,
14 or 15 of the 1934 Act within the time periods prescribed by the 1934 Act and
the 1934 Act Regulations.
(l) Neither ERP nor EQR will, prior to
the 30
th
day following the date of the first Closing
Time that occurs after the date of the applicable Terms Agreement, without your
prior written consent, offer or sell, grant any option for the sale of, or enter
into any agreement to sell, any debt securities of ERP with a maturity of more
than one year (other than the Underwritten Securities which are to be sold
pursuant to such Terms Agreement) or any
Common Shares or any other securities convertible into or exercisable for
Common Shares. However, the foregoing
restrictions do not apply to (A) any OP Units issued in connection with real
estate acquisition transactions by ERP or EQR, (B) Common Shares issued in
connection with EQR’s employee or trustee benefit plans, stock option plans,
long-term incentive plan and/or distribution reinvestment plans existing at the
date of the applicable Terms Agreement, (C) Common Shares issued pursuant to
options, warrants or rights outstanding as of the date of the applicable Terms
Agreement or
24
(D) Common Shares issued
upon the conversion or redemption of OP Units outstanding as of the date of the
Applicable Terms Agreement.
(m) ERP will take all reasonable action
necessary to enable Standard & Poor’s Corporation (“S&P”) and Moody’s
Investors Service, Inc. (“Moody’s”) to provide their respective credit ratings
of any Underwritten Securities, if applicable.
(n) EQR will use its reasonable best
efforts to have the Common Shares issuable in exchange for the Securities
listed on the New York Stock Exchange.
(o) EQR will reserve and keep available
at all times, free of any preemptive rights, Common Shares for the purpose of
enabling the Company to satisfy any obligations to issue Common Shares in
exchange for the Securities.
(p) ERP will, pursuant to reasonable
procedures developed in good faith, retain copies of each Issuer Free Writing
Prospectus that is not filed with the Commission in accordance with Rule 433
under the 1933 Act.
Section 4.
Payment
of Expenses
.
ERP will pay all
expenses incident to the performance of its obligations under the applicable
Terms Agreement, including (i) the printing and filing of the Registration
Statement as originally filed and of each amendment thereto, (ii) the printing
and filing of these Standard Underwriting Provisions and the applicable Terms
Agreement,, (iii) the preparation, issuance and delivery of the Underwritten
Securities to the Underwriters and the certificates for the Common Shares
issuable in exchange therefor, (iv) to the extent applicable, the fees and
disbursements of ERP’s counsel and accountants, (v) the qualification of the
Underwritten Securities and the Common Shares issuable in exchange therefor
under securities laws and real estate syndication laws in accordance with the provisions
of Section 3(g), including filing fees and the fees and disbursements of
counsel for the Underwriters in connection therewith and in connection with the
preparation of the Blue Sky Survey, (vi) the printing and delivery to the
Underwriters of copies of the Registration Statement as originally filed and of
each amendment thereto, of any Issuer Free Writing Prospectus and any Time of
Sale Information, and of the Prospectus and any Preliminary Prospectus
Supplement and any amendments or supplements thereto, (vii) the printing and
delivery to the Underwriters of copies of the Indenture, (viii) any fees
charged by nationally recognized statistical rating organizations for the
rating of the Underwritten Securities, (ix) the fees and expenses, if any, incurred
with respect to the listing of the Underwritten Securities and the Common
Shares issuable in exchange therefor on any national securities exchange or
quotation system, (x) the fees and expenses, if any, incurred with
25
respect to any filing
with the National Association of Securities Dealers, Inc. (including fees and
disbursements of counsel for the Underwriters in connection therewith), (xi)
the fees and expenses of the Trustee, (xii) the preparation, issuance and
delivery to the Depository Trust Company for credit to your account of any
global note registered in the name of Cede & Co., as nominee for the
Depository Trust Company and (xiii) any fees charged by the Depository
Trust Company in connection with the issuance and delivery of the Common Shares
issuable in exchange for the Underwritten Securities.
If the applicable Terms
Agreement is terminated by you in accordance with the provisions of Section 5
or Section 10(a)(i) or 10(a)(v), ERP shall reimburse the Underwriters named in
such Terms Agreement for all of their out-of-pocket expenses, including the
reasonable fees and disbursements of counsel for the Underwriters.
Section 5.
Certain Agreements of the Underwriters.
Each Underwriter hereby represents and agrees that:
(a) It has not and will not use,
authorize use of, refer to, or participate in the planning for use of, any “free
writing prospectus”, as defined in Rule 405 under the Securities Act (which
term includes use of any written information furnished to the Commission by ERP
and not incorporated by reference into the Registration Statement and any press
release issued by ERP) other than (i) a free writing prospectus that contains
no “issuer information” (as defined in Rule 433(h)(2) under the Securities Act)
that was not included (including through incorporation by reference) in the
Preliminary Prospectus Supplement or a previously filed Issuer Free Writing
Prospectus, (ii) any Issuer Free Writing Prospectus listed on an annex to the
applicable Terms Agreement or prepared pursuant to Section 1(a)(iii) or Section
3(d) above, or (iii) any free writing prospectus prepared by such underwriter
and approved by ERP in advance in writing (each such free writing prospectus
referred to in clauses (i) or (iii), an “Underwriter Free Writing Prospectus”).
(b) It has not and will not distribute
any Underwriter Free Writing Prospectus referred to in clause (a)(i) in a
manner reasonably designed to lead to its broad unrestricted dissemination.
(c) It has not and will not, without the
prior written consent of ERP, use any free writing prospectus that contains the
final terms of the Securities unless such terms have previously been included
in a free writing prospectus filed with the Commission;
provided
that
Underwriters may use a term sheet substantially in the form attached to the
applicable Terms Agreement without the consent of the Company;
provided
further
that any Underwriter using such term
26
sheet shall notify the
Company, and provide a copy of such term sheet to the Company, prior to, or
substantially concurrently with, the first use of such term sheet.
(d) It will, pursuant to reasonable
procedures developed in good faith, retain copies of each free writing
prospectus used or referred to by it, in accordance with Rule 433 under the
1933 Act.
(e) It is not subject to any pending
proceeding under Section 8A of the 1933 Act with respect to the offering (and
will promptly notify the Company if any such proceeding against it is initiated
during the period of time after the first date of the public offering of the
Underwritten Securities as in the opinion of counsel for the Underwriters a
prospectus relating to the Underwritten Securities is required by law to be
delivered (or required to be delivered but for Rule 172 under the 1933 Act) in
connection with sales of the Underwritten Securities by any Underwriter or
dealer).
Section 6.
Conditions of Underwriters’ Obligations
.
The several obligations
of the Underwriters to purchase Underwritten Securities pursuant to the
applicable Terms Agreement are subject to the accuracy of the representations
and warranties of ERP and EQR herein contained, to the accuracy of the
statements of officers of ERP and EQR made in any certificate pursuant to the
provisions hereof, to the performance by ERP and EQR of all of their respective
covenants and other obligations hereunder, and to the following further
conditions:
(a) At the applicable Closing Time, (i)
no stop order suspending the effectiveness of the Registration Statement shall
have been issued under the 1933 Act or proceedings therefor or pursuant to
Section 8A of the 1933 Act initiated or threatened by the Commission, (ii) any
request on the part of the Commission for additional information shall have
been complied with to the reasonable satisfaction of counsel for the
Underwriters, (iii) the rating assigned by any nationally recognized
statistical rating organization to any long-term debt securities of ERP as of
the date of the applicable Terms Agreement shall not have been lowered since
such date nor shall any such rating organization have publicly announced that
it has placed any long-term debt securities of ERP on what is commonly termed a
“watch list” for possible downgrading, (iv) there shall not have come to your
attention any facts that would cause you to believe that the Time of Sale
Information as of the Time of Sale or at Closing Time, or that the Prospectus,
together with the applicable Prospectus Supplement, at the time it was required
to be delivered to purchasers of the Underwritten Securities, included an untrue
statement of a material fact or omitted to state a material fact necessary in
order to make the statements therein, in light of the circumstances existing at
such time,
27
not misleading, and (v)
each Issuer Free Writing Prospectus shall have been timely filed with the
Commission under Rule 433 or 164 of the 1933 Act Regulations to the extent
required by Rule 433 of the 1933 Act Regulations. A prospectus containing
information relating to the description of the Underwritten Securities, the
specific method of distribution and similar matters shall have been filed with
the Commission in accordance with Rule 424 (or any required post-effective
amendment providing such information shall have been filed and declared
effective in accordance with the requirements of Rule 430A).
(b) At the applicable Closing Time, you
shall have received:
(1) The favorable opinion, dated as of
the applicable Closing Time, of counsel for ERP, in form and substance
satisfactory to counsel for the Underwriters, to the effect that:
(i) EQR is authorized and exists as a
real estate investment trust under the laws of the State of Maryland, and has
the power and authority to own, lease and operate its properties and conduct
its business as described in the Prospectus; and, to counsel’s knowledge, is
duly qualified and in good standing and authorized to transact business in any
jurisdiction in which the conduct of its business or its ownership or leasing
of property requires such qualification, except where the failure to be so
qualified or in good standing would not have a Material Adverse Effect.
(ii) ERP is authorized and exists as an
Illinois limited partnership under the Illinois Revised Uniform Limited
Partnership Act, and has the power and authority to own, lease and operate its
properties and conduct its business as described in the Prospectus; and, to
counsel’s knowledge, is duly qualified and in good standing and authorized to
transact business in any jurisdiction in which the conduct of its business or
its ownership or leasing of property requires such qualification, except where
the failure to be so qualified or in good standing would not have a Material
Adverse Effect.
(iii) Each of EQR’s subsidiaries has been
duly formed and is validly existing and in good standing under the laws of the
jurisdiction of its formation, has the power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus, and, to counsel’s knowledge, is duly qualified and in good standing
and authorized to transact business in any jurisdiction in which the conduct of
its business or its ownership or leasing of property requires such
qualification, except where the failure to be validly existing, so qualified or
in good standing would not have a
28
Material
Adverse Effect; all of the issued and outstanding shares of capital stock, LLC
interests and partnership interests of each subsidiary have been duly
authorized and validly issued, are fully paid and with respect to the shares of
capital stock, LLC interests and partnership interests owned by EQR or another
subsidiary, are owned by EQR or another subsidiary, to such counsel’s
knowledge, directly, free and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim or equity, except where any such failure would not
have a Material Adverse Effect. None of
the outstanding shares of capital stock, LLC interests or partnership interests
of any subsidiary were issued in violation of statutory preemptive rights or,
to counsel’s knowledge, contractual rights of any security holder of such
subsidiary to subscribe for more shares, LLC interests or partnership
interests, except where such violation would not have a Material Adverse
Effect.
(iv) Each of ERP’s subsidiaries has been
duly formed and is validly existing and in good standing under the laws of the
jurisdiction of its formation, has the power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus, and, to counsel’s knowledge, is duly qualified and in good standing
and authorized to transact business in any jurisdiction in which the conduct of
its business or its ownership or leasing of property requires such
qualification, except where the failure to be validly existing, so qualified or
in good standing would not have a Material Adverse Effect; all of the issued
and outstanding shares of capital stock, LLC interests and partnership
interests of each subsidiary have been duly authorized and validly issued, are
fully paid and with respect to the shares of capital stock, LLC interests and
partnership interests owned by ERP or another subsidiary, are owned by ERP or
another subsidiary, to such counsel’s knowledge, directly, free and clear of
any security interest, mortgage, pledge, lien, encumbrance, claim or equity,
except where any such failure would not have a Material Adverse Effect. None of the outstanding shares of capital
stock, LLC interests or partnership interests of any subsidiary were issued in
violation of statutory preemptive rights or, to counsel’s knowledge,
contractual rights of any security holder of such subsidiary to subscribe for
more shares, LLC interests or partnership interests, except where such
violation would not have a Material Adverse Effect.
(v) The Indenture has been duly qualified
under the 1939 Act and has been duly authorized, executed and delivered by ERP
and (assuming due authorization, execution and delivery by the Trustee)
constitutes a valid and binding obligation of ERP enforceable
29
against
ERP in accordance with its terms except as (A) the enforceability thereof
may be limited by bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer or similar laws affecting creditors’ rights generally, and
(B) the availability of equitable remedies may be limited by equitable
principles of general applicability, and except that a waiver of rights under
any usury law may be unenforceable.
(vi) The Underwritten Securities have been
duly and validly authorized by all necessary action and, when executed, authenticated
and delivered in accordance with the Indenture and against payment therefor
specified in the applicable Terms Agreement or the Delayed Delivery Contracts,
if any, will be entitled to the benefits of the Indenture and will be valid and
legally binding obligations of ERP enforceable against ERP in accordance with
their terms, except as (A) the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer, or
similar laws affecting creditors’ rights generally, and (B) the
availability of equitable remedies may be limited by equitable principles of
general applicability, and except that a waiver of rights under any usury law
may be unenforceable.
(vii) The applicable Terms Agreement and the
Delayed Delivery Contracts, if any, has been duly and validly authorized,
executed and delivered by ERP, and ERP has the power and authority to perform
its obligations hereunder and thereunder.
(viii) The applicable Terms Agreement has been
duly and validly authorized, executed and delivered by EQR, and EQR has the
trust power and authority to perform its obligations hereunder and thereunder.
(ix) The Registration Rights Agreement has
been duly and validly authorized, executed and delivered by ERP and EQR and is
a valid and legally binding obligations of each of ERP and EQR enforceable
against ERP and EQR in accordance with its terms, except as (A) the
enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer, or similar laws affecting
creditors’ rights generally, (B) the availability of equitable remedies
may be limited by equitable principles of general applicability, and except
that a waiver of rights under any usury law may be unenforceable and (C) rights to indemnity and contribution thereunder may
be limited by state or federal securities laws or the public policy underlying
such laws.
30
(x) The execution and delivery of the
applicable Terms Agreement, the Indenture and the Registration Rights Agreement
and the issuance and sale of the Underwritten Securities and, if applicable,
the issuance and delivery of the Common Shares issuable upon exchange of the
Underwritten Securities, do not result in a violation of any provision of the
partnership agreement of ERP or the declaration of trust or bylaws of EQR, or,
to counsel’s knowledge, any other applicable law, administrative regulation or
administrative or court decree, and will not, to such counsel’s knowledge,
conflict with or constitute a breach of, or default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property or
assets of ERP or EQR or any of their respective subsidiaries pursuant to any
agreement or other instrument that is binding upon ERP, EQR or any respective subsidiary,
or to which any of their properties or assets is subject.
(xi) The Registration Statement is
effective under the 1933 Act and, to counsel’s knowledge, no stop order
suspending the effectiveness of the Registration Statement has been issued under
the 1933 Act and no proceedings for that purpose have been initiated or
threatened by the Commission.
(xii) The Underwritten Securities, the
Common Shares and the Indenture conform in all material respects to the
descriptions thereof contained in the Prospectus and the Time of Sale
Information.
(xiii) No consent, approval, authorization, or
order of, or qualification with, any governmental body or agency and no
consent, approval, or authorization of any person other than EQR is required
for the performance by EQR of its obligations under the applicable Terms
Agreement or the Registration Rights Agreement, except such as may be required
under the federal securities laws and the securities or Blue Sky laws of
various states in connection with the Common Shares issuable upon exchange of
the Underwritten Securities.
(xiv) No consent, approval, authorization, or
order of, or qualification with, any governmental body or agency and no
consent, approval, or authorization of any person other than ERP is required
for the performance by ERP of its obligations under the applicable Terms
Agreement, the Indenture, the Registration Rights Agreement or the Underwritten
Securities, except such as may be required under the federal securities laws
and the securities or Blue Sky laws of various states in connection with the
offer and sale of the Underwritten Securities.
31
(xv) The Board of Trustees of EQR, or a
committee thereof with requisite authority granted to it by the Board of
Trustees of EQR, has duly adopted resolutions approving the reservation of the
Common Shares initially issuable upon exchange of the Securities. Such Common Shares, if and when issued and
delivered by EQR upon such exchange in accordance with the Underwritten Securities
and the Indenture, will be validly issued, fully paid and non-assessable and
will not be subject to any preemptive rights arising under Title 8 of the
Corporations and Associations Article of the Annotated Code of Maryland.
(xvi) To the knowledge of counsel, there are
no (A) legal or governmental proceedings pending or threatened which are
required to be disclosed in the Registration Statement, the Prospectus or the
Time of Sale Information other than those disclosed therein, and all pending
legal or governmental proceedings to which ERP or any of its subsidiaries is a
party or to which any of their property is subject which are not described in
the Registration Statement, the Prospectus or the Time of Sale Information
including ordinary routine litigation incidental to the business, are,
considered in the aggregate, not material or (B) statutes, regulations,
contracts, indentures, mortgages, loan agreements, notes, leases, instruments
or other documents that are required to be described in the Prospectus or the
Time of Sale Information or to be filed as exhibits to the Registration
Statement that are not described or filed as required.
(xvii) None of ERP, EQR or any of their
respective subsidiaries is required to be registered under the 1940 Act.
(xviii) The information (A) in the Prospectus, any
Preliminary Prospectus Supplement included in the Time of Sale Information and
the applicable Prospectus Supplement under the headings “Description of Debt
Securities,” “Underwriting,” “Description of Shares of Beneficial Interest”
and, if applicable, “Federal Income Tax Consequences” and (B) in ERP’s and EQR’s
most recent Annual Reports on Form 10-K, and ERP’s and EQR’s most recent
Quarterly Reports on Form 10-Q, if applicable, under the heading “Legal
Proceedings,” to the extent that it constitutes matters of law, summaries of
legal matters, documents or proceedings, or legal conclusions, has been
reviewed by such counsel and, to such counsel’s knowledge with respect to
paragraph (B) above, is correct in all material respects.
32
(xix) The Registration Statement, the
Prospectus and the Time of Sale Information (except for financial statements
and schedules and other financial and statistical data included therein, or the
Statement of Eligibility, as to which such counsel need not express any opinion),
excluding the documents incorporated by reference therein, as of their
respective effective or issue dates comply as to form in all material respects
with the requirements for registration statements on Form S-3 under
the 1933 Act, the 1939 Act, the 1933 Act Regulations and the 1939 Act
Regulations.
(xx) To such counsel’s knowledge, ERP, EQR
and each of their respective subsidiaries has consents, authorizations,
approvals, orders, certificates and permits of and from, and has made all
declarations and filings with, all federal, state, local, and other
governmental authorities, all self-regulatory organizations, and all courts and
other tribunals, necessary to own, lease, license and use their respective
properties and assets and to conduct their respective businesses in the manner
described in the Registration Statement, the Prospectus and the Time of Sale
Information, except to the extent that the failure to obtain or file would not
have a Material Adverse Effect.
(xxi) To such counsel’s knowledge, except as
described in the Prospectus and the Time of Sale Information, there are no
outstanding rights, warrants or options to acquire, or instruments convertible
into or exchangeable for, or agreements or understandings with respect to the
sale or issuance of any shares of capital stock or partnership interests of or
other equity interest in ERP, EQR or any of their respective subsidiaries
except for multifamily property acquisition agreements with respect to the sale
or issuance of OP Units which are not material in amount.
(xxii) Each document filed pursuant to the 1934
Act (other than the financial statements, schedules and other financial and
statistical data, as to which no opinion need be rendered) and incorporated or
deemed to be incorporated by reference in the Preliminary Prospectus Supplement
included in the Time of Sale Information or in the Prospectus complied when so
filed as to form in all material respects with the 1934 Act and the 1934 Act
Regulations.
(xxiii) ERP has qualified and, based upon its
organization and its proposed method of operation, ERP will continue to qualify
to be treated as a partnership for federal income tax purposes and not as an
association taxable as a corporation.
33
(2) The favorable opinion, dated as of
the applicable Closing Time, of counsel(s) for the Underwriters, substantially
to the effect specified in subparagraphs (i) first clause only, (ii) first
clause only, (v) excluding the first clause, (vi), (vii) first clause
only, (ix), (xi), (xviii)(A) and (xix) of Section 6(b)(1).
(3) In rendering their opinions required
by subsections (b)(1) and (b)(2) of this Section 6, counsel shall each
additionally state (which shall not constitute an opinion) that no facts have
come to the attention of such counsel which cause them to believe that the
Registration Statement or any post-effective amendment thereto (except for
financial statements and supporting schedules and other financial and
statistical information and data included therein or omitted therefrom, or the
Statement of Eligibility, as to which such counsel need not express any view),
at the time the Registration Statement or any post-effective amendment thereto
(including, if later, the filing of ERP’s or EQR’s Annual Report on Form 10-K
with the Commission) became effective, or at the date of the applicable Terms
Agreement, contained an untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading, that the Time of Sale Information, at the
Time of Sale, contained any untrue statement of a material fact or omitted to
state a material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading or that the
Prospectus or any amendment or supplement thereto (except as aforesaid) as of
the date of the applicable Terms Agreement or at the applicable Closing Time,
contained an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
In giving their opinions
required by this Section 6(b), such counsel, (A) may rely as to all
matters of fact, upon certificates and written statements of officers and
employees of and accountants for ERP and EQR and (B) may rely as to the
qualification and good standing of each of ERP and EQR or any of their
respective subsidiaries to do business in any state or jurisdiction, upon
certificates of appropriate government officials or opinions of counsel in such
jurisdictions, which opinions shall be in form and substance satisfactory to
counsel for the Underwriters. In giving
their belief required in Section 6(b)(3), such counsel may state that their
belief is based upon their participation in the preparation of the Registration
Statement, the Prospectus and the Time of Sale Information and any amendments
and supplements thereto and review and discussion of the contents thereof, but
are without independent check or verification except as specified.
(c) At
the applicable Closing Time, there shall not have been, since the date of the
applicable Terms Agreement or since the respective dates as of which
information is given in the Prospectus and the Time of Sale Information, any
material adverse change in the financial condition or in the earnings, assets,
34
business affairs or
business prospects of ERP or EQR and their respective subsidiaries considered
as a single enterprise, whether or not arising in the ordinary course of
business; and you shall have received a certificate of the Chief Executive
Officer, the President or the chief financial or chief accounting officer of
EQR, on behalf of EQR and on behalf of EQR as the general partner of ERP, dated
as of such Closing Time, to the effect that (i) there has been no such material
adverse change, (ii) the representations and warranties in Section 1 are true
and correct with the same force and effect as though such Closing Time were a
Representation Date (iii) ERP and EQR have each 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 initiated or threatened by the Commission.
(d) At the time of execution of the
applicable Terms Agreement, you shall have received from ERP’s and EQR’s
independent public accountants, a letter dated such date, in form and substance
satisfactory to you, to the effect that (i) they are independent accountants
with respect to ERP, EQR and their respective subsidiaries within the meaning
of the 1933 Act and the 1933 Act Regulations; (ii) it is their opinion that the
consolidated financial statements and supporting schedules included or
incorporated by reference in the Registration Statement and the Time of Sale
Information and covered by their opinions therein comply in form in all
material respects with the applicable accounting requirements of the 1933 Act
and the 1933 Act Regulations; (iii) based upon limited procedures set forth in
detail in such letter, and except as otherwise set forth in such letter,
nothing has come to their attention which causes them to believe that at a
specified date not more than five days prior to the date of the applicable
Terms Agreement, there has been any change in the partners’ capital of ERP or
Common Shares of EQR, or in the consolidated long term debt of ERP or EQR, or any decrease in the net assets of ERP or
EQR, as compared with the amounts shown in the most recent consolidated balance
sheet included or incorporated by reference in the Registration Statement and
the Time of Sale Information or, during the period from the date of the most
recent consolidated statement of operations included or incorporated by
reference in the Registration Statement and the Time of Sale Information to a
specified date not more than five days prior to the date of the applicable
Terms Agreement, there were any decreases, as compared with the corresponding
period in the preceding year, in consolidated revenues, or decrease in net
income or net income per weighted average OP Units outstanding of ERP, or any
decreases, as compared with the corresponding period in the preceding year, in
consolidated revenues, or decrease in net income or net income per weighted average
Common Share outstanding of EQR, except in all instances for changes, increases
or decreases which the Registration Statement or the Time of Sale Information
disclose have occurred or may occur; and (iv) in addition to the audit referred
to in their opinions and the limited procedures
35
referred to in clause
(iii) above, they have carried out certain specified procedures with respect to
certain amounts, percentages and financial information which are included in
the Registration Statement and the Time of Sale Information and which are
specified by you, and have found such amounts, percentages and financial
information to be in agreement with relevant accounting, financial and other
records of ERP and EQR, as the case may be, and their respective subsidiaries
identified in such letter.
(e) At the applicable Closing Time, you
shall have received from ERP’s and EQR’s independent public accountants a
letter dated as of the applicable Closing Time similar to the letter furnished
pursuant to subsection (d) of this Section but with respect to the
Registration Statement and the Prospectus, except that the “specified date”
referred to shall be a date not more than five days prior to the applicable
Closing Time.
(f) At the applicable Closing Time,
counsel for the Underwriters shall have been furnished with such documents and
opinions as they may reasonably require for the purpose of enabling them to
pass upon the issuance and sale of the Underwritten Securities as herein
contemplated and related proceedings, 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 ERP and EQR in
connection with the issuance and sale of the Underwritten Securities and the
issuance and delivery of the Common Shares issuable upon exchange of the
Underwritten Securities as herein contemplated shall be reasonably satisfactory
in form and substance to you and counsel for the Underwriters.
(g) At Closing Time and at any relevant
Date of Delivery, the Underwritten Securities shall have the ratings accorded
by any “nationally recognized statistical rating organization”, as defined by
the Commission for purposes of Rule 436(g)(2) of the 1933 Act Regulations, if
and as specified in the applicable Terms Agreement, and ERP shall have
delivered to you a letter, dated as of such date, from each such rating
organization, or other evidence satisfactory to you, confirming that the
Underwritten Securities have such ratings.
Since the time of execution of such Terms Agreement, there shall not
have occurred a downgrading in the rating assigned to the Underwritten
Securities or any of ERP’s other securities by any such rating organization,
and no such rating organization shall have publicly announced that it has under
surveillance or review its rating of the Underwritten Securities or any of ERP’s
other securities.
(h) As of the Closing Time, the Common
Shares issuable in exchange for the Underwritten Securities shall be subject to
a listing application filed with the New York Stock Exchange.
36
(i) If
the Underwriters exercise their option provided in a Terms Agreement as set
forth in Section 2(b) hereof to purchase all or any portion of the Option
Securities, the representations and warranties of ERP contained herein and the
statements in any certificates furnished by ERP hereunder shall be true and
correct as of each Date of Delivery, and you shall have received:
(1) A certificate, dated such Date
of Delivery, of the Chief Executive Officer, the President or the chief
financial or chief accounting officer of EQR, on behalf of EQR on its own
behalf and on behalf of EQR as the general partner of ERP, confirming that the
certificate delivered at Closing Time pursuant to Section 6(c) hereof remains
true and correct as of such Date of Delivery.
(2) The favorable opinion of counsel
for ERP and EQR, in form and substance satisfactory to counsel for the
Underwriters, dated such Date of Delivery, relating to the Option Securities
and otherwise substantially to the same effect as the opinions required of them
by Section 6(b)(1) and the belief required by Section 6(b)(3) hereof.
(3) The favorable opinion of
counsel(s) for the Underwriters, dated such Date of Delivery, relating to the
Option Securities and otherwise to the same effect as the opinion required by
Section 6(b)(2) and the belief required by Section 6(b)(3) hereof.
(4) A letter from ERP’s and EQR’s
independent public accounts, in form and substance satisfactory to you and
dated such Date of Delivery, substantially the same in scope and substance as
the letter furnished to you pursuant to Section 6(d) hereof, except that the “specified
date” in the letter furnished pursuant to this Section 6(h)(4) shall be a date
not more than five days prior to such Date of Delivery.
If
any condition specified in this Section shall not have been fulfilled when and
as required to be fulfilled, the applicable Terms Agreement may be terminated
by you by notice to ERP at any time at or prior to the applicable Closing Time,
and such termination shall be without liability of any party to any other party
except as provided in Section 4 hereof and except that Sections 1, 7, 8 and 9
shall survive any such termination and remain in full force and effect.
Section 7.
Indemnification
.
(a) ERP and EQR hereby, jointly and
severally, agree 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, and any director, officer,
employee or affiliate thereof, as follows:
37
(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 contained in the Prospectus (or any
amendment or supplement thereto) any Issuer Free Writing Prospectus or any Time
of Sale Information, or the omission, or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading;
(ii) against any and all loss, liability,
claim, damage and expense whatsoever, as incurred, to the extent of the
aggregate amount paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened, or of
any claim whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission;
provided
that (subject to
Section 7(d) below) any such settlement is effected with the written consent of
ERP and EQR; and
(iii) against any and all expense whatsoever
as incurred (including, without limitation, the fees and other charges of
counsel chosen by you) reasonably incurred in investigating, preparing or
defending against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever
based upon any such untrue statement or omission, or any such alleged untrue
statement or omission, to the extent that any such expense is not paid under
(i) or (ii) above;
provided
,
however
, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent such loss, liability, claim,
damage or expense arises 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 ERP or EQR by any Underwriter through you
expressly for use in the Registration Statement (or any amendment thereto), the
Prospectus (or any amendment or supplement thereto) and any Time of Sale
Information.
(b) Each Underwriter severally agrees to
indemnify and hold harmless ERP and EQR, and each person, if any, who controls
ERP or EQR within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act, and any trustee, director, officer, employee or affiliate
thereof, against any and all loss,
38
liability, claim, damage
and expense described in the indemnity contained in subsection (a) of this
Section 7, 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), the Prospectus (or any amendment or
supplement thereto) or any Time of Sale Information in reliance upon, and in
conformity with, written information furnished to ERP by any Underwriter
through you expressly for use in the Registration Statement (or any amendment
thereto), the Prospectus (or any amendment or supplement thereto) or any Time
of Sale Information.
(c) 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 provisions set forth in this Agreement. In the case of parties indemnified pursuant
to Section 7(a) above, counsel to the indemnified parties shall be selected by
you, and, in the case of parties indemnified pursuant to Section 7(b) above,
counsel to the indemnified parties shall be selected by ERP and EQR. 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 7 or Section 8 hereof (whether or not the indemnified parties are
actual or potential parties thereto), unless such settlement, compromise or
consent (i) includes an unconditional release of each indemnified party
from all liability arising out of such litigation, investigation, proceeding or
claim and (ii) does not include a statement as to or an admission of
fault, culpability or a failure to act by or on behalf of any indemnified
party.
(d) 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 7(a)(ii)
effected without its written consent if
39
(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.
Section 8.
Contribution
.
If the
indemnification provided for in Section 7 hereof is for any reason unavailable
to or insufficient to hold harmless an indemnified party in respect of any
losses, liabilities, claims, damages or expenses referred to therein, then each
indemnifying party shall contribute to the aggregate amount of such losses,
liabilities, claims, damages and expenses incurred by such indemnified party,
as incurred, (i) in such proportion as is appropriate to reflect benefits
received by ERP and EQR, on the one hand, and the Underwriters, on the other
hand, from the offering of the Underwritten Securities pursuant to the
applicable Terms 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 ERP and EQR, 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 ERP and EQR, on the one hand, and the Underwriters, on the
other hand, in connection with the offering of the Underwritten Securities
pursuant to the applicable Terms Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of such
Underwritten Securities (before deducting expenses) received by ERP and EQR and
the total underwriting discount received by the Underwriters, in each case as
set forth on the cover of the Prospectus or in the Time of Sale Information,
bear to the aggregate initial public offering price of such Underwritten
Securities as set forth on such cover.
The relative fault
of ERP and EQR, 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 ERP and EQR or by the
Underwriters and the parties’ relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
ERP and EQR and
the Underwriters agree that it would not be just and equitable if contribution
pursuant to this Section 8 were determined by pro rata
40
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 8. The aggregate amount of losses, liabilities,
claims, damages and expenses incurred by an indemnified party and referred to
above in this Section 8 shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in investigating, preparing or
defending against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever
based upon any such untrue or alleged untrue statement or omission or alleged
omission.
Notwithstanding
the provisions of this Section 8, no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at which
the Underwritten Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of any such untrue or
alleged untrue statement or omission or alleged omission.
No person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the
1933 Act) shall be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation.
For purposes of
this Section 8, each person, if any, who controls an Underwriter within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have
the same rights to contribution as such Underwriter, and each trustee, each
officer of ERP or EQR who signed the Registration Statement, and each person,
if any, who controls ERP or EQR 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
ERP and EQR. The Underwriters’
respective obligations to contribute pursuant to this Section 8 are several in
proportion to the principal amount of the Underwritten Securities set forth
opposite their respective names in the applicable Terms Agreement, and not
joint.
Section 9.
Representations, Warranties and Agreements
to Survive Delivery
.
All representations,
warranties and agreements included the applicable Terms Agreement, or included
in certificates of officers of ERP or EQR submitted pursuant thereto, shall
remain operative and in full force and effect, regardless of any termination of
the applicable Terms Agreement or investigation made by or on behalf of any
Underwriter or any controlling person, or by or on behalf of ERP, and shall
survive delivery of and payment for the Underwritten Securities until the
obligations relating to all Underwritten Securities have been fully satisfied
in accordance with their terms.
41
Section 10.
Termination of Terms Agreement
.
(a) You may terminate the applicable
Terms Agreement, by notice to ERP, at any time at or prior to the applicable
Closing Time if (i) there has been, since the date of such Terms Agreement or
since the respective dates as of which information is given in the Prospectus
and the Time of Sale Information, any Material Adverse Change, or (ii) there
has occurred any material adverse change in the financial markets in the United
States or any outbreak of hostilities or other calamity or crisis or escalation
of any existing hostilities 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 your judgment, impracticable to market the Underwritten Securities or
enforce contracts for the sale of the Underwritten Securities, or (iii) trading
in any of the securities of ERP or EQR has been suspended by the Commission or
any exchange or any over-the-counter market, or if trading generally on either
the New York Stock Exchange, the American Stock Exchange or in the Nasdaq
National Market has been suspended or limited, or minimum or maximum prices for
trading have been fixed, or maximum ranges for prices for securities have been
required, by either of said exchanges or by such system or by order of the
Commission, the NASD, or any other governmental authority, or (iv) a banking
moratorium has been declared by Federal, Illinois or New York authorities, or
(v) the rating assigned by any nationally recognized statistical rating organization
to any long-term debt securities of ERP as of the date of the applicable Terms
Agreement shall have been lowered since such date or if any such rating
organization shall have publicly announced that it has placed any long-term
debt securities of ERP on what is commonly termed a “watch list” for possible
downgrading.
(b) In the event of any such termination,
(x) the covenants set forth in Section 3 with respect to any offering of
Underwritten Securities shall remain in effect so long as any Underwriter owns
any such Underwritten Securities purchased from ERP pursuant to the applicable
Terms Agreement and (y) the covenant set forth in Section 3(h) hereof, the
provisions of Section 4 hereof, the indemnity and contribution agreements set
forth in Section 7 and 8 hereof, and the provisions of Sections 9 and 15 hereof
shall remain in effect.
Section 11.
Default by One or More of the Underwriters
.
If one or more of the
Underwriters shall fail at the applicable Closing Time or the relevant Date of
Delivery, as the case may be, to purchase the Underwritten Securities which it
or they are obligated to purchase under the applicable Terms Agreement (the “Defaulted
Securities”), then you 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
42
upon the terms herein
set forth; if, however, you shall not have completed such arrangements within
such 24-hour period, then:
(a) If the aggregate principal amount of
Defaulted Securities does not exceed 10% of the aggregate principal amount of
Underwritten Securities to be purchased pursuant to such Terms Agreement, the
non-defaulting Underwriters named in such Terms Agreement shall be obligated 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 aggregate principal amount of
Defaulted Securities exceeds 10% of the aggregate principal amount of
Underwritten Securities to be purchased pursuant to such Terms Agreement, the
applicable Terms Agreement (or, with respect to the Underwriters’ exercise of
any applicable over-allotment option for the purchase of Option Securities on a
Date of Delivery after the Closing Time, the obligations of the Underwriters to
purchase, and ERP to sell, such Option Securities on such Date of Delivery)
shall terminate without liability on the part of any non-defaulting
Underwriter.
No action taken pursuant
to this Section shall relieve any defaulting Underwriter from liability in
respect of its default under this Agreement and the applicable Terms Agreement.
In the event of any such
default which does not result in a termination of the applicable Terms
Agreement, either you or ERP shall have the right to postpone the applicable
Closing Time for a period not exceeding seven days in order to effect any
required changes in the Registration Statement or the Prospectus or in any
other documents or arrangements.
Section 12.
No Fiduciary Duty
.
ERP acknowledges
and agrees that: (i) the purchase and sale of the Securities pursuant to this
Agreement, including the determination of the public offering price of the
Securities and any related discounts and commissions, is an arm’s-length
commercial transaction between ERP, on the one hand, and the several
Underwriters, on the other hand, and ERP is capable of evaluating and
understanding, and understands and accepts, the terms, risks and conditions of
the offer and sale of the Underwritten Securities pursuant to this Agreement;
(ii) in connection with the offer and sale of the Underwritten Securities and
the process leading to such offer and sale of the Underwritten Securities, each
Underwriter is and has been acting solely as a principal and is not the
financial advisor, agent or fiduciary of ERP or its affiliates, trustees,
officers, directors, partners, stockholders, creditors or employees; (iii) no
Underwriter has assumed or will assume an advisory, agency or fiduciary
responsibility in favor of ERP with respect to any of
43
the offer and sale of the
Underwritten Securities or the process leading thereto (irrespective of whether
such Underwriter has advised or is currently advising ERP on other matters);
(iv) the several Underwriters and their respective affiliates may be engaged in
a broad range of transactions that involve interests that differ from those of
ERP and that the several Underwriters have no obligation to disclose any
of such interests by virtue of any advisory, agency or fiduciary relationship;
and (v) the Underwriters have not provided any legal, accounting, regulatory or
tax advice with respect to the offer and sale of the Underwritten Securities
and ERP has consulted its own legal, accounting, regulatory and tax advisors to
the extent its deemed appropriate.
Section 13.
Notices
.
All notices and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if mailed or transmitted by any standard form of
telecommunication. Notices to the
Underwriters shall be directed as set forth in the applicable Terms Agreement;
notices to ERP shall be directed to it at Two North Riverside Plaza, Chicago,
Illinois 60606, attention of Donna Brandin.
Section 14.
Parties
.
The applicable Terms
Agreement shall inure to the benefit of and be binding upon you, ERP, EQR, if
applicable, and any Underwriter who becomes a party to such Terms Agreement,
and their respective successors. Nothing
expressed or mentioned in the applicable Terms Agreement is intended or shall
be construed to give any person, firm or corporation, other than those referred
to in Sections 7 and 8 and their heirs and legal representatives, any legal or
equitable right, remedy or claim under or in respect of such Terms Agreement or
any provision therein contained. The applicable Terms Agreement and all
conditions and provisions thereof are intended to be for the sole and exclusive
benefit of the parties hereto and thereto and 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 Underwritten Securities from
any Underwriter shall be deemed to be a successor by reason merely of such
purchase.
Section 15.
Governing Law and Time
.
The applicable Terms
Agreement shall be governed by and construed in accordance with the laws of the
State of New York applicable to agreements made and to be performed in said
State. Specified times of day refer to
New York City time.
44
Section 16.
Counterparts
.
The applicable Terms
Agreement may be executed in one or more counterparts, and if executed in more
than one counterpart the executed counterparts shall constitute a single
instrument.
* * * * *
45
Exhibit A
ERP OPERATING
LIMITED PARTNERSHIP
(an Illinois limited partnership)
[Title of
Securities]
FORM OF TERMS
AGREEMENT
Dated:
,
20
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To:
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ERP Operating Limited Partnership
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Two North
Riverside Plaza
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Chicago,
Illinois 60606
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Attention:
Ladies and
Gentlemen:
We
(the “Representative”) understand that ERP Operating Limited Partnership, an
Illinois limited partnership (“ERP”), proposes to issue and sell $
aggregate principal amount of its [Title of Debt Securities’] (the “Underwritten
Securities”). Subject to the terms and
conditions set forth or incorporated by reference herein, the underwriters named
below (the “Underwriters”) offer to purchase, severally and not jointly, the
respective amounts of Underwritten Securities set forth below opposite their
respective names, and a proportionate share of Option Securities (as defined in
the Standard Underwriting Provisions referred to below) to the extent any are
purchased, at the purchase price set forth below.
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Principal Amount of
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Underwriter
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Underwritten Securities
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Total
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$
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The Underwritten Securities shall have the following
terms:
Title of Securities:
Currency:
Principal amount to be
issued:
Current ratings: Moody’s Investors Service, Inc. ;
Standard & Poor’s Corporation .
Interest rate or formula:
Interest payments dates:
Stated maturity date:
Redemption or repayment
provisions:
Number of Option
Securities, if any, that may be purchased by the Underwriters:
Delayed Delivery
Contracts: [authorized][not authorized]
[Date of Delivery:
Minimum contract:
Maximum aggregate
principal amount:
Fee: %]
[Initial public offering
price: %, plus
accrued interest, if any, or amortized original issue discount, if any, from 20 .]
Purchase price: %, plus accrued
interest, if any, or amortized original issue discount, if any, from ,
20 (payable in [same] [next] day funds).
Other terms:
Closing date and
location:
All the provisions
contained in the document attached as Annex A hereto entitled “ERP Operating
Limited Partnership—Debt Securities—Standard Underwriting Provisions” are hereby
incorporated by reference in their entirety herein and shall be deemed to be a
part of this Terms Agreements to the same extent as if such provisions had been
set forth in full herein. Terms defined
in such document are used herein as therein defined.
For purposes of this
transaction, the term “Time of Sale” as used in the Standard Underwriting
Provisions and this Terms Agreement shall mean : on the date
hereof.
The Time of Sale
Information for this transaction shall constitute the following: (1) any
scheduled Issuer Free Writing Prospectuses attached as exhibits hereto [note:
to include Bloomberg pricing sheet], (2) the Preliminary Prospectus Supplement
dated , 20
together with the Base Prospectus and (3) any filing under the 1934 Act which
is deemed incorporated by reference in the Registration Statement or the
Preliminary Prospectus Supplement and the Base Prospectus.
47
Please accept this offer
no later than o’clock P.M.
(New York City time) on ,
20 by signing a copy of this Terms Agreement in the space set forth
below and returning the signed copy to us.
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Very truly yours
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[NAME OF
REPRESENTATIVE]
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By:
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Acting on behalf of itself and the other
named Underwriters.
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Accepted:
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ERP OPERATING
LIMITED PARTNERSHIP
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By:
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Equity Residential,
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General Partner
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By:
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Name:
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Title:
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48
Exhibit B
ERP OPERATING LIMITED PARTNERSHIP
(an Illinois limited partnership)
[Title of Securities]
DELAYED DELIVERY CONTRACT
,
20
ERP Operating
Limited Partnership
Two North Riverside Plaza
Chicago, Illinois 60606
Attention:
Ladies and
Gentlemen:
The undersigned
hereby agrees to purchase from ERP Operating Limited Partnership (“ERP”), and
ERP agrees to sell to the undersigned on ,
20 (the “Delivery Date”),
principal amount of ERP’s [insert title of security] (the “Securities”),
offered by ERP’s Prospectus dated ,
20 , as supplemented by its Prospectus Supplement dated ,
20 , receipt of which is hereby acknowledged, at a purchase price [ %
of the principal amount thereof, plus accrued interest from ,
20 ,] to the Delivery Date, and on the further terms and conditions
set forth in this contract.
Payment for the
Securities which the undersigned has agreed to purchase on the Delivery Date
shall be made to ERP or its order by [certified or official bank check in New
York Clearing House] [same day] funds at the office of ,
on the Delivery Date, upon delivery to the undersigned of the Securities to be
purchased by the undersigned in definitive form and in such denominations and
registered in such names as the undersigned may designate by written or
telegraphic communication addressed to ERP not less than five full business
days prior to the Delivery Date.
The obligation of
the undersigned to take delivery of and make payment for Securities on the
Delivery Date shall be subject only to the conditions that (1) the purchase of
Securities to be made by the undersigned shall not on the Delivery Date be
prohibited under the laws of the jurisdiction to which the undersigned is
subject and (2) ERP, on or before ,
20 , shall have sold to the Underwriters of
49
the Securities (the “Underwriters”)
such principal amount of the Securities as is to be sold to them pursuant to
the Terms Agreement dated ,
20 between ERP and the Underwriters. The obligation of the undersigned to take
delivery of and make payment for Securities shall not be affected by the
failure of any purchaser to take delivery of and make payments for Securities
pursuant to other contracts similar to this contract. The undersigned represents and warrants to
you that its investment in the Securities is not, as of the date hereof,
prohibited under the laws of any jurisdiction to which the undersigned is
subject and which govern such investment.
Promptly after
completion of the sale to the Underwriters, ERP will mail or deliver to the
undersigned at its address set forth below notice to such effect, accompanied
by a copy of the opinions of counsel for ERP delivered to the Underwriters in
connection therewith.
By the execution
hereof, the undersigned represents and warrants to ERP that all necessary
corporate action for the due execution and delivery of this contract and the
payment for and purchase of the Securities has been taken by it and no further
authorization or approval of any governmental or other regulatory authority is
required for such execution, delivery, payment or purchase, and that, upon
acceptance hereof by ERP and mailing or delivery of a copy as provided below,
this contract will constitute a valid and binding agreement of the undersigned
in accordance with its terms.
This contract will
inure to the benefit of and be binding upon the parties hereto and their
respective successors, but will not be assignable by either party hereto
without the written consent of the other.
It is understood
that ERP will not accept Delayed Delivery Contracts for an aggregate principal
amount of Securities in excess of $ and
that the acceptance of any Delayed Delivery Contract is in ERP’s sole
discretion and, without limiting the foregoing, need not be on a first-come, first-served
basis. If this contract is acceptable to
ERP, it is requested that ERP sign the form of acceptance on a copy hereof and
mail or deliver a signed copy hereof to the undersigned at its address set
forth below. This will become a binding
contract between ERP and the undersigned when such copy is so mailed or
delivered.
50
This Agreement
shall be governed by the laws of the State of New York.
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Yours very truly,
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(Name of Purchaser)
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By:
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(Title)
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(Address)
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Accepted as of
the date first above written.
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ERP OPERATING
LIMITED PARTNERSHIP
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By:
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Equity Residential,
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General Partner
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By:
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Name:
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Title:
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PURCHASER-PLEASE COMPLETE
AT TIME OF SIGNING
The name and
telephone number of the representative of the Purchase with whom details of
delivery on the Delivery Date may be discussed are as follows: (Please print.)
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Telephone No.
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Name
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(including Area Code)
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51
Exhibit 4.1
ERP
OPERATING LIMITED PARTNERSHIP,
as Issuer,
and
J.P. MORGAN TRUST COMPANY, NATIONAL ASSOCIATION
(as successor in interest to Bank One Trust
Company, NA,
as successor to The First National Bank of Chicago),
as Trustee
SECOND SUPPLEMENTAL INDENTURE
Dated as of August 23, 2006
3.85%
Exchangeable Senior Notes due 2026
SECOND
SUPPLEMENTAL INDENTURE
THIS SECOND SUPPLEMENTAL INDENTURE (this “
Second Supplemental Indenture
”) is entered into as of August
23, 2006 among ERP OPERATING LIMITED PARTNERSHIP, an Illinois limited
partnership (the “
Partnership
” or
“
Issuer
”), having its principal offices
at Two North Riverside Plaza, Suite 400, Chicago, Illinois 60606, and J.P.
MORGAN TRUST COMPANY, NATIONAL ASSOCIATION (as successor in trust to Bank One
Trust Company, NA, as successor to The First National Bank of Chicago), a bank
duly organized and existing under the laws of the United States, as Trustee
hereunder (the “
Trustee
”), having a Corporate
Trust Office at 227 West Monroe Street, Suite 2600, Chicago,
Illinois 60606, Attention: Worldwide Securities Services.
WHEREAS, the Issuer and the Trustee entered into that
certain Indenture, dated as of October 1, 1994 (the “
Original
Indenture
”), and the First Supplemental Indenture thereto, dated as
of September 9, 2004 (the “
First Supplemental
Indenture
”), relating to the Issuer’s senior debt securities;
WHEREAS, pursuant to Section 901 of the
Indenture, the Issuer and the Trustee may enter into supplemental indentures to
establish the terms and provisions of a series of Securities issued pursuant to
the Indenture;
WHEREAS, pursuant to Section 301 of the
Indenture, the Issuer desires to establish the terms of a series of Securities
entitled the 3.85% Exchangeable Senior Notes due 2026” of the Partnership (the “
Notes
”);
WHEREAS, the Issuer desires under this Second
Supplemental Indenture to provide for exchange rights in respect of the Notes
on the terms herein set forth; and
WHEREAS, the Issuer and the Trustee have duly
authorized the execution and delivery of this Second Supplemental Indenture to
establish the terms of the Notes set forth herein, have done all things
necessary to make this Second Supplemental Indenture (together with the
Original Indenture and the First Supplemental Indenture, the “
Indenture
”) a valid agreement of the parties hereto, in
accordance with its terms, and the Issuer has complied with all covenants and
conditions precedent to the execution and delivery of this Second Supplemental
Indenture;
NOW, THEREFORE, in consideration of the premises and
the covenants and agreements contained herein, and for other good and valuable
consideration the receipt of which is hereby acknowledged, and for the equal
and proportionate benefit of the Holders of the Securities, the Issuer and the
Trustee agree as follows:
ARTICLE ONE
DEFINITIONS
Section 1.01.
Definitions
. Capitalized terms used in this Second
Supplemental Indenture and not otherwise defined herein shall have the meanings
assigned to such terms in the Original Indenture or in the form of Note
attached as Exhibit A hereto.
“
Additional Notes
”
has the meaning provided in Section 2.02 hereof.
“
Additional Shares
”
has the meaning specified in Section 2.10.
2
“
Applicable Exchange Period
”
means, with respect to an exchange of Notes, the 10 consecutive Trading Day
period commencing on the third Trading Day following the date the Notes are
tendered for exchange.
“
Average Price
”
means, with respect to an exchange of Notes, an amount equal to the average of
the Closing Sale Prices of Company Common Shares for each Trading Day in the
Applicable Exchange Period.
“
Base Exchange Rate
”
has the meaning specified in Section 2.14.
“
Business Day
”
means, with respect to any Note, any day, other than a Saturday, Sunday or any
other day on which banking institutions in The City of New York are authorized
or obligated by law or executive order to close.
“
Change in Control
”
means the consummation of any transaction or event (whether by means of an
exchange offer, liquidation, tender offer, consolidation, merger, combination,
reclassification, recapitalization or otherwise) in connection with which more
than 50% of the Company Common Shares are exchanged for, converted into,
acquired for or constitutes solely the right to receive, consideration which is
not at least 90% shares of common stock (or depositary receipts or other
certificates representing common equity interests) that are (1) listed on, or
immediately after consummation of such transaction or event will be listed on,
a United States national securities exchange or (2) approved, or immediately
after the transaction or event will be approved, for quotation on the Nasdaq
Global Market or any similar United States system of automated dissemination of
quotations of securities prices.
“
Change in Control Purchase
Date
” has the meaning provided in Section 2.09 hereof.
“
Change in Control Purchase
Notice
” has the meaning provided in Section 2.09 hereof.
“
Change in Control Purchase
Price
” has the meaning provided in Section 2.09 hereof.
“
Closing Sale Price
”
of the Company Common Shares or other capital stock or similar equity interests
or other publicly traded securities on any date means the closing sale price
per share (or, if no closing sale price is reported, the average of the closing
bid and ask prices or, if more than one in either case, the average of the
average closing bid and the average closing ask prices) on such date as
reported on the principal U.S. securities exchange on which the Company Common
Shares or such other capital stock or similar equity interests or other
securities are traded or, if the Company Common Shares or such other capital
stock or similar equity interests or other securities are not listed on a U.S.
national or regional securities exchange, as reported by the Nasdaq National
Market or by the National Quotation Bureau Incorporated or another established
over-the-counter trading market in the United States. The Closing
Sale Price shall be determined without regard to after-hours trading or
extended market making. In the absence of the foregoing, the Partnership shall
determine the Closing Sale Price on such basis as it considers appropriate.
“
Company
” means
Equity Residential, a Maryland real estate trust, or its successors.
3
“
Company Common Shares
”
means common shares of beneficial interest, par value $0.01 per share, of the
Company.
“
Company Notice
”
has the meaning provided in Section 2.09 hereof.
“
Daily Share Amount
”
has the meaning provided in Section 2.12 hereof.
“
Declaration of Trust
”
means the Amended and Restated Declaration of Trust of the Company.
“
Depositary
” has
the meaning provided in Section 2.03 hereof.
“
Dividend Threshold
Amount
” has the meaning specified in Section 2.14.
“
Effective Date
”
with respect to any Change in Control has the meaning specified in Section
2.10.
“
Exchange Agent
”
means the office or agency designated by the Partnership where the Notes may be
presented for exchange.
“
Exchange Price
”
means, as of any date of determination, for $1,000 principal amount of Notes,
the quotient obtained by dividing $1,000 by the Exchange Rate in effect as of
such date, rounded to the nearest $0.01, with $0.005 rounded upward.
“
Exchange Rate
”
means the number of Company Common Shares by reference to which the Exchange
Value shall be determined, which shall be initially 16.3934 Company Common
Shares for each $1,000 principal amount of Notes and as the same shall be
adjusted from time to time in accordance with the provisions hereof and of the
Notes.
“
Exchange Value
”
means, for each $1,000 principal amount of Notes, the product of (a) the
applicable Exchange Rate, multiplied by (b) the Average Price.
“
Expiration Time
”
has the meaning specified in Section 2.14.
“
interest
” means,
when used with reference to the Notes, any interest payable under the terms of
the Notes.
“
Indenture
” has
the meaning provided in the preamble of this Second Supplemental Indenture.
“
Interest Payment Date
”
has the meaning provided in Section 2.05 hereof.
“
Net Amount
” has
the meaning provided in Section 2.12 hereof.
“
Net Cash Amount
”
has the meaning provided in Section 2.12 hereof.
“
Net Shares
” has
the meaning provided in Section 2.12 hereof.
4
“
Notes
” has the
meaning provided in Section 2.01 hereof, shall include any Additional Notes and
shall be substantially in the form attached as Exhibit A hereto.
“
Optional Repurchase Date
”
has the meaning provided in Section 2.08 hereof.
“
Optional Repurchase Notice
”
has the meaning provided in Section 2.08 hereof.
“
Optional Repurchase Price
”
has the meaning provided in Section 2.08 hereof.
“
Partnership
”
has the meaning specified in the first paragraph of this instrument until a
successor Person shall have become such pursuant to the applicable provisions
of the Indenture, and thereafter “Partnership” shall mean such successor
Person.
“
Principal Return
”
has the meaning provided in Section 2.12 hereof.
“
Redemption Date
”
means, with respect to any Note or portion thereof to be redeemed in accordance
with the provisions of Section 2.07 hereof, the date fixed for such redemption
in accordance with the provisions of Section 2.07 hereof.
“
Redemption Price
”
has the meaning provided in Section 2.07 hereof.
“
Regular Record Date
”
has the meaning provided in Section 2.05 hereof.
“
Spin-Off
”
has the meaning specified in Section 2.14.
“
Stock Price
”
has the meaning specified in Section 2.10.
“
Trading Day
”
means a day during which trading in securities generally occurs on the New York
Stock Exchange or, if Company Common Shares are not then listed on the New York
Stock Exchange, on the principal other U.S. national or regional securities
exchange on which Company Common Shares are then listed or, if Company Common
Shares are not then listed on a U.S. national or regional securities exchange,
on the Nasdaq National Market or, if Company Common Shares are not then quoted
on the Nasdaq National Market, on the principal other market on which Company
Common Shares are then traded.
“
Trading Price
”
means, with respect to the Notes on any date of determination, the average of
the secondary market bid quotations per $1,000 principal amount of Notes
obtained by the Trustee for a $5,000,000 principal amount of Notes at
approximately 3:30 p.m., New York City time, on such determination date from
two independent nationally recognized securities dealers selected by the
Partnership, which may include one or more of the Underwriters or any successor
to such entities. If at least two such
bids cannot reasonably be obtained by the Trustee, but one such bid can
reasonably be obtained by the Trustee, then one bid shall be used. If the
Trustee cannot reasonably obtain at least one bid for a $5,000,000
5
principal amount of Notes
from a nationally recognized securities dealer or, in the reasonable judgment
of the Partnership, the bid quotations are not indicative of the secondary
market value of the Notes, then the Trading Price per $1,000 principal amount
of Notes shall be deemed to be less than 98% of the product of the Closing Sale
Price of Company Common Shares and the Exchange Rate on such determination
date.
“
Underwriters
”
means Merrill Lynch, Pierce, Fenner & Smith Incorporated, Bank of America
Securities LLC, Citigroup Global Markets Inc. and Morgan Stanley & Co.
Incorporated (each, an “
Underwriter
”).
ARTICLE TWO
TERMS
Section 2.01.
Title
. The Notes shall constitute a series of
Securities designated as the “3.85% Exchangeable Senior Notes due 2026” of the
Partnership.
Section 2.02.
Aggregate
Principal Amount
. The aggregate
principal amount of Notes which may be authenticated and delivered under the
Indenture is initially limited in aggregate principal amount to $650,000,000,
except for Notes authenticated and delivered upon registration of transfer of,
or in exchange for, or in lieu of, other Notes pursuant to Sections 304, 305,
306 or 1107 of the Indenture and except for any Notes which, pursuant to
Section 303 of the Indenture, are deemed never to have been authenticated and
delivered thereunder; provided that the Partnership may from time to time,
without the consent of the Holders of the Notes, increase the principal amount
of the Notes by issuing additional Securities (the “
Additional Notes
”), having the same terms and ranking equally
and ratably with the Notes in all respects and with the same CUSIP number as
the Notes, except for the difference in the issue price and interest accrued
prior to the issue date of such Additional Notes, provided that such Additional
Notes constitute part of the same issue as the Notes for U.S. federal income
tax purposes. Any Additional Notes will
be treated as a single series with the Notes under the Indenture and shall have
the same terms as to status, redemption, repurchase, exchange and otherwise as
the Notes.
Section 2.03.
Registered
Securities in Book-Entry Form
.
The Notes shall be issuable in the form of one or more global Securities
registered in the name of The Depository Trust Company’s nominee, and shall be
deposited with, or on behalf of, The Depository Trust Company, New York, New
York (the “
Depositary
”). The Notes
may be surrendered for registration of transfer and for exchange at the office
or agency of the Partnership or the Company (including the Trustee) maintained
for such purpose in the Borough of Manhattan, The City of New York, or at any
other office or agency maintained by the Partnership or the Company for such
purpose.
Section 2.04.
Stated
Maturity of Principal
. The Stated
Maturity of the principal of the Notes shall be August 15, 2026.
Section 2.05.
Interest
. The Notes shall bear interest at the rate of
3.85% per annum from August 23, 2006 or from the most recent Interest Payment
Date to which interest has been paid or provided for, as the case may be, and
will be payable semi-annually in arrears on February 15 and
6
August 15 of each year (each, an “
Interest Payment Date
”), commencing on February 15, 2007,
until the principal thereof is paid or duly made available for payment, to the
Persons in whose names such Notes are registered at the close of business on
the February 1 or August 1 (whether or not a Business Day) immediately
preceding the applicable Interest Payment Date (each, a “
Regular Record Date
”). Interest payable on each Interest Payment
Date shall equal the amount of interest accrued for the period commencing on
and including the immediately preceding Interest Payment Date in respect of
which interest has been paid (or commencing on and including August 23, 2006,
if no interest has been paid) and ending on and including the day preceding
such Interest Payment Date. Interest on
the Notes will be computed on the basis of a 360-day year consisting of
twelve 30-day months.
If the Partnership shall redeem the Notes in
accordance with the provisions of Section 2.07 hereof, or if a Holder shall
surrender a Note for repurchase by the Partnership in accordance with the
provisions of Section 2.08 or 2.09 hereof, subject to the next succeeding
sentence, accrued and unpaid interest (including Additional Interest, if any)
shall be payable to each Holder that shall have surrendered such Note for
redemption or repurchase, as the case may be. However, if an Interest Payment
Date shall fall on or prior to the Redemption Date or Optional Repurchase Date
or Change in Control Purchase Date, as the case may be, for a Note, accrued and
unpaid interest (including Additional Interest, if any) due on such Interest
Payment Date shall be payable instead to the Person in whose name such Note is
registered at the close of business on the related Regular Record Date.
Section 2.06.
Place
of Payment
.
The principal of and the interest on and
other amounts payable on the Notes shall be payable at the office or agency of
the Company or the Partnership (including the Trustee) maintained for such
purpose in the Borough of Manhattan, The City of New York in the manner
specified in the Indenture.
Section 2.07.
Redemption
.
The
Partnership shall not have the right to redeem any Notes prior to August 18,
2011, except to preserve the Company’s status as a real estate investment
trust. If, at any time, the Partnership
determines it is necessary to redeem the Notes in order to preserve the Company’s
status as a real estate investment trust, the Partnership may, upon not less
than 30 nor more than 60 days’ prior written notice by mail to the Holders of
the Notes, redeem the Notes in whole or in part, for cash equal to 100% of the
principal amount of the Notes to be redeemed plus unpaid interest (including
Additional Interest, if any) accrued thereon up to, but excluding, the
Redemption Date. In such case, the Partnership shall provide the Trustee with
an Officers’ Certificate evidencing that the Board of Trustees of the Company
has, in good faith, made the determination that it is necessary to redeem the
Notes in order to preserve the Company’s status as a real estate investment
trust, and such other documents as may be required under the Indenture.
The Partnership shall have the right to redeem the
Notes, in whole or in part at any time or from time to time, on or after August
18, 2011 upon not less than 30 nor more than 60 days’ prior written notice by
mail to the Holders of the Notes, at a redemption price (“
Redemption
Price
”) for cash equal to 100% of the principal amount of the Notes
to be redeemed plus unpaid interest (and Additional Interest, if any) accrued
thereon up to, but excluding, the Redemption Date.
7
Notwithstanding the foregoing, the Partnership may not
effectuate any redemption of the Notes unless (1) it elects to deliver solely
cash in respect of the Exchange Value owing upon the exchange of the Notes or
(2) at the time of notice of redemption to the Holders of the Notes sufficient
Company Common Shares that have been registered for sale by the Company under
the Securities Act are available to satisfy the Partnership’s election, if
applicable, to deliver Net Shares upon the exchange of the Notes.
If less than all the Notes are to be redeemed and the
Notes are not then held by the Depositary, the Trustee shall select the Notes
to be redeemed (in principal amounts of $1,000 and integral multiples thereof)
on a
pro rata
basis or by such other method
the Trustee considers fair and appropriate.
The Trustee shall make the selection at least 30 days but not more than
60 days before the Redemption Date from Outstanding Notes not previously called
for redemption. Notes and portions of
the principal amount thereof selected for redemption shall be in integral
multiples of $1,000. The Trustee shall
notify the Partnership promptly of the Notes or portions of the principal
amount thereof to be redeemed. If the
Trustee selects a portion of a Note for partial redemption and a Holder
exchanges a portion of the same Note in accordance with the provisions of
Section 2.11 hereof before termination of the exchange right with respect to
the portion of the Note so selected, the exchanged portion of such Note shall
be deemed to be from the portion selected for redemption. Notes that have been exchanged during a
selection of Notes to be redeemed shall be treated by the Trustee as
Outstanding for the purpose of such selection.
In the event of any redemption in part, the
Partnership shall not be required to: (i) issue or register the transfer or
exchange of any Note during a period beginning at the opening of business 15
days before any selection of Notes for redemption and ending at the close of
business on the earliest date on which the relevant notice of redemption is
deemed to have been given to all Holders of Notes to be so redeemed, or
(ii) register the transfer or exchange of any Note so selected for redemption,
in whole or in part, except the unredeemed portion of any Note being redeemed
in part.
In addition to those matters set forth in Section 1104
of the Indenture, a notice of redemption sent to the Holders of Notes to be
redeemed in accordance with the provisions of the two preceding paragraphs
shall state:
(a) the name and address of the Paying
Agent and Exchange Agent;
(b) the then current Exchange Rate;
(c) that Notes called for redemption may
be exchanged at any time prior to the close of business on the second Business
Day immediately preceding the Redemption Date; and
(d) that Holders who wish to exchange
Notes must comply with the procedures relating thereto specified in Section
2.13 hereof.
The Partnership or one of its Affiliates may, to the
extent permitted by applicable law, at any time purchase Notes in the open
market, by tender at any price or by private agreement. Any Note purchased by the Partnership or its Affiliates,
upon Partnership Request (x) after the date that is two years from the latest
issuance of the Notes may, to the extent permitted by applicable law, be
reissued or sold or
8
may be surrendered to the
Trustee for cancellation or (y) on or prior to the date referred to in clause
(x), will be surrendered to the Trustee for cancellation. Any Notes surrendered for cancellation may
not be reissued or resold and will be canceled promptly.
Section 2.08.
Repurchase
Rights
.
A Holder of Notes shall have the right to
require the Partnership to repurchase such Holder’s Notes, in whole or in part
(in principal amounts of $1,000 or an integral multiple thereof), on each of
August 18, 2011, August 15, 2016 and August 15, 2021 (each, an “
Optional Repurchase Date
”) for cash equal
to 100% of the principal amount of the Notes to be repurchased plus unpaid
interest (including Additional Interest, if any) accrued thereon up to, but
excluding, the Optional Repurchase Date (such amount, the “
Optional Repurchase Price
”), subject to
satisfaction by or on behalf of the Holder of the requirements set forth below.
On or before to the 30th day prior to each Optional
Repurchase Date, the Partnership shall provide a written notice by first-class
mail to the Trustee, any Paying Agent and all Holders (and to beneficial owners
as required by applicable law). The
notice shall include a form of Optional Repurchase Notice to be completed by
the Holder and shall state:
(a) the date by which the Optional
Repurchase Notice must be delivered to the Paying Agent;
(b) the Optional Repurchase Date;
(c) the Optional Repurchase Price;
(d) the name and address of the Trustee,
the Paying Agent and the Exchange Agent;
(e) that Notes must be surrendered to the
Paying Agent to collect payment of the Optional Repurchase Price;
(f) that the Optional Repurchase Price
for any Note as to which an Optional Repurchase Notice has been duly given will
be paid within two Business Days after the later of the Optional Repurchase
Date or the time at which such Notes are surrendered to the Trustee or the Paying
Agent for repurchase;
(g) that, unless the Partnership defaults
in making payment of the Optional Repurchase Price, interest on Notes
surrendered for repurchase will cease to accrue on and after the Optional
Repurchase Date;
(h) that Notes in respect of which an Optional
Repurchase Notice is provided by a Holder shall not be exchangeable in
accordance with their terms even if otherwise exchangeable unless such Holder
validly withdraws such Optional Repurchase Notice in accordance with the
provisions of this Section 2.08; and
(i) the CUSIP number of the Notes.
9
The Partnership shall also disseminate a press release
through Dow Jones & Company, Inc. or Bloomberg Business News containing the
information specified in such notice or publish such information in a newspaper
of general circulation in The City of New York or on the Company’s website, or
through such other public medium as the Partnership shall deem appropriate at
such time.
A Holder may exercise its rights specified in this
Section 2.08 upon delivery of a written notice of repurchase (an “
Optional Repurchase Notice
”) to the Paying Agent during the
period beginning at any time from the opening of business on the date that is
30 days prior to the applicable Optional Repurchase Date until the close of
business on the third Business Day prior to such Optional Repurchase Date,
stating:
(a) if
such Notes are in certificated form, the certificate number(s) of the Notes
which the Holder will deliver to be repurchased;
(b) the
portion of the principal amount of the Notes to be repurchased, in integral
multiples of $1,000, provided that the remaining principal amount of Notes is
in an authorized denomination; and
(c) that
such Notes shall be repurchased pursuant to the applicable provisions hereof
and the Notes.
The Paying Agent shall promptly notify the Partnership
and the Company in writing of the receipt by it of any Optional Repurchase
Notice.
Book-entry transfer of Notes in book-entry
form in compliance with appropriate procedures of the Depositary or delivery of
Notes in certificated form, together with all necessary endorsements, to the
Paying Agent shall be a condition to the receipt by the Holder of the Optional
Repurchase Price therefor. Holders
electing to require the Partnership to repurchase Notes must effect such
transfer or delivery to the Paying Agent prior to the Optional Repurchase Date
to receive payment of the Optional Repurchase Price on or within two Business
Days after the Optional Repurchase Date. The Partnership shall pay the Optional
Repurchase Price within two Business Days after the later of the Optional
Repurchase Date or the time of such transfer or delivery of the Notes.
An Optional Repurchase Notice may be withdrawn in
whole or in part by a Holder by means of a written notice of withdrawal delivered
to the office of the Paying Agent prior to the close of business on the third
Business Day prior to the Optional Repurchase Date specifying:
(a) the
Holder’s name;
(b) the
principal amount of Notes in respect of which the Optional Repurchase Notice is
being withdrawn, which must be an integral multiple of $1,000;
(c) if
the Notes subject to the notice of withdrawal are in certificated form, the
certificate number(s) of all Notes subject to the notice of withdrawal; and
10
(d) the
principal amount of Notes, if any, that remains subject to the Optional
Repurchase Notice, which must be an integral multiple of $1,000.
If Notes subject to the notice of withdrawal are in
book-entry form, the above notices must also comply with the applicable
procedures of the Depositary.
On or before 10:00 a.m. (New York City time) on the
Optional Repurchase Date, the Partnership shall deposit with the Paying Agent
(or if the Partnership or an Affiliate of the Partnership is acting as the
Paying Agent, shall segregate and hold in trust) money sufficient to pay the
aggregate Optional Repurchase Price of the Notes to be repurchased pursuant to
this Section 2.08. If the Paying Agent holds, in accordance with the terms of
the Indenture, money sufficient to pay the Optional Repurchase Price of such
Notes on the Optional Repurchase Date, then on and after such date, such Notes
shall cease to be Outstanding and interest on such Notes shall cease to accrue,
and all rights of the Holder of such Notes shall terminate (other than the right
to receive the Optional Repurchase Price after delivery or transfer of the
Notes to the Trustee or the Paying Agent for such purpose). Such will be the case whether or not book-entry
transfer of the Notes in book-entry form is made and whether or not Notes
in certificated form, together with the necessary endorsements, are delivered
to the Paying Agent. To the extent that
the aggregate amount of cash deposited by the Partnership hereunder exceeds the
aggregate Optional Repurchase Price, then, promptly after the Optional
Repurchase Date, the Trustee or Paying Agent, as the case may be, shall return
any such excess cash to the Partnership.
Notwithstanding the foregoing, no Notes may be
repurchased by the Partnership in accordance with the provisions of this
Section 2.08 if there has occurred and is continuing an Event of Default with
respect to the Notes (other than a default in the payment of the Optional
Repurchase Price).
To the extent legally required in connection with a
repurchase of Notes, the Partnership shall comply with the provisions of Rule
13e-4 and other tender offer rules under the Exchange Act then
applicable, if any, and will file with the Commission a Schedule TO or any
other schedule required under the Exchange Act.
The Partnership may arrange for a third party to
purchase Notes for which the Partnership has received a valid Optional
Repurchase Notice that has not been properly withdrawn, in the manner and
otherwise in compliance with the requirements set forth herein and in the
Notes. If a third party purchases any Notes under such circumstances, then
interest will continue to accrue on the Notes and such Notes will continue to
be Outstanding after the Optional Repurchase Date for all purposes of the
Indenture and will be fungible with all other Notes then Outstanding. The
Trustee or Paying Agent, as applicable, are hereby authorized to take actions
upon Partnership Request to effect such purchase upon delivery by the
Partnership to the Trustee or Paying Agent of such documents as may be required
under the Indenture.
Section 2.09.
Repurchase
at Option of Holders upon a Change in Control
.
If a Change in
Control occurs at any time prior to August 18, 2011, a Holder of Notes shall
have the right to require the Partnership to repurchase such Holder’s Notes, in
whole or in part (in principal amounts of $1,000 or an integral multiple
thereof) for cash equal to 100% of the principal amount of the Notes to be
repurchased, plus unpaid interest (including Additional Interest, if any)
accrued thereon up to, but excluding, the Change in Control Purchase Date (such
amount, the “
Change in Control Purchase Price
”),
subject to satisfaction by or on behalf of the Holder of the requirements set
forth below. If a Change in Control
occurs on or after August 18, 2011, Holders
11
of Notes will not have any right to require the Partnership to
repurchase its Notes, except in accordance with Section 2.08.
Within 20 days after the occurrence of a Change in
Control, the Partnership shall mail a written notice of the particular Change
in Control and of the repurchase right arising as a result of such Change in
Control (the “
Company Notice
”) by first-class
mail to the Trustee, any Paying Agent and to each Holder (and to beneficial
owners as required by applicable law). The
notice shall include a form of Change in Control Purchase Notice to be
completed by the Holder and shall state:
(a) briefly, the events causing a Change
in Control and the date of such Change in Control;
(b) the date by which the Change in
Control Purchase Notice must be delivered to the Paying Agent;
(c) the date on which the Partnership
will repurchase Notes upon a Change in Control, which must be not less than 15
days nor more than 30 days after the date of the Company Notice (such date, the
“
Change in Control Purchase Date
”);
(d) the Change in Control Purchase Price;
(e) the name and address of the Trustee,
the Paying Agent and the Exchange Agent;
(f) that Notes in respect of which a
Change in Control Purchase Notice is provided by a Holder shall not be
exchangeable unless such Holder validly withdraws such Change in Control
Purchase Notice in accordance with the provisions of this Section 2.09;
(g) that Notes must be surrendered to the
Paying Agent to collect payment of the Change in Control Purchase Price;
(h) that the Change in Control Purchase
Price for any Note as to which a Change in Control Purchase Notice has been
duly given will be paid within two Business Days after the later of the Change
in Control Purchase Date or the time at which such Notes are surrendered for
repurchase;
(i) that, unless the Partnership
defaults in making payment of the Change in Control Purchase Price, interest on
Notes surrendered for repurchase will cease to accrue on and after the Change
in Control Purchase Date; and
(j) the CUSIP number of the Notes.
The Partnership shall also disseminate a press release
through Dow Jones & Company, Inc. or Bloomberg Business News announcing the
occurrence of such Change in Control or publish such information in a newspaper
of general circulation in The City of New York or on
12
the Company’s website, or
through such other public medium as the Partnership shall deem appropriate at
such time.
A Holder may exercise its rights specified in this
Section 2.09 upon delivery of a written notice of such Holder’s exercise of its
repurchase right (a “
Change in Control Purchase
Notice
”) to the Trustee (or any Paying Agent), at any time prior to
the close of business on the third Business Day prior to the Change in Control
Purchase Date, stating:
(a) if
such Notes are in certificated form, the certificate number(s) of the Notes
which the Holder will deliver to be repurchased;
(b) the
portion of the principal amount of the Notes to be repurchased, in multiples of
$1,000, provided that the remaining principal amount of Notes is in an
authorized denomination; and
(c) that
such Note shall be repurchased pursuant to the applicable provisions hereof and
of the Notes.
The Trustee or any Paying Agent shall promptly notify
the Partnership and the Company in writing of the receipt by it of any Change
in Control Purchase Notice.
Book-entry transfer of Notes in book-entry form in
compliance with appropriate procedures of the Depositary or delivery of Notes
in certificated form (together with all necessary endorsements) to the Paying
Agent shall be a condition to the receipt by the Holder of the Change in
Control Purchase Price therefor. Holders
electing to require the Partnership to repurchase Notes must effect such transfer
or delivery to the Paying Agent prior to the Change in Control Purchase Date to
receive payment of the Change in Control Purchase Price on or within two
Business Days after the Change in Control Purchase Date. The Partnership shall
pay the Change in Control Purchase Price within two Business Days after the
later of the Change in Control Purchase Date or the time of such transfer or
delivery of the Notes.
A Change in Control Purchase Notice may be withdrawn
in whole or in part by a Holder by means of a written notice of withdrawal
delivered to the office of the Paying Agent prior to the close of business on
the third Business Day prior to the Change in Control Purchase Date specifying:
(a) the
Holder’s name;
(b) the
principal amount of Notes in respect of which the Change in Control Purchase
Notice is being withdrawn, which must be an integral multiple of $1,000;
(c) if
the Notes subject to the notice of withdrawal are in certificated form, the
certificate number(s) of all Notes subject to the notice of withdrawal; and
(d) the
principal amount of Notes, if any, that remains subject to the Change in
Control Purchase Notice, which must be an integral multiple of $1,000.
13
If Notes subject to the notice of withdrawal are in
book-entry form, the above notices must also comply with the applicable procedures
of the Depositary.
On or before 10:00 a.m. (New York City time) on the
second Business Day following the Change in Control Purchase Date, the
Partnership shall deposit with the Paying Agent (or if the Partnership or an
Affiliate of the Partnership is acting as the Paying Agent, shall segregate and
hold in trust) money sufficient to pay the aggregate Change in Control Purchase
Price of the Notes to be repurchased pursuant to this Section 2.09. If the
Paying Agent holds, in accordance with the terms of the Indenture, money
sufficient to pay the Change in Control Purchase Price of such Notes on the
Change in Control Purchase Date, then, on and after such date, such Notes shall
cease to be Outstanding and interest on such Notes shall cease to accrue and all
rights of the Holders of such Notes shall terminate (other than the right to
receive the Change in Control Purchase Price after delivery or transfer of the
Notes). Such will be the case whether or
not book-entry transfer of the Notes in book-entry form is made and
whether or not Notes in certificated form, together with the necessary
endorsements, are delivered to the Paying Agent. To the extent that the aggregate amount of
cash deposited by the Partnership hereunder exceeds the aggregate Change in
Control Purchase Price, then, promptly after the Change in Control Purchase
Date, upon Partnership Request, the Trustee or Paying Agent, as the case may
be, shall return any such excess cash to the Partnership.
Notwithstanding the foregoing, no Notes may be repurchased
by the Partnership in accordance with the provisions of this Section 2.09 if
there has occurred and is continuing an Event of Default with respect to the
Notes (other than a default in the payment of the Change in Control Purchase
Price).
To the extent legally required in connection with a
repurchase of Notes, the Partnership shall comply with the provisions of Rule
13e-4 and other tender offer rules under the Exchange Act then
applicable, if any, and will file with the Commission a Schedule TO or any
other required schedule under the Exchange Act.
The Partnership may arrange for a third party to
purchase Notes for which the Partnership has received a valid Change in Control
Purchase Notice that has not been properly withdrawn, in the manner and otherwise
in compliance with the requirements set forth herein and in the Notes. If a
third party purchases any Notes under such circumstances, then interest will
continue to accrue on the Notes and such Notes will continue to be Outstanding
after the Change in Control Purchase Date for all purposes of the Indenture and
will be fungible with all other Notes then Outstanding. The Trustee or Paying
Agent, as applicable, are hereby authorized to take actions upon Partnership
Request to effect such purchase upon delivery by the Partnership to the Trustee
or Paying Agent of such documents as may be required under the Indenture.
Section 2.10.
Make
Whole Amount
.
If a Change in Control occurs prior to August
18, 2011 and a Holder elects to exchange its Notes in connection with such
Change in Control pursuant to Section 2.11(d), the Partnership shall increase
the applicable Exchange Rate for such Notes surrendered for exchange by a
number of additional Company Common Shares (the “
Additional Shares
”) as specified below. An exchange of Notes shall be deemed for
these purposes to be “in connection with” such a Change in Control if the
notice of exchange of the Notes is received by the Exchange Agent on any date
from and including the date that is the Effective Date (as defined below) of
such Change in Control up to and including the 30th Business Day following the
Effective Date of such Change in Control.
14
The number of Additional Shares will be determined by
reference to the table below and is based on the date on which such Change in
Control transaction becomes effective (the “
Effective
Date
”) and the price (the “
Stock Price
”)
paid per Company Common Share in such Change in Control transaction. If holders of Company Common Shares receive
only cash in a Change in Control transaction, the Stock Price shall be the cash
amount paid per Company Common Share. In
all other cases, the Stock Price shall be the average of the Closing Sale
Prices of Company Common Shares on the 10 consecutive Trading Days up to but
excluding the Effective Date.
The Stock Prices set forth in the first row of the
table (i.e., the column headers) will be adjusted as of any date on which the
Exchange Rate of the Notes is adjusted.
The adjusted Stock Prices will equal the Stock Prices applicable immediately
prior to such adjustment multiplied by a fraction, the numerator of which is
the Exchange Rate immediately prior to the adjustment giving rise to the Stock
Price adjustment and the denominator of which is the Exchange Rate as so
adjusted. In addition, the number of
Additional Shares will be subject to adjustment in the same manner as the
Exchange Rate in accordance with the provisions of Section 2.14 hereof.
The following table sets
forth the Stock Price and number of Additional Shares to be received per $1,000
principal amount of Notes:
|
Effective
|
|
Stock Price
|
|
|
Date
|
|
$47.64
|
|
$60.00
|
|
$70.00
|
|
$80.00
|
|
$90.00
|
|
$100.00
|
|
$125.00
|
|
$150.00
|
|
|
August 23, 2006
|
|
4.5973
|
|
2.1819
|
|
1.2716
|
|
0.7948
|
|
0.5353
|
|
0.3858
|
|
0.2145
|
|
0.1438
|
|
|
August 15, 2007
|
|
4.5973
|
|
2.0534
|
|
1.1280
|
|
0.6666
|
|
0.4289
|
|
0.2998
|
|
0.1637
|
|
0.1096
|
|
|
August 15, 2008
|
|
4.5973
|
|
1.8779
|
|
0.9466
|
|
0.5144
|
|
0.3104
|
|
0.2089
|
|
0.1145
|
|
0.0767
|
|
|
August 15, 2009
|
|
4.5973
|
|
1.6313
|
|
0.7100
|
|
0.3347
|
|
0.1837
|
|
0.1212
|
|
0.0691
|
|
0.0463
|
|
|
August 15, 2010
|
|
4.5973
|
|
1.2502
|
|
0.3850
|
|
0.1335
|
|
0.0694
|
|
0.0507
|
|
0.0320
|
|
0.0211
|
|
|
August 18, 2011
|
|
4.5973
|
|
0.2733
|
|
0.0000
|
|
0.0000
|
|
0.0000
|
|
0.0000
|
|
0.0000
|
|
0.0000
|
|
The exact Stock Prices
and Effective Dates may not be set forth on the table, in which case:
(a) if the Stock Price is between two
Stock Price amounts in the table or the Effective Date is between two dates in
the table, the Additional Shares will be determined by straight-line
interpolation between the number of Additional Shares set forth for the higher
and lower Stock Price amounts and the two dates, as applicable, based on a 365-day
year;
(b) if the Stock Price is equal to or in
excess of $150.00 per Company Common Share (subject to adjustment as specified
in the second preceding paragraph), no Additional Shares will be issued upon an
exchange of Notes; and
(c) if the Stock Price is less than
$47.64 per Company Common Share (subject to adjustment as specified in the
second preceding paragraph), no Additional Shares will be issued upon an
exchange of Notes.
Notwithstanding the foregoing, in no event shall the
total number of Company Common Shares issuable upon an exchange of Notes exceed
20.9907 shares per $1,000 principal amount
15
of Notes, subject to
adjustment in the same manner as the Exchange Rate pursuant to Section 2.14
hereof.
Section 2.11.
Exchange
Rights
.
Subject to the restrictions on ownership of Company
Common Shares as set forth in Section 2.15 hereof and to the conditions set
forth herein, Holders may surrender their Notes for exchange for cash and, if
applicable, Company Common Shares or, at the Partnership’s option, cash in lieu
of all or any portion of such Company Common Shares, at the applicable Exchange
Rate prior to the close of business on the second Business Day immediately
preceding the Stated Maturity of the Notes at any time on or after August 15,
2025 and also under any of the circumstances set forth in this Section 2.11.
(a)
Exchange Upon Satisfaction of Market Price
Condition
. A Holder may surrender any of its Notes for exchange
during any calendar quarter beginning after September 30, 2006 (and only during
such calendar quarter) if, and only if, the Closing Sale Price of Company
Common Shares for at least 20 Trading Days (whether or not consecutive) in the
period of 30 consecutive Trading Days ending on the last Trading Day of the
preceding calendar quarter is more than 130% of the Exchange Price per Company
Common Share in effect on the applicable Trading Day. The Board of Trustees of the Company shall
make appropriate adjustments, in its good faith determination, to account for
any adjustment to the Exchange Rate that becomes effective, or any event
requiring an adjustment to the Exchange Rate where the ex-dividend date
of the event occurs, during that 30 consecutive Trading Day period.
(b)
Exchange Upon Satisfaction of Trading Price
Condition
. A Holder may surrender any of its Notes for exchange
during the five consecutive Trading Day period following any ten consecutive
Trading Day period in which the Trading Price per $1,000 principal amount of
Notes (as determined following a reasonable request by a Holder of the Notes)
was less than 98% of the product of the Closing Sale Price of Company Common
Shares multiplied by the Exchange Rate.
The Trustee shall have no obligation to determine the
Trading Price of the Notes unless the Partnership shall have requested such
determination, and the Partnership shall have no obligation to make such
request unless a Holder provides the Partnership with written reasonable
evidence that the Trading Price per $1,000 principal amount of the Notes would
be less than 98% of the product of the Closing Sale Price of Company Common
Shares and the Exchange Rate, whereupon the Partnership shall instruct the
Trustee to determine the Trading Price of the Notes beginning on the next Trading
Day and on each successive Trading Day until the Trading Price is greater than
or equal to 98% of the product of the Closing Sale Price of Company Common
Shares and the Exchange Rate.
(c)
Exchange Upon Notice of Redemption
.
A Holder may surrender for exchange any of the Notes called for redemption at
any time prior to the close of business on the second Business Day prior to the
Redemption Date, even if the Notes are not otherwise exchangeable at such
time. The right to exchange Notes
pursuant to this clause (c) will expire after the close of business on the
second Business Day prior to the Redemption Date unless the Partnership
defaults in making the payment due upon redemption. A Holder may exchange fewer than all of
16
its Notes so long as the
Notes exchanged are an integral multiple of $1,000 principal amount and the
remaining principal amount of Notes is in an authorized denomination. However,
if a Holder has already delivered an Optional Repurchase Notice or a Change in
Control Purchase Notice with respect to a Note, such Holder may not surrender
such Note for exchange until it has withdrawn such notice in accordance with
the applicable provisions of Section 2.08 or 2.09 hereof, as the case may be.
(d)
Exchange Upon Specified Transactions
.
If the Company elects to:
(i) distribute to all holders of Company
Common Shares rights entitling them to purchase, for a period expiring within
45 days, Company Common Shares at less than the Closing Sale Price of Company
Common Shares on the Trading Day immediately preceding the declaration date of
the distribution; or
(ii) distribute to all holders of Company
Common Shares assets, debt securities or certain rights to purchase securities
of the Partnership or the Company, which distribution has a per share value exceeding
15% of the Closing Sale Price of Company Common Shares on the Trading Day
immediately preceding the declaration date of such distribution,
the Partnership shall notify the Holders of the Notes
in writing at least 20 days prior to the ex-dividend date for such
distribution. Following the giving of
such notice, Holders may surrender their Notes for exchange at any time until
the earlier of the close of business on the Business Day prior to the ex-dividend
date or an announcement that such distribution will not take place;
provided, however
, that a Holder may not exercise this right
to exchange if the Holder may participate, on an as-exchanged basis, in
the distribution without an exchange of Notes. The ex-dividend date is
the first date upon which a sale of the Company Common Shares does not
automatically transfer the right to receive the relevant distribution from the
seller of Company Common Shares to its buyer.
In addition, if the Partnership or the Company is
party to a consolidation, merger or binding share exchange pursuant to which
all of the Company Common Shares would be exchanged for cash, securities or
other property that is not otherwise a Change in Control, a Holder may
surrender Notes for exchange at any time from and including the date that is 15
Business Days prior to the Effective Date of the transaction up to and
including five Business Days after the actual date of such transaction. The Partnership shall notify the Holders as
promptly as practicable following the date it publicly announces such
transaction (but in no event less than 15 Business Days prior to the
anticipated effective time of such transaction).
If a Change in Control occurs, a Holder will have the
right to exchange its Notes at any time from and including the Effective Date
of such transaction up to and including the 30th Business Day following the
Effective Date of the transaction, provided that, if a Holder has already
delivered an Optional Repurchase Notice or a Change in Control Purchase Notice
with respect to a Note, such Holder may not surrender such Note for exchange
until it has withdrawn such notice in accordance with the applicable provisions
of Section 2.08 or 2.09 hereof, as the case may be. The Partnership will notify
the Holders as promptly as practicable following the date
17
that it publicly
announces such Change in Control (but in no event later than five Business Days
prior to the Effective Date of such Change in Control).
If the Partnership or the Company is a party to a
consolidation, merger or binding share exchange pursuant to which all of the
Company Common Shares are exchanged for cash, securities or other property,
then at the Effective Date of the transaction any exchange of Notes and the
Exchange Value will be based on, and determined by reference to, the kind and
amount of cash, securities or other property that the Holder would have
received if such Holder had exchanged its Notes for Company Common Shares
immediately prior to the Effective Date of the transaction. For purposes of the foregoing, where a
consolidation, merger or binding share exchange involves a transaction that
causes Company Common Shares to be converted into the right to receive more
than a single type of consideration based upon any form of stockholder
election, such consideration will be deemed to be the weighted average of the
types and amounts of consideration received by the holders of Company Common
Shares that affirmatively make such an election. If a Change of Control occurs
prior to August 18, 2011, the Partnership will adjust the Exchange Rate for
Notes tendered for exchange in connection with such a Change in Control
transaction, as described in Section 2.10 hereof.
(e)
Exchange Upon Delisting of Company Common Shares
. A Holder
of Notes may surrender any of its Notes for exchange at any time beginning on
the first Business Day after the Company Common Shares have ceased to be listed
on a U.S. national or regional securities exchange or quoted on the Nasdaq
Global Market for a 30 consecutive Trading Day period.
Section 2.12.
Exchange
Settlement
.
Upon an exchange of Notes, the Partnership
shall deliver, in respect of each $1,000 principal amount of Notes tendered for
exchange in accordance with their terms:
(a) cash in an amount (the “
Principal Return
”) equal to the lesser of
(1) the principal amount of the Notes surrendered for exchange and (2) the
Exchange Value, and
(b) if the Exchange Value is greater than
the Principal Return, an amount (the “
Net
Amount
”) in cash or Company Common Shares with an aggregate value
equal to the difference between the Exchange Value and the Principal Return.
The Partnership may elect to deliver any portion of
the Net Amount in cash (the “
Net Cash Amount
”)
or Company Common Shares, and any portion of the Net Amount the Partnership
elects to deliver in Company Common Shares (the “
Net Shares
”)
will be the sum of the Daily Share Amounts for each Trading Day during the
Applicable Exchange Period. Prior to the
close of business on the second Trading Day following the date on which Notes
are tendered for exchange, the Partnership shall inform the Holders of such
Notes of its election to pay cash for all or a portion of the Net Amount and,
if applicable, the portion of the Net Amount that will be paid in cash and the
portion that will be delivered in the form of Net Shares.
The Partnership shall deliver cash in lieu of any
fractional Company Common Shares issuable in connection with payment of the Net
Shares based upon the Average Price.
The “
Daily Share Amount
”
for each $1,000 principal amount of Notes and each Trading Day in the
Applicable Exchange Period is equal to the greater of:
18
(a)
zero; and
(b)
a number
of Company Common Shares determined by the following formula:
where
CSP means the Closing
Sale Price of Company Common Shares on such Trading Day, and
ER means the applicable
Exchange Rate
The Partnership will determine the Exchange Value,
Principal Return, Net Amount, Net Cash Amount and the number of Net Shares, as
applicable, promptly after the end of the Applicable Exchange Period. The Partnership shall pay the Principal
Return and cash in lieu of fractional shares, and deliver Net Shares or pay the
Net Cash Amount, as applicable, no later than the third Business Day following
the last Trading Day of the Applicable Exchange Period.
If the Partnership elects to deliver Company Common
Shares in respect of any portion of the Exchange Value owing upon an exchange
of Notes and the Partnership does not deliver a prospectus satisfying the
requirements of the Securities Act relating to such shares in connection
therewith, the Partnership agrees to issue to Holders additional settlement
consideration of 0.03 Company Common Shares for each Company Common Share that
would otherwise have been due upon exchange.
Any additional settlement consideration will be delivered at the time of
the delivery of the Company Common Shares that are otherwise due upon
exchange.
Section 2.13.
Exchange Procedures
.
To
exchange Notes, a Holder must satisfy the requirements set forth in this
Section 2.13.
To exchange the Notes, a Holder must (a) complete
and manually sign the irrevocable exchange notice on the reverse of the Note
(or complete and manually sign a facsimile of such notice) and deliver such
notice to the Exchange Agent at the office maintained by the Exchange Agent for
such purpose, (b) with respect to Notes which are in certificated form, surrender
the Notes to the Exchange Agent, or, if the Notes are in book-entry form,
comply with the appropriate procedures of the Depositary, (c) furnish
appropriate endorsements and transfer documents if required by the Exchange
Agent, the Company or the Trustee and (d) pay any transfer or similar tax,
if required. The date on which the Holder satisfies all such requirements shall
be deemed to be the date on which the applicable Notes shall have been tendered
for exchange.
Notes in respect of which a Holder has delivered an
Optional Repurchase Notice or Change in Control Purchase Notice may be
exchanged only if such notice is timely withdrawn in accordance with the terms
of Section 2.08 or Section 2.09, as the case may be.
19
In case any Note shall be surrendered for partial
exchange, the Partnership shall execute and the Trustee shall authenticate and
deliver to, or upon the written order of, the Holder of the Note so
surrendered, without charge to such holder, a new Note or Notes in authorized
denominations in an aggregate principal amount equal to the portion of the
surrendered Notes not surrendered for exchange.
A Holder may exchange fewer than all of such Holder’s Notes so long as
the Notes exchanged are an integral multiple of $1,000 principal amount.
Upon surrender of a Note for exchange by a Holder,
such Holder shall deliver to the Partnership cash equal to the amount that the
Partnership is required to deduct and withhold under applicable law in
connection with the exchange;
provided, however
,
if the Holder does not deliver such cash, the Partnership may deduct and
withhold from the amount of consideration otherwise deliverable to such Holder
the amount required to be deducted and withheld under applicable law.
Upon the exchange of an interests in a Note issued in
the form of a global Security, the Trustee, as custodian for the Depositary and
at the direction of the Trustee, shall make a notation on such global Security
as to the reduction in the principal amount represented thereby.
Upon exchange of a Note, a Holder will not receive any
cash payment representing accrued and unpaid interest on such Note, except as
specified in the immediately preceding paragraph. Instead, upon an exchange of Notes, the
Partnership will deliver to tendering Holders only the consideration specified
in Section 2.12. Delivery of cash and Company Common Shares, if any, required
by Section 2.12 upon an exchange of Notes will be deemed to satisfy the
Partnership’s obligation to pay the principal of the Notes and any accrued and unpaid
interest. Accordingly, upon an exchange of Notes, any accrued and unpaid
interest will be deemed paid in full rather than cancelled, extinguished or
forfeited. In no event will the Exchange Rate be adjusted to account for
accrued and unpaid interest on the Notes.
Holders of Notes at the close of business on a Regular
Record Date for an interest payment will receive payment of interest payable on
the corresponding Interest Payment Date notwithstanding the exchange of such
Notes at any time after the close of business on the applicable Regular Record
Date. Notes tendered for exchange by a
Holder after the close of business on any Regular Record Date for an interest
payment and on or prior to the corresponding Interest Payment Date must be
accompanied by payment of an amount equal to the interest that such Holder is
to receive on such Notes on such Interest Payment Date;
provided,
however
, that no such payment shall be required to be made (1) if
such Notes have been called for redemption on a Redemption Date that is after
such Regular Record Date and on or prior to such Interest Payment Date or (2)
with respect to overdue interest, if any overdue interest exists at the time of
exchange with respect to such Notes.
Upon exchange of a Note, the Partnership, if it elects
to deliver Net Shares, will pay any documentary, stamp or similar issue or
transfer tax due on the issue of the Net Shares upon such exchange unless the
tax is due because the Holder requests the Net Shares to be issued or delivered
to a Person other than the Holder, in which case the Holder must pay the tax
due prior to the delivery of such Net Shares. Certificates representing Company
Common Shares will not be issued or delivered unless all taxes and duties, if
any, payable by the Holder have been paid.
20
A Holder of Notes, as such, shall not be entitled to
any rights of a holder of Company Common Shares. Such Holder shall only acquire such rights
upon the delivery by the Partnership, at its option, of Net Shares in accordance
with the provisions of Section 2.12 in connection with the exchange by a Holder
of Notes.
If a Holder exchanges more than one Note at the same
time, the number of Net Shares, if any, issuable upon the exchange shall be
based on the total principal amount of the Notes surrendered for exchange.
The Company shall, prior to issuance of any Notes
hereunder, and from time to time as may be necessary, reserve out of its
authorized but unissued common stock a sufficient number of Company Common
Shares to permit the exchange of the Notes at the applicable Exchange
Rate. Any Company Common Shares
delivered upon an exchange of Notes shall be newly issued shares or treasury
shares, shall be duly and validly issued and fully paid and nonassessable and
shall be free from preemptive rights and free of any lien or adverse claim.
The Company shall endeavor promptly to comply with all
federal and state securities laws regulating the issuance and delivery of
Company Common Shares, if any, upon an exchange of Notes and shall cause to
have listed or quoted all such Company Common Shares on each U.S. national
securities exchange or over-the-counter or other domestic market on
which the Company Common Shares are then listed or quoted.
Except as set forth herein, no other payment or
adjustment for interest shall be made upon exchange of Notes.
The Partnership shall notify the Trustee as soon as
reasonably practicable of the occurrence of any event specified in
Section 2.11 that would enable Holders of Notes to exchange their Notes in
accordance with their terms and the terms of the Indenture.
Section 2.14.
Exchange
Rate Adjustments
.
The Exchange Rate shall be adjusted from time
to time as follows:
(a)
If
the Company issues Company Common Shares as a dividend or distribution on
Company Common Shares to all holders of Company Common Shares, or if the
Company effects a share split or share combination, the Exchange Rate will be
adjusted based on the following formula:
ER1 = ER0 x OS1/OS0
where
ER0 =
the
Exchange Rate in effect immediately prior to the adjustment relating to such
event
ER1 =
the
new Exchange Rate in effect taking such event into account
OS0 =
the
number of Company Common Shares outstanding immediately prior to such event
OS1 =
the
number of Company Common Shares outstanding immediately after such event.
21
Any adjustment made
pursuant to this clause (a) shall become effective on the date that is
immediately after (x) the date fixed for the determination of shareholders
entitled to receive such dividend or other distribution or (y) the date on
which such split or combination becomes effective, as applicable. If any
dividend or distribution described in this clause (a) is declared but not so
paid or made, the new Exchange Rate shall be readjusted to the Exchange Rate
that would then be in effect if such dividend or distribution had not been
declared.
(b)
If
the Company issues to all holders of Company Common Shares any rights,
warrants, options or other securities entitling them for a period of not more
than 45 days after the date of issuance thereof to subscribe for or purchase
Company Common Shares, or issues to all holders of Company Common Shares
securities convertible into Company Common Shares for a period of not more than
45 days after the date of issuance thereof, in either case at an exercise price
per Company Common Share or a conversion price per Company Common Share less
than the Closing Sale Price of Company Common Shares on the Business Day
immediately preceding the time of announcement of such issuance, the Exchange
Rate will be adjusted based on the following formula:
ER1 = ER0 x
(OS0+X)/(OS0+Y)
where
ER0 =
the
Exchange Rate in effect immediately prior to the adjustment relating to such
event
ER1 =
the
new Exchange Rate taking such event into account
OS0 =
the
number of Company Common Shares outstanding immediately prior to such event
X =
the
total number of Company Common Shares issuable pursuant to such rights,
warrants, options, other securities or convertible securities
Y =
the
number of Company Common Shares equal to the quotient of (A) the aggregate
price payable to exercise such rights, warrants, options, other securities or
convertible securities and (B) the average of the Closing Sale Prices of
Company Common Shares for the 10 consecutive Trading Days prior to the Business
Day immediately preceding the date of announcement for the issuance of such
rights, warrants, options, other securities or convertible securities.
For purposes of this
clause (b), in determining whether any rights, warrants, options, other securities
or convertible securities entitle the holders to subscribe for or purchase, or
exercise a conversion right for, Company Common Shares at less than the
applicable Closing Sale Price of Company Common Shares, and in determining the
aggregate
22
exercise or conversion
price payable for such Company Common Shares, there shall be taken into account
any consideration received by the Company for such rights, warrants, options,
other securities or convertible securities and any amount payable on exercise
or conversion thereof, with the value of such consideration, if other than
cash, to be determined by the Board of Trustees of the Company. If any right, warrant, option, other security
or convertible security described in this clause (b) is not exercised or converted
prior to the expiration of the exercisability or convertibility thereof, the
new Exchange Rate shall be readjusted to the Exchange Rate that would then be
in effect if such right, warrant, option, other security or convertible
security had not been so issued.
(c)
If
the Company distributes shares of capital stock, evidences of indebtedness or
other assets or property of the Company to all holders of Company Common
Shares, excluding:
(i)
dividends,
distributions, rights, warrants, options, other securities or convertible
securities referred to in clause (a) or (b) above,
(ii)
dividends
or distributions paid exclusively in cash, and
(iii)
Spin-Offs
described below in this paragraph (c),
then the Exchange Rate
will be adjusted based on the following formula:
ER1 =
ER0
x SP0/(SP0-FMV)
where
ER0 =
the
Exchange Rate in effect immediately prior to the adjustment relating to such
event
ER1 =
the
new Exchange Rate taking such event into account
SP0 =
the
average of the Closing Sale Prices of Company Common Shares for the 10
consecutive Trading Days prior to the Business Day immediately preceding the
earlier of the record date or the ex-dividend date for such distribution
FMV=
the
fair market value (as determined in good faith by the Board of Trustees of the
Company) of the shares of capital stock, evidences of indebtedness, assets or
property distributed with respect to each outstanding Company Common Share on
the earlier of the record date or the ex-dividend date for such
distribution.
An adjustment to
the Exchange Rate made pursuant to the immediately preceding paragraph shall be
made successively whenever any such distribution is made and shall become
effective on the day immediately after the date fixed for the determination of
holders of Company Common Shares entitled to receive such distribution.
23
If the Company
distributes to all holders of Company Common Shares capital stock of any class
or series, or similar equity interest, of or relating to a subsidiary or other
business unit of the Company (a “
Spin-Off
”),
the Exchange Rate in effect immediately before the close of business on the
date fixed for determination of holders of Company Common Shares entitled to
receive such distribution will be adjusted based on the following formula:
ER1 =
ER0
x (FMV0+MP0)/MP0
where
ER0 =
the
Exchange Rate in effect immediately prior to the adjustment relating to such
event
ER1 =
the
new Exchange Rate taking such event into account
FMV0 =
the
average of the Closing Sale Prices of the capital stock or similar equity interest
distributed to holders of Company Common Shares applicable to one Company
Common Share over the first 10 consecutive Trading Days after the effective
date of the Spin-Off
MP0 =
the
average of the Closing Sale Prices of Company Common Shares over the first 10
consecutive Trading Days after the effective date of the Spin-Off.
An adjustment to
the Exchange Rate made pursuant to the immediately preceding paragraph will
occur on the 10th Trading Day from and including the effective date of the Spin-Off.
If any such
dividend or distribution described in this clause (c) is declared but not paid
or made, the new Exchange Rate shall be readjusted to be the Exchange Rate that
would then be in effect if such dividend or distribution had not been declared.
(d)
The Exchange Rate will be adjusted on the
basis of all cash dividends and distributions that the Company pays to all or
substantially all holders of Company Common Shares in respect of any quarterly
fiscal period based on the following formula:
ER1 = ER0 ×
SP0
- T
SP0 - C
where,
ER0 =
the
Exchange Rate in effect immediately prior to the record date for such
distribution (provided that if a distribution were to result in a downward
adjustment to the Exchange Rate, ER0 shall mean the Exchange Rate in effect on,
and calculated to, the record date for such distribution without regard to the
24
limitation
on the exchange rate set forth in paragraph (f) below and in such case, ER1
shall equal the lower of ER1 as calculated on such basis and the Exchange Rate
determined in accordance with clause (f));
ER1 =
the
Exchange Rate in effect immediately after the record date for such
distribution;
SP0 =
the
average of the Closing Sale Prices of Company Common Shares over the ten
consecutive Trading Day period ending on the Business Day immediately preceding
the record date for such distribution (or, if earlier, the “ex-date” relating
to such distribution);
T =
the
Dividend Threshold Amount, which shall initially be $0.4425 per quarter and
which amount shall be appropriately adjusted from time to time for any share
dividends on, or subdivisions or combinations of, Company Common Shares;
provided, that if an Exchange Rate Adjustment is required to be made as a
result of a distribution that is not a quarterly dividend either in whole or in
part, the Dividend Threshold Amount shall be deemed to be zero; and
C =
the
amount in cash per share that the Company distributes to holders of Company
Common Shares in the applicable fiscal quarter.
Notwithstanding
the foregoing, in no event will the Exchange Rate be adjusted pursuant to this
clause (d) to a rate that is below the Base Exchange Rate. The “Base Exchange Rate” at any time means
the initial Exchange Rate of 16.3934 Company Common Shares per $1,000 principal
amount of Notes as adjusted to the date of determination based on all
adjustments to the Exchange Rate exclusive of adjustments to the Exchange Rate
made pursuant to this clause (d).
Accordingly, if the Exchange Rate were to be increased following the
payment of one or more cash dividends in a fiscal quarter in excess of the
Dividend Threshold Amount, the Exchange Rate could thereafter be reduced if the
Company were to pay one or more cash dividends in a subsequent fiscal quarter
in an aggregate amount that is less than the Dividend Threshold Amount,
provided that any such adjustment will not result in the Exchange Rate being
reduced to a rate that is below the Base Exchange Rate.
An adjustment to
the Exchange Rate made pursuant to this clause (d) shall become effective on the
date immediately after the date fixed for the determination of holders of
Company Common Shares entitled to receive such dividend or distribution. If any
dividend or distribution described in this clause (d) is declared but not so
paid or made, the new Exchange Rate shall be readjusted to the Exchange Rate
that would then be in effect if such dividend or distribution had not been
declared.
25
(e)
If
the Company or any of its subsidiaries makes a payment in respect of a tender
offer or exchange offer for Company Common Shares to the extent that the cash
and value of any other consideration included in the payment per Company Common
Share exceeds the Closing Sale Price of a Company Common Share on the Trading
Day next succeeding the last date on which tenders or exchanges may be made
pursuant to such tender or exchange offer (the “
Expiration Time
”), the Exchange Rate will be adjusted based on
the following formula:
ER1 = ER0 x (AC + (SP1 x
OS1))/(SP1 x OS0)
where
ER0 =
the
Exchange Rate in effect immediately prior to the adjustment relating to such
event
ER1 =
the
new Exchange Rate taking such event into account
AC =
the
aggregate value of all cash and any other consideration (as determined by the
Board of Trustees of the Company) paid or payable for Company Common Shares
purchased in such tender or exchange offer
OS0 =
the
number of Company Common Shares outstanding immediately prior to the date such
tender or exchange offer expires
OS1 =
the
number of Company Common Shares outstanding immediately after such tender or
exchange offer expires (after giving effect to the purchase or exchange of
shares pursuant to such tender or exchange offer)
SP1 =
the
average of the Closing Sale Prices of Company Common Shares for the 10
consecutive Trading Days commencing on the Trading Day next succeeding the date
such tender or exchange offer expires.
If the application
of the foregoing formula would result in a decrease in the Exchange Rate, no
adjustment to the Exchange Rate will be made.
For the avoidance of doubt, for purposes of this paragraph (e), the
terms “tender offer” and “exchange offer” shall not include open market
purchases of Company Common Shares at prevailing market prices by the Company
or its Affiliate pursuant to the Company’s share repurchase programs.
Any adjustment to
the Exchange Rate made pursuant to this clause (e) shall become effective on
the date immediately following the Expiration Time. If the Company or one of its subsidiaries is
obligated to purchase Company Common Shares pursuant to any such tender or
exchange offer but is permanently prevented by applicable law from effecting
any such purchase or all such purchases are rescinded, the new
26
Exchange Rate shall be
readjusted to be the Exchange Rate that would be in effect if such tender or
exchange offer had not been made.
(f)
Notwithstanding
the foregoing, in the event of an adjustment to the Exchange Rate pursuant to
clause (d) or (e) above, in no event will the Exchange Rate exceed 20.9907 per
$1,000 principal amount of Notes, subject to adjustment pursuant to clauses
(a), (b) and (c) above.
(g)
If
the Company has in effect a rights plan while any Notes remain Outstanding,
Holders of Notes will receive, upon an exchange of Notes in respect of which
the Partnership has elected to deliver Net Shares, in addition to such Net
Shares, rights under the Company’s shareholder rights agreement unless, prior
to exchange, the rights have expired, terminated or been redeemed or unless the
rights have separated from the Company Common Shares. If the rights provided
for in the rights plan adopted by the Company have separated from the Company
Common Shares in accordance with the provisions of the applicable shareholder
rights agreement so that Holders of Notes would not be entitled to receive any
rights in respect of Company Common Shares that the Partnership elects to
deliver as Net Shares upon exchange of Notes, the Exchange Rate will be
adjusted at the time of separation as if the Company had distributed to all
holders of Company Common Shares capital stock, evidences of indebtedness or
other assets or property pursuant to clause (c) above, subject to readjustment
upon the subsequent expiration, termination or redemption of the rights. In
lieu of any such adjustment, the Company may amend such applicable shareholder
rights agreement to provide that upon an exchange of Notes the Holders will
receive, in addition to Company Common Shares that the Partnership elects to
deliver as Net Shares upon such exchange, the rights which would have attached
to such Company Common Shares if the rights had not become separated from the
Company Common Shares under such applicable shareholder rights agreement. To
the extent that the Company adopts any future shareholder rights agreement,
upon an exchange of Notes in respect of which the Partnership elects to deliver
Company Common Shares as Net Shares, a Holder of Notes shall receive, in
addition to such Company Common Shares, the rights under the future shareholder
rights agreement whether or not the rights have separated from Company Common
Shares at the time of exchange and no adjustment will be made in accordance
with clause (c) or otherwise.
In addition to the
adjustments pursuant to clauses (a) through (g) above, the Partnership may
increase the Exchange Rate in order to avoid or diminish any income tax to
holders of Company Common Shares resulting from any dividend or distribution of
capital stock (or rights to acquire Company Common Shares) or from any event
treated as such for income tax purposes. The Partnership may also, from time to
time, to the extent permitted by applicable law, increase the Exchange Rate by
any amount for any period if the Partnership has determined that such increase
would be in the best interests of the Partnership or the Company. If the Partnership makes such determination,
it will be conclusive and Partnership will mail to the Trustee and the Holders
of the Notes a notice of the increased Exchange Rate and the period during
which it will be in effect at least fifteen (15) days prior to the date the
increased Exchange Rate takes effect in accordance with applicable law.
27
If, in connection
with any adjustment to the Exchange Rate as set forth in this Section 2.14 a
Holder shall be deemed for U.S. federal tax purposes to have received a distribution
or an Additional Interest payment, the Partnership may set off any withholding
tax it or the Company reasonably believes it is required to collect with
respect to any such deemed distribution or payment against cash payments of
interest in accordance with the provisions of Section 2.05 hereof or from cash
and Company Common Shares, if any, otherwise deliverable to a Holder upon an
exchange of Notes in accordance with the provisions of Section 2.12 hereof or a
redemption or repurchase of a Note in accordance with the provisions of Section
2.07, 2.08 or 2.09 hereof.
The Partnership
will not make any adjustment to the Exchange Rate if Holders of the Notes are
permitted to participate, on an as-exchanged basis, in the transactions
described above.
Notwithstanding
anything to the contrary contained herein, in addition to the other events set
forth herein on account of which no adjustment to the Exchange Rate shall be
made, the applicable Exchange Rate shall not be adjusted for:
(i)
the issuance of any
Company Common Shares pursuant to any present or future plan providing for the
reinvestment of dividends or interest payable on securities of
the Partnership or those of the Company and the investment of additional
optional amounts in Company Common Shares under any plan;
(ii)
the
issuance of any Company Common Shares or options or rights to purchase those
shares pursuant to any present or future employee, trustee or consultant
benefit plan, employee agreement or arrangement or program of the Partnership
or the Company;
(iii)
the
issuance of any Company Common Shares pursuant to any option, warrant, right,
or exercisable, exchangeable or convertible security outstanding as of the date
the Notes were first issued;
(iv)
a
change in the par value of Company Common Shares;
(v)
accumulated
and unpaid dividends or distributions;
(vi)
as
a result of a tender offer solely to holders of fewer than 100 Company Common
Shares; and
(vii)
the
issuance of limited partnership units by the Partnership and the issuance of
Company Common Shares or the payment of cash upon redemption of such limited
partnership units.
No adjustment in the Exchange Rate will be required
unless the adjustment would require an increase or decrease of at least 1% of
the Exchange Price. If the adjustment is not made because the adjustment does
not change the Exchange Price by at least 1%, then the adjustment that is not
made will be carried forward and taken into account in any future adjustment.
All
28
required calculations
will be made to the nearest 1/10,000th of a share. Notwithstanding the foregoing, if the Notes
are called for redemption, all adjustments not previously made will be made on
the applicable Redemption Date.
Whenever the Exchange Rate is adjusted as herein
provided, the Company or the Partnership shall as promptly as reasonably
practicable file with the Trustee and any Exchange Agent other than the Trustee
an Officers’ Certificate setting forth the Exchange Rate after such adjustment
and setting forth a brief statement of the facts requiring such adjustment.
Promptly after delivery of such certificate, the Company or the Partnership
shall prepare a notice of such adjustment of the Exchange Rate setting forth
the adjusted Exchange Rate and the date on which each adjustment becomes effective
and shall mail such notice of such adjustment of the Exchange Rate to the
Holders of the Notes upon request within 20 Business Days of the Effective Date
of such adjustment. Failure to deliver such notice shall not affect the
legality or validity of any such adjustment.
For purposes of this Section 2.14, the number of
Company Common Shares at any time outstanding shall not include shares held in
the treasury of the Company but shall include shares issuable in respect of
scrip certificates issued in lieu of fractions of Company Common Shares.
Notwithstanding anything in this Section 2.14 to the
contrary, in no event shall the Exchange Rate be adjusted so that the Exchange
Price would be less than $0.01.
Except as described in this Section 2.14, the Exchange
Rate shall not be adjusted.
Section 2.15.
Ownership
Limit; Withholding
. Notwithstanding
any other provision of the Notes or the Indenture, no Holder of Notes shall be
entitled to exchange such Notes for Company Common Shares to the extent that
receipt of such shares would cause such Holder (together with such Holder’s Affiliates)
to exceed the ownership limit contained in the Declaration of Trust of the
Company as in effect from time to time.
At the Maturity of the principal of the Notes, whether
at Stated Maturity or upon earlier redemption or repurchase of Notes or
otherwise, and as otherwise required by law, the Partnership may deduct and
withhold from the amount of consideration otherwise deliverable to such Holder
the amount required to be deducted and withheld under applicable law.
Section 2.16.
Satisfaction
and Discharge.
The provisions of
ARTICLE FOURTEEN of the Indenture shall not be applicable to the Notes. The Partnership may satisfy and discharge its
obligations under the Indenture by delivering to the Trustee for cancellation
all Outstanding Notes or by depositing with the Trustee, the Paying Agent or
the Exchange Agent, if applicable, after the Notes have become due and payable,
whether on the date of the Stated Maturity of the principal amount of the
Notes, any Redemption Date, Optional Repurchase Date or Change in Control
Repurchase Date or upon exchange or otherwise, cash or Company Common Shares in
accordance with the terms hereof sufficient to pay all of the Outstanding Notes
and paying all other sums payable under the Notes and the Indenture in respect
of the Notes.
29
Section 2.17.
Events
of Default; Waiver of Past Defaults
.
(a)
Subparagraph
(4) of Section 501 of the Original Indenture is modified and amended for
purposes of the Notes to read as follows:
“(4)
a default
under any bond, debenture, note or other evidence of recourse indebtedness of
the Partnership, or under any mortgage, indenture or other instrument of the
Partnership (including a default with respect to Securities of any series other
than the Notes) under which there may be issued or by which there may be
secured any recourse indebtedness of the Partnership (or by any Subsidiary the
repayment of which the Partnership has guaranteed or for which the Partnership
is directly responsible or liable as obligor or guarantor), whether such
indebtedness now exists or shall hereafter be created, which default shall
constitute a failure to pay an aggregate principal amount exceeding $50,000,000
of such indebtedness when due and payable after the expiration of any
applicable grace period with respect thereto and shall have resulted in such
indebtedness in an aggregate principal amount exceeding $50,000,000 becoming or
being declared due and payable prior to the date on which it would otherwise
have become due and payable, without such indebtedness having been discharged,
or such acceleration having been rescinded or annulled, within a period of
10 days after there shall have been given, by registered or certified
mail, to the Partnership by the Trustee or to the Partnership and the Trustee
by the Holders of at least 25% in principal amount of the Outstanding Notes of
a written notice specifying such default and requiring the Partnership to cause
such indebtedness to be discharged or cause such acceleration to be rescinded
or annulled and stating that such notice is a “Notice of Default” hereunder;”
(b)
Section
501 of the Original Indenture is further modified and amended for purposes of
the Notes to add the following Events of Default:
“default in the delivery when due of the Exchange
Value, on the terms set forth herein and in the Notes, upon exercise of a
Holder’s exchange right in accordance with the terms hereof and of the Notes
and the continuation of such default for 10 days;”
- and -
“failure of the Partnership to provide a Company
Notice within 20 days after the occurrence of a Change in Control as provided
in Section 2.09 of the Second Supplemental Indenture.”
(c)
Section
508 of the Original Indenture is modified and amended for purposes of the Notes
to read as follows:
“SECTION
508.
Unconditional Right of Holders
to Receive Principal, Interest and Exchange Value
. Notwithstanding any other provision in this
Indenture, the Holder of any Note shall have the right which is absolute and
unconditional to receive payment of the principal of, and (subject to Sections
305 and 307) interest on, and the Exchange Value owing upon exchange of, such
Note on the respective Stated Maturity or Maturities specified in the Note (or,
in the case of redemption, on the Redemption Date, in the case of repayment, on
the Repayment Date or, in the case of an exchange, on the due date for the
delivery of such Exchange Value specified in the Notes) and to institute suit
for the
30
enforcement
of any such payment or delivery and such rights shall not be impaired without
the consent of such Holder.
(d)
Section
513 of the Indenture is modified and amended for purposes of the Notes to add
the following as clause (3):
(3) “in respect
of the failure by the Partnership to exchange any Notes in accordance with the
provisions of this Indenture.”
Section 2.18.
Modification
.
New
subparagraphs (4) and (5) are hereby added to Section 902 to read as follows:
“(4)
make any
change that impairs or adversely affects the rights of a Holder to exchange
Notes in accordance herewith, or
(5)
impair the
right to institute suit for the enforcement of the delivery of the Exchange
Value as required by the Indenture upon an exchange of Notes.”
Section 2.19.
Certain
Covenants Not Applicable to the Notes.
The Notes shall not be entitled to the benefits of the covenants set
forth in Sections 1004 and 1005 of the Indenture or the benefits of the
covenants set forth in the First Supplemental Indenture.
Section 2.20.
Calculations
in Respect of the Notes
.
Except as otherwise specifically
stated herein or in the Notes, all calculations to be made in respect of the
Notes or the Exchange Rate shall be the obligation of the Partnership. All
calculations made by the Partnership or its agent as contemplated pursuant to
the terms hereof and of the Notes shall be made in good faith and be final and
binding on the Partnership and the Holders absent manifest error. The
Partnership shall provide a schedule of calculations to the Trustee, and the
Trustee shall be entitled to rely upon the accuracy of the calculations by the
Partnership without independent verification.
The Trustee shall forward calculations made by the Partnership it
receives to any Holder of Notes upon request within 20 Business Days after the
effective date of any adjustment.
Section 2.21.
Authorized
Denominations
.
The Notes shall be issued in
denominations of $1,000 and integral multiples thereof and payments of
principal of and interest on, the Notes shall be made in U.S. dollars.
Section 2.22.
Exchange
Agent, Paying Agent and Securities Registrar
.
J.P. Morgan Trust
Company, National Association, is hereby appointed as Exchange Agent, Paying
Agent and the Security Registrar for the Notes. The Security Register for the
Notes will be maintained by the Security Registrar in a manner readily
available to it in the Borough of Manhattan, The City of New York. The rights, privileges, protections,
immunities and benefits given to the Trustee pursuant to the Indenture,
including, without limitation, its right to be indemnified, are extended to,
and shall be enforceable by, the Trustee in each of its capacities with respect
to the Notes.
Section 2.23.
No
Sinking Fund
. No sinking fund is
provided for the Notes.
31
Section 2.24.
No
Security Interest Created
. Nothing
in this Indenture or in the Notes, express or implied, shall be construed to
constitute a security interest under the Uniform Commercial Code or similar
legislation, as now or hereafter enacted and in effect, in any
jurisdiction.
ARTICLE THREE
FORM OF NOTES
Section 3.01.
Form
of Notes
. The Notes and the Trustee’s
certificate of authentication to be borne by such Notes shall be substantially
in the form set forth in Exhibit A hereto. Any of the Notes may have such
letters, numbers or other marks of identification and such notations, legends,
endorsements or changes as the officers executing the same may approve
(execution thereof to be conclusive evidence of such approval) and as are not
inconsistent with the provisions of the Indenture, or as may be required by the
Depositary or as may be required to comply with any applicable law or with any
rule or regulation made pursuant thereto or with any rule or regulation of any
securities exchange or automated quotation system on which the Notes may be
listed, or to conform to usage, or to indicate any special limitations or
restrictions to which any particular Notes are subject.
ARTICLE FOUR
MISCELLANEOUS
Section 4.01.
Relation
to Original Indenture
. This Second
Supplemental Indenture supplements and amends the Original Indenture and the
First Supplemental Indenture and shall be a part and subject to all the terms
thereof. Except as supplemented and amended hereby, all of the terms,
provisions and conditions of the Original Indenture and the First Supplemental
Indenture and the Securities issued thereunder shall continue in full force and
effect.
Section 4.02.
Concerning
the Trustee
. The Trustee shall not
be responsible for any recital herein as such recitals shall be taken as
statements solely of the Issuer, or the validity of the execution by the Issuer
of this Second Supplemental Indenture. The Trustee makes no representations as
to the validity or sufficiency of this instrument or the terms of the Notes.
All of the provisions contained in the Indenture in respect of the rights,
privileges, immunities, powers and duties of the Trustee shall be applicable in
respect of the Second Supplemental Indenture as fully and with like force and
effect as though fully set forth herein.
Section 4.03.
Effect
of Headings
. The Article and Section
headings herein are for convenience of reference only and shall not affect the
construction hereof.
Section 4.04.
Counterparts
. This Second Supplemental Indenture may be
executed in counterparts, each of which shall be deemed an original, but all of
which shall together constitute one and the same instrument.
Section 4.05.
Governing
Law
. This Second Supplemental
Indenture shall be governed by and construed in accordance with the laws of the
State of New York.
[signature pages
follow]
32
IN WITNESS WHEREOF, the parties hereto have caused
this Second Supplemental Indenture to be duly executed as of the day and year
first above written.
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ERP OPERATING LIMITED
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PARTNERSHIP, as
Issuer of the Notes
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By:
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Equity Residential, its General Partner
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By:
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/s/ Donna Brandin
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Name: Donna
Brandin
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Title: Executive
Vice President and Chief Financial Officer
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J.P. MORGAN TRUST COMPANY, NATIONAL
ASSOCIATION, as Trustee
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By:
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/s/ Janice Ott Rotunno
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Name: Janice Ott
Rotunno
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Title: Vice
President
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33
Exhibit A
[FORM OF NOTE]
[Include only for Global
Notes]
UNLESS THIS NOTE IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A
NEW YORK CORPORATION (“DTC”), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC, ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS
AN INTEREST HEREIN.
UNLESS AND UNTIL THIS
NOTE IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN CERTIFICATED FORM, THIS NOTE
MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY DTC TO A NOMINEE THEREOF OR BY A
NOMINEE THEREOF TO DTC OR ANOTHER NOMINEE OF DTC OR BY DTC OR ANY SUCH NOMINEE
TO A SUCCESSOR OF DTC OR A NOMINEE OF SUCH SUCCESSOR.
A -
1
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NO.
1
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PRINCIPAL AMOUNT
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CUSIP NO. 26884A AV5
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$650,000,000
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ERP OPERATING LIMITED PARTNERSHIP
3.85% Exchangeable Senior Note due 2026
ERP Operating Limited
Partnership, a limited partnership duly organized and existing under the laws
of the State of Illinois (the “Issuer,” which term shall include any successor
under the Indenture hereinafter referred to), for value received, hereby
promises to pay to Cede & Co., or its registered assigns, the principal sum
of Six Hundred Fifty Million Dollars ($650,000,000) on August 15, 2026 unless
redeemed, repurchased or exchanged prior to such date in accordance with the
terms hereof and of the Indenture.
This Note shall bear
interest as specified on the reverse hereof.
This Note is exchangeable for the consideration specified on the reverse
hereof. This Note is subject to redemption
by the Issuer at its option and to repurchase by the Issuer at the option of
the Holder as specified on the reverse hereof.
Reference is hereby made
to the further provisions of this Note set forth on the reverse hereof, which
further provisions shall for all purposes have the same effect as if set forth
at this place.
This Note shall not be
entitled to the benefits of the Indenture or be valid or become obligatory for
any purpose until the certificate of authentication hereon shall have been
signed by the Trustee.
A -
2
IN WITNESS WHEREOF, the
Issuer has caused this Note to be signed manually or by facsimile by an
authorized signatory.
Dated:
August 23, 2006
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ERP OPERATING LIMITED
PARTNERSHIP
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as Issuer
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By: Equity Residential, its General Partner
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By:
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Name:
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Title:
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By:
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Name:
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Title:
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TRUSTEE’S CERTIFICATE OF AUTHENTICATION
This is one of the
Securities of the series designated therein referred to in the within-mentioned
Indenture.
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J.P. MORGAN TRUST COMPANY, NATIONAL
ASSOCIATION, as Trustee
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By:
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Authorized Signatory
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A -
3
[REVERSE OF NOTE]
ERP OPERATING LIMITED PARTNERSHIP
3.85% Exchangeable Senior Note due 2026
This Note is one of a
duly authorized issue of notes, debentures, bonds, or other evidences of
indebtedness of the Issuer (hereinafter called the “Securities”) of the series
hereinafter specified, all issued or to be issued under and pursuant to an
Indenture, dated as of October 1, 1994 (as amended and supplemented by the
First Supplemental Indenture, dated as of September 9, 2004, and the Second
Supplemental Indenture, dated as of August 23, 2006, and as further amended or
supplemented from time to time, the “Indenture”), duly executed and delivered
by the Issuer to J.P. Morgan Trust Company, National Association, as trustee
(the “Trustee,” which term includes any successor trustee under the Indenture
with respect to the series of Securities of which this Note is a part), and
reference is hereby made to the Indenture, and all modifications and amendments
and indentures supplemental thereto relating to the Notes, for a description of
the rights, limitations of rights, obligations, duties, and immunities
thereunder of the Trustee, the Issuer and the Holders of the Notes and the
terms upon which the Notes are authenticated and delivered. The Securities may be issued in one or more
series, which different series may be issued in various aggregate principal
amounts, may mature at different times, may accrue interest (if any) at
different rates or formulas and may otherwise vary as provided in the
Indenture. This Note is one of a series
of Securities designated as the “3.85% Exchangeable Senior Notes due 2026” of
the Issuer, initially limited (except as permitted under the Indenture) in
aggregate principal amount to $650,000,000. The Issuer may from time to time,
without the consent of the Holders of the Notes, increase the principal amount of
the Notes by issuing additional Securities (the “Additional Notes”), having the
same terms and ranking equally and ratably with the Notes in all respects and
with the same CUSIP number as the Notes, except for the difference in the issue
price and interest accrued prior to the issue date of such Additional Notes,
provided that such Additional Notes constitute part of the same issue as the
Notes for U.S. federal income tax purposes.
Any Additional Notes will be treated as a single series with the Notes under
the Indenture and shall have the same terms as to status, redemption,
repurchase, exchange and otherwise as the Notes. Terms used herein without
definition and which are defined in the Indenture have the meanings assigned to
them in the Indenture.
1.
INTEREST
The Notes shall bear
interest at the rate of 3.85% per annum from August 23, 2006 or from the most
recent Interest Payment Date (as defined below) to which interest has been paid
or duly provided for, as the case may be, payable semi-annually in arrears on
February 15 and August 15 of each year (each, an “Interest Payment Date”),
commencing on February 15, 2007, until the principal hereof is paid or duly
made available for payment. Interest
payable on each Interest Payment Date shall equal the amount of interest
accrued for the period commencing on and including the immediately preceding
Interest Payment Date in respect of which interest has been paid or duly
provided for (or commencing on and including August 23, 2006, if no interest
has been paid or duly provided for) and ending on and including the day
preceding such Interest Payment Date.
Interest on the Notes will be computed on the basis of a 360-day year
consisting of twelve 30-day months
2.
METHOD
OF PAYMENT
Except as provided in the
Indenture, the Issuer shall pay interest on the Notes to the Persons who are
Holders of record of Notes at the close of business (whether or not a Business
Day) on the February 1 and August 1 immediately preceding the applicable
Interest Payment Date (each, a “Regular Record Date”). Holders must surrender Notes to a Paying
Agent and
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comply with the other
terms of the Indenture to collect the principal amount, Redemption Price,
Optional Repurchase Price or Change in Control Purchase Price of the Notes,
plus, if applicable, accrued and unpaid interest (including Additional
Interest, if any) payable as herein provided at maturity, upon redemption at
the Issuer’s option or repurchase at the Holder’s option. The Issuer shall pay, in money of the United
States that at the time of payment is legal tender for payment of public and
private debts, all amounts due in cash with respect to the Notes on the dates
and in the manner provided in this Note and the Indenture.
3.
PAYING
AGENT, EXCHANGE AGENT AND SECURITY REGISTRAR
Initially, the Trustee
shall act as Paying Agent, Exchange Agent and Security Registrar. The Issuer hereby initially designates the
Corporate Trust Office of the Trustee in New York, New York as the office to be
maintained by it where this Note may be presented for payment, registration of
transfer or exchange, where notices or demands to or upon the Issuer or Equity
Residential in respect of this Note or the Indenture may be served and where
the Notes may be surrendered for exchange in accordance with the provisions of
paragraph 6 hereof and the Indenture.
The Issuer may appoint and change any Paying Agent, Exchange Agent,
Security Registrar or co-registrar or approve a change in the office through
which any Paying Agent acts without notice, other than notice to the Trustee.
4.
REDEMPTION
BY THE ISSUER
The Issuer
shall not have the right to redeem any Notes prior to August 18, 2011, except
to preserve the status of Equity Residential as a real estate investment
trust. If the Issuer determines it is
necessary to redeem the Notes in order to preserve the status of Equity
Residential as a real estate investment trust, the Issuer may redeem the Notes
then Outstanding, in whole or in part, at 100% of the principal amount of the
Notes to be redeemed plus unpaid interest (including Additional Interest, if
any) accrued thereon to, but excluding, the Redemption Date.
The Issuer shall have the
right to redeem the Notes for cash, in whole or in part at any time or from
time to time, on or after August 18, 2011 at 100% of the principal amount of
the Notes to be redeemed plus unpaid interest accrued thereon to, but
excluding, the Redemption Date (the “Redemption Price”).
Notice of redemption at
the option of the Issuer shall be mailed at least 30 days but not more than 60
days before the Redemption Date to each Holder of Notes to be redeemed at the
Holder’s registered address. Notes in denominations larger than $1,000
principal amount may be redeemed in part but only in integral multiples of
$1,000 principal amount.
Notwithstanding the
foregoing, the Issuer may not effectuate any redemption of the Notes unless (1)
it elects to deliver solely cash in respect of the Exchange Value deliverable
upon the exchange of the Notes or (2) sufficient Company Common Shares that
have been registered for sale by the Company under the Securities Act are
available to satisfy the Issuer’s election, if applicable, to deliver Net
Shares upon the exchange of the Notes.
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5.
OPTIONAL
REPURCHASE RIGHTS;
REPURCHASE AT OPTION OF HOLDER UPON A CHANGE IN CONTROL
(a)
Subject
to the terms and conditions of the Indenture, a Holder shall have the right to
require the Issuer to repurchase all of its Notes, or any portion of the
principal amount thereof that is equal to $1,000 or an integral multiple
thereof, on each of August 18, 2011, August 15, 2016 and August 15, 2021 (each,
an “Optional Repurchase Date”) for cash equal to 100% of the principal amount
of the Notes to be repurchased plus unpaid interest accrued thereon to, but
excluding, such Optional Repurchase Date (the “Optional Repurchase Price”),
upon delivery to the Paying Agent of an Optional Repurchase Notice containing
the information set forth in the Indenture, from the opening of business on the
date that is 30 days prior to such Optional Repurchase Date until the close of
business on the third Business Day prior to such Optional Repurchase Date and
upon compliance with the other terms of the Indenture.
(b)
If
a Change in Control occurs at any time prior to August 18, 2011, a Holder shall
have the right, at such Holder’s option and subject to the terms and conditions
of the Indenture, to require the Issuer to repurchase all or any of such Holder’s
Notes having a principal amount equal to $1,000 or an integral multiple thereof
on the date (the “Change in Control Purchase Date”) specified by the Issuer in
the Company Notice (which date shall be no earlier than 15 days and no later
than 30 days after the date of such Company Notice) for cash equal to the 100%
of the principal amount of the Notes to be repurchased plus unpaid interest
accrued thereon to, but excluding, the Change in Control Purchase Date (the “Change
in Control Purchase Price”).
(c)
Holders
have the right to withdraw any Optional Repurchase Notice or Change in Control
Purchase Notice, as the case may be, by delivery to the Paying Agent of a
written notice of withdrawal in accordance with the provisions of the
Indenture.
(d)
If
the Paying Agent holds, in accordance with the terms of the Indenture, money
sufficient to pay the Optional Repurchase Price or Change in Control Purchase
Price of such Notes on the Optional Repurchase Date or Change in Control
Purchase Date, as the case may be, then, on and after such date, such Notes
shall cease to be Outstanding and interest on such Notes shall cease to accrue,
and all other rights of the Holder shall terminate (other than the right to
receive the Optional Repurchase Price or Change in Control Purchase Price upon
delivery or transfer of the Notes).
6.
EXCHANGE
The Notes shall be
exchangeable into the consideration specified in the Indenture at such times,
upon compliance with such conditions and upon the terms set forth in the
Indenture.
The initial
Exchange Rate shall be 16.3934 Company Common Shares per $1,000 principal
amount of Notes, subject to adjustment in certain circumstances as specified in
the Indenture. Notes tendered for
exchange by a Holder after the close of business on any Regular Record Date for
an interest payment and on or prior to the corresponding Interest Payment Date
must be accompanied by payment of an amount equal to the interest that such
Holder is to receive on such Notes on such Interest Payment Date;
provided, however
, that no such payment
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shall be required
(1) if such Notes have been called for redemption on a Redemption Date that is
after such Regular Record Date and on or prior to such Interest Payment Date or
(2) with respect to overdue interest, if any overdue interest exists at the
time of exchange with respect to such Notes.
The Exchange Rate
applicable to each Note a notice of exchange in respect of which is received by
the Exchange Agent from and including the Effective Date of a Change in Control
up to and including the 30th Business Day following the Effective Date of such
Change in Control shall be increased by the number of Additional Shares
specified in the Indenture.
To exchange this
Note, the Holder must (a) complete and manually sign the irrevocable
exchange notice set forth below (or complete and manually sign a facsimile of
such notice) and deliver such notice to the Exchange Agent at the office
maintained by the Exchange Agent for such purpose, (b) if this Note is in
certificated form, surrender such Note to the Exchange Agent, (c) furnish
appropriate endorsements and transfer documents if required by the Exchange
Agent, Issuer or the Trustee and (d) pay any transfer or similar tax, if
required. The date on which the Holder satisfies all such requirements shall be
deemed to be the date on which this Note shall have been tendered for exchange.
If the Holder has
delivered an Optional Repurchase Notice or a Change in Control Purchase Notice
requiring the Issuer to repurchase all or a portion of this Note pursuant to
paragraph 5 hereof, then this Note (or portion hereof subject to such Optional
Repurchase Notice or Change in Control Purchase Notice) may be exchanged only
if the Optional Repurchase Notice or Change in Control Purchase Notice is
withdrawn in accordance with the terms of the Indenture.
7.
RANKING
The Notes are
senior unsecured obligations of the Issuer and shall rank pari passu in right
of payment with all other senior unsecured indebtedness of the Issuer from time
to time outstanding.
8.
DEFAULTED
INTEREST
Except as
otherwise specified herein or in the Indenture, any Defaulted Interest on this
Note shall forthwith cease to be payable to the Holder hereof on the relevant
Regular Record Date by virtue of having been such Holder, and such Defaulted
Interest may be paid by the Issuer as provided for in Section 307 of the
Indenture.
9.
DENOMINATIONS;
TRANSFER; EXCHANGE
This
Note is issuable only in fully registered form, without coupons, in
denominations of $1,000 and integral multiples thereof. This Note may be exchanged for a like
aggregate principal amount of Notes of other authorized denominations at the
office or agency of the Issuer in The City of New York, in the manner and
subject to the limitations provided herein and in the Indenture, but without
the payment of any charge except for any tax or other governmental charge
imposed in connection therewith. Upon due presentment for registration of
transfer of this Note at the office or agency of the Issuer in The City of New
York, one or more new Notes of
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authorized
denominations in an equal aggregate principal amount will be issued to the transferee
in exchange therefor but without payment of any charge except for any tax or
other governmental charge imposed in connection therewith. In the event of any redemption in part, the
Issuer shall not be required to: (i) issue or register the transfer or exchange
of any Note during a period beginning at the opening of business 15 days before
any selection of Notes for redemption and ending at the close of business on
the earliest date on which the relevant notice of redemption is deemed to have
been given to all Holders of Notes to be so redeemed, or (ii) register the
transfer or exchange of any Note so selected for redemption, in whole or in
part, except the unredeemed portion of any Note being redeemed in part.
10.
PERSONS
DEEMED OWNERS
The Holder of this
Note may be treated as the owner of this Note for all purposes, and none of the
Issuer, the Trustee or any authorized agent of the Issuer or the Trustee shall
be affected by any notice to the contrary, except as required by law.
11.
DEFAULTS
AND REMEDIES
If an Event of
Default occurs and is continuing, the Trustee, or the Holders of not less than
25% in aggregate principal amount of the Notes at the time Outstanding, may
declare the principal amount and any accrued and unpaid interest, of all the
Notes to be due and payable in the manner and with the effect provided in the
Indenture.
12.
CERTAIN
COVENANTS NOT TO APPLY
The Notes shall not be entitled to the benefits of the
covenants set forth in Sections 1004 and 1005 of the Indenture or the benefits
of the covenants set forth in the First Supplemental Indenture.
13.
TRUSTEE
AND AGENT DEALINGS WITH THE COMPANY
The Trustee,
Paying Agent, Exchange Agent and Securities Registrar under the Indenture, each
in its individual or any other capacity, may become the owner or pledgee of
Notes and may otherwise deal with and collect obligations owed to it by the
Issuer or their respective Affiliates and may otherwise deal with the Issuer or
its Affiliates with the same rights it would have if it were not Trustee, Paying
Agent, Exchange Agent or Registrar.
14.
CALCULATIONS
IN RESPECT OF THE NOTES
Except as
otherwise specifically stated herein or in the Indenture, all calculations to
be made in respect of the Notes shall be the obligation of the Issuer. All
calculations made by the Issuer or its agent as contemplated pursuant to the
terms hereof and of the Indenture shall be final and binding on the Issuer and
the Holders absent manifest error. The Issuer shall provide a schedule of
calculations to the Trustee, and the Trustee shall be entitled to rely upon the
accuracy of the calculations by the Issuer without independent
verification. The Trustee shall forward
calculations made by and received from the Issuer to any Holder of Notes upon
request.
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15.
GOVERNING
LAW
The Indenture and
this Note shall be governed by and construed in accordance with the laws of the
State of New York.
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ASSIGNMENT
FOR VALUE RECEIVED, the
undersigned hereby sell(s), assign(s) and transfer(s) unto .
PLEASE INSERT SOCIAL
SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
(Please print or Typewrite Name and Address
Including Postal Zip Code of Assignee)
the within Note and all
rights thereunder, and hereby irrevocably constitutes and appoints
to transfer said Note on
the books of the Issuer, with full power of substitution in the premises.
Dated:
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Signature Guaranteed
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NOTICE: Signature must be guaranteed by an eligible
Guarantor Institution (banks, stockbrokers, savings and loan associations and
credit unions) with membership in an approved signature guarantee medallion
program pursuant to Securities and Exchange Commission Rule 17Ad-15.
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NOTICE: The signature to this Assignment must
correspond with the name as written upon the face of the within Note in every
particular, without alteration or enlargement or any change whatever.
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EXCHANGE NOTICE
To exchange this Note as
provided in the Indenture, check the box:
o
To exchange only part of
this Note, state the principal amount to be exchanged (must be $1,000 or an
integral multiple of $1,000): $ .
If, in the event the
Issuer delivers Net Shares and you want the stock certificate made out in
another person’s name, fill in the form below:
(Insert assignee’s soc. sec. or tax I.D. no.)
(Print or type assignee’s name, address and zip code)
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Your Signature:
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Date:
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(Sign exactly as your name appears on the
other side of this Note)
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(1)Signature
guaranteed by:
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By:
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(1)
Signature
must be guaranteed by an eligible Guarantor Institution (banks, stockbrokers,
savings and loan associations and credit unions) with membership in an approved
signature guarantee medallion program pursuant to Securities and Exchange
Commission Rule 17Ad-15.
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Exhibit
4.3
REGISTRATION RIGHTS AGREEMENT
BY AND BETWEEN
EQUITY RESIDENTIAL
AND
ERP OPERATING LIMITED PARTNERSHIP
AUGUST 23, 2006
REGISTRATION RIGHTS AND LOCK-UP AGREEMENT
This Registration
Rights Agreement (this “Agreement”) is entered into as of August 23, 2006
by and between Equity Residential, a Maryland real estate investment trust (the
“Trust”), and ERP Operating Limited Partnership, an Illinois limited
partnership (the “Company”), for itself and for the benefit of the Holders (as
hereinafter defined).
WHEREAS, the
Company will issue $600,000,000 principal amount of its 3.85% Exchangeable
Senior Notes due 2026 (up to $650,000,000 if the overallotment option is
exercised) (the “Notes”) on the date hereof pursuant to the terms of the Indenture
(the “Original Indenture”), dated as of October 1, 1994, as supplemented
by the First Supplemental Indenture (the “First Supplemental Indenture”), dated
as of September 9, 2004, and the Second Supplemental Indenture (the “Second
Supplemental Indenture”), dated as of August 23, 2006, between the Company
and J.P. Morgan Trust Company, National Association (as successor in trust to
Bank One Trust Company, NA, as successor to The First National Bank of
Chicago), as trustee (the Original Indenture, as amended and supplemented by
the First Supplemental Indenture and the Second Supplemental Indenture and as
further amended and supplemented from time to time, the “Indenture”);
WHEREAS, as an
inducement for the Holders to purchase Notes, the Trust hereby grants certain
registration rights to the Company for the benefit of the Holders with respect
to common shares of beneficial interest, par value $0.01 per share (the “Common
Shares”), of the Trust that may in the future be issued to the Holders by the
Trust upon an exchange of Notes, if such Common Shares when so issued shall not
have been registered under the Securities Act of 1933, as amended, and are subject
to restrictions on transfer (“Restricted Shares”);
NOW, THEREFORE, in
consideration of the foregoing, the mutual promises and agreements set forth
herein, and for other valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto hereby agree as follows:
1.
Certain Definitions
As used in this
Agreement, in addition to the other terms defined herein, the following
capitalized defined terms shall have the following meanings:
“Affiliate” shall
mean a Person that directly, or indirectly though one or more intermediaries,
controls, is controlled by, or is under common control with a specified Person.
“Common Shares”
shall have the meaning set forth in the preamble to this Agreement.
“Company” shall
have the meaning set forth in the preamble to this Agreement.
“Exchange Act” shall mean the Securities
Exchange Act of 1934, as amended, and the rules and regulations promulgated
thereunder.
“Filing Date”
shall have the meaning set forth in Section 2(a) hereof.
2
“First
Supplemental Indenture” shall have the meaning set forth in the preamble to
this Agreement.
“Holder” or “Holders”
shall mean the beneficial owners from time to time of the Notes and the
beneficial owners from time to time of the Restricted Shares issued on account
of Notes pursuant to the Indenture.
“Indemnitee” shall
have the meaning set forth in
Section 9
hereof.
“Indenture” shall
have the meaning set forth in the preamble to this Agreement.
“NASD” shall mean
the National Association of Securities Dealers, Inc.
“Notes” shall have
the meaning set forth in the preamble to this Agreement.
“NYSE” shall mean
the New York Stock Exchange.
“Notice Holder”
shall mean, on any date, any Holder that has delivered to the Trust on or prior
to such date a duly executed and completed Notice and Questionnaire.
“Notice and
Questionnaire” shall mean a written notice and questionnaire containing all
material information required to be disclosed with respect to such Holder as a “selling
stockholder” in a Resale Shelf Registration Statement under the Securities Act.
“Offering Blackout
Period” shall have the meaning set forth in
Section 6(c)
hereof.
“Original
Indenture” shall have the meaning set forth in the preamble to this Agreement.
“Partnership”
shall have the meaning set forth in the recitals to this Agreement.
“Partnership
Agreement” shall mean the agreement of limited partnership of the Company, as
amended from time to time.
“Person” shall
mean an individual, partnership, corporation, trust, or unincorporated
organization, or a government or agency or political subdivision thereof.
“Prospectus” shall
mean the prospectus included in a Registration Statement, including any
preliminary prospectus, as amended or supplemented by any prospectus supplement
with respect to the terms of the offering of any portion of the Registrable
Shares covered by such Registration Statement, and by all other amendments and
supplements to such prospectus, including post-effective amendments, and in
each case including all material incorporated by reference therein.
“Registrable
Shares” (a) when used with respect to any Holder, shall mean all
Restricted Shares held by such Holder, until (A) the earliest of
(i) their effective registration under the Securities Act and resale in
accordance with the Registration Statement covering them, (ii) if
applicable, expiration of the holding period that would be applicable thereto
under Rule 144(k) or any successor provision, (iii) if applicable, their sale
to the public pursuant to Rule 144 or
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(iv) the date such
Shares cease to be outstanding (whether as a result of redemption, repurchase
and cancellation, conversion or otherwise), and (B) as a result of the
event or circumstance described in any of the foregoing clauses (A)(i) through
(A)(iii), the legend with respect to Securities Act transfer restrictions is
removed or removable.
“Registration
Expenses” shall mean any and all expenses of the Trust incident to the
performance of or compliance with this Agreement, including without limitation:
(i) all registration and filing fees; (ii) all fees and expenses
associated with a required listing of the Registrable Shares on any securities
exchange; (iii) fees and expenses with respect to filings required to be
made with the NYSE or the NASD; (iv) fees and expenses of compliance with
securities or “blue sky” laws; (v) printing expenses, messenger, telephone and
delivery expenses; (vi) fees and disbursements of counsel for the Trust
and customary fees and expenses for independent certified public accountants
retained by the Trust; (vii) securities acts liability insurance, if the Trust
so desires; (viii) all internal expenses of the Trust (including, without
limitation, all salaries and expenses of its officers and employees performing
legal or accounting duties); (ix) the expense of any annual audit; and
(x) the fees and expenses of any person, including special experts,
retained by the Trust;
provided
,
however
, that Registration
Expenses shall not include, and the Trust shall not have any obligation to pay,
any underwriting fees, discounts, or commissions attributable to the sale of
such Registrable Shares, or any legal fees and expenses of counsel to any
Holder and any broker/dealer or other financial intermediary or agent engaged
by any Holder.
“Registration
Statement” shall mean any registration statement of the Trust which covers the
resale of any of the Registrable Shares under the Securities Act on an
appropriate form, and all amendments and supplements to such registration
statement, including post-effective amendments, in each case including the
Prospectus contained therein, all exhibits thereto and all materials
incorporated by reference therein.
“Resale Shelf
Registration Expiration Date” shall have the meaning set forth in
Section
2(a)
hereof.
“Resale Shelf
Registration Statement” shall have the meaning set forth in
Section 2(a)
hereof.
“Restricted Shares”
shall have the meaning set forth in the preamble to this Agreement.
“Rule 144” shall
mean Rule 144 under the Securities Act (or any successor provision).
“SEC” shall mean
the Securities and Exchange Commission.
“Second
Supplemental Indenture” shall have the meaning set forth in the preamble to
this Agreement.
“Securities Act” shall
have the meaning set forth in the preamble to this Agreement.
“Shares” shall
mean all Restricted Shares issued to all Holders as described in the preamble
to this Agreement and any other Common Shares issued as a dividend with respect
to, or in exchange for or in replacement of such Restricted Shares.
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“Suspension Event”
shall have the meaning set forth in
Section 6(b)
hereof.
“Trustee” shall
have the meaning set forth in the preamble to this Agreement.
“Trust Offering”
shall have the meaning set forth in
Section 6(c)
hereof.
2.
Registration
(a)
Resale Shelf Registration
Statement
. The Trust shall prepare and file with the SEC a Registration
Statement (a “Resale Shelf Registration Statement”) for an offering to be made
on a delayed or continuous basis pursuant to Rule 415 under the Securities
Act relating to the sale by Holders from time to time of Registrable Shares,
such filing to be made on a date (the “Filing Date”) which is no later than
thirty (30) days after the issuance of the Registrable Shares covered by
such Registration Statement. The Trust shall use its reasonable efforts to
cause such Resale Shelf Registration Statement to be declared effective by the
SEC as soon as practicable after the Filing Date. The Trust agrees to use its
reasonable efforts to keep the Resale Shelf Registration Statement, after its
date of effectiveness, continuously effective until the date (the “Resale Shelf
Registration Expiration Date”) that all Registrable Shares have ceased to be
Registrable Shares. At the time the initial Resale Shelf Registration Statement
is declared effective, each Holder that shall have become a Notice Holder on or
prior to the date ten (10) business days prior to such time of
effectiveness shall be named as a selling securityholder in the initial Resale
Shelf Registration Statement and the related Prospectus in such a manner as to
permit such Holder to deliver such Prospectus to purchasers of Registrable
Securities in accordance with applicable law. No holder shall be entitled to be
named as a selling securityholder in the initial Resale Shelf Registration
Statement or to use the Prospectus forming a part thereof for offers or resales
of Registrable Securities unless such holder is a Notice Holder on or prior to
the date ten (10) business days prior to the time of effectiveness of such
Resale Shelf Registration Statement. Each Holder agrees that if such Holder
wishes to sell Registrable Shares pursuant to a Resale Shelf Registration
Statement and related Prospectus, it will do so only in accordance with this
Section 2(a). Following the date that the initial Resale Shelf
Registration Statement is declared effective, each Holder that is not a Notice
Holder wishing to sell Registrable Shares pursuant to a Resale Shelf
Registration Statement and related Prospectus shall agree to deliver a Notice
and Questionnaire to the Trust in order that it be named as a selling
stockholder in such Prospectus. Upon receipt of any such Notice and
Questionnaire after the date the initial Resale Shelf Registration Statement is
declared effective, the Trust shall, as promptly as reasonably practicable
after the date such Notice and Questionnaire is delivered, and in any event within
fifteen (15) business days after such date:
(i) if
required by applicable law, file with the SEC a post-effective amendment to the
Resale Shelf Registration Statement or prepare and, if required by applicable
law, file a supplement to the related Prospectus or an amendment thereto or
file any other required document so that the Holder delivering such Notice and
Questionnaire is named as a selling stockholder in the Resale Shelf
Registration Statement and the related Prospectus in such a manner as to permit
such Holder to deliver such Prospectus to purchasers of the Registrable Shares
in accordance with the Securities Act and, if the Trust shall file a
post-effective amendment
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to the Resale Shelf Registration Statement, use its reasonable efforts
to cause such post-effective amendment to be declared effective under the
Securities Act as promptly as is reasonably practicable, but in any event by
the date that is forty-five (45) days after the date such post-effective
amendment is required by this clause to be filed; and
(ii) provide
such Holder copies of any documents filed pursuant to this Section 2(a).
If the Trust shall file a
post-effective amendment in accordance with the provisions of clause (i) above,
the Trust shall notify such Holder as promptly as practicable after the
effectiveness under the Securities Act of any such post-effective amendment. Notwithstanding anything contained herein to
the contrary, (i) the Trust shall be under no obligation to name any
Holder that is not a Notice Holder as a selling stockholder in any Registration
Statement or related Prospectus, and (ii) the Trust shall not be required to
file a prospectus supplement or post-effective amendment to name additional
Notice Holders as selling stockholders more often than on three occasions
during any calendar quarter.
(b)
Notification and Distribution of
Materials
. The Trust shall notify Holders of Registrable Shares of the
effectiveness of any Registration Statement applicable to the Registrable
Shares and shall furnish to the Holders, without charge, such number of copies
of the Registration Statement (including any amendments, supplements and
exhibits), the Prospectus contained therein (including each preliminary
prospectus and all related amendments and supplements) and any documents
incorporated by reference in the Registration Statement or such other documents
as the Holders may reasonably request in order to facilitate the sale of the
Registrable Shares in the manner described in the Registration Statement.
(c)
Amendments and Supplements
.
The Trust shall promptly prepare and file with the SEC from time to time such
amendments and supplements to the Registration Statement and Prospectus used in
connection therewith as may be necessary to keep the Registration Statement
effective and to comply with the provisions of the Securities Act with respect
to the disposition of all the Registrable Shares until the earlier of
(a) such time as all of the Registrable Shares have been issued or
disposed of in accordance with the intended methods of disposition by the
Holders as set forth in the Registration Statement, (b) the date on which
the Registration Statement is no longer required to be effective under the
terms of this Agreement or (c) the shares subject to such Registration
Statement and/or related Prospectus cease to be Registrable Shares. Upon ten (10) business days’ notice, the
Trust shall file any supplement or post-effective amendment to the Registration
Statement with respect to the plan of distribution or a Holder’s ownership
interests in its Registrable Shares that is reasonably necessary to permit the
sale of such Holder’s Registrable Shares pursuant to the Registration
Statement.
(d)
Notice of Certain Events
. The
Trust shall promptly notify the Holders of, and confirm in writing, any request
by the SEC for any amendment or supplement to, or additional information in
connection with, any Registration Statement required to be prepared and filed
hereunder (or Prospectus relating thereto). In addition, the Trust shall
promptly notify each Holder of, and confirm in writing, the filing of the
Registration Statement or any Prospectus, amendment or supplement related
thereto or of any post-effective amendment to the Registration Statement and
the effectiveness of any such post-effective amendment.
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At any time when a
Prospectus relating to the Registrable Shares is made available for use by
Holders of Registrable Securities in connection with resales thereof or is
otherwise required to be delivered under the Securities Act by a Holder of
Registrable Shares to a transferee, the Trust shall immediately notify the
Holders of the happening of any event as a result of which the Prospectus
included in such Registration Statement, as then in effect, includes an untrue
statement of a material fact or omits to state any material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. In such event, the
Trust shall promptly, and in any event within ten (10) business days of
the occurrence of such event, prepare and furnish to the Holders a reasonable
number of copies of a supplement to or an amendment of such Prospectus as may
be necessary so that, as thereafter delivered to the purchasers of Registrable
Shares sold under the Prospectus, such Prospectus shall not include an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they are made, not misleading. The Trust shall, if
necessary, promptly, and in any event within ten (10) business days of the
occurrence of the event in question, amend the Registration Statement of which
such Prospectus is a part to reflect such amendment or supplement.
(e) Notwithstanding any provision of this
Agreement to the contrary, the Trust may satisfy its obligation to file a
Registration Statement pursuant to this Agreement by designating an existing
effective Registration Statement filed pursuant to Rule 415 (Registration
Statement within the meaning of this Agreement) by Notice to each of the
Holders.
3.
State Securities Laws
.
Subject to the conditions set forth in this Agreement, the Trust shall, in
connection with the filing of any Registration Statement hereunder, register or
qualify the Registrable Shares under the securities or “Blue Sky” laws of such
states as the Holders may reasonably request, and the Trust shall use its
reasonable efforts to effect such registration or qualification in a timely
manner; provided, however, that the Trust shall not be obligated to qualify as
a foreign corporation to do business under the laws of any such state in which
it is not then qualified or to file any general consent to service of process
in any such state. Once so registered or qualified, the Trust shall use its
reasonable efforts to keep such registrations or qualifications effective until
the earlier of (a) such time as all of the Registrable Shares have been
disposed of in accordance with the intended methods of disposition by the
Holders as set forth in the applicable Registration Statement, (b) in the
case of a particular state, the applicable Holders have notified the Trust that
they no longer require an effective filing in such state in accordance with
their original request for filing, (c) the date on which the applicable
Registration Statement ceases to be effective or (d) the date on which the
Registrable Shares subject to any such registrations or qualifications cease to
be Registrable Shares.
4.
Listing
. The Trust will use
reasonable efforts to cause all Registrable Shares to be listed or otherwise
eligible for full trading privileges on the principal national securities
exchange (currently the NYSE) on which the Common Shares are then listed, in
each case not later than the date on which a Registration Statement covering
the Registrable Shares becomes effective or the Registrable Shares are issued
by the Trust to a Holder, whichever is later. The Trust will use reasonable
efforts to continue the listing or trading privilege for all Registrable Shares
on such exchange. The Trust will promptly notify the Holders of, and confirm in
writing, the delisting of the Common Shares by such exchange.
7
5.
Expenses
. The Trust shall
bear all Registration Expenses incurred in connection with the registration of
the Registrable Shares pursuant to this Agreement and the Trust’s performance
of its other obligations under the terms of this Agreement. The Holders shall
bear all underwriting fees, discounts or commissions attributable to the sale
of securities by the Holders, or any legal fees and expenses of counsel to the
Holders and any broker/dealer or other financial intermediary or agent engaged
by Holders and all other expenses incurred in connection with the performance
by the Holders of their obligations under the terms of this Agreement.
6.
Suspension of Registration
Requirement; Restriction on Sales
.
(a) The Trust shall promptly notify each
Holder of, and confirm in writing, the issuance by the SEC of any stop order
suspending the effectiveness of a Registration Statement with respect to such
Holder’s Registrable Shares or the initiation of any proceedings for that
purpose. The Trust shall use its reasonable efforts to obtain the withdrawal of
any order suspending the effectiveness of such a Registration Statement at the
earliest possible moment.
(b) Notwithstanding anything to the
contrary set forth in this Agreement, the Trust’s obligation under this
Agreement to file, amend or supplement a Registration Statement, or to cause a
Registration Statement, or any filings with any state securities commission, to
become effective shall be suspended, for one or more periods not to exceed the
period described in
Section 9
below, if such obligation would (i) require
additional disclosure of material information by the Trust in the Registration
Statement or such filing as to which the Trust has a bona fide business purpose
for preserving confidentiality, or (ii) render the Trust unable to comply
with SEC requirements, or (iii) otherwise make it impractical or inadvisable
to cause the Registration Statement or such filings to be filed, amended or
supplemented or to become effective (any such circumstances being hereinafter
referred to as a “Suspension Event”). The Trust shall notify the Holders of the
existence of any Suspension Event by promptly delivering to each Holder a
certificate signed by an executive officer of the Trust stating that a
Suspension Event has occurred and is continuing.
(c) Subject to the terms of
Section 7
below, each Holder of Registrable Shares agrees, if requested by the Trust in
the case of a non-underwritten offering registered under the Securities Act or
if requested by the managing underwriter or underwriters in an underwritten
offering (each, a “Trust Offering”), not to effect any public sale or
distribution of any of the Shares during the period (the “Offering Blackout
Period”) beginning on the date specified in such written notice from the Trust
(which in no event shall be any earlier than the fifteenth (15th) day preceding
the anticipated date of pricing of such Trust Offering) and ending on the
earlier to occur of:
(i) ninety
(90) days after the closing date of such Trust Offering;
(ii) thirty
(30) days after the date on which the closing price of the class of equity
securities sold by the Trust in such Trust Offering shall have averaged for a
period of twenty (20) consecutive trading days at least one-hundred-five
percent (105%) of the initial price to the public of such security in such Trust
Offering;
8
(iii) the
date on which the Trust may begin to effect any public sale or distribution of
any of the securities of the Trust following such Trust Offering pursuant to
any contractual lock-up or similar restrictions on the sale of Common Shares;
(iv) the
date on which all trustees and executive officers who have been required to
enter into contractual lock-up or similar restrictions on the sale of Common
Shares owned by them may begin to effect public sales of Common Shares
following such Trust Offering, including pursuant to waivers of the
restrictions by the managing underwriter or underwriters; or
(v) the
date the Trust or managing underwriter or underwriters withdraws such request
in writing;
provided
,
however
, that this
Section 6(c)
shall not prohibit resales
of Shares by any Holder not subject to restrictions on transfer (including,
without limitation and as applicable, resale of Shares pursuant to
Rule 144) and similarly exempt from any registration requirement under any
state “Blue Sky” or similar laws.
(d) Subject to the terms of
Section 7
below, each Holder agrees that, following the effectiveness of any Registration
Statement relating to Registrable Shares held by such Holder, such Holder will
not effect any sales of the Shares pursuant to such Registration Statement at
any time after such Holder has received notice from the Trust to suspend sales
as a result of the occurrence or existence of any Suspension Event or so that
the Trust may correct or update the Registration Statement. The Holders may
recommence effecting sales of the Registrable Shares pursuant to the
Registration Statement, and all other obligations which are suspended as a
result of a Suspension Event shall no longer be so suspended, following further
notice to such effect from the Trust, which notice shall be given by the Trust
not later than one (1) business day after the date on which the condition
resulting in such Suspension Event terminates.
7.
Limitations on
Suspension/Blackout Periods
. Notwithstanding anything herein to the
contrary, the Trust covenants and agrees that (i) the Trust’s rights to
suspend its obligation under this Agreement to file, amend or supplement a
Registration Statement and maintain the effectiveness of any Registration
Statement during the pendency of any Suspension Event, (ii) the Holders’
obligation to suspend public sales of Shares during one or more Offering
Blackout Periods and (iii) the Holders’ obligations to suspend sales of
Shares pursuant to a Registration Statement during the pendency of any
Suspension Event, shall not, in the aggregate, cause the Holders to be required
to suspend sales of Shares or relieve the Trust of its obligation to file,
amend or supplement and maintain the effectiveness of a Registration Statement
for longer than a total of ninety (90) days during any twelve (12) month
period.
8.
Additional Shares
. The
Trust, at its option, may register, under any Registration Statement and include
in any filings with any state securities commissions filed pursuant to this
Agreement, any number of unissued, treasury or other Common Shares of or owned
by the Trust and any of its Subsidiaries or any Common Shares or other
securities of the Trust owned by any other security holder or security holders
of the Trust.
9
9.
Indemnification
(a)
Indemnification
by the Trust.
The Trust shall indemnify and hold harmless each
Holder and each Person, if any, who controls such Holder (within the meaning of
Section 15 of the Securities Act) as follows:
(i) against
any and all loss, liability, claim, damage and expense whatsoever, as incurred,
arising out of any untrue statement or alleged untrue statement of a material
fact contained in the Resale Shelf Registration Statement (or any amendment
thereto) pursuant to which the Registrable Shares were registered under the
Securities Act, including all documents incorporated therein by reference, 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 contained in any Prospectus (or any amendment or supplement thereto),
including all documents incorporated therein by reference, or the omission or
alleged omission therefrom of a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading;
(ii) against
any and all loss, liability, claim, damage and expense whatsoever, as incurred,
to the extent of the aggregate amount paid in settlement of any litigation, or
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, if such settlement
is effected with the prior written consent of the Trust; and
(iii) against
any and all expense whatsoever, as incurred (including reasonable fees and
disbursements of counsel), reasonably incurred in investigating, preparing or
defending against any litigation, or investigation or proceeding by any
governmental agency or body, commenced or threatened, in each case whether or
not a party, 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 subparagraph (i) or (ii) above;
provided, however, that
the indemnity provided pursuant to this Section 9(a) does not apply to the
Holder with respect 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 Trust by the Holder expressly for use in the
Resale Shelf Registration Statement (or any amendment thereto) or any
Prospectus (or any amendment or supplement thereto).
(b)
Indemnification
by the Holders.
In connection with the Resale Shelf Registration
Statement, each Holder, on a several and not joint basis, shall indemnify and
hold harmless the Trust, and each of its trustees and officers (including each
trustee and officer of the Trust who signed the Resale Shelf Registration
Statement), and each Person, if any, who controls the Trust within the meaning
of Section 15 of the Securities Act, to the same extent as the indemnity
contained in Section 9(a) (except that any settlement described in
Section 9(a)(ii) shall be
10
effected with the prior written
consent of the Holder), but only insofar as such loss, liability, claim, damage
or expense arises out of or is based upon any untrue statement or omission, or
alleged untrue statements or omissions, made in the Resale Shelf Registration
Statement (or any amendment thereto) or any Prospectus (or any amendment or
supplement thereto) in reliance upon and in conformity with written information
furnished to the Trust by the Holder expressly for use in such Resale Shelf
Registration Statement (or any amendment thereto) or such Prospectus (or any
amendment or supplement thereto). Notwithstanding
the provisions of this Section 9(b), the Holder shall not be required to
indemnify the Trust with respect to any amount in excess of the amount of the
total net proceeds received by the Holder from sales of the Registrable Shares
under the Resale Shelf Registration Statement.
(d) For purposes of this Section 9, the
term Resale Shelf Registration Statement and Prospectus shall be deemed to
include any “issuer free writing prospectus” (as such term is defined in Rule
433 promulgated under the Securities Act) used in connection with any resale of
the Registrable Shares.
10.
Indemnification Procedures
The
indemnified party shall give reasonably prompt notice to the indemnifying party
of any action or proceeding commenced against it of which the indemnified party
has actual knowledge and in respect of which indemnity may be sought hereunder,
but failure to so notify the indemnifying party (i) shall not relieve it
from any liability which it may have under the indemnity agreement provided in
Section 9(a) or 9(b), unless and to the extent it did not otherwise learn of
such action and the lack of notice by the indemnified party results in the
forfeiture by the indemnifying party of substantial rights and defenses and
(ii) shall not, in any event, relieve the indemnifying party from any
obligations to the indemnified party other than the indemnification obligation
provided under Section 9(a) or 9(b). If the indemnifying party so elects within
a reasonable time after receipt of such notice, the indemnifying party may assume
the defense of such action or proceeding at such indemnifying party’s own
expense with counsel chosen by the indemnifying party and approved by the
indemnified party, which approval shall not be unreasonably withheld; provided,
however, that, if the indemnified party reasonably determines that a conflict
of interest exists where it is advisable for the indemnified party to be
represented by separate counsel or that, upon advice of counsel, there may be
legal defenses available to it which are different from or in addition to those
available to the indemnifying party, then the indemnifying party shall not be entitled
to assume such defense and the indemnified party shall be entitled to separate
counsel at the indemnifying party’s expense. In no event shall an indemnifying party be
liable for the payment of legal fees and expenses of more than one counsel or
the indemnified parties with respect to any action, matter or claim. If the indemnifying party is not entitled to
assume the defense of such action or proceeding as a result of the proviso to
the preceding sentence, the indemnifying party’s counsel shall be entitled to
conduct the indemnifying party’s defense and counsel for the indemnified party
shall be entitled to conduct the defense of the indemnified party, it being
understood that both such counsel will cooperate with each other to conduct the
defense of such action or proceeding as efficiently as possible; provided,
however, that counsel for the indemnified party shall not be required to take any
action which would prejudice the defense of the indemnified party. If the
indemnifying party is not so entitled to assume the defense of such action or
does not assume such defense, after having received the notice referred to in
the first sentence of this paragraph, the indemnifying party shall pay the
reasonable fees and expenses of counsel for the indemnified party. In such
event, however, the indemnifying party shall not be
11
liable for any settlement
effected without the written consent of the indemnifying party. If an
indemnifying party is entitled to assume, and assumes, the defense of such
action or proceeding in accordance with this paragraph, the indemnifying party
shall not be liable for any fees and expenses of counsel for the indemnified
party incurred thereafter in connection with such action or proceeding.
11.
Contribution
. If the
indemnification provided for in Section 9 is unavailable to an indemnified
party with respect to any losses, claims, damages, actions, liabilities, costs
or expenses referred to therein or is insufficient to hold the indemnified
party harmless as contemplated therein, then the indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages,
actions, liabilities, costs or expenses in such proportion as is appropriate to
reflect the relative fault of the indemnifying party, on the one hand, and the
indemnified party, on the other hand, in connection with the statements or
omissions which resulted in such losses, claims, damages, actions, liabilities,
costs or expenses as well as any other relevant equitable considerations. The
relative fault of the indemnifying party, on the one hand, and of the indemnified
party, on the other hand, shall be determined by reference to, among other
factors, whether the untrue or alleged untrue statement of a material fact or
omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties’ relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission; provided, however, that in no event shall the
obligation of any indemnifying party to contribute under this Section 11
exceed the amount that such indemnifying party would have been obligated to pay
by way of indemnification if the indemnification provided for under
Section 9 hereof had been available under the circumstances.
The Trust and the
Holders agree that it would not be just and equitable if contribution pursuant
to this
Section 11
were determined by
pro
rata
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to in the immediately preceding
paragraph.
Notwithstanding
the provisions of this
Section 11
, no Holder shall be required to
contribute any amount in excess of the amount by which the gross proceeds from
the sale of Shares exceeds the amount of any damages that such Holder has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission. No indemnified party guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any indemnifying party who was not guilty of such fraudulent
misrepresentation.
12.
No Other Obligation to Register
. Except as otherwise expressly provided in
this Agreement, the Trust shall have no obligation to the Holders to register
the Registrable Shares under the Securities Act. Without limiting the foregoing, Common Shares
issued pursuant to the Indenture which are not Restricted Shares shall not
constitute Registrable Shares for purposes of this Agreement. Accordingly, in no event shall any holder of
such Common Shares have any registration rights with respect to such Common
Shares under this Agreement.
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13.
Amendments and Waivers
. The
provisions of this Agreement, including the provisions of this sentence, may
not be amended, modified or supplemented, and waivers or consents to departures
from the provisions hereof may not be given, unless the Trust has obtained the
written consent of Holders of a majority of the then outstanding Registrable
Shares. Notwithstanding the foregoing, a waiver or consent to depart from the
provisions hereof with respect to a matter that relates exclusively to the
rights of Holders whose securities are being sold pursuant to a Registration
Statement and that does not directly or indirectly affect the rights of other
Holders may be given by Holders of at least a majority of the Registrable
Securities being sold by such Holders pursuant to such Registration Statement;
provided
that the provisions of this sentence may not be amended, modified or
supplemented except in accordance with the provisions of the immediately
preceding sentence. Notwithstanding the foregoing two sentences, this Agreement
may be amended by written agreement signed by the Trust and the Company,
without the consent of the Holders of Registrable Shares, to cure any ambiguity
or to correct or supplement any provision contained herein that may be
defective or inconsistent with any other provision contained herein, or to make
such other provisions in regard to matters or questions arising under this
Agreement that shall not adversely affect the interests of the Holders of
Registrable Shares. Each Holder of Registrable Shares outstanding at the time
of any such amendment, modification, supplement, waiver or consent or
thereafter shall be bound by any such amendment, modification, supplement,
waiver or consent effected pursuant to this Section 13, whether or not any
notice, writing or marking indicating such amendment, modification, supplement,
waiver or consent appears on the Registrable Shares or is delivered to such
Holder.
14.
Notices
. All notices and other
communications provided for or permitted hereunder shall be made in writing by
hand delivery, by telecopier, by courier guaranteeing overnight delivery or by
first-class mail, and shall be deemed given (i) when made, if made by hand
delivery, (ii) upon confirmation, if made by telecopier, or (iii) one
(1) Business Day after being deposited with such courier, if made by a
recognized overnight courier, if made by first-class mail, to the parties as
follows:
If to the Trust:
Equity
Residential
Two
North Riverside Plaza
Chicago,
Illinois 60606
Attn
:
Bruce
C. Strohm, Esq.
Fax:
With a copy to:
DLA Piper Rudnick Gray
Cary US LLP
203 North LaSalle Street,
Suite 1900
Chicago, Illinois 60601
Attn: Hal M. Brown, Esq.
Fax: (312) 630-5399
If to a Holder:
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At the most current address given by such Holder to the Trust in a
Notice and Questionnaire or any amendment thereto.
15.
Successors and Assigns
. This
Agreement shall be binding upon the parties hereto and their respective
successors and assigns and shall inure to the benefit of the parties hereto and
their respective successors and assigns. If any successor, assignee or
transferee of any Holder shall acquire Registrable Shares, in any manner,
whether by operation of law or otherwise, (i) such successor, assignee or
transferee shall be entitled to all of the benefits of a “Holder” under this
Agreement and (ii) such Registrable Shares shall be held subject to all of
the terms of this Agreement, and by taking and holding such Registrable Shares
such Person shall be conclusively deemed to have agreed to be bound by all of
the terms and provisions hereof.
16.
Counterparts
. This Agreement
may be executed in any number of counterparts and by the parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement.
17.
Governing Law
This Agreement
shall be governed by and construed in accordance with the laws of the State of
New York applicable to contracts made and to be performed wholly within said
state.
18.
Third Party Beneficiary and
Remedies
. Each of the Holders shall be a third party beneficiary of this
Agreement, with full rights of enforcement as if a party hereto. The remedies
provided for herein are not exclusive and shall not limit any rights or
remedies which may otherwise be available to any Holder at law or in equity.
The Trustee shall be entitled, on behalf of Holders, to seek any available
remedy for the enforcement of this Agreement
19.
Severability
. In the event
that any one or more of the provisions contained herein, or the application
thereof in any circumstances, is held invalid, illegal or unenforceable in any
respect for any reason, the validity, legality and enforceability of any such
provision in every other respect and of the remaining provisions contained
herein shall not be in any way impaired thereby, it being intended that all of
the rights and privileges of the parties hereto shall be enforceable to the
fullest extent permitted by law.
20.
Entire Agreement
. This
Agreement is intended by the parties as a final expression of their agreement
and intended to be the complete and exclusive statement of the agreement and
understanding of the parties hereto in respect of the subject matter contained
herein. There are no restrictions, promises, warranties or undertakings, other
than those set forth or referred to herein, with respect to such subject
matter. This Agreement supersedes all prior agreements and understandings
between the parties with respect to such subject matter.
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IN
WITNESS WHEREOF
, the parties hereto have executed this
Agreement as of the date first written above.
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EQUITY RESIDENTIAL
,
a
Maryland real
estate investment trust
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By:
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/s/ Donna
Brandin
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Name: Donna
Brandin
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Title: Executive
Vice President and
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Chief Financial
Officer
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ERP
OPERATING LIMITED
PARTNERSHIP,
an Illinois limited partnership
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By:
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Equity
Residential, its general partner
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By:
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/s/ Robert A.
Garechana
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Name: Robert A.
Garechana
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Title: Assistant
Vice President and
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Assistant
Treasurer
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