Exhibit 1.1
41,250,000 Shares
AMB PROPERTY CORPORATION
Common Stock
par value $.01 per share
UNDERWRITING AGREEMENT
March 25, 2009
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
J.P. Morgan Securities Inc.
Morgan Stanley & Co. Incorporated
As representatives of the several underwriters
named in Schedule I hereto
c/o Merrill Lynch, Pierce, Fenner & Smith
Incorporated
4 World Financial Center
New York, New York 10080
J.P. Morgan Securities Inc.
383 Madison Avenue
New York, New York 10179
Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Dear Sirs and Mesdames:
AMB Property Corporation, a Maryland corporation (the REIT), proposes to issue and sell to
the several Underwriters named in Schedule I hereto (each, an Underwriter, and,
collectively, the Underwriters) an aggregate of forty-one million two-hundred fifty thousand
(41,250,000) shares (the Firm Shares) of its common stock, par value $.01 per share (the Common
Stock). Merrill Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan Securities Inc. and Morgan
Stanley & Co. Incorporated have each agreed to act as representatives of the several Underwriters
(in such capacity, the Representatives) in connection with the offering and sale of the Shares
(as defined below). As used herein, the Company shall include the REIT, AMB Property, L.P., a
Delaware limited partnership (the Operating Partnership), and each of the subsidiaries of the
REIT or the Operating Partnership which is a significant subsidiary as defined in Rule 405 of
Regulation C of the Securities Act of 1933, as amended (together with the rules and regulations of
the Commission thereunder, the Securities Act) (each, a Subsidiary, and, collectively, the
Subsidiaries). The REIT also proposes to issue and sell to the several Underwriters not more
than an additional six million one hundred eighty-seven thousand five hundred (6,187,500) shares of
Common Stock (the Additional Shares), if and to the extent that the Representatives shall have
determined to exercise, on behalf of the Underwriters, the right to purchase such shares granted to
the Underwriters in Section 3 hereof. The Firm Shares and the Additional Shares are hereinafter
collectively referred to as the Shares.
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The REIT and the Operating Partnership have prepared and filed with the Securities and
Exchange Commission (the Commission) under the Securities Act an automatic shelf registration
statement, as defined under Rule 405 under the Securities Act, on Form S-3 (Registration No.
333-153379), including a prospectus, relating to the Shares. Such registration statement,
including the exhibits thereto, as amended (or deemed to have been amended pursuant to Rules 430A,
430B or 430C under the Securities Act) from time to time, is hereinafter referred to as the
Registration Statement. The prospectus in the form in which it appears in the Registration
Statement, including the documents, if any, incorporated by reference therein, is hereinafter
referred to as the Basic Prospectus. The REIT filed on March 25, 2009 with the Commission
pursuant to Rule 424(b) under the Securities Act a preliminary prospectus supplement to the Basic
Prospectus relating to the Shares (the Preliminary Prospectus Supplement) and proposes to file
with the Commission pursuant to Rule 424(b) under the Securities Act a final prospectus supplement
to the Basic Prospectus relating to the Shares and in the form first used (or made available upon
the request of the purchasers pursuant to Rule 173 of the Securities Act) in connection with the
confirmation of sales (the Prospectus Supplement). The term Prospectus means the Basic
Prospectus together with the Preliminary Prospectus Supplement and the Prospectus Supplement and
the documents, if any, incorporated by reference therein. The terms supplement, amendment and
amend as used herein with respect to the Basic Prospectus, the Preliminary Prospectus Supplement,
the Prospectus Supplement and the Prospectus shall include all documents incorporated by reference,
or deemed to be incorporated by reference, therein that are filed subsequent to the date of the
Basic Prospectus by the REIT with the Commission pursuant to the Securities Exchange Act of 1934,
as amended (together with the rules and regulations of the Commission thereunder, the Exchange
Act) or the Securities Act.
As used herein, the term General Disclosure Package means (i) the Basic Prospectus and the
Preliminary Prospectus Supplement immediately prior to the Applicable Time (as defined below),
including any document incorporated by reference, or deemed to be incorporated by reference,
therein, or any amendment or supplement thereto and (iii) a schedule indicating the number of
Shares being sold and the price at which the Shares will be sold to the public attached as
Exhibit E. As used herein, the term Issuer Represented Free Writing Prospectus means any
issuer free writing prospectus as defined in Rule 433 of the Securities Act relating to the
Shares, including without limitation any Permitted Free Writing Prospectus. As used herein, the
term Applicable Time means at or immediately prior to the time when sales of the Shares were
first made. As used herein, the term Information 8-Ks means the REITs current report on Form
8-K filed with the Commission on March 25, 2009 and any current report on Form 8-K filed with the
Commission after the date hereof and on or prior to the Closing Date furnishing revised guidance.
1. Representations and Warranties. The REIT and Operating Partnership, jointly and
severally, represent and warrant to and agree with each of the Underwriters as of the date hereof,
at the Applicable Time and on the Closing Date (as defined in Section 5 below) that:
(a) The Registration Statement has become effective; the Registration Statement is an
automatic effective registration statement as defined under Rule 405 of the Securities Act
that has been filed with the Commission not earlier than three years prior to the date
hereof; and no notice of objection of the Commission to the use of such
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registration statement or any post-effective amendment thereto pursuant to Rule
401(g)(2) under the Securities Act has been received by the REIT; no stop order suspending
the effectiveness of the Registration Statement is in effect, and no proceedings for such
purpose or pursuant to Section 8A of the Securities Act are pending before or, to the
knowledge of the REIT, threatened by the Commission. The REIT is not an ineligible issuer
and is a well-known seasoned issuer, in each case, as defined under the Securities Act, in
each case, at the times specified in the Securities Act in connection with the offering of
the Shares. The REIT has paid the registration fee for this offering pursuant to Rule 456
(b) (1) under the Securities Act or will pay such fees within the time period required by
such rule (without giving effect to the proviso therein) and in any event prior to the
Closing Date.
(b) Except for statements in such documents which do not constitute part of the
Registration Statement or the Prospectus or the General Disclosure Package pursuant to Rule
412 of Regulation C under the Securities Act, (i) each document filed pursuant to the
Exchange Act or the Securities Act and incorporated by reference or deemed to be
incorporated by reference in the Prospectus complied when filed or will comply when so filed
in all material respects with the Exchange Act or the Securities Act, as the case may be,
and the applicable rules and regulations of the Commission thereunder, (ii) each part of the
Registration Statement, when such part became or becomes effective, did not contain any
untrue statement of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, (iii) each part of the
Registration Statement, when such part became or becomes effective, and the Prospectus, when
originally filed, complied and, as amended or supplemented, will comply in all material
respects with the Securities Act and the applicable rules and regulations of the Commission
thereunder, (iv) the Prospectus, on the date of filing with the Commission, did not contain
and, as amended or supplemented at each of the Applicable Time, the Closing Date and any
Option Closing Date (as defined in Section 5 below), will not contain, any untrue statement
of a material fact or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not misleading, and
(v) each of the General Disclosure Package, any Issuer Represented Free Writing Prospectus
and the Information 8-Ks (when considered together with the General Disclosure Package), at
the Applicable Time did not, and at the Closing Date will not, contain any untrue statement
of a material fact or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not misleading;
provided that the representations and warranties set forth in this Section 1(b) do
not apply to statements in or omissions from the Registration Statement, the Permitted Free
Writing Prospectus or the Prospectus, or any amendment or supplement thereto, based upon and
in conformity with information relating to any Underwriter furnished to the REIT in writing
by any Underwriter expressly for use in the Registration Statement, the Permitted Free
Writing Prospectus or the Prospectus, which information is limited to the information set
forth in Exhibit A hereto.
(c) The REIT has been duly incorporated and is validly existing as a corporation in
good standing under the laws of the State of Maryland, and has all power and authority
necessary to own, lease and operate its properties and to conduct the
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businesses in which it is engaged or proposes to engage as described in the Prospectus
and the General Disclosure Package and to enter into and perform its obligations under this
Agreement. The REIT is duly qualified or registered as a foreign corporation and is in good
standing in California and is in good standing in each other jurisdiction in which such
qualification or registration is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure so to qualify or be registered
or to be in good standing in such other jurisdiction would not result in a material adverse
effect on the consolidated financial position, results of operations or business of the
REIT, the Operating Partnership and their subsidiaries, taken as a whole (a Material
Adverse Effect).
(d) The Operating Partnership is a limited partnership duly formed and existing under
and by virtue of the laws of the State of Delaware and is in good standing under the
Delaware Revised Uniform Limited Partnership Act with partnership power and authority to
own, lease and operate its properties, to conduct the business in which it is engaged or
proposes to engage as described in the Prospectus and the General Disclosure Package and to
enter into and perform its obligations under this Agreement. The Operating Partnership is
duly qualified or registered as a foreign partnership and is in good standing in California
and is in good standing in each other jurisdiction in which such qualification or
registration is required, whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure so to qualify or be registered or to be in
good standing in such other jurisdiction would not have Material Adverse Effect. The REIT
is the sole general partner of the Operating Partnership and owns the percentage interest in
the Operating Partnership as set forth or incorporated by reference in the Prospectus and
the General Disclosure Package.
(e) Each Subsidiary is, as the case may be, duly incorporated or organized, and is
validly existing as a partnership, corporation or limited liability company in good standing
under the laws of its respective jurisdiction of organization, and has the corporate,
partnership or other power and authority to own its property and to conduct its business as
described in the Prospectus and the General Disclosure Package. Each Subsidiary is duly
qualified to transact business and is in good standing in each jurisdiction in which the
conduct of its business or its ownership or leasing of property requires such qualification,
except to the extent that the failure to be so qualified or be in good standing would not
have a Material Adverse Effect; all of the issued shares of capital stock or other ownership
interests of each Subsidiary have been duly and validly authorized and issued, are fully
paid and non-assessable and, except as set forth or incorporated by reference in the
Prospectus and the General Disclosure Package, are owned directly or indirectly by the REIT
or the Operating Partnership, free and clear of all liens, encumbrances, equities or claims.
(f) Each of the joint venture partnerships or limited liability companies that is
consolidated in the consolidated financial statements of the Company or that is listed in
the REITs or the Operating Partnerships annual report on Form 10-K (together, the Annual
Report) for the year ended December 31, 2008 (collectively, the Joint Ventures) has been
duly formed and is validly existing as a limited partnership or limited liability company in
good standing under the laws of its state of organization,
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with power and authority to own, lease and operate its properties and to conduct the
business in which it is engaged, except where the failure to be duly formed, validly
existing or in good standing or where to own, lease and operate its properties and to
conduct its business would not have a Material Adverse Effect. Each Joint Venture is duly
qualified or registered as a foreign limited partnership or limited liability company to
transact business in each jurisdiction in which such qualification or registration is
required, whether by reason of the ownership or leasing of property or the conduct of
business, except where the failure so to qualify or be registered would not have a Material
Adverse Effect. Except as would not have a Material Adverse Effect, the REIT, the Operating
Partnership or a subsidiary of the REIT or the Operating Partnership owns the percentage of
the partnership or other equity interest in each of the Joint Ventures as set forth in the
Annual Report (the Joint Venture Interests), and each of the Joint Venture Interests is
validly issued and fully paid and free and clear of any security interest, mortgage, pledge,
lien encumbrance, claim or equity, except for any security interest, mortgage, pledge, lien,
encumbrance, claim or equity which would not, singly or in the aggregate, have a Material
Adverse Effect. The Company has no other interests in joint venture partnerships or limited
liability companies in which unrelated third parties have interests which are, individually
or in the aggregate, material to the consolidated financial position, results of operations
or business of the REIT, the Operating Partnership and their subsidiaries, taken as a whole,
other than as set forth in the Annual Report or as reflected in the financial statements and
schedules therein.
(g) Each of the REIT and the Operating Partnership has full right, power and authority
to execute and deliver this Agreement and to perform its obligations hereunder; and all
action required to be taken for the due and proper authorization, execution and delivery by
it of this Agreement and the consummation by it of the transactions contemplated hereby has
been duly and validly taken. This Agreement has been duly authorized, executed and
delivered by the REIT and the Operating Partnership.
(h) The REIT has an authorized capitalization as set forth in the Prospectus and the
General Disclosure Package, and the authorized capital stock of the REIT conforms in all
material respects to the description thereof contained in the Prospectus and the General
Disclosure Package.
(i) All of the issued and outstanding partnership units of the Operating Partnership
(the Units) have been duly and validly authorized and issued and conform to the
description thereof contained or incorporated by reference in the Prospectus and the General
Disclosure Package. The Units owned by the REIT are owned directly by the REIT, free and
clear of all liens, encumbrances, equities or claims.
(j) The Shares have been duly authorized and classified for issuance and sale to the
Underwriters pursuant to this Agreement. When the Shares are duly paid for and delivered as
provided herein, the Shares will be validly issued, fully paid and nonassessable. The
issuance of the Shares is not subject to preemptive or similar rights.
(k) The execution and delivery by the REIT and the Operating Partnership of, and the
performance by each of the REIT and the Operating Partnership of its respective obligations
under, this Agreement and the consummation of the transactions
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contemplated hereby and thereby, as described in the Prospectus and the General
Disclosure Package, will not (i) conflict with or result in a breach or violation of any of
the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of
trust, loan agreement, joint venture agreement, partnership agreement, limited liability
company agreement or any other agreement or instrument to which the Company is a party or by
which the Company is bound or to which any of the property or assets of the Company is
subject, except for such conflicts, breaches or violations which would not, singly or in the
aggregate, have a Material Adverse Effect, (ii) result in any violation of the provisions of
the charter, by-laws, certificate of limited partnership, partnership agreement or other
organizational documents of the REIT, the Operating Partnership or any Subsidiary, as the
case may be, or (iii) result in any violation of any statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction over the Company,
except where such noncompliance or violation of any such statute, order, rule or regulation
would not, singly or in the aggregate, have a Material Adverse Effect. No consent,
approval, authorization or order of, or filing or registration with, any such court or
governmental agency or body is required for the execution and delivery by the REIT or the
Operating Partnership of, and the performance by each of the REIT and the Operating
Partnership of its respective obligations under, this Agreement and the consummation of the
transactions contemplated hereby and thereby, except for (A) the registration of the Shares
under the Securities Act or the rules and regulations thereunder and such consents,
approvals, authorizations, registrations or qualifications as may be required under the
Securities Act, the Exchange Act, or the rules and regulations thereunder, and applicable
state and foreign securities laws in connection with issuance, offer and sale of the Shares,
(B) the listing of the Shares on the New York Stock Exchange (the NYSE), or (C) consents,
approvals, authorizations, orders, filings or registrations that will be completed on or
prior to the Closing Date.
(l) There are no legal or governmental proceedings pending or, to the knowledge of the
REIT and the Operating Partnership, threatened, to which the Company is a party or to which
any of the properties of the Company is subject that are required to be described in the
Registration Statement, the Prospectus or the General Disclosure Package and are not so
described or incorporated by reference, or any statutes, regulations, contracts or other
documents that are required to be described in the Registration Statement, the Prospectus or
the General Disclosure Package or to be filed as exhibits to the Registration Statement that
are not described, incorporated by reference or filed as required.
(m) The Preliminary Prospectus Supplement and any Issuer Represented Free Writing
Prospectus when so filed with the Commission complied in all material respects with the
Securities Act and the applicable rules and regulations of the Commission thereunder.
(n) None of the REIT, the Operating Partnership or any Subsidiary is, and after giving
effect to the offering and sale of the Shares and the application of the proceeds thereof as
described in the Prospectus and the General Disclosure Package, none will be, an investment
company as such term is defined in the Investment Company Act of 1940, as amended.
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(o) Other than as contemplated by the General Disclosure Package and the Prospectus,
there are no contracts, agreements or understandings between the REIT and any person
granting such person the right to require the REIT to file a registration statement under
the Securities Act with respect to any securities of the REIT, other than with respect to a
de minimis number of shares of Common Stock, of the REIT, or to require the REIT to include
such securities with the Shares registered pursuant to the Registration Statement.
(p) There has not occurred any material adverse change, or any development involving a
prospective material adverse change, in the condition, financial or otherwise, or in the
earnings, business or operations of the REIT, the Operating Partnership, and their
subsidiaries, taken as a whole, from that set forth or incorporated by reference in the
Prospectus and the General Disclosure Package. Subsequent to the respective dates as of
which information is given in the Registration Statement, the Prospectus and the General
Disclosure Package, except as described in or contemplated by the Prospectus or the General
Disclosure Package or a document incorporated therein by reference, (i) the Company has not
incurred any liability or obligation, direct or contingent, nor entered into any transaction
not in the ordinary course of business that is material with respect to the REIT, the
Operating Partnership and their subsidiaries, taken as a whole; (ii) the REIT has not
purchased any of its outstanding capital stock other than pursuant to its stock repurchase
program, nor declared, paid or otherwise made any dividend or distribution of any kind on
its capital stock other than regular quarterly cash dividends; (iii) the Operating
Partnership has not purchased any of its outstanding Units, nor declared, paid or otherwise
made any dividend or distribution of any kind on its Units other than in the normal course
of business, and (iv) there has not been any change in the capital stock or increase in the
short-term debt or long-term debt that is, in either case, material with respect to the
Company taken as a whole (excluding debt resulting from a draw down on the credit facilities
of the REIT, the Operating Partnership or any of their subsidiaries).
(q) Except as otherwise disclosed in the General Disclosure Package and the Prospectus,
the REIT, the Operating Partnership and their respective subsidiaries each has good and
marketable title to, or valid and enforceable leasehold estates in, all items of real and
personal property referred to therein as owned or leased by them, in each case free and
clear of all liens, encumbrances, claims, security interests and defects, other than those
referred to therein or which would not materially affect the value thereof or materially
interfere with the use made or to be made by them.
(r) Except as disclosed or incorporated by reference in the General Disclosure Package
and the Prospectus: The REIT and the Operating Partnership each has no knowledge of any of
the following which could have a Material Adverse Effect: (1) the unlawful presence of any
hazardous substances, hazardous materials, toxic substances or waste materials
(collectively, Hazardous Materials) on any of the properties currently owned by it or any
of its subsidiaries or any of the properties previously owned by it or any of its
subsidiaries for which it retains any liability with respect to Hazardous Materials or (2)
any unlawful spills, releases, discharges or disposal of Hazardous Materials that have
occurred or are presently occurring off such properties as a result of
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any construction on or operation and use of such properties. In connection with the
construction on or operation and use of the properties owned by the REIT, the Operating
Partnership or any of their respective subsidiaries, the REIT and the Operating Partnership
each represents that it has no knowledge of any material failure to comply with all
applicable local, state and federal environmental laws, regulations, ordinances and
administrative and judicial orders relating to the generation, recycling, reuse, sale,
storage, handling, transport and disposal of any Hazardous Materials.
(s) The independent auditors of the Company, who have certified certain financial
statements incorporated by reference in the Registration Statement, the Prospectus and the
General Disclosure Package, whose report appears in the Prospectus and the General
Disclosure Package, are independent public accountants as required by the Securities Act and
the rules and regulations of the Commission thereunder during the periods covered by the
financial statements on which they reported contained in the Prospectus and the General
Disclosure Package.
(t) The Company is insured by insurers of recognized financial responsibility against
such losses and risks and in such amounts as are prudent and customary in the businesses in
which they are engaged; the Company has not been refused any insurance coverage sought or
applied for; and the Company does not have any reason to believe that it will not be able to
renew its existing insurance coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to continue its business at a cost that
would not have a Material Adverse Effect, except as described in or contemplated by the
Prospectus and the General Disclosure Package, or in a document incorporated by reference
therein.
(u) The Company possesses all certificates, authorizations and permits issued by the
appropriate federal, state or foreign regulatory authorities necessary to conduct its
businesses, except where the failure to possess such certificates, authorizations and
permits, singly or in the aggregate, would not result in a Material Adverse Effect, and the
Company has not received any notice of proceedings relating to the revocation or
modification of any such certificate, authorization or permit which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding, would result in a
Material Adverse Effect, except as described in or contemplated by the Prospectus and the
General Disclosure Package.
(v) The Company has filed all Federal, state, and local income tax returns which have
been required to be filed and has paid all taxes required to be paid and any other
assessment, fine or penalty levied against it, to the extent that any of the foregoing is
due and payable, except, in all cases, for any such tax, assessment, fine or penalty that is
being contested in good faith (and except in any case in which the failure to so file or pay
would not have a Material Adverse Effect).
(w) The financial statements (including the notes thereto) included or incorporated by
reference in the Registration Statement, the Prospectus and the General Disclosure Package
present fairly in all material respects the financial position of the respective entity or
entities presented therein at the respective dates indicated and the results of their
operations for the respective periods specified, and except as otherwise
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stated or incorporated by reference in the Registration Statement, the Prospectus and
the General Disclosure Package, said financial statements have been prepared in conformity
with generally accepted accounting principles (GAAP) applied on a consistent basis. The
supporting schedules included in the Registration Statement present fairly in all material
respects the information required to be stated or incorporated by reference therein. The
financial information and data included in the Registration Statement, the Prospectus and
the General Disclosure Package present fairly in all material respects the information
included therein and have been prepared on a basis consistent with that of the books and
records of the respective entities presented therein. The Companys ratios of earnings to
fixed charges and preferred stock dividends set forth in the Prospectus under the caption
Ratio of Earnings to Fixed Charges and Preferred Stock Dividends and in Exhibit 12 to the
Registration Statement have been calculated in compliance with Item 503(d) of Regulation S-K
under the Securities Act. Pro forma financial information included or incorporated by
reference in the Prospectus and the General Disclosure Package has been prepared in
accordance with the applicable requirements of Rules 11-01 and 11-02 of Regulation S-X under
the Securities Act, and the necessary pro forma adjustments have been properly applied to
the historical amounts in the compilation of such information, and, in managements opinion,
the assumptions used in the preparation thereof are reasonable and the adjustments used
therein are appropriate to give effect to the transactions and circumstances referred to
therein.
(x) There is and has been no failure on the part of the Company or any of the Companys
directors or officers, in their capacities as such, to comply with any provision of the
Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated in connection
therewith, including Section 402 related to loans and Sections 302 and 906 related to
certifications.
(y) The Company maintains an effective system of disclosure controls and procedures
(as defined in Rule 13a-15(e) of the Exchange Act) that is designed to ensure that
information required to be disclosed by the Company in reports that it files or submits
under the Exchange Act is recorded, processed, summarized and reported within the time
periods specified in the Commissions rules and forms, including controls and procedures
designed to ensure that such information is accumulated and communicated to the Companys
management as appropriate to allow timely decisions regarding required disclosure. The
Company and its subsidiaries have carried out evaluations of the effectiveness of their
disclosure controls and procedures as required by Rule 13a-15 of the Exchange Act.
(z) The Company maintains systems of internal control over financial reporting (as
defined in Rule 13a-15(f) of the Exchange Act) that comply with the requirements of the
Exchange Act and have been designed by, or under the supervision of, their respective
principal executive and principal financial officers, or persons performing similar
functions, to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles, including, but not limited to internal accounting
controls sufficient to provide reasonable assurance that (i) transactions are executed in
accordance with managements general or specific authorizations; (ii)
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transactions are recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain asset
accountability; (iii) access to assets is permitted only in accordance with managements
general or specific authorization; and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action is taken
with respect to any differences. Except as disclosed in the Registration Statement, the
General Disclosure Package and the Prospectus, there are no material weaknesses in the
Companys internal controls.
(aa) The Company is currently in compliance with all presently applicable provisions of
the Americans with Disabilities Act, except for such noncompliance which would not, singly
or in the aggregate, have a Material Adverse Effect, and no failure of the Company to comply
with all presently applicable provisions of the Americans with Disabilities Act would have a
Material Adverse Effect.
(bb) The REIT has elected to be taxed as a real estate investment trust under the
Internal Revenue Code of 1986, as amended (the Code), commencing with its taxable year
ended December 31, 1997; the REIT has qualified and expects that it will continue to qualify
as a real estate investment trust under the Code beginning with its taxable year ended
December 31, 1997, and will continue to qualify as a real estate investment trust under
the Code after consummation of the transactions contemplated by the Prospectus and the
General Disclosure Package; and the REITs present and contemplated operations, assets and
income will enable it to meet the requirements for qualification as a real estate
investment trust under the Code.
(cc) Neither the REIT, the Operating Partnership nor any Subsidiary, nor any of their
directors, officers or controlling persons, has taken or will take, directly or indirectly,
any action designed to cause or result under the Exchange Act, or otherwise in, or which has
constituted or which reasonably might be expected to constitute, the unlawful stabilization
or manipulation of the price of any security of the REIT to facilitate the sale or resale of
the Shares.
2. Representations and Warranties Regarding Free Writing Prospectuses. The Company
represents and agrees that, unless it obtains the prior consent of the Representatives on behalf of
the several Underwriters, and each Underwriter represents and agrees that, unless it obtains the
prior consent of the Company and the other Underwriters, it has not made and will not make any
offer relating to the Shares that would constitute an issuer free writing prospectus, as defined
in Rule 433 under the Securities Act, or that would otherwise constitute a free writing
prospectus, as defined in Rule 405 under the Securities Act, required to be filed with the
Commission. Any such free writing prospectus consented to by the Company and the Underwriters is
referred to herein as a Permitted Free Writing Prospectus, each of which Permitted Free Writing
Prospectus as of the date hereof is attached as Exhibit E. The Company represents that it
has treated, and agrees that it will treat, each Permitted Free Writing Prospectus as an issuer
free writing prospectus, as defined in Rule 433, and has complied and will comply with the
requirements of Rules 164 and 433 applicable to any Permitted Free Writing Prospectus, including
timely filing with the Commission where required, legending and record keeping. The Company
represents that each Issuer Represented Free Writing Prospectus, if any, as of its issue date and
at all subsequent times through the completion of the public offer and sale of the Shares
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did not, does not and will not include any information that conflicted, conflicts or will
conflict with the information contained in the Registration Statement or the Prospectus, including
any information in the Preliminary Prospectus Supplement or any other prospectus deemed to be a
part of the Prospectus that has not been superseded or modified, provided that this
representation does not apply to information contained in the Permitted Free Writing Prospectus
based upon and in conformity with information relating to any Underwriter furnished to the REIT in
writing by any Underwriter expressly for use in the Permitted Free Writing Prospectus, which
information is limited to the information set forth in Exhibit A hereto.
3. Agreement to Sell and Purchase. The REIT hereby agrees to issue and sell to the
several Underwriters, and each Underwriter, upon the basis of the representations and warranties
herein contained and upon the terms and subject to the conditions herein set forth, agrees,
severally and not jointly, to purchase from the REIT, the respective number of Firm Shares set
forth in Schedule I hereto opposite its name. The purchase price per share of the Shares
to be paid by the several Underwriters to the REIT shall be $11.664 a share (the Purchase Price).
In addition, the REIT hereby agrees to issue and sell to the several Underwriters, and the
Underwriters, upon the basis of the representations and warranties herein contained and upon the
terms and subject to the conditions herein set forth, shall have a one-time right to purchase,
severally and not jointly, from the REIT any or all of the Additional Shares at the Purchase Price.
If you, on behalf of the Underwriters, elect to exercise such option, you shall so notify the REIT
in writing not later than 30 days after the date of this Agreement, which notice shall specify the
number of Additional Shares to be purchased by the Underwriters and the date on which such shares
are to be purchased. Such date may be the same as the Closing Date (as defined below), but not
earlier than the Closing Date nor later than ten (10) business days after the date of such notice.
Additional Shares may be purchased as provided in Section 5 hereof solely for the purpose of
covering over-allotments made in connection with the offering of the Firm Shares. If any
Additional Shares are to be purchased, each Underwriter agrees, severally and not jointly, to
purchase the number of Additional Shares (subject to such adjustments to eliminate fractional
shares as you may determine) that bears the same proportion to the total number of Additional
Shares to be purchased as the number of Firm Shares set forth in Schedule I hereto opposite
the name of such Underwriter bears to the total number of Firm Shares.
Each of the REIT and the Operating Partnership hereby agrees that, without the prior written
consent of each of Merrill Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan Securities Inc.
and Morgan Stanley & Co. Incorporated on behalf of the Underwriters, it will not, directly or
indirectly, during the period commencing on the date hereof and ending 90 days after the date of
the Prospectus, (i) offer, pledge, announce the intention to sell, sell, contract to sell, sell any
option or contract to purchase, purchase any option or contract to sell, grant any option, right or
warrant to purchase, lend or otherwise transfer or dispose of any shares of its Common Stock, or
any securities convertible into or exercisable or exchangeable for Common Stock or any other
securities substantially similar to the Common Stock (other than in connection with the acquisition
of properties) or (ii) enter into any swap or other arrangement that transfers to another, in whole
or in part, any of the economic consequences of ownership of shares of Common Stock, whether any
such transaction described in clause (i) or (ii) above is to be settled by delivery of shares of
Common Stock, other securities, in cash or otherwise. The restrictions
11
described in the foregoing sentence shall not apply to (1) the Shares to be sold hereunder,
(2) the issuance by the Company of options or shares of restricted Common Stock pursuant to the
Companys existing employee stock option plans in the ordinary course and consistent with past
practice and the Companys standard vesting schedule, (3) the issuance of any shares of Common
Stock issued upon the exercise of options granted under existing employee stock option plans in the
ordinary course and consistent with past practice and the Companys standard vesting schedule,(4)
the issuance of Units or AMB Property II, L.P. units in connection with the acquisition of
properties by the Company, (5) the issuance of shares of Common Stock in exchange for Units or AMB
Property II, L.P. units, or (6) prevent the Company from redeeming or repurchasing any of its
securities, including, without limitation, Units or limited partnership units of AMB Property II,
L.P. Notwithstanding the foregoing, if (1) during the last 17 days of the 90-day restricted
period, the Company issues an earnings release or material news or a material event relating to the
Company occurs; or (2) prior to the expiration of the 90-day restricted period, the Company
announces that it will release earnings results during the 16-day period beginning on the last day
of the 90-day period, the restrictions imposed by this Agreement shall continue to apply until the
expiration of the 18-day period beginning on the issuance of the earnings release or the occurrence
of the material news or material event.
4. Terms of Public Offering. The REIT is advised by you that the Underwriters propose
to make a public offering of their respective portions of the Shares as soon after this Agreement
has become effective as in your judgment is advisable. The REIT is further advised by you that the
Shares are to be offered to the public initially at $12.15 a share (the Public Offering Price),
and to certain dealers selected by you at a price that represents a concession not in excess of
$0.2916 a share under the Public Offering Price.
5. Payment and Delivery. Payment of the aggregate Purchase Price for the Firm Shares
shall be made to the REIT in federal or other funds immediately available in New York City against
delivery of such Firm Shares to the Representatives for the respective accounts of the several
Underwriters at 10:00 A.M., New York City time, on the third full business day following the date
of this Agreement, or at such other time on the same or such other date as shall be agreed to in
writing by the REIT and the Representatives. The time and date of such payment are hereinafter
referred to as the Closing Date.
Payment for the Additional Shares shall be made to the REIT in federal or other funds
immediately available in New York City against delivery of such Additional Shares to the
Representatives for the respective accounts of the several Underwriters at 10:00 A.M., New York
City time, on the date specified in the notice described in Section 3 or at such other time on the
same or such other date as shall be agreed to in writing by the REIT and the Representatives. The
time and date of such payment are hereinafter referred to as the Option Closing Date.
The Company will deliver the Firm Shares and Additional Shares to the Representatives for the
respective accounts of the Underwriters in book-entry form through the facilities of the Depository
Trust Company on the Closing Date or the Option Closing Date, as the case may be, with any transfer
taxes payable in connection with the transfer of the Shares to the Underwriters duly paid, against
payment of the Purchase Price therefor.
6. Conditions to the Underwriters Obligations. The several obligations of the
Underwriters hereunder are subject to the accuracy of the representations and warranties on the
12
part of the REIT and the Operating Partnership herein, to the accuracy of the statements of
the Companys officers made in each certificate furnished pursuant to the provisions hereof and to
the performance and observance by the Company of all covenants and agreements herein contained on
its part to be performed and observed and to the following conditions:
(a) Subsequent to the execution and delivery of this Agreement and prior to the
Applicable Time and the Closing Date, as the case may be:
(i) there shall not have occurred any change, or any development involving a
prospective change, in the condition, financial or otherwise, or in the earnings,
business or operations of the REIT, the Operating Partnership and their
subsidiaries, taken as a whole, from that set forth in the Prospectus and the
General Disclosure Package (exclusive of any amendments or supplements thereto
subsequent to the date of this Agreement) that, in your judgment, is material and
adverse and that makes it, in your judgment, impracticable to market the Shares on
the terms and in the manner contemplated in the Prospectus and the General
Disclosure Package; and
(ii) there shall not have occurred any downgrading, nor shall any notice have
been given of any intended or potential downgrading or of any review for a possible
change that does not indicate the direction of the possible change, in the rating
accorded the REIT, the Operating Partnership, any of their subsidiaries, any of
their respective securities or in the rating outlook for any of them by any
nationally recognized statistical rating organization, as such term is defined for
purposes of Rule 436(g)(2) under the Securities Act.
(b) The Underwriters shall have received on the Closing Date a certificate, dated the
Closing Date, and signed by an executive officer of the REIT on behalf of the REIT and in
the REITs capacity as general partner of the Operating Partnership, to the effect set forth
in subsection (a) and subsection (c) of this Section 6, and to the effect that:
(i) the representations and warranties of the REIT and the Operating Partnership
contained in this Agreement are true and correct at the Applicable Time and on the Closing
Date, as if made at the Applicable Time and on the Closing Date; and
(ii) all of the covenants and agreements contained herein to be performed on the part
of the Company and all conditions contained herein to be fulfilled or complied with by the
Company at or prior to the Applicable Time or the Closing Date, as the case may be, shall
have been duly performed, fulfilled or complied with in all material respects at or prior to
the time such performance, fulfillment or compliance was required.
The officer signing and delivering such certificate may rely upon the best of his or her
knowledge as to proceedings threatened.
(c) The Prospectus and any Issuer Represented Free Writing Prospectus required to be
filed shall have been filed with the Commission as required by the Securities Act and/or
this Agreement and no stop order suspending the effectiveness of
13
the Registration Statement or any order preventing or suspending the use of the
Prospectus or the General Disclosure Package shall have been issued and no proceedings for
that purpose, pursuant to Rule 401(g)(2) or pursuant to Section 8A under the Securities Act,
shall be pending or threatened by the Commission.
(d) The Underwriters shall have received on the Closing Date (i) an opinion or opinions
of Latham & Watkins LLP, special counsel for the REIT, dated the Closing Date, in form and
substance satisfactory to the Underwriters, as to the matters set forth in Exhibit
B-1 attached hereto, (ii) an opinion or opinions of Latham & Watkins LLP, special tax
counsel for the REIT, dated the Closing Date, in form and substance satisfactory to the
Underwriters, as to the matters set forth in Exhibit B-2 attached hereto, and (iii)
a letter of Latham & Watkins LLP, special counsel for the REIT, dated the Closing Date, in
form and substance satisfactory to the Underwriters, as to the matters set forth in
Exhibit B-3 attached hereto.
(e) The Underwriters shall have received on the Closing Date an opinion of Tamra D.
Browne, General Counsel to the REIT, dated the Closing Date, in form and substance
satisfactory to the Underwriters, as to the matters set forth in Exhibit C attached
hereto.
(f) The Underwriters shall have received on the Closing Date an opinion of Ballard
Spahr Andrews & Ingersoll, LLP, Maryland corporate counsel for the REIT, dated the Closing
Date, in form and substance satisfactory to the Underwriters, as to the matters set forth in
Exhibit D attached hereto.
(g) The Underwriters shall have received on the Closing Date an opinion(s) of Gibson,
Dunn & Crutcher LLP, counsel for the Underwriters, dated the Closing Date, in form and
substance satisfactory to the Underwriters.
(h) The Underwriters shall have received on the date hereof a letter(s) dated the date
hereof, in form and substance reasonably satisfactory to the Underwriters, from
PricewaterhouseCoopers LLP, the Companys independent registered public accounting firm,
containing statements and information of the type ordinarily included in accountants
comfort letters to underwriters with respect to the financial statements and certain
financial information contained in the Registration Statement and the Prospectus. On the
Closing Date, PricewaterhouseCoopers LLP shall have furnished to the Underwriters a letter,
dated the Closing Date, which shall confirm, on the basis of a review in accordance with the
procedures set forth in the letter from PricewaterhouseCoopers LLP, that nothing has come to
their attention during the period from the date of the letter referred to in the prior
sentence to a date (specified in the letter) not more than three days prior to the Closing
Date which would require any change in their letter dated the date hereof if it were
required to be dated and delivered at the Closing Date.
(i) The Underwriters shall have received on the Closing Date a certificate, dated the
Closing Date, and signed by the chief financial officer of the REIT on behalf of the REIT
and in the REITs capacity as general partner of the Operating Partnership, covering the
matters set forth in Exhibit F attached hereto.
14
(j) The Shares shall be qualified for sale in such states as the Underwriters may
reasonably request, and each such qualification shall be in effect and not subject to any
stop order or other proceeding at the Applicable Time and on the Closing Date. The Shares
to be delivered on the Closing Date or Option Closing Date, as the case may be, shall have
been approved for listing on the NYSE, subject to official notice of issuance.
(k) The lock-up agreements, each substantially in the form of Exhibit G
attached hereto, between you and each executive officer of the Company relating to sales and
certain other dispositions of shares of Common Stock or certain other securities, delivered
to you on or before the date hereof, shall be full force and effect on the Closing Date or
Option Closing Date, as the case may be.
(l) At the Applicable Time and on the Closing Date, the Company shall have furnished to
the Underwriters such appropriate further information, certificates and documents as they
may reasonably request.
The several obligations of the Underwriters to purchase Additional Shares hereunder are
subject to the delivery to you on the Option Closing Date of such documents as you may reasonably
request with respect to the good standing of the REIT and the Operating Partnership, the due
authorization and issuance of the Additional Shares and other matters related to the issuance of
the Additional Shares, including, without limitation, (i) a certificate dated and as of the Option
Closing Date to same effect as the certificate described in paragraph (b) above, (ii) opinions of
Latham & Watkins, Tamra D. Browne and Ballard Spahr Andrews & Ingersoll, LLP dated the Option
Closing Date to same effect as the opinions described in paragraphs (d), (e) and (f) but relating
to the Additional Shares, (iii) an opinion of Gibson, Dunn & Crutcher LLP dated the Option Closing
Date relating to the Additional Shares, (iv) a letter from PricewaterhouseCoopers LLP dated the
Option Closing Date to same effect as the described in paragraph (h), and (v) such appropriate
further information, certificates and documents as you may reasonably request.
7. Covenants of the REIT and the Operating Partnership. In further consideration of
the agreements of the Underwriters herein contained, the REIT and the Operating Partnership
covenant with each Underwriter as follows:
(a) The Company will advise the Representatives promptly of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration Statement or
an order preventing or suspending the use of the Preliminary Prospectus Supplement, the
Prospectus Supplement, the Prospectus or any Issuer Represented Free Writing Prospectus or
of the institution or threatening of any proceedings for that purpose or pursuant to Section
8A of the Securities Act, and will use their best efforts to prevent the issuance of any
such order and to obtain as soon as possible the lifting thereof, if issued, and will advise
the Representatives promptly of any examination pursuant to 8(e) of the Securities Act or of
the REIT or Operating Partnership becoming the subject of a proceeding pursuant to 8A of the
Securities Act in connection with any offering of the Shares. The Company will advise the
Representatives promptly of the receipt by the Company of any notice of objection of the
Commission to the use of the Registration Statement or any post-effective amendment thereto
pursuant to Rule 401(g)(2) under the Securities Act. The REIT and the Operating Partnership
will advise the Representatives
15
promptly of any request by the Commission for any amendment of or supplement to the
Registration Statement or the Prospectus or any Issuer Represented Free Writing Prospectus
or the receipt of any comments from the Commission relating to the Registration Statement or
the Prospectus or any Issuer Represented Free Writing Prospectus or any other request by the
Commission for additional information. Prior to the termination of the offering of the
Shares and at any time during which the Underwriters have a prospectus delivery requirement
under the Commissions rules and regulations, the Company will not at any time file any
amendment to the Registration Statement or supplement to the Prospectus or any Issuer
Represented Free Writing Prospectus which shall not previously have been submitted to the
Representatives a reasonable time prior to the proposed filing or use thereof or to which
the Representatives shall reasonably object or which is not in compliance with the
Securities Act and the rules and regulations thereunder. The REIT and the Operating
Partnership will cause the Preliminary Prospectus Supplement, the Prospectus Supplement and
any Issuer Represented Free Writing Prospectus to be filed within the required time periods,
and will advise you promptly when the Prospectus has been filed pursuant to Rule 424(b) and
Rule 430A, 430B or 430C under the Securities Act and any Issuer Represented Free Writing
Prospectus has been filed pursuant to Rule 433 under the Securities Act, and will file
promptly all reports and any definitive proxy or information statements required to be filed
by the Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act subsequent to the date of the Prospectus and for so long as the delivery of a
prospectus is required in connection with the offering or sale of the Shares. The Company
will pay the registration fees for this offering within the time period required by Rule
456(b)(i) under the Securities Act prior to the Closing Date.
(b) To furnish to you, upon request and without charge, a signed copy of the
Registration Statement as originally filed and each amendment thereto (including exhibits
and consents filed therewith) and for delivery to each other Underwriter a conformed copy of
the Registration Statement as originally filed and each amendment thereto (without exhibits
thereto) and to furnish to you in New York City, without charge, prior to 10:00 A.M. New
York City time on the business day next succeeding the date of this Agreement and during the
period mentioned in Section 7(c) below, as many copies of the General Disclosure Package and
Prospectus and any supplements and amendments thereto or to the Registration Statement as
you may reasonably request. The Company 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 Securities Act.
(c) If, at any time prior to the Closing Date or during such period after the first
date of the public offering of the Shares, in the opinion of counsel for the Underwriters,
the Prospectus or the General Disclosure Package is required by law to be delivered in
connection with sales of Shares by an Underwriter or dealer, any event shall occur or
condition exist as a result of which it is necessary to amend or supplement the General
Disclosure Package or the Prospectus in order to ensure that the General Disclosure Package
or the Prospectus do 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 when the
16
General Disclosure Package or the Prospectus is delivered to a purchaser, or if, in the
opinion of counsel for the Underwriters, it is necessary to amend or supplement the
Prospectus or the General Disclosure Package to comply with applicable law, the Company will
immediately notify the Underwriters and forthwith prepare, file with the Commission and
furnish, at its own expense, to the Underwriters and to the dealers (whose names and
addresses you will furnish to the REIT and the Operating Partnership) to which Shares may
have been sold by you on behalf of the Underwriters and to any other dealers upon request,
either amendments or supplements to the Prospectus and/or the General Disclosure Package so
that the statements in the Prospectus and the General Disclosure Package as so amended or
supplemented will 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 when the Prospectus or the General
Disclosure Package is delivered to a purchaser, or so that the Prospectus and the General
Disclosure Package, as amended or supplemented, will comply with law.
(d) To endeavor to qualify the Shares for offer and sale under the securities or Blue
Sky laws and real estate syndication laws of such jurisdictions as you shall reasonably
request. The Company will advise the Representatives promptly of the receipt by the Company
of any notice with respect to any suspension of the qualification of the Shares for offer
and sale in any jurisdiction or the initiation or threatening of any proceeding for such
purpose; and the Company will use its best efforts to prevent the issuance of any such order
suspending any such qualification of the Shares and, if any such order is issued, will
obtain as soon as possible the withdrawal thereof.
(e) To make generally available to the REITs security holders and to you as soon as
practicable (but no event later than the last day of the fifteenth full calendar month
following the end of the REITs current fiscal quarter), an earnings statement covering the
twelve-month period beginning after the date upon which the Prospectus Supplement is filed
pursuant to Rule 424 under the Securities Act that satisfies the provisions of Section 11(a)
of the Securities Act and the rules and regulations of the Commission thereunder.
(f) Whether or not the transactions contemplated in this Agreement are consummated or
this Agreement is terminated, to pay or cause to be paid all expenses incident to the
performance of its obligations under this Agreement, including: (i) the fees, disbursements
and expenses of counsel for the Company and the Companys accountants in connection with the
registration and delivery of the Shares under the Securities Act and all other fees or
expenses in connection with the preparation and filing of the Registration Statement, the
Preliminary Prospectus Supplement, the Prospectus Supplement, the Prospectus and any Issuer
Represented Free Writing Prospectus, and any amendments and supplements to any of the
foregoing, including all printing costs associated therewith, and the mailing and delivering
of copies thereof to the Underwriters and dealers, in the quantities hereinabove specified,
(ii) all costs and expenses related to the transfer and delivery of the Shares to the
Underwriters, including any transfer or other taxes payable thereon, (iii) the cost of
printing or producing any Blue Sky or Legal Investment memorandum in connection with the
offer and sale of the Shares under state
17
securities laws and all expenses in connection with the qualification of the Shares for
offer and sale under state securities laws as provided in Section 7(d) hereof, including
filing fees and the reasonable fees and disbursements of counsel for the Underwriters in
connection with such qualification and in connection with the Blue Sky or Legal Investment
memorandum, (iv) all filing fees and the reasonable fees and disbursements of counsel to the
Underwriters incurred in connection with the review and qualification of the offering of the
Shares by the Financial Industry Regulatory Authority, Inc., if any, (v) all costs and
expenses incident to listing the Shares on the NYSE, (vi) the cost of printing certificates
representing the Shares, if applicable, (vii) the fees and expenses of any transfer agent,
registrar or depositary in connection with the issuance of the Shares, (viii) the costs and
expenses of the Company relating to investor presentations on any road show undertaken in
connection with the marketing of the offering of the Shares, including, without limitation,
expenses associated with the production of road show slides and graphics, fees and expenses
of any consultants engaged in connection with the road show presentations with the prior
approval of the REIT, travel and lodging expenses of the representatives and officers of the
REIT and any such consultants, and, with the prior approval of the REIT, the cost of any
aircraft chartered in connection with the road show and (ix) all other costs and expenses
incident to the performance of the obligations of the Company hereunder for which provision
is not otherwise made in this Section. It is understood, however, that except as provided
in this Section, Section 8 entitled Indemnity and Contribution and the last paragraph of
Section 10 below, the Underwriters will pay all of their costs and expenses, including fees
and disbursements of their counsel, stock transfer taxes payable on resale of any of the
Shares by them and any advertising expenses connected with any offers they may make.
(g) The Company will use the net proceeds received by it from the sale of the Shares
sold by it in the manner specified in the Prospectus and the General Disclosure Package
under the caption Use of Proceeds.
(h) The Company shall have applied to list the Shares, and the Shares shall have been
approved for listing, subject to notice of issuance, on the NYSE on or prior to the Closing
Date, and the REIT and the Operating Partnership shall use its best efforts to maintain the
listing of such Shares on the NYSE.
(i) Except for the authorization of actions permitted to be taken by the Underwriters
as contemplated herein or in the Prospectus or the General Disclosure Package, neither the
REIT nor the Operating Partnership will, within 30 days of the date of the Prospectus,
directly or indirectly, (i) take any action designed to cause or to result in, or that might
reasonably be expected to constitute, the stabilization or manipulation of the price of any
security of the REIT to facilitate the sale or resale of the Shares, (ii) sell, bid for or
purchase the Shares or pay any person any compensation for soliciting purchases of the
Shares or (iii) pay or agree to pay to any person any compensation for soliciting another to
purchase any other securities of the REIT, which payment or agreement is designed to cause
or to result in the stabilization or manipulation of the price of the Shares.
(j) The Company acknowledges and agrees that (i) the purchase and sale of the Shares
pursuant to this Agreement, including the determination of the public offering
18
price of the Shares and any related discounts and commissions, is an arms-length
commercial transaction between the Company, on the one hand, and the several Underwriters,
on the other hand, (ii) in connection with the offering contemplated hereby and the process
leading to such transaction each Underwriter is and has been acting solely as a principal
and is not the agent or fiduciary of the Company, or its stockholders, creditors, employees
or any other party, (iii) no Underwriter has assumed or will assume an advisory or fiduciary
responsibility in favor of the Company with respect to the offering contemplated hereby or
the process leading thereto (irrespective of whether such Underwriter has advised or is
currently advising the Company on other matters) and no Underwriter has any obligation to
the Company with respect to the offering contemplated hereby except the obligations
expressly set forth in this Agreement, (iv) the Underwriters and their respective affiliates
may be engaged in a broad range of transactions that involve interests that differ from
those of the Company, and (v) the Underwriters have not provided any legal, accounting,
regulatory or tax advice with respect to the offering contemplated hereby and the Company
has consulted its own legal, accounting, regulatory and tax advisors to the extent it deemed
appropriate.
8. Indemnity and Contribution.
(a) The REIT and the Operating Partnership, jointly and severally, agree to indemnify and hold
harmless each Underwriter and each person, if any, who controls any Underwriter within the meaning
of either Section 15 of the Securities Act or Section 20 of the Exchange Act, from and against any
and all losses, claims, damages, liabilities and expenses (including, without limitation, any legal
or other expenses reasonably incurred in connection with defending or investigating any such action
or claim) arising out of or caused by (i) any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or any amendment thereof, the Preliminary
Prospectus Supplement, Prospectus Supplement, the Prospectus, the Information 8-Ks or any Issuer
Represented Free Writing Prospectus (in each case, as amended or supplemented if the REIT and the
Operating Partnership shall have furnished any amendments or supplements thereto) or in any
documents filed under the Securities Act or the Exchange Act and incorporated by reference or
deemed to be incorporated by reference into the Registration Statement, the Preliminary Prospectus
Supplement, Prospectus Supplement, the Prospectus or the General Disclosure Package or in any
application or other document executed by or on behalf of the Company or based on written
information furnished by or on behalf of the Company filed in any jurisdiction in order to qualify
the Shares under the securities or blue sky laws thereof or filed with the Commission, (ii) any
omission or alleged omission to state in the Registration Statement, the Prospectus, or the General
Disclosure Package, the Information 8-Ks or any Issuer Represented Free Writing Prospectus a
material fact required to be stated therein or necessary to make the statements therein not
misleading, or (iii) any act or failure to act or any alleged act or failure to act by any
Underwriter in connection with, or relating in any manner to, the Shares or the offering
contemplated hereby, and which is included as part of or referred to in any loss, claim, damage,
liability or expense arising out of or based upon matters covered by clause (i) or (ii) above
(provided, however, that the REIT and the Operating Partnership shall not be liable
under this clause (iii) to the extent it is finally judicially determined by a court of competent
jurisdiction that such loss, claim, damage, liability or expense resulted directly from any such
acts or failures to act undertaken or omitted to be taken by such Underwriter through its gross
negligence or
19
willful misconduct), except insofar as such losses, claims, damage, liabilities or expenses
are caused by any such untrue statement or omission or alleged untrue statement or omission based
upon information relating to any Underwriter furnished to the REIT and the Operating Partnership in
writing by such Underwriter through you expressly for use in the Registration Statement, the
Permitted Free Writing Prospectus or the Prospectus, which information is limited to that set forth
on Exhibit A hereof. This indemnity agreement will be in addition to any liability that
the REIT or the Operating Partnership might otherwise have.
(b) Each Underwriter agrees, severally and not jointly, to indemnify and hold harmless the
REIT, the Operating Partnership and the REITs directors, its officers who sign the Registration
Statement and each person, if any, who controls the REIT or the Operating Partnership within the
meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act to the same
extent as the foregoing indemnities from the REIT and the Operating Partnership to such
Underwriter, but only with reference to information relating to such Underwriter furnished to the
REIT in writing by such Underwriter through you expressly for use in the Registration Statement,
the Permitted Free Writing Prospectus or the Prospectus, which information is limited to that set
forth on Exhibit A hereto.
(c) In case any proceeding (including any governmental investigation) shall be instituted
involving any person in respect of which indemnity may be sought pursuant to Section 8(a) or 8(b),
such person (the indemnified party) shall promptly notify the person against whom such indemnity
may be sought (the indemnifying party) in writing and the indemnifying party, upon request of the
indemnified party, shall retain counsel reasonably satisfactory to the indemnified party (who shall
not, without the consent of the indemnified party, be counsel to the indemnifying party) to
represent the indemnified party and any others the indemnifying party may designate in such
proceeding and shall pay the fees and disbursements of such counsel related to such proceeding,
provided that the failure to notify the indemnifying party shall not relieve it from any
liability that it may have under paragraph (a) or (b) above except to the extent that it has been
materially prejudiced (through the forfeiture of substantive rights or defenses) by such failure;
and provided, further, that the failure to notify the indemnifying party shall not
relieve it from any liability that it may have to an indemnified party otherwise than under
paragraph (a) or (b) above. In any such proceeding, any indemnified party shall have the right to
retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such
indemnified party unless (i) the indemnifying party and the indemnified party shall have mutually
agreed to the retention of such counsel or (ii) the named parties to any such proceeding (including
any impleaded parties) include both the indemnifying party and the indemnified party and
representation of both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. It is understood that the indemnifying party shall
not, in respect of the legal expenses of any indemnified party in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the fees and expenses of more than one
separate firm (in addition to any local counsel) for all such indemnified parties and that all such
fees and expenses shall be reimbursed as they are incurred. Such firm shall be designated in
writing by the Representatives, in the case of parties indemnified pursuant to Section 8(a), and by
the REIT or the Operating Partnership, in the case of parties indemnified pursuant to Section 8(b).
The indemnifying party shall not be liable for any settlement of any proceeding effected without
its written consent, but if settled with such consent or if there be a final judgment for the
plaintiff, the indemnifying party agrees to indemnify the indemnified party from and against any
20
loss or liability by reason of such settlement or judgment. Notwithstanding the foregoing
sentence, if at any time an indemnified party shall have requested an indemnifying party in writing
to reimburse the indemnified party for fees and expenses of counsel as contemplated by the second
and third sentences of this paragraph, the indemnifying party agrees that it shall be liable for
any settlement of any proceeding effected without its written consent if (i) such settlement is
entered into more than 60 days after receipt by such indemnifying party of the aforesaid request
and (ii) such indemnifying party shall not have reimbursed the indemnified party in accordance with
such request prior to the date of such settlement. No indemnifying party shall, without the prior
written consent of each indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a party and indemnity
could have been sought hereunder by such indemnified party, unless such settlement (x) includes an
unconditional release of such indemnified party from all liability on claims that are the subject
matter of such proceeding and (y) does not include any statement as to or any admission of fault,
culpability or a failure to act by or on behalf of any indemnified person.
(d) To the extent the indemnification provided for in Section 8(a) or 8(b) is unavailable to
an indemnified party or insufficient in respect of any losses, claims, damages or liabilities
referred to therein, then each indemnifying party under such paragraph, in lieu of indemnifying
such indemnified party thereunder, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (i) in such proportion
as is appropriate to reflect the relative benefits received by the REIT and the Operating
Partnership on the one hand and the Underwriters on the other hand from the offering of the Shares
or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the REIT and the Operating Partnership on the one hand and of
the Underwriters on the other hand in connection with the statements or omissions that resulted in
such losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the REIT and the Operating Partnership on the
one hand and the Underwriters on the other hand in connection with the offering of the Shares shall
be deemed to be in the same respective proportions as the net proceeds from the offering of the
Shares (before deducting expenses) received by the REIT and the total underwriting discounts and
commissions received by the Underwriters, in each case as set forth in the table on the cover of
the Prospectus, bear to the aggregate Public Offering Price of the Shares. The relative fault of
the REIT and the Operating Partnership on the one hand and the Underwriters on the other hand shall
be determined by reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact relates to
information supplied by the REIT or the Operating Partnership or by the Underwriters and the
parties relative intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Underwriters respective obligations to contribute pursuant to
this Section 8 are several in proportion to the respective number of Shares they have purchased
hereunder, and not joint.
(e) The REIT, the Operating Partnership and the Underwriters agree that it would not be just
or equitable if contribution pursuant to this Section 8 were determined by pro rata allocation
(even if the Underwriters were treated as one entity for such purpose) or by any other method of
allocation that does not take account of the equitable considerations referred to
21
in Section 8(d). The amount paid or payable by an indemnified party as a result of the
losses, claims, damages and liabilities referred to in the immediately preceding paragraph shall be
deemed to include, subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating or defending any
such action or claim. Notwithstanding the provisions of this Section 8, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total price at which the
Shares underwritten by it and distributed to the public were offered to the public exceeds the
amount of any damages that such Underwriter has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent misrepresentation. The remedies
provided for in this Section 8 are not exclusive and shall not limit any rights or remedies which
may otherwise be available to any indemnified party at law or in equity.
(f) The indemnity and contribution provisions contained in this Section 8 and the
representations, warranties and other statements of the REIT and the Operating Partnership
contained in this Agreement shall remain operative and in full force and effect regardless of (i)
any termination of this Agreement, (ii) any investigation made by or on behalf of any Underwriter
or any person controlling any Underwriter or by or on behalf of the REIT, the Operating Partnership
or the REITs officers or directors or any person controlling the REIT or the Operating Partnership
and (iii) acceptance of and payment for any of the Shares.
9. Termination. The obligations of the Underwriters under this Agreement may be
terminated at any time on or prior to the Closing Date, by notice to the REIT and the Operating
Partnership from the Underwriters, without liability on the part of the Underwriters to the REIT
and the Operating Partnership, if, prior to delivery and payment for the Shares, in the sole
judgment of the Underwriters, (i) trading in any of the securities of the REIT or the Operating
Partnership shall have been suspended by the Commission, by any exchange that lists such securities
or in any over-the-counter market, (ii) trading in securities generally on the NYSE shall have been
suspended or limited or minimum or maximum prices shall have been generally established on such
exchange, or additional material governmental restrictions, not in force on the date of this
Agreement, shall have been imposed upon trading in securities generally by such exchange or by
order of the Commission or any court or other governmental authority, (iii) a general banking
moratorium shall have been declared by either Federal or New York State authorities or (iv) any
material adverse change in the financial or securities markets within or outside the United States
or in political, financial or economic conditions within or outside the United States or any
material outbreak or material escalation of hostilities within or outside the United States or
declaration by the United States of a national emergency or war or other material calamity or
crisis within or outside the United States, including, without limitation, an act of terrorism,
shall have occurred the effect of any of which is such as to make it, in the judgment of the
Underwriters, impracticable or inadvisable to proceed with the offering, sale or delivery of the
Shares on the terms and in the manner contemplated by the Prospectus, the General Disclosure
Package and this Agreement.
10. Effectiveness; Defaulting Underwriters. This Agreement shall become effective
upon the execution and delivery hereof by the parties hereto. If, on the Closing Date or the
Option Closing Date, as the case may be, any one or more of the Underwriters shall fail or
22
refuse to purchase Shares that it has or they have agreed to purchase hereunder on such date,
and the aggregate number of Shares which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase is not more than one-tenth of the aggregate number of the Shares to
be purchased on such date, the other Underwriters shall be obligated severally in the proportions
that the number of Firm Shares set forth opposite their respective names in Schedule I
bears to the aggregate number of Firm Shares set forth opposite the names of all such
non-defaulting Underwriters, or in such other proportions as you may specify, to purchase the
Shares which such defaulting Underwriter or Underwriters agreed but failed or refused to purchase
on such date; provided that in no event shall the number of Shares that any Underwriter has
agreed to purchase pursuant to this Agreement be increased pursuant to this Section 10 by an amount
in excess of one-ninth of such number of Shares without the written consent of such Underwriter.
If, on the Closing Date, any Underwriter or Underwriters shall fail or refuse to purchase Firm
Shares and the aggregate number of Firm Shares with respect to which such default occurs is more
than one-tenth of the aggregate number of Firm Shares to be purchased and arrangements satisfactory
to the Representatives and the REIT for the purchase of such Firm Shares are not made within 36
hours after such default, this Agreement shall terminate without liability on the part of any
non-defaulting Underwriter or the REIT. In any such case, either the Representatives or the REIT
shall have the right to postpone the Closing Date, but in no event for longer than seven (7) days,
in order that the required changes, if any, in the Registration Statement, the Prospectus and the
General Disclosure Package or in any other documents or arrangements may be effected. If, on the
Option Closing Date, any Underwriter or Underwriters shall fail or refuse to purchase Additional
Shares and the aggregate number of Additional Shares with respect to which such default occurs is
more than one-tenth of the aggregate number of Additional Shares to be purchased, the
non-defaulting Underwriters shall have the option to (i) terminate their obligation hereunder to
purchase Additional Shares or (ii) purchase not less than the number of Additional Shares that such
non-defaulting Underwriters would have been obligated to purchase in the absence of such default.
Any action taken under this paragraph shall not relieve any defaulting Underwriter from liability
in respect of any default of such Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or any of them, because of any
failure or refusal on the part of the REIT or the Operating Partnership to comply with the terms or
to fulfill any of the conditions of this Agreement, or if for any reason the REIT or the Operating
Partnership shall be unable to perform their obligations under this Agreement, the REIT and the
Operating Partnership will, jointly and severally, reimburse the Underwriters or such Underwriters
as have so terminated this Agreement with respect to themselves, severally, for all out-of-pocket
expenses (including the fees and disbursements of their counsel) reasonably incurred by such
Underwriters in connection with this Agreement or the offering contemplated hereunder.
11. Representations and Agreements to Survive Delivery. All representations,
warranties, agreements and covenants of the REIT and the Operating Partnership herein or in
certificates delivered pursuant hereto and the agreements of the Underwriters in Section 8 herein
shall remain operative and in full force and effect regardless of any investigation made by or on
behalf of any Underwriter or any controlling persons, or the REIT or the Operating Partnership or
any of its officers, trustees, or any controlling persons, and shall survive (i) termination of
this Agreement and (ii) delivery of and payment for the Shares hereunder.
23
12. Notices. All communications hereunder will be in writing and effective only on
receipt, and, with respect to any party hereto, will be mailed, delivered or telefaxed and
confirmed as follows:
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|
|
if to the Company:
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|
AMB Property Corporation |
|
|
Pier 1, Bay 1 |
|
|
San Francisco, California 94111 |
|
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Attention: General Counsel |
|
|
Telefax number: (415) 394-9000 |
|
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with a copy to:
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Latham & Watkins LLP |
|
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505 Montgomery St., Suite 2000 |
|
|
San Francisco, California 94111 |
|
|
Attention: Laura L. Gabriel |
|
|
Telefax number: (415) 395-8095 |
|
|
|
if to the Underwriters:
|
|
Merrill Lynch, Pierce, Fenner & Smith |
|
|
Incorporated |
|
|
One Bryant Park |
|
|
New York, New York 10036 |
|
|
Attention: ECM Legal |
|
|
Telefax number: (212) 230-8730 |
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|
|
|
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J.P. Morgan Securities Inc. |
|
|
383 Madison Avenue |
|
|
New York, New York 10179 |
|
|
Attention: Equity Syndicate Desk |
|
|
Telefax number: (212) 622-8358 |
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Morgan Stanley & Co. Incorporated |
|
|
1585 Broadway |
|
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New York, New York 10036 |
|
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Attention: |
|
|
Telefax number: (212) 507-4254 |
|
|
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with a copy to:
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Gibson, Dunn & Crutcher LLP |
|
|
555 Mission Street, Suite 3000 |
|
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San Francisco, California 94105 |
|
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Attention: Douglas D. Smith |
|
|
Telefax number: (415) 986-5309 |
13. Counterparts. This Agreement may be signed in two or more counterparts (which may
include counterparts delivered by any standard form of telecommunication), each of which shall be
an original, with the same effect as if the signatures thereto and hereto were upon the same
instrument.
24
14. Applicable Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.
15. Parties. This Agreement has been and is made solely for the benefit of the
Underwriters and the REIT and the Operating Partnership and of the controlling persons, directors,
trustees, and officers referred to in Section 8, and their respective successors and assigns, and
no other person shall acquire or have any right under or by virtue of this Agreement. The term
successors and assigns as used in this Agreement shall not include a purchaser, as such
purchaser, of Shares from the Underwriters.
16. Amendments. This Agreement may be amended or supplemented if, but only if, such
amendment or supplement is in writing and is signed by the REIT, the Operating Partnership and the
Representatives.
17. Severability. In case any provision in this Agreement shall be invalid, illegal
or unenforceable, the validity, legality and enforceability of the remaining provisions shall not
in any way be affected or impaired thereby.
18. Waiver of Trial by Jury. The REIT and each of the Underwriters each hereby
irrevocably waive any right they may have to a trial by jury in respect of any claim based upon or
arising out of this Agreement or the transactions contemplated hereby.
19. Headings. The headings of the sections of this Agreement have been inserted for
convenience of reference only and shall not be deemed a part of this Agreement.
[Signature Page Follows]
25
Please confirm that the foregoing correctly sets forth the agreement among the REIT, the
Operating Partnership and the Underwriters.
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Very truly yours,
AMB PROPERTY CORPORATION
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By: |
/s/ Thomas S. Olinger |
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Name: |
Thomas S. Olinger |
|
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Title: |
Chief Financial Officer |
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AMB PROPERTY, L.P.
|
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By: |
AMB PROPERTY CORPORATION,
its sole general partner
|
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By: |
/s/ Thomas S. Olinger |
|
|
|
Name: |
Thomas S. Olinger |
|
|
|
Title: |
Chief Financial Officer |
|
|
[Signature Page to AMB Underwriting Agreement]
Accepted as of the date hereof:
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
J.P. MORGAN SECURITIES INC.
MORGAN STANLEY & CO. INCORPORATED
Acting on behalf of themselves and the
several Underwriters named in Schedule I hereto.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
|
|
|
By: |
|
/s/
Peter Chapman
Name: Peter Chapman Title: Managing
Director |
J.P. MORGAN SECURITIES INC.
|
|
|
By: |
|
/s/ Eddy
Allegaert
Name: Eddy
Allegaert Title: Executive Director |
MORGAN STANLEY & CO. INCORPORATED
|
|
|
By: |
|
/s/ John
Tyree
Name:
John Tyree Title: Managing Director |
[Signature Page to AMB Underwriting Agreement]
Schedule I
Underwriters
|
|
|
|
|
|
|
Number of Firm Shares |
Underwriter |
|
to be Purchased |
Merrill Lynch, Pierce, Fenner & Smith
Incorporated |
|
|
13,406,250 |
|
J.P. Morgan Securities Inc. |
|
|
13,406,250 |
|
Morgan Stanley & Co. Incorporated |
|
|
8,250,000 |
|
Daiwa Securities America Inc. |
|
|
1,031,250 |
|
ING Financial Markets LLC |
|
|
1,031,250 |
|
Scotia Capital (USA) Inc. |
|
|
1,031,250 |
|
Wells Fargo Securities, LLC |
|
|
1,031,250 |
|
HSBC Securities (USA) Inc. |
|
|
618,750 |
|
SG Americas Securities, LLC |
|
|
618,750 |
|
ABN AMRO Incorporated |
|
|
412,500 |
|
PNC Capital Markets LLC |
|
|
412,500 |
|
Total Firm Shares |
|
|
41,250,000 |
|
|
|
|
|
|