Exhibit 1.1
ONE LIBERTY PROPERTIES, INC.
2,500,000 SHARES OF COMMON STOCK
UNDERWRITING AGREEMENT
TABLE OF CONTENTS
1. SALE AND PURCHASE.....................................................2
2. PAYMENT AND DELIVERY..................................................3
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.........................4
4. CERTAIN COVENANTS OF THE COMPANY.....................................13
5. PAYMENT OF EXPENSES..................................................17
6. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS..........................18
7. TERMINATION..........................................................25
8. INCREASE IN UNDERWRITERS' COMMITMENTS................................26
9. INDEMNITY AND CONTRIBUTION BY THE COMPANY AND THE UNDERWRITERS.......26
10. SURVIVAL.............................................................29
11. NOTICES..............................................................30
12. GOVERNING LAW; CONSENT TO JURISDICTION...............................30
13. PARTIES IN INTEREST..................................................30
14. COUNTERPARTS.........................................................30
ONE LIBERTY PROPERTIES, INC.
2,500,000 SHARES OF COMMON STOCK
UNDERWRITING AGREEMENT
, 2002
FRIEDMAN, BILLINGS, XXXXXX & CO., INC.
as Representative of the several Underwriters
c/o Friedman, Billings, Xxxxxx & Co., Inc.
0000 00xx Xxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Dear Sirs:
One Liberty Properties, Inc., a Maryland corporation (the "Company"),
confirms its agreement with Friedman, Billings, Xxxxxx & Co., Inc. and each of
the other Underwriters listed on Schedule I hereto (collectively, the
"Underwriters"), for whom Friedman, Billings, Xxxxxx & Co., Inc. is acting as
representative (in such capacity, the "Representative"), with respect to (i) the
sale by the Company and the purchase by the Underwriters, acting severally and
not jointly, of the respective numbers of shares of common stock of the Company,
$1.00 par value per share (the "Common Shares"), set forth in Schedule I hereto
and (ii) the grant by the Company to the Underwriters, acting severally and not
jointly, of the option described in Section 1(b) hereof to purchase all or any
part of 375,000 Common Shares to cover over-allotments, if any. The 2,500,000
Common Shares to be purchased by the Underwriters (the "Initial Shares") and all
or any part of the 375,000 Common Shares subject to the option described in
Section 1(b) hereof (the "Option Shares") are hereinafter called, collectively,
the "Shares." The Company acknowledges that at its request, the Underwriters
have reserved up to [________] of the Initial Shares for sale to Xxxxx Investors
L.P. at the purchase price per share of $[_____].
The Company understands that the Underwriters propose to make a public
offering of the Shares as soon as the Underwriters deem advisable after this
Agreement has been executed and delivered.
The Company has filed with the Securities and Exchange Commission (the
"Commission"), a registration statement on Form S-2 (No. 333-_____) and a
related preliminary prospectus for the registration of the Shares under the
Securities Act of 1933, as amended (the "Securities Act"), and the rules and
regulations thereunder (the "Securities Act Regulations").
The Company has prepared and filed such amendments thereto, if any, and
such amended preliminary prospectuses, if any, as may have been required to the
date hereof, and will file such
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additional amendments thereto and such amended prospectuses as may hereafter be
required. The registration statement has been declared effective under the
Securities Act by the Commission. The registration statement as amended at the
time it became effective (including all information deemed to be a part of the
registration statement at the time it became effective pursuant to Rule 430A(b)
of the Securities Act Regulations) is hereinafter called the "Registration
Statement," except that, if the Company files a post-effective amendment to such
registration statement which becomes effective prior to the Closing Time (as
defined below), "Registration Statement" shall refer to such registration
statement as so amended. Any registration statement filed pursuant to Rule
462(b) of the Securities Act Regulations is hereinafter called the "Rule 462(b)
Registration Statement," and after such filing the term "Registration Statement"
shall include the Rule 462(b) Registration Statement. Each prospectus included
in the registration statement, or amendments thereof or supplements thereto,
before it became effective under the Securities Act and any prospectus filed
with the Commission by the Company with the consent of the Underwriters pursuant
to Rule 424(a) of the Securities Act Regulations is hereinafter called the
"Preliminary Prospectus." The term "Prospectus" means the final prospectus, as
first filed with the Commission pursuant to paragraph (1) or (4) of Rule 424(b)
of the Securities Act Regulations, and any amendments thereof or supplements
thereto. Any reference herein to the Registration Statement, any Preliminary
Prospectus or to the Prospectus or to any amendment or supplement to any of the
foregoing documents shall be deemed to refer to and include any documents
incorporated by reference therein. The Commission has not issued any order
preventing or suspending the use of any Preliminary Prospectus.
The Company and the Underwriters agree as follows:
1. Sale and Purchase:
(a) Initial Shares. Upon the basis of the warranties and representations
and other terms and conditions herein set forth, the Company agrees to sell to
each Underwriter, severally and not jointly, and each Underwriter agrees,
severally and not jointly, to purchase from the Company at the purchase price
per share of $__________, the number of Initial Shares set forth in Schedule I
opposite such Underwriter's name, plus any additional number of Initial Shares
which such Underwriter may become obligated to purchase pursuant to the
provisions of Section 8 hereof subject, in each case, to such adjustments among
the Underwriters as the Representative in its sole discretion shall make to
eliminate any sales or purchases of fractional shares.
(b) Option Shares. In addition, upon the basis of the warranties and
representations and other terms and conditions herein set forth, the Company
hereby grants an option to the Underwriters, severally and not jointly, to
purchase from the Company all or any part of the Option Shares at the purchase
price per share set forth in paragraph (a) above plus, with respect to each
Underwriter purchasing Option Shares, any additional number of Option Shares
which each Underwriter may become obligated to purchase pursuant to the
provisions of Section 8 hereof. The option hereby granted will expire 30 days
after the date hereof and may be exercised in whole or in part from time to time
only for the purpose of covering over-allotments, which may be made in
connection with the offering and distribution of the Initial Shares, upon
written notice by the Representative to the Company setting forth the number of
Option Shares as to which the several Underwriters are then exercising the
option and the time and date of payment and delivery for such Option Shares. Any
such time and date of delivery (a "Date of Delivery")
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shall be determined by the Representative, but shall not be later than three
full business days (or earlier, without the consent of the Company, than two
full business days) after the exercise of said option, nor in any event prior to
the Closing Time. If the option is exercised as to all or any portion of the
Option Shares, each of the Underwriters, acting severally and not jointly, will
purchase that proportion of the total number of Option Shares then being
purchased which the number of Initial Shares set forth in Schedule I opposite
the name of such Underwriter bears to the total number of Initial Shares,
subject in each case to such adjustments as the Representative in its sole
discretion shall make to eliminate any sales or purchases of fractional shares.
(c) Terms of Public Offering. The Company is advised by you that the Shares
are to be offered to the public initially at $______ per share (the "Public
Offering Price") and to certain dealers selected by you at a price that
represents a concession not in excess of $.____ per share less than the Public
Offering Price, and that any Underwriter may allow, and such dealers may
reallow, a concession, not in excess of $.____ per share, to any Underwriter or
to certain other dealers. The Underwriters may from time to time increase or
decrease the Public Offering Price of the Shares after the initial public
offering to such extent as the Underwriters may determine.
2. Payment and Delivery:
(a) Initial Shares. The Initial Shares to be purchased by each Underwriter
hereunder, in definitive form, and in such authorized denominations and
registered in such names as the Representative may request upon at least
forty-eight hours' prior written notice to the Company shall be delivered by or
on behalf of the Company to the Representative, including, at the option of the
Representative, through the facilities of The Depository Trust Company ("DTC")
for the account of each Underwriter, against payment by or on behalf of each
Underwriter of the purchase price therefor by wire transfer of Federal
(same-day) funds to the account specified to the Representative by the Company
upon at least forty-eight hours' prior written notice. The Company will cause
the certificates representing the Initial Shares to be made available for
checking and packaging at least twenty-four hours prior to the Closing Time with
respect thereto. The time and date of such delivery and payment shall be 9:30
a.m., New York City time, on ________________, 2002 or on such other time and
date as the Company and the Representative may agree upon in writing. The time
at which such payment and delivery are actually made is hereinafter sometimes
called the "Closing Time" and the date of delivery of both Initial Shares and
Option Shares is hereinafter sometimes called the "Date of Delivery."
(b) Option Shares. Any Option Shares to be purchased by each Underwriter
hereunder, in definitive form, and in such authorized denominations and
registered in such names as the Representative may request upon at least
forty-eight hours' prior written notice to the Company shall be delivered by or
on behalf of the Company to the Representative, including, at the option of the
Representative, through the facilities of DTC for the account of such
Underwriter, against payment by or on behalf of such Underwriter of the purchase
price therefor by wire transfer of Federal (same-day) funds to the account
specified to the Representative by the Company upon at least forty-eight hours'
prior written notice. The Company will cause the certificates representing the
Option Shares to be made available for checking and packaging at least
twenty-four hours prior to the Date of Delivery with respect thereto. The time
and date of such delivery and payment shall be 9:30 a.m., New York City time, on
the date specified by the Representative in the notice given by the
Representative to the Company of the Underwriters' election to
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purchase such Option Shares or on such other time and date as the Company and
the Representative may agree upon in writing.
3. Representations and Warranties of the Company: The Company represents
and warrants to the Underwriters that:
(a) each of the Company, the subsidiaries of the Company and certain other
related companies as set forth on Schedule II hereto (each a "Subsidiary" and,
collectively, the "Subsidiaries") has been duly formed or incorporated, as the
case may be, and is validly existing and in good standing under the laws of its
respective jurisdiction of formation or incorporation with all requisite
corporate power and authority to own, lease and operate its respective
properties and to conduct its respective business as now conducted and, in the
case of the Company, to authorize, execute and deliver this Agreement, and the
other agreements described in the Prospectus and listed on Schedule III attached
hereto, if any (the "Other Transaction Documents"), and to consummate the
transactions described in each such agreement;
(b) the Company and the Subsidiaries are duly qualified or registered to
transact business in each jurisdiction in which they conduct their respective
businesses as now conducted and in which the failure, individually or in the
aggregate, to be so qualified or registered could reasonably be expected to have
a material adverse effect on the assets, operations, business, prospects or
condition (financial or otherwise) of the Company and the Subsidiaries taken as
a whole, and the Company and the Subsidiaries are in good standing in each
jurisdiction in which they maintain an office or in which the nature or conduct
of their respective businesses as now conducted requires such qualification,
except where the failure to be in good standing could not reasonably be expected
to have a material adverse effect on the assets, operations, business, prospects
or condition (financial or otherwise) of the Company and the Subsidiaries taken
as a whole;
(c) the Company and the Subsidiaries, and their assets, operations and
business, are in compliance in all material respects with all applicable laws,
rules, regulations, orders, decrees and judgments;
(d) neither the Company nor any of the Subsidiaries is in breach of, or in
default under (nor has any event occurred which with notice, lapse of time, or
both would constitute a breach of, or default under), its respective charter,
by-laws, certificate of limited liability company, agreement of limited
liability company, certificate of limited partnership or partnership agreement,
as the case may be, or in the performance or observance of any obligation,
agreement, covenant or condition contained in any license, advisory agreement,
management agreement, lease, indenture, mortgage, deed of trust, deed to secure
debt, loan or credit agreement or other agreement or instrument to which the
Company or any of the Subsidiaries is a party or by which any of them or their
respective properties is bound, except for such breaches or defaults which could
not reasonably be expected to have a material adverse effect on the assets,
operations, business, prospects or condition (financial or otherwise) of the
Company and the Subsidiaries taken as a whole, and the issuance, sale and
delivery by the Company of the Shares, the execution, delivery and performance
of this Agreement and the Other Transaction Documents, and consummation of the
transactions contemplated hereby and thereby will not conflict with, or result
in any breach of, or constitute a default under (nor constitute any event which
with notice,
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lapse of time, or both would constitute a breach of, or default under), (i) any
provision of the charter, by-laws, certificate of limited liability company,
agreement of limited liability company, certificate of limited partnership or
partnership agreement, as the case may be, of the Company or any of the
Subsidiaries, (ii) any provision of any license, advisory agreement, management
agreement, lease, indenture, mortgage, deed of trust, deed to secure debt, loan
or credit agreement or other agreement or instrument to which the Company or any
of the Subsidiaries is a party or by which any of them or their respective
properties may be bound or affected, or (iii) any Federal, state, local or
foreign law, regulation or rule or any decree, judgment or order applicable to
the Company or any of the Subsidiaries, and no such license, advisory agreement,
management agreement, lease, indenture, mortgage, deed of trust, deed to secure
debt, loan or credit agreement or other agreement or instrument to which the
Company or any of the Subsidiaries is a party or by which any of them or their
respective properties may be bound contains a materially burdensome restriction
that is not adequately disclosed in the Registration Statement and the
Prospectus;
(e) the Company has full legal right, power and authority to enter into and
perform this Agreement and to consummate the transactions contemplated herein;
this Agreement has been duly authorized, executed and delivered by the Company
and is a legal, valid and binding agreement of the Company enforceable in
accordance with its terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights
generally, and by general principles of equity, and except to the extent that
the indemnification and contribution provisions of Section 9 hereof may be
limited by Federal or state securities laws and public policy considerations in
respect thereof;
(f) the issuance and sale of the Shares to the Underwriters hereunder have
been duly authorized by the Company; when issued and delivered against payment
therefor as provided in this Agreement, the Shares will be validly issued, fully
paid and non-assessable and the issuance of the Shares will not be subject to
any preemptive or similar rights; except as contemplated herein, no person or
entity holds a right to require or participate in the registration under the
Securities Act of the Shares pursuant to the Registration Statement; no person
or entity has a right of participation or first refusal with respect to the sale
of the Shares by the Company; there are no contracts, agreements or
understandings between the Company and any person or entity granting such person
or entity the right to require the Company to file a registration statement
under the Securities Act with respect to any securities of the Company or to
require the Company to include such securities with the Shares registered
pursuant to the Registration Statement; the form of certificates evidencing the
Shares complies with all applicable legal requirements and with all applicable
requirements of the charter and bylaws of the Company and the requirements of
the American Stock Exchange;
(g) the Other Transaction Documents, if any, have been duly authorized and
will be, upon execution and delivery by the Company, legal, valid and binding
agreements of the Company enforceable in accordance with their terms, except as
may be limited by bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting creditors' rights generally, and by general principles of equity;
(h) no approval, authorization, consent or order of or filing with any
Federal, state or local governmental or regulatory commission, board, body,
authority or agency is required in
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connection with the execution, delivery and performance of this Agreement and
the Other Transaction Documents, the consummation of the transactions
contemplated hereby and thereby or the sale and delivery of the Shares as
contemplated hereby other than (i) such as have been obtained, or will have been
obtained at the Closing Time or the relevant Date of Delivery, as the case may
be, under the Securities Act or the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), (ii) such approvals as have been obtained in connection
with the approval of the listing of the Shares on the American Stock Exchange
and (iii) any necessary qualification under the securities or blue sky laws of
the various jurisdictions in which the Shares are being offered by the
Underwriters;
(i) each of the Company and the Subsidiaries has all necessary licenses,
authorizations, consents and approvals and has made all necessary filings
required under any Federal, state or local law, regulation or rule, and has
obtained all necessary authorizations, consents and approvals from other persons
required in order to own their respective assets and to conduct their respective
operations and businesses as described in the Prospectus, except to the extent
that any failure to have any such licenses, authorizations, consents or
approvals, to make any such filings or to obtain any such authorizations,
consents or approvals could not reasonably be expected to have, individually or
in the aggregate, a material adverse effect on the assets, operations, business,
prospects or condition (financial or otherwise) of the Company and the
Subsidiaries taken as a whole; neither the Company nor any of the Subsidiaries,
nor any of their assets, operations or businesses is in violation of, in default
under, or has received any notice regarding a possible violation, default or
revocation of any such license, authorization, consent or approval or any
Federal, state, local or foreign law, regulation or rule or any decree, order or
judgment applicable to the Company or any of the Subsidiaries, the effect of
which could reasonably be expected to be material and adverse to the assets,
operations, business, prospects or condition (financial or otherwise) of the
Company and the Subsidiaries taken as a whole; and no such license,
authorization, consent or approval contains a materially burdensome restriction
that is not adequately disclosed in the Registration Statement and the
Prospectus;
(j) each of the Registration Statement and any Rule 462(b) Registration
Statement has become effective under the Securities Act and no stop order
suspending the effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement has been issued under the Securities Act and no
proceedings for that purpose have been instituted or are pending or, to the
knowledge of the Company, are threatened by the Commission, and any request on
the part of the Commission for additional information has been complied with;
(k) the Company and the transactions contemplated by this Agreement meet
the requirements and conditions for using a registration statement on Form S-2
under the Securities Act, set forth in the General Instructions to Form S-2; the
Preliminary Prospectus and the Registration Statement comply and the Prospectus
and any further amendments or supplements thereto will comply, when they have
become effective or are filed with the Commission, as the case may be, in all
material respects with the requirements of the Securities Act and the Securities
Act Regulations and, in each case, present, or will present, fairly the
information required to be shown; the Registration Statement did not, and any
amendment thereto will not, in each case as of the applicable effective date,
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; and the Preliminary Prospectus does not, and the Prospectus or any
amendment or
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supplement thereto will not, as of the applicable filing date and at the Closing
Time and on each Date of Delivery (if any), 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, in the light of the circumstances
under which they were made, not misleading; provided, however, that the Company
makes no warranty or representation with respect to any statement contained in
the Registration Statement or the Prospectus in reliance upon and in conformity
with the information concerning the Underwriters and furnished in writing by or
on behalf of the Underwriters through the Representative to the Company
expressly for use in the Registration Statement or the Prospectus (that
information being limited to that described in the last sentence of the first
paragraph of Section 9(b) hereof);
(l) the Preliminary Prospectus was and the Prospectus delivered to the
Underwriters for use in connection with this offering will be identical to the
versions of the Preliminary Prospectus and Prospectus created to be transmitted
to the Commission for filing via the Electronic Data Gathering Analysis and
Retrieval System ("XXXXX"), except to the extent permitted by Regulation S-T;
(m) each document incorporated by reference or deemed to be incorporated by
reference in the Registration Statement and in the Prospectus, when each became
effective or was filed with the Commission, as the case may be, conformed in all
material respects to the requirements of the Securities Act or the Exchange Act,
as applicable, and the Securities Act Regulations and the regulations
promulgated under the Exchange Act (the "Exchange Act Regulations"), and none of
such documents 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, in the light of the circumstances under which they were
made, not misleading; and any further documents so filed and incorporated by
reference in the Registration Statement and the Prospectus or any further
amendment or supplement thereto, when such documents become effective or are
filed with the Commission, as the case may be, will conform in all material
respects to the requirements of the Securities Act or the Exchange Act, as
applicable, and the Securities Act Regulations and the Exchange Act Regulations
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 in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading;
(n) all legal or governmental proceedings, contracts or documents which are
material and of a character required to be filed as exhibits to the Registration
Statement or to be summarized or described in the Prospectus have been so filed,
summarized or described as required;
(o) there are no actions, suits, proceedings, inquiries or investigations
pending or, to the Company's knowledge, threatened against the Company or any of
the Subsidiaries or any of their respective officers and directors or to which
the properties, assets or rights of any such entity is subject, at law or in
equity, before or by any Federal, state, local or foreign governmental or
regulatory commission, board, body, authority, arbitration panel or agency which
could reasonably be expected to result in a judgment, decree, award or order
having a material adverse effect on the assets, operations, business, prospects
or condition (financial or otherwise) of the Company and the Subsidiaries taken
as a whole, or which could adversely affect the consummation of the transactions
contemplated by this Agreement in any material respect;
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(p) the financial statements, including the notes thereto, included in the
Registration Statement and the Prospectus present fairly the financial position
of the Company and the Subsidiaries as of the dates indicated and the results of
operations and changes in financial position and cash flows of the Company and
the Subsidiaries for the periods specified; such financial statements have been
prepared in conformity with generally accepted accounting principles applied on
a consistent basis during the periods involved (except as indicated in the notes
thereto); the financial statement schedules included in the Registration
Statement and the Prospectus fairly present the information shown therein; no
other financial statements or schedules are required by Form S-2 or otherwise to
be included in the Registration Statement or Prospectus;
(q) the Company has filed in a timely manner all reports required to be
filed pursuant to Sections 13, 14, 15(d) of the Exchange Act during the
preceding twelve calendar months and if during such period the Company has
relied on Rule 12b-25(b) under the Exchange Act ("Rule 12b-25(b)") with respect
to a report or a portion of a report, that report or portion of a report has
actually been filed within the time period prescribed by Rule 12b-25(b);
(r) Ernst & Young LLP, whose reports on the audited financial statements of
the Company and the Subsidiaries are included as part of the Registration
Statement and Prospectus or are incorporated by reference therein are and were
during the periods covered by their reports independent public accountants
within the meaning of the Securities Act and the Securities Act Regulations;
(s) subsequent to the respective dates as of which information is given in
the Registration Statement and the Prospectus, and except as may be otherwise
stated in the Registration Statement or Prospectus, there has not been (i) any
material adverse change in the assets, operations, business, prospects or
condition (financial or otherwise), present or prospective, of the Company and
the Subsidiaries taken as a whole, whether or not arising in the ordinary course
of business, (ii) any transaction, which is material to the Company and the
Subsidiaries taken as a whole, planned or entered into by the Company or any of
the Subsidiaries, (iii) any obligation, contingent or otherwise, directly or
indirectly incurred by the Company or any of the Subsidiaries, which is material
to the Company and the Subsidiaries taken as a whole or (iv) except in
accordance with the Company's ordinary practice as disclosed in the Registration
Statement and the Prospectus, any dividend or distribution of any kind declared,
paid or made with respect to the capital stock of the Company;
(t) the authorized shares of capital stock of the Company conform in all
material respects to the description thereof contained in the Prospectus; the
Company has an authorized, issued and outstanding capitalization as set forth in
the Prospectus under the caption "Capitalization" as of the date stated in such
section; immediately after the Closing Time, 5,584,561 Common Shares and 648,058
shares of $16.50 Cumulative Convertible Preferred Stock, par value $1.00 per
share (the "Preferred Stock") will be issued and outstanding (subject to the
Underwriters' option described in Section 1(b) hereof) and no shares of any
other class of capital stock will be issued and outstanding. All of the issued
and outstanding shares of capital stock of the Company have been duly authorized
and are validly issued, fully paid and non-assessable, and have been offered,
sold and issued by the Company in compliance with all applicable laws
(including, without limitation, Federal and state securities laws); none of the
issued shares of capital stock of
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the Company have been issued in violation of any preemptive or similar rights
granted by the Company; except as disclosed in the Prospectus, there is no
outstanding option, warrant or other right calling for the issuance of, and no
commitment, plan or arrangement to issue, any shares of capital stock of the
Company or any security convertible into or exchangeable for shares of capital
stock of the Company;
(u) each of the Company, the Subsidiaries, and each of their respective
officers, directors and controlling persons, directly or indirectly, (A) has not
taken, and will not take any action which is designed to or which has
constituted or which might reasonably be expected to cause or result in
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares, or (B) since the filing of the
Registration Statement: (1) sold, bid for, purchased, or paid anyone any
compensation for soliciting purchases of, the Shares, or (2) paid or agreed to
pay to any person any compensation for soliciting another to purchase any other
securities of the Company;
(v) neither the Company nor any of its affiliates (i) is required to
register as a "broker" or "dealer" in accordance with the provisions of the
Exchange Act or the Exchange Act Regulations, or (ii) directly, or indirectly
through one or more intermediaries, controls or has any other association with
(within the meaning of Article 1 of the By-laws of the National Association of
Securities Dealers, Inc. (the "NASD")) any member firm of the NASD;
(w) the Company has not relied upon the Representative or legal counsel for
the Representative for any legal, tax or accounting advice in connection with
the offering and sale of the Shares;
(x) any certificate signed by any officer of the Company or any Subsidiary
delivered to the Representative or to counsel for the Underwriters pursuant to
or in connection with this Agreement shall be deemed a representation and
warranty by the Company to each Underwriter as to the matters covered thereby;
(y) the Company and each of its Subsidiaries have good and marketable title
in fee simple to all real property and all the improvements thereon owned, or
described in the Prospectus as owned, by them, good and marketable title to the
lessor's interest under each lease at each of such properties, and good title to
all personal property owned, or described in the Prospectus as owned, by them,
in each case free and clear of all liens, security interests, pledges, charges,
leases, encumbrances, mortgages and defects, except such as are disclosed in the
Prospectus or the financial statements thereto or such as do not materially and
adversely affect the value of such property and do not interfere with the use
made or proposed to be made of such property by the Company and the Subsidiaries
and by the lessee under each lease at each of such properties; all the leases of
real property and buildings to which the Company or any Subsidiary is a party
are valid, existing and enforceable leases, with no exceptions, and subject to
no liens, security interests, pledges, charges, encumbrances, mortgages or
defects, other than as are disclosed in the Prospectus or as are not material
and do not interfere with the use made or proposed to be made of such property
and buildings by the Company or such Subsidiary and by the lessee under each
lease at each of such properties and neither the Company nor any Subsidiary
knows of any default or possible default under any such lease by the Company or
any Subsidiary or any other party to such lease; the Company or a Subsidiary has
obtained a valid and enforceable owner's
9
title insurance policy from a title insurance company licensed to issue such
policy on any real property owned by the Company or any Subsidiary that remains
in force and insures the Company's or the Subsidiary's fee interest in such real
property with coverage in an amount at least equal to the greater of the
original purchase price of such fee interest in the real property and the
maximum aggregate principal amount of any indebtedness of the Company or any
Subsidiary and secured by the real property;
(z) the improvements at each real property owned by the Company or any of
its Subsidiaries are in good condition and repair in accordance with the terms
of each respective lease at each such property and are in compliance with all
applicable zoning and other applicable laws, ordinances and regulations, and no
such property or improvements presently is affected by an event of casualty, or
is presently subject to or threatened in writing with an event of condemnation,
in each case other than as does not interfere with the use made or proposed to
be made of such property and improvements by the Company or such Subsidiary and
by the lessee under each lease at each of such properties and will not
materially and adversely affect the value of such property and improvements; the
joint venture agreements, limited liability company agreements, limited
partnership agreements and other agreements pursuant to which the Company or its
Subsidiaries own real property or interests in entities which own real property,
and the purchase agreements to which the Company or any its Subsidiaries is a
party pursuant to which the Company or any of its Subsidiaries has agreed to
acquire real property, are valid, legally binding and enforceable, except to the
extent enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally and by general
principles of equity, and neither the Company nor any Subsidiary knows of any
default or possible default under any such agreement by the Company or any
Subsidiary or any other party to such agreement; the Preliminary Prospectus
correctly states, and the Prospectus or any amendment or supplement thereto will
correctly state, as of the applicable filing date and at the Closing Time and on
each Date of Delivery (if any), the rentable square footage of the improvements
at, the type of use presently being made of, and the 2002 contractual rental
revenue stated to be paid by the tenant at, each real property owned by the
Company and its Subsidiaries;
(aa) to the knowledge of the Company, there are no statutes or regulations
applicable to the Company or any of the Subsidiaries or the assets, operations,
or businesses of any of them or certificates, permits or other authorizations
from governmental regulatory officials or bodies required to be obtained or
maintained by the Company or any of the Subsidiaries of a character required to
be disclosed in the Registration Statement or the Prospectus which have not been
so disclosed and properly described therein; all agreements between the Company
or any of the Subsidiaries and third parties expressly referenced in the
Registration Statement are legal, valid and binding obligations of the Company
or one or more of the Subsidiaries, enforceable in accordance with their
respective terms, except to the extent enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally and by general principles of equity;
(bb) no relationship, direct or indirect, exists between or among the
Company or any of the Subsidiaries on the one hand, and the directors, trustees,
officers, shareholders, customers or suppliers of the Company or any of the
Subsidiaries on the other hand, which is required by the
10
Securities Act to be described in the Registration Statement and the Prospectus
which is not so described;
(cc) the Company and each Subsidiary owns or possesses adequate license or
other rights to use all patents, trademarks, service marks, trade names,
copyrights, software and design licenses, trade secrets, manufacturing
processes, other intangible property rights and know-how, if any (collectively
"Intangibles"), necessary to entitle the Company and each Subsidiary to conduct
its business as described in the Prospectus, and neither the Company, nor any
Subsidiary, has received notice of infringement of or conflict with (and knows
of no such infringement of or conflict with) asserted rights of others with
respect to any Intangibles which could materially and adversely affect the
assets, operations, business, prospects or condition (financial or otherwise) of
the Company or any Subsidiary;
(dd) each of the Company and the Subsidiaries has filed on a timely basis
all necessary Federal, state, local and foreign income, franchise and real or
personal property tax returns, if any such returns were required to be filed,
through the date hereof and have paid all taxes shown as due thereon; and no tax
deficiency has been asserted against the Company or any of the Subsidiaries, nor
does the Company or any of the Subsidiaries know of any tax deficiency which is
likely to be asserted against any such entity which, if determined adversely to
any such entity, could materially adversely affect the assets, operations,
business, prospects or condition (financial or otherwise) of any such entity,
respectively; all tax liabilities, if any, are adequately provided for on the
respective books of such entities;
(ee) each of the Company and the Subsidiaries maintains insurance (issued by
insurers of recognized financial responsibility) of the types and in the amounts
generally deemed adequate, if any, for their respective businesses and
consistent with insurance coverage maintained by similar companies in similar
businesses, including, but not limited to, insurance covering real and personal
property owned or leased by the Company and the Subsidiaries against theft,
damage, destruction, acts of vandalism and all other risks customarily insured
against, and such insurance includes coverage for each property in an amount not
less than the replacement cost (less the amount of a commercially reasonable
deductible) for the improvements at such property, all of which insurance is in
full force and effect;
(ff) except as otherwise disclosed in the Prospectus, neither the Company,
any of the Subsidiaries nor any former owner of any real property owned by the
Company or the Subsidiaries has authorized or conducted or has knowledge of the
generation, transportation, storage, presence, use, treatment, disposal,
release, or other handling of any hazardous substance, hazardous waste,
hazardous material, hazardous constituent, toxic substance, pollutant,
contaminant, asbestos, radon, polychlorinated biphenyls ("PCBs"), petroleum
product or waste (including crude oil or any fraction thereof), natural gas,
liquefied gas, synthetic gas or other material defined, regulated, controlled or
potentially subject to any remediation requirement under any environmental law
(collectively, "Hazardous Materials"), on, in, under or affecting any real
property currently leased or owned or by any means controlled by the Company or
any of the Subsidiaries, including any real property underlying any loan held by
the Company or the Subsidiaries and any real property owned by an entity in
which the Company or the Subsidiaries own an interest (collectively, the "Real
Property"), except in material compliance with applicable laws; the Real
Property, and the Company's, the Subsidiaries' and the former owners of the Real
11
Property's operations with respect to the Real Property, are and were in
compliance with all Federal, state and local laws, ordinances, rules,
regulations and other governmental requirements relating to pollution, control
of chemicals, management of waste, discharges of materials into the environment,
health, safety, natural resources, and the environment (collectively,
"Environmental Laws"), and the Company and the Subsidiaries are in compliance
with, all licenses, permits, registrations and government authorizations
necessary to operate under all applicable Environmental Laws; except as
otherwise disclosed in the Prospectus, neither the Company nor the Subsidiaries
or, to the knowledge of the Company, any former owner of any of the Real
Property has received any written or oral notice from any governmental entity or
any other person; there is no pending or threatened claim, litigation or any
administrative agency proceeding that (A) alleges a violation of any
Environmental Laws by the Company or any of the Subsidiaries, (B) alleges that
the Company or any of the Subsidiaries is a liable party or a potentially
responsible party under the Comprehensive Environmental Response, Compensation
and Liability Act, 42 U.S.C. Section 9601, et seq., or any state superfund law,
(C) has resulted in or could result in the attachment of an environmental lien
on any of the Real Property, or (D) alleges that the Company or any of the
Subsidiaries is liable for any contamination of the environment, contamination
of the Real Property, damage to natural resources, property damage, or personal
injury based on their activities or the activities of their predecessors or
third parties (whether at the Real Property or elsewhere) involving Hazardous
Materials, whether arising under the Environmental Laws, common law principles,
or other legal standards;
(gg) neither the Company nor any of the Subsidiaries nor, to the best of the
Company's knowledge, any officer, director or trustee purporting to act on
behalf of the Company or any of the Subsidiaries has at any time; (i) made any
contributions to any candidate for political office, or failed to disclose fully
any such contributions, in violation of law, (ii) made any payment to any state,
Federal or foreign governmental officer or official, or other person charged
with similar public or quasi-public duties, other than payments required or
allowed by applicable law, (iii) made any payment outside the ordinary course of
business to any investment officer or loan broker or person charged with similar
duties of any entity to which the Company or any of the Subsidiaries sells or
from which the Company or any of the Subsidiaries buys loans or servicing
arrangements for the purpose of influencing such agent, officer, broker or
person to buy loans or servicing arrangements from or sell loans to the Company
or any of the Subsidiaries, or (iv) engaged in any transactions, maintained any
bank account or used any corporate funds except for transactions, bank accounts
and funds which have been and are reflected in the normally maintained books and
records of the Company and the Subsidiaries;
(hh) except as otherwise disclosed in the Prospectus, there are no material
outstanding loans or advances or material guarantees of indebtedness by the
Company or any of the Subsidiaries to or for the benefit of any of the officers
or directors of the Company or any of the Subsidiaries or any of the members of
the families of any of them;
(ii) neither the Company nor any of the Subsidiaries nor, to the Company's
knowledge, any employee or agent of the Company or any of the Subsidiaries, has
made any payment of funds of the Company or of any Subsidiary or received or
retained any funds in violation of any law, rule or regulation or of a character
required to be disclosed in the Prospectus;
12
(jj) the Company is organized and operates in conformity with the
requirements for qualification as a real estate investment trust under the
Internal Revenue Code of 1986, as amended (the "Code"), and the Company's
proposed method of operation will enable it to meet the requirements for
taxation as a real estate investment trust under the Code;
(kk) the Shares have been approved for listing, upon official notice of
issuance, on the American Stock Exchange;
(ll) in connection with this offering, the Company has not offered and will
not offer its Common Shares or any other securities convertible into or
exchangeable or exercisable for Common Shares in a manner in violation of the
Securities Act or the Securities Act Regulations; the Company has not
distributed and will not distribute any Prospectus or other offering material
in connection with the offer and sale of the Shares, except as contemplated
herein;
(mm) to the best knowledge of the Company, each of the properties owned by
the Company or any Subsidiary is in compliance with all presently applicable
provisions of the Americans with Disabilities Act, except for any failures to
comply which would not, singly or in the aggregate, result in a material adverse
change in the assets, operations, business, prospects or condition (financial or
otherwise) of the Company and the Subsidiaries, taken as a whole;
(nn) neither the Company nor any of the Subsidiaries is, or solely as a
result of transactions contemplated hereby and the application of the proceeds
from the sale of the Shares, will become an "investment company" or a company
"controlled" by an "investment company" within the meaning of the Investment
Company Act of 1940, as amended (the "1940 Act");
(oo) the Company has not incurred any liability for any finder's fees or
similar payments in connection with the transactions herein contemplated;
(pp) to the Company's knowledge, no general labor problem exists or is
imminent with the employees of the Company or any of its Subsidiaries;
(qq) except for the interests in the Subsidiaries owned by the Company,
neither the Company nor any Subsidiary owns any shares of stock or any other
equity securities of any corporation or has any equity interest in any firm,
partnership, association or other entity; and
(rr) each of the Company and each Subsidiary maintains a system of internal
accounting controls sufficient to provide reasonable assurance that: (A)
transactions are executed in accordance with management's general or specific
authorizations; (B) transactions are recorded as necessary to permit preparation
of financial statements in conformity with generally accepted accounting
principles and to maintain asset accountability; (C) access to assets is
permitted only in accordance with management's general or specific
authorization; and (D) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
4. Certain Covenants of the Company: The Company hereby covenants with
each Underwriter:
13
(a) to furnish such information as may be required and otherwise to
cooperate in qualifying the Shares for offering and sale under the securities or
blue sky laws of such states as the Representative may designate and to maintain
such qualifications in effect as long as required for the distribution of the
Shares, provided that the Company shall not be required to qualify as a foreign
corporation or to consent to the service of process under the laws of any such
state (except service of process with respect to the offering and sale of the
Shares);
(b) if, at the time this Agreement is executed and delivered, it is
necessary for a post-effective amendment to the Registration Statement to be
declared effective before the offering of the Shares may commence, the Company
will endeavor to cause such post-effective amendment to become effective as soon
as possible and will advise the Representative promptly and, if requested by the
Representative, will confirm such advice in writing, when such post-effective
amendment has become effective;
(c) to prepare the Prospectus in a form approved by the Underwriters and
file such Prospectus with the Commission pursuant to Rule 424(b) within the time
period prescribed by law, on the day following the execution and delivery of
this Agreement and to furnish promptly (and with respect to the initial delivery
of such Prospectus, not later than 10:00 a.m. (New York City time) on the day
following the execution and delivery of this Agreement) to the Underwriters as
many copies of the Prospectus (or of the Prospectus as amended or supplemented
if the Company shall have made any amendments or supplements thereto after the
effective date of the Registration Statement) as the Underwriters may reasonably
request for the purposes contemplated by the Securities Act Regulations, which
Prospectus and any amendments or supplements thereto furnished to the
Underwriters will be identical to the version created to be transmitted to the
Commission for filing via XXXXX, except to the extent permitted by Regulation
S-T;
(d) to advise the Representative promptly and (if requested by the
Representative) to confirm such advice in writing, when the Registration
Statement has become effective and when any post-effective amendment thereto
becomes effective under the Securities Act Regulations;
(e) to advise the Representative immediately, confirming such advice in
writing, of (i) the receipt of any comments from, or any request by, the
Commission for amendments or supplements to the Registration Statement or
Prospectus or for additional information with respect thereto, or (ii) the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or of any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus, or of the suspension of the
qualification of the Shares for offering or sale in any jurisdiction, or of the
initiation or threatening of any proceedings for any of such purposes and, if
the Commission or any other government agency or authority should issue any such
order, to make every reasonable effort to obtain the lifting or removal of such
order as soon as possible; to advise the Representative promptly of any proposal
to amend or supplement the Registration Statement or Prospectus and to file no
such amendment or supplement to which the Representative shall reasonably object
in writing;
(f) to file promptly with the Commission any amendment to the Registration
Statement or the Prospectus or any supplement to the Prospectus that may, in the
judgment of the Company or the Representative, be required by the Securities Act
or requested by the Commission; to advise
14
the Representative promptly of any proposal to amend or supplement the
Registration Statement or Prospectus and to file no such amendment or supplement
to which the Representative shall reasonably object in writing;
(g) to furnish to the Underwriters for a period of five years from the date
of this Agreement (i) as soon as available, copies of all annual, quarterly and
current reports or other communications supplied to holders of Common Shares,
(ii) as soon as practicable after the filing thereof, copies of all reports
filed by the Company with the Commission, the NASD or any securities exchange
and (iii) such other publicly available information as the Underwriters may
reasonably request regarding the Company and its Subsidiaries;
(h) to advise the Underwriters promptly during any period of time in which
a Prospectus relating to the Shares is required to be delivered under the
Securities Act Regulations (i) of any material change in the Company's assets,
operations, business, prospects or condition (financial or otherwise) or (ii) of
the happening of any event which would require the making of any change in the
Prospectus then being used so that the Prospectus would not include 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, in the light of the
circumstances under which they were made, not misleading, and, during such time,
to prepare and furnish, at the Company's expense, to the Underwriters promptly
such amendments or supplements to the Prospectus as may be necessary to reflect
any such change;
(i) to furnish promptly to the Representative a signed copy of the
Registration Statement, as initially filed with the Commission, and of all
amendments or supplements thereto (including all exhibits filed therewith) and
such number of conformed copies of the foregoing as the Underwriters may
reasonably request;
(j) to furnish to the Underwriters, not less than two business days before
filing with the Commission, subsequent to the effective date of the Prospectus
and during any period of time in which a prospectus relating to the Shares is
required to be delivered under the Securities Act Regulations, a copy of any
document proposed to be filed with the Commission pursuant to Section 13, 14, or
15(d) of the Exchange Act;
(k) to apply the net proceeds of the sale of the Shares substantially in
accordance with its statements under the caption "Use of Proceeds" in the
Prospectus;
(l) to make generally available to its security holders as soon as
practicable, but in any event not later than the end of the fiscal quarter first
occurring after the first anniversary of the effective date of the Registration
Statement, an earnings statement complying with the provisions of Section 11(a)
of the Securities Act (in form, at the option of the Company, complying with the
provisions of Rule 158 of the Securities Act Regulations) covering a period of
12 months beginning on the effective date of the Registration Statement;
(m) to use its best efforts to effect and maintain the listing of the
Shares on the American Stock Exchange and to file with the American Stock
Exchange all documents and notices required by the American Stock Exchange of
companies that have securities that are listed on the American Stock Exchange;
15
(n) except for the granting of options in the ordinary course of business
pursuant to the Company's 1989 Stock Option Plan or 1996 Stock Option Plan (not
to exceed an aggregate of ________ options), to refrain during a period of 90
days from the date of the Prospectus, without the prior written consent of the
Representative, from (i) offering, pledging, selling, contracting to sell,
selling any option or contract to purchase, purchasing any option or contract to
sell, granting any option for the sale of, or otherwise disposing of or
transferring, directly or indirectly, any Common Shares or any securities
convertible into or exercisable or exchangeable for Common Shares, or filing any
registration statement under the Securities Act with respect to any of the
foregoing or (ii) entering into any swap or any other agreement or any
transaction that transfers, in whole or in part, directly or indirectly, the
economic consequence of ownership of the Common Shares, whether any such swap or
transaction described in clause (i) or (ii) above is to be settled by delivery
of Common Shares or such other securities, in cash or otherwise; the foregoing
sentence shall not apply to (A) the Shares to be sold hereunder, (B) any Common
Shares issued by the Company upon the exercise of an option outstanding on the
date hereof or upon the exercise of any option granted in the ordinary course of
business as provided herein, or (C) any Common Shares issuable upon the
conversion of any shares of Preferred Stock outstanding on the date hereof;
(o) the Company will maintain a transfer agent and, if necessary under the
jurisdiction of formation of the Company, a registrar (which may be the same
entity as the transfer agent) for its Common Shares;
(p) the Company will use its best efforts to continue to meet the
requirements to qualify as a real estate investment trust under the Code;
(q) the Company will comply with all of the provisions of any undertakings
in the Registration Statement;
(r) the Company and the Subsidiaries will conduct their affairs in such a
manner so as to ensure that neither the Company nor any Subsidiary will be an
"investment company" or an entity "controlled" by an investment company within
the meaning of the 1940 Act;
(s) if at any time during the 30-day period after the Registration
Statement becomes effective, any rumor, publication or event relating to or
affecting the Company shall occur as a result of which in the Representative's
reasonable opinion the market price of the Common Shares has been or is likely
to be materially affected (regardless of whether such rumor, publication or
event necessitates a supplement to or amendment of the Prospectus) and after
written notice from the Representative advising the Company to the effect set
forth above, to forthwith prepare, consult with the Representative concerning
the substance of, and disseminate a press release or other public statement, in
compliance with the Securities Act, the Securities Act Regulations and other
applicable laws and reasonably satisfactory to the Representative, responding to
or commenting on such rumor, publication or event;
(t) to maintain a system of internal accounting controls sufficient to
provide reasonable assurance that (i) transactions are executed in accordance
with management's general or specific authorizations; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain asset
16
accountability; (iii) access to assets is permitted only in accordance with
management's 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;
(u) if the Company elects to rely on Rule 462(b), the Company shall both
file a Rule 462(b) Registration Statement with the Commission in compliance with
Rule 462(b) and the Company shall pay the applicable fees in accordance with
Rule 111 promulgated under the Act by the earlier of (i) 10:00 p.m., New York
City time, on the date of this Agreement and (ii) the time confirmations are
sent or given, as specified by Rule 462(b)(2);
(v) for a period of 90 days after the date hereof, neither the Company nor
any Subsidiary will, directly or indirectly: (i) take any action designed to
cause or to result in, or that has constituted or which might reasonably be
expected to constitute, the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Shares; or
(ii)(A) sell, bid for, purchase, or pay anyone any compensation for soliciting
purchases of, the Shares; or (B) pay or agree to pay to any person any
compensation for soliciting another to purchase any other securities of the
Company; and
(w) the Company will obtain each of the lock-up agreements described in
Section 6(k) hereof prior to the Closing Time.
5. Payment of Expenses:
(a) The Company agrees to pay all costs and expenses incident to the
performance of the Company's obligations under this Agreement whether or not the
transactions contemplated hereunder are consummated or this Agreement
terminated, including, but not limited to, all fees and expenses of and filing
with the Commission and the NASD; all blue sky fees and expenses, including
filing fees and disbursements of the Representative's Blue Sky counsel, fees and
disbursements of counsel and accountants for the Company, printing costs,
including costs of printing the Prospectus, and any amendments thereto; all
underwriting documents, Blue Sky Memoranda, a reasonable quantity of
Prospectuses requested by the Representative, and the Company's road show costs
and expenses.
(b) If this Agreement shall be terminated by the Underwriters, or any of
them, because of any failure or refusal on the part of the Company to comply
with the terms or to fulfill any of the conditions of this Agreement, or if for
any reason the Company shall be unable to perform its obligations under this
Agreement, the Company will 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 transactions contemplated herein.
(c) In addition to the costs and expenses to be paid by the Company
pursuant to Section 5(a) and Section 5(b) above, whether or not the transactions
contemplated hereunder are consummated or this Agreement is terminated, the
Company agrees to reimburse the Representative for such other reasonable and
actual out of pocket expenses incurred by the
17
Representative in connection with the performance of their obligations
hereunder, including the fees and disbursements of the Representative' outside
legal counsel.
6. Conditions of the Underwriters' Obligations: The obligations of the
Underwriters to purchase the Shares hereunder are subject to (i) the accuracy of
the representations and warranties on the part of the Company on the date hereof
and at the Closing Time and on each Date of Delivery, as if made on and as of
such date, (ii) the performance by the Company of its obligations, covenants and
agreements hereunder, and (iii) the following further conditions:
(a) If, at the time this Agreement is executed and delivered, it is
necessary for a post-effective amendment to the Registration Statement to be
declared effective before the offering of the Shares may commence, such
post-effective amendment shall have become effective not later than 5:30 p.m.,
New York City time, on the date hereof, or at such later date and time as shall
be consented to in writing by you; if the Company has elected to rely upon Rule
462(b), the Rule 462(b) Registration Statement, shall have been declared
effective not later than the earlier of (i) 11:00 a.m., New York City time, on
the date on which the amendment to the Registration Statement originally filed
with respect to the Shares or to the Registration Statement, as the case may be,
containing information regarding the public offering price of the Shares has
been filed with the Commission and (ii) the time confirmations are sent or given
as specified by Rule 462(b) or, with respect to the Registration Statement, such
later time and date as shall have been consented to in writing by you; if
required, the Prospectus and any amendment or supplement thereto shall have been
filed with the Commission in the manner and within the time period required by
Rule 424(b) under the Securities Act;
(b) The Company shall furnish to the Underwriters at the Closing Time and
on each Date of Delivery an opinion of XxXxxxxx & English, LLP, counsel for the
Company, addressed to the Underwriters and dated the Closing Time and each Date
of Delivery and in form satisfactory to Xxxxxx, Xxxx & Xxxxxxxx LLP, counsel for
the Underwriters, stating that:
(i) the authorized shares of common stock of the Company conform as to
legal matters to the description thereof contained in the Prospectus and meet
the requirements of Form S-2 under the Securities Act; the Company has an
authorized capitalization as set forth in the Prospectus under the caption
"Capitalization" as of the date stated in such section; the outstanding shares
of common stock or capital stock, as the case may be, of the Company and the
Subsidiaries have been duly and validly authorized and issued and are fully paid
and non-assessable and have been issued in compliance with all Federal and state
securities laws; all of the authorized and validly issued shares of capital
stock of, or other equity interests in the Subsidiaries, as the case may be, are
directly or indirectly owned of record and beneficially by the Company; except
as disclosed in the Prospectus, there are no authorized and validly issued (A)
securities or obligations of the Company or any of the Subsidiaries convertible
into or exchangeable for any shares of common stock of the Company or any
capital stock or interests in any such Subsidiary or (B) warrants, rights or
options to subscribe for or purchase from the Company or any such Subsidiary any
such shares of common stock, capital stock, interests or any such convertible or
exchangeable securities or obligations; except as set forth in the Prospectus or
contemplated by this Agreement, there are no outstanding obligations of the
Company or any such Subsidiary to issue any shares of common stock, capital
stock or interests, any such convertible or exchangeable securities or
obligation, or any such warrants, rights or options;
18
(ii) the Company and the Subsidiaries each has been duly formed or
incorporated, as the case may be, and is validly existing and in good standing
under the laws of its respective jurisdiction of formation or incorporation with
the requisite power and authority to own its respective properties and to
conduct its respective business as described in the Registration Statement and
Prospectus and, in the case of the Company, to execute and deliver this
Agreement and the Other Transaction Documents and to consummate the transactions
described in each such agreement;
(iii) the Company and the Subsidiaries are duly qualified in or registered by
and are in good standing in each jurisdiction specifically referred to in the
Registration Statement and Prospectus as jurisdictions in which property
securing loans proposed to be made or acquired by the Company is located and in
which the failure, individually or in the aggregate, to be so qualified could
reasonably be expected to have a material adverse effect on the assets,
operations, business, prospects or condition (financial or otherwise) of the
Company and the Subsidiaries taken as a whole; to such counsel's knowledge,
other than the Subsidiaries, the Company does not own, directly or indirectly,
any capital stock or other equity securities of any other corporation or any
ownership interest in any limited liability company, partnership, joint venture
or other association;
(iv) to such counsel's knowledge, the Company and the Subsidiaries are in
compliance in all material respects with all applicable laws, rules, regulations
and orders;
(v) to such counsel's knowledge, except as disclosed in the Registration
Statement and the Prospectus, neither the Company nor any of its Subsidiaries is
in material breach of, or in material default under (nor has any event occurred
which with notice, lapse of time, or both would constitute a material breach of,
or material default under) its respective charter, by-laws, certificate of
limited liability company, agreement of limited liability company, certificate
of limited partnership or partnership agreement, as the case may be, or in the
performance or observation of any obligation, agreement, covenant, or condition
contained in any license, lease, indenture, mortgage, deed of trust, deed to
secure debt, loan or credit agreement or any other agreement or instrument to
which the Company or any of the Subsidiaries is a party or by which any of them
or their respective properties may be bound or affected;
(vi) the execution, delivery and performance of this Agreement and the Other
Transaction Documents by the Company and the consummation by the Company of the
transactions contemplated under this Agreement or the Other Transaction
Documents, as the case may be, do not and will not result in the creation or
imposition of any lien, encumbrance, or to such counsel's knowledge, charge or
claim upon any property or assets of the Company or the Subsidiaries, or
conflict with, or result in any breach of, or constitute a default under (nor
constitute any event which with notice, lapse of time, or both would constitute
a breach of or default under), (i) any provisions of the charter, by-laws,
certificate of limited liability company, agreement of limited liability
company, certificate of limited partnership or partnership agreement, as the
case may be, of the Company or any Subsidiary, (ii) to such counsel's knowledge,
any provision of any license, lease, indenture, mortgage, deed of trust, deed to
secure debt, loan or credit agreement or other agreement or instrument to which
the Company or any Subsidiary is a party or by which any of them or their
respective properties may be bound or affected, or (iii) to such counsel's
knowledge, any law or regulation or any decree, judgment or order applicable to
the Company or any Subsidiary (other than State and foreign securities or
19
blue sky laws and the rules and regulations of the NASD, as to which counsel
need express no opinion, or the Federal securities laws, as to which counsel
need express only that nothing has come to its attention to lead it to believe
that such a violation has or will occur);
(vii) the Company has full legal right, power and authority to enter into and
perform this Agreement and to consummate the transactions contemplated herein;
this Agreement has been duly authorized, executed and delivered by the Company
and is a legal, valid and binding agreement of the Company enforceable in
accordance with its terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights
generally, and by general principles of equity, and except that enforceability
of the indemnification and contribution provisions set forth in Section 9 hereof
may be limited by the Federal or state securities laws of the United States or
public policy underlying such laws;
(viii) the Other Transaction Documents, if any, have been duly authorized,
executed and delivered by the Company and are legal, valid and binding
agreements of the Company enforceable in accordance with their terms, except as
may be limited by bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting creditors' rights generally, and by general principles of equity;
(ix) no approval, authorization, consent or order of or filing with any
Federal or state governmental or regulatory commission, board, body, authority
or agency is required in connection with the execution, delivery and performance
of this Agreement and the Other Transaction Documents or the consummation of the
transactions contemplated hereby and thereby by the Company, or the sale and
delivery of the Shares by the Company as contemplated hereby, other than such as
have been obtained or made under the Securities Act or the Exchange Act and such
approvals as have been obtained in connection with the listing of the Shares on
the American Stock Exchange and except that such counsel need express no opinion
as to any necessary qualification under the state securities or blue sky laws of
the various jurisdictions in which the Shares are being offered by the
Underwriters or any approval of the underwriting terms and arrangements by the
NASD;
(x) to such counsel's knowledge, each of the Company and the Subsidiaries
has all necessary licenses, authorizations, consents and approvals and has made
all necessary filings required under any Federal, state or local law, regulation
or rule, and has obtained all necessary authorizations, consents and approvals
from other persons, required to conduct their respective businesses, as
described in the Registration Statement and the Prospectus, except to the extent
that any failure to have any such authorizations, consents or approvals would
not, individually or in the aggregate, have a material adverse effect on the
assets, operations, business, prospects or condition (financial or otherwise) of
the Company and the Subsidiaries, taken as a whole; to such counsel's knowledge,
neither the Company nor any of the Subsidiaries is in violation of, in default
under, or has received any notice regarding a possible violation, default or
revocation of any such license, authorization, consent or approval or any
Federal, state, local or foreign law, regulation or decree, order or judgment
applicable to the Company or any of the Subsidiaries, the effect of which could
be material and adverse to the assets, operations, business, prospects or
condition (financial or otherwise) of the Company and the Subsidiaries taken as
a whole; and no such license, authorization, consent or approval contains a
materially burdensome restriction that is not adequately disclosed in the
Registration Statement and the Prospectus;
20
(xi) the Shares have been duly authorized and, when the Shares have been
issued and duly delivered against payment therefor as contemplated by this
Agreement, the Shares will be validly issued, fully paid and nonassessable, will
have been issued in compliance with all Federal and state securities laws, to
the knowledge of such counsel, will not be issued in violation of or subject to
any preemptive rights or other rights to subscribe for or purchase securities,
and, except for any action that may have been taken by the holder thereof, free
and clear of any pledge, lien, encumbrance, security interest, or other claim;
(xii) the issuance and sale of the Shares by the Company is not subject to
preemptive or other similar rights arising by operation of law, under the
charter or by-laws of the Company under any agreement known to such counsel to
which the Company or any of the Subsidiaries is a party or, to such counsel's
knowledge, otherwise;
(xiii) to such counsel's knowledge, there are no persons with registration or
other similar rights to have any securities registered pursuant to the
Registration Statement or otherwise registered by the Company under the
Securities Act;
(xiv) the form of certificate used to evidence the Shares complies with all
applicable statutory requirements, with any applicable requirements of the
charter and bylaws of the Company and the requirements of the American Stock
Exchange;
(xv) the Registration Statement has become effective under the Securities
Act; any required filing of the Prospectus pursuant to Rule 424(b) has been made
in the manner and within the time period required by Rule 424(b); and, to such
counsel's knowledge, no stop order suspending the effectiveness of the
Registration Statement has been issued and, to such counsel's knowledge, no
proceedings with respect thereto have been commenced or threatened;
(xvi) as of the effective date of the Registration Statement, the
Registration Statement, any Rule 462(b) Registration Statement and the
Prospectus (except as to the financial statements and other financial and
statistical data contained therein, as to which such counsel need express no
opinion) complied as to form in all material respects with the requirements of
the Securities Act and the Securities Act Regulations;
(xvii) the statements under the captions "Our Company," "Risk Factors,"
"Market Price and Dividends on our Common Stock," "Description of Securities,"
and "Certain Federal Income Tax Considerations," in the Registration Statement
and the Prospectus, insofar as such statements constitute a summary of the legal
matters, documents and proceedings referred to therein, constitute accurate
summaries thereof in all material respects;
(xviii) the Shares have been approved for listing on the American Stock
Exchange;
(xix) to such counsel's knowledge, there are no actions, suits or
proceedings, inquiries, or investigations pending or threatened against the
Company or any of the Subsidiaries or any of their respective officers and
directors or to which the properties, assets or rights of any such entity are
subject, at law or in equity, before or by any Federal, state, local or foreign
governmental or regulatory commission, board, body, authority, arbitration panel
or agency that are required to be described in the Prospectus but are not so
described;
21
(xx) to such counsel's knowledge, there are no contracts or documents of a
character that are required to be filed as exhibits to the Registration
Statement or to be described, summarized or incorporated by reference in the
Prospectus which have not been so filed, described, summarized or incorporated;
to such counsel's knowledge, all agreements between the Company or any of the
Subsidiaries, respectively, and third parties expressly referenced in the
Prospectus are legal, valid and binding obligations of the Company or the
Subsidiaries, as the case may be, enforceable in accordance with their
respective terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights generally
and by general principles of equity; and each document incorporated by reference
or deemed to be incorporated by reference in the Registration Statement and in
the Prospectus, when each became effective or was filed with the Commission, as
the case may be, conformed in all material respects to the requirements of the
Securities Act or the Exchange Act, as applicable, and the Securities Act
Regulations and the Exchange Act Regulations;
(xxi) the Company, commencing with the Company's taxable year ended December
31, 1998, has been organized and operated in conformity with the requirements
for qualification as a real estate investment trust pursuant to Sections 856
through 860 of the Code, and that the Company's method of operation will enable
it to meet the requirements for qualification and taxation as a real estate
investment trust under the Code;
(xxii) neither the Company nor any of the Subsidiaries is, or solely as a
result of the transactions contemplated hereby and the application of the
proceeds from the sale of the Shares as described in the Registration Statement
and the Prospectus under the caption "Use of Proceeds," will become an
"investment company" or a company "controlled" by an "investment company" within
the meaning of the 1940 Act; and
(xxiii) to such counsel's knowledge, each of the Company and the Subsidiaries
has filed on a timely basis all necessary Federal, state, local and foreign
income and franchise tax returns through the date hereof, if any such returns
are required to be filed, and have paid all taxes shown as due thereon; and no
tax deficiency has been asserted against any such entity, nor does any such
entity know of any tax deficiency which is likely to be asserted against any
such entity which, if determined adversely to any such entity, could have a
material adverse effect on the assets, operations, business, prospects or
condition (financial or otherwise) of any such entity, respectively.
In addition, such counsel shall state that they have participated
in conferences with officers and other representatives of the Company,
independent public accountants of the Company and Underwriters at which the
contents of the Registration Statement and Prospectus were discussed and,
although such counsel is not passing upon and does not assume responsibility for
the accuracy, completeness or fairness of the statements contained in the
Registration Statement or Prospectus (except as and to the extent stated in
subparagraphs (i), (xvi) and (xvii) above), nothing has caused them to believe
that the Registration Statement as of its effective date , and as of the date of
such counsel's opinion, contained or contains any untrue statement of a material
fact or omitted or omits to state a material fact required to be stated therein
or necessary to make the statements therein not misleading, or that the
Preliminary Prospectus or the Prospectus, as of their respective issue dates and
as of the date of such counsel's opinion, contained or contains any untrue
statement of a material fact or omitted or
22
omits 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 (it being understood that, in each case, such counsel
need express no view with respect to the financial statements and other
financial and statistical data included in the Registration Statement,
Preliminary Prospectus or Prospectus).
(c) The Representative shall have received from Ernst & Young LLP letters
dated, respectively, as of the date of this Agreement, the Closing Time and each
Date of Delivery, as the case may be, addressed to the Representative as
representative of the Underwriters and in form and substance satisfactory to the
Representative.
(d) The Underwriters shall have received at the Closing Time and on each
Date of Delivery the favorable opinion of Xxxxxx, Xxxx & Xxxxxxxx LLP, dated the
Closing Time or such Date of Delivery, addressed to the Representative and in
form and substance satisfactory to the Representative.
(e) No amendment or supplement to the Registration Statement or Prospectus
shall have been filed to which the Underwriters shall have objected in writing.
(f) Prior to the Closing Time and each Date of Delivery (i) no stop order
suspending the effectiveness of the Registration Statement or any order
preventing or suspending the use of any Preliminary Prospectus or Prospectus
shall have been issued by the Commission, and no suspension of the qualification
of the Shares for offering or sale in any jurisdiction, or of the initiation or
threatening of any proceedings for any of such purposes, shall have occurred;
and (ii) from the time the Registration Statement was declared effective up to
and including the Closing Time or Date of Delivery, as applicable, the
Registration Statement shall 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, and the Prospectus shall 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, in
the light of the circumstances under which they were made, not misleading.
(g) Between the time of execution of this Agreement and the Closing Time or
the relevant Date of Delivery (i) no material and unfavorable change in the
assets, operations, business, prospects or condition (financial or otherwise) of
the Company and its Subsidiaries taken as a whole shall occur or become known
(whether or not arising in the ordinary course of business), (ii) no transaction
which is material and outside of the ordinary course of business of the Company
shall have been entered into by the Company or any of the Subsidiaries, (iii)
neither the Company nor any Subsidiary has incurred any obligation, direct or
contingent, that is material to the Company and the Subsidiaries taken as a
whole, except obligations incurred in the ordinary course of business, (iv)
there has not been any change in the capital stock or outstanding indebtedness
of the Company or the Subsidiaries that is material to the Company and the
Subsidiaries taken as a whole or (v) neither the Company nor any Subsidiary has
sustained any loss or damage (whether or not insured) to the property of the
Company or such Subsidiary which could have a material adverse effect on the
assets, operations, business, prospects or condition (financial or otherwise) of
the Company and its Subsidiaries taken as a whole.
23
(h) At the Closing Time, the Other Transaction Documents shall have been
entered into and delivered by all required parties.
(i) At the Closing Time, the Shares shall have been approved for listing on
the American Stock Exchange, subject to official notice of issuance.
(j) The NASD shall have stated that it will raise no objection with respect
to the fairness and reasonableness of the underwriting terms and arrangements.
(k) The Representative shall have received letters (each, a "Lock-up
Agreement") from each person listed on Schedule IV hereto, in form and substance
satisfactory to the Representative, confirming that for a period of 90 days
after the Closing Time, such persons will not directly or indirectly (i) offer,
pledge to secure any obligation due on or within 90 days after the Closing Time,
sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option for the sale of, or otherwise
dispose of or transfer (other than a disposition or transfer pursuant to which
the acquiror or transferee is subject to the restrictions on disposition and
transfer set forth in this Section 6(k) to the same extent as such stockholder
delivering a letter hereunder), directly or indirectly, any Common Shares (other
than by participating as selling stockholders in a registered offering of Common
Shares offered by the Company with the consent of the Representative) or any
securities convertible into or exercisable or exchangeable for Common Shares or
(ii) enter into any swap or any other agreement or any transaction that
transfers, in whole or in part, directly or indirectly, the economic consequence
of ownership of the Common Shares, whether any such swap or transaction
described in clause (i) or (ii) above is to be settled by delivery of Common
Shares or such other securities, in cash or otherwise, without the prior written
consent of the Representative, which consent may be withheld at the sole
discretion of the Representative.
(l) The Company will, at the Closing Time and on each Date of Delivery,
deliver to the Underwriters a certificate of two principal executive officers to
the effect that the representations and warranties of the Company set forth in
this Agreement and the conditions set forth in paragraphs (f), (g), (h), (i) and
(o) have been met and are true and correct as of such date.
(m) The Company shall have furnished to the Underwriters such other
documents and certificates or other information, including with respect to the
accuracy and completeness of any statement in the Registration Statement and the
Prospectus, the representations, warranties and statements of the Company
contained herein, the performance by the Company of its covenants contained
herein, and the fulfillment of any conditions contained herein, as of the
Closing Time or any Date of Delivery, as the Underwriters may reasonably
request.
(n) All filings with the Commission required by Rule 424 under the
Securities Act shall have been made within the applicable time period prescribed
for such filing by such Rule.
(o) The Company shall perform such of its obligations and satisfy all
conditions under this Agreement that are to be performed or satisfied by the
terms hereof at or before the Closing Time or the relevant Date of Delivery.
The several obligations of the Underwriters to purchase Shares
hereunder are also subject to the delivery to the Representative on the relevant
Date of Delivery of such documents as the
24
Representative may reasonably request with respect to the good standing of the
Company, the due authorization and issuance of the Shares and other matters
related to the issuance of the Shares.
7. Termination: The obligations of the several Underwriters hereunder
shall be subject to termination in the absolute discretion of the
Representative, at any time prior to the Closing Time or any Date of Delivery,
(i) if any of the conditions specified in Section 6 shall not have been
fulfilled when and as required by this Agreement to be fulfilled, or (ii) if
there has been since the respective dates as of which information is given in
the Registration Statement, any material adverse change, or any development
involving a prospective material adverse change, in or affecting the assets,
operations, business, prospects or condition (financial or otherwise) of the
Company and the Subsidiaries taken as a whole, whether or not arising in the
ordinary course of business, or (iii) if there has occurred outbreak or
escalation of hostilities or other national or international calamity or crisis
or change in economic, political or other conditions the effect of which on the
financial markets of the United States is such as to make it, in the judgment of
the Representative, impracticable to market or deliver the Shares or enforce
contracts for the sale of the Shares, or (iv) if trading in any securities of
the Company has been suspended by the Commission or by the American Stock
Exchange or if trading generally on the New York Stock Exchange, the American
Stock Exchange or in the Nasdaq over-the-counter market has been suspended
(including automatic halt in trading pursuant to market-decline triggers other
than those in which solely program trading is temporarily halted), or
limitations on prices for trading (other than limitations on hours or numbers of
days of trading) have been fixed, or maximum ranges for prices for securities
have been required, by such exchange or the NASD or by order of the Commission
or any other governmental authority, or (v) if there has been any downgrading in
the rating of any of the Company's debt securities or preferred stock by any
"nationally recognized statistical rating organization" (as defined for purposes
of Rule 436(g) under the Securities Act), or (vi) any Federal or state statute,
regulation, rule or order of any court or other governmental authority has been
enacted, published, decreed or otherwise promulgated which in the reasonable
opinion of the Representative has a material adverse affect or will have a
material adverse affect on the assets, operations, business, prospects or
condition (financial or otherwise) of the Company, or (vii) any action has been
taken by any Federal, state or local government or agency in respect of its
monetary or fiscal affairs which in the reasonable opinion of the Representative
has a material adverse effect on the securities markets in the United States, or
(viii) in the case of any of the events specified in clauses (i) through (vii),
such event, singly or together with any other such events, makes it, in the
judgment of the Representative, impracticable to market or deliver the Shares on
the terms and in the manner contemplated in the Prospectus.
If the Representative elects to terminate this Agreement as provided in
this Section 7, the Company and the Underwriters shall be notified promptly by
telephone, promptly confirmed by facsimile.
If the sale to the Underwriters of the Shares, as contemplated by this
Agreement, is not carried out by the Underwriters for any reason permitted under
this Agreement or if such sale is not carried out because the Company shall be
unable to comply in all material respects with any of the terms of this
Agreement, the Company shall not be under any obligation or liability under this
Agreement (except to the extent provided in Sections 5 and 9 hereof) and the
Underwriters
25
shall be under no obligation or liability to the Company under this Agreement
(except to the extent provided in Section 9 hereof) or to one another hereunder.
8. Increase in Underwriters' Commitments: If any Underwriter shall default
at the Closing Time or on a Date of Delivery in its obligation to take up and
pay for the Shares to be purchased by it under this Agreement on such date, the
Representative shall have the right, within 36 hours after such default, 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 Shares which such
Underwriter shall have agreed but failed to take up and pay for (the "Defaulted
Shares"). Absent the completion of such arrangements within such 36 hour period,
(i) if the total number of Defaulted Shares does not exceed 10% of the total
number of Shares to be purchased on such date, each non-defaulting Underwriter
shall take up and pay for (in addition to the number of Shares which it is
otherwise obligated to purchase on such date pursuant to this Agreement) the
portion of the total number of Shares agreed to be purchased by the defaulting
Underwriter on such date in the proportion that its underwriting obligations
hereunder bears to the underwriting obligations of all non-defaulting
Underwriters; and (ii) if the total number of Defaulted Shares exceeds 10% of
such total, the Representative may terminate this Agreement by notice to the
Company, without liability to any non-defaulting Underwriter, except that the
provisions of Sections 5 and 9 shall at all times be effective and survive such
termination.
Without relieving any defaulting Underwriter from its obligations
hereunder, the Company agrees with the non-defaulting Underwriters that it will
not sell any Shares hereunder on such date unless all of the Shares to be
purchased on such date are purchased on such date by the Underwriters (or by
substituted Underwriters selected by the Representative with the approval of the
Company or selected by the Company with the approval of the Representative).
If a new Underwriter or Underwriters are substituted for a defaulting
Underwriter in accordance with the foregoing provision, the Company or the
non-defaulting Underwriters shall have the right to postpone the Closing Time or
the relevant Date of Delivery for a period not exceeding five business days in
order that any necessary changes in the Registration Statement and Prospectus
and other documents may be effected.
The term "Underwriter" as used in this Agreement shall refer to and
include any Underwriter substituted under this Section 8 with the like effect as
if such substituted Underwriter had originally been named in this Agreement.
9. Indemnity and Contribution by the Company and the Underwriters:
(a) The Company agrees to indemnify, defend and hold harmless each
Underwriter and any person who controls any Underwriter within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act from and
against any loss, expense, liability, damage or claim (including the reasonable
cost of investigation) which, jointly or severally, any such Underwriter or
controlling person may incur under the Securities Act, the Exchange Act or
otherwise, insofar as such loss, expense, liability, damage or claim arises out
of or is based upon:
(i) any untrue statement or alleged untrue statement made by the Company in
Section 3 of this Agreement;
26
(ii) any untrue statement or alleged untrue statement of a material fact
contained in: (A) the Registration Statement or any amendment thereto, any
Preliminary Prospectus or the Prospectus or any amendment or supplement thereto
and including any Rule 462(b) Registration Statement; or (B) any application or
other document, or any amendment or supplement thereto, executed by the Company
or any Subsidiary or based upon written information furnished by or on behalf of
the Company or any Subsidiary filed in any jurisdiction in order to qualify the
Shares under the securities or blue sky laws thereof or filed with the
Commission or any securities association or securities exchange (each an
"Application");
(iii) any omission or alleged omission to state in any such Registration
Statement or any amendment thereto, a material fact required to be stated
therein or necessary to make the statements made therein not misleading, or in
any such Preliminary Prospectus or Prospectus, or any amendment or supplement
thereto, or any Application a material fact required to be stated therein or
necessary to make the statements made therein, in the light of the circumstances
under which they were made, not misleading; or
(iv) any untrue statement or alleged untrue statement of any material fact
contained in any audio or visual materials prepared, approved or used by the
Company in connection with the marketing of the Shares, including without
limitation, slides, videos, films and tape recordings;
Except insofar as any such loss, expense, liability, damage or claim
under this Section 9(a) arises out of or is based upon any untrue statement or
alleged untrue statement or omission or alleged omission of a material fact
contained in and in conformity with information furnished in writing by the
Underwriters through the Representative to the Company expressly for use in such
Registration Statement, Preliminary Prospectus, Prospectus, or Application (as
set forth in subsection (b) below); provided, however, that the indemnity
agreement contained in this subsection (a) with respect to the Preliminary
Prospectus or the Prospectus shall not inure to the benefit of an Underwriter
(or to the benefit of any person controlling such Underwriter) with respect to
any person asserting any such loss, expense, liability, damage or claim which is
the subject thereof if the Prospectus or any supplement thereto prepared with
the consent of the Representative and furnished to the Underwriters prior to the
Closing Time corrected any such alleged untrue statement or omission and if such
Underwriter failed to send or give a copy of the Prospectus or supplement
thereto to such person at or prior to the written confirmation of the sale of
Shares to such person, unless such failure resulted from noncompliance by the
Company with Section 4(a) of this Agreement.
If any action is brought against an Underwriter or controlling person
in respect of which indemnity may be sought against the Company pursuant to this
Section 9(a), such Underwriter shall promptly notify the Company in writing of
the institution of such action and the Company shall assume the defense of such
action, including the employment of counsel and payment of expenses, provided,
however, that any failure or delay to so notify the Company will not relieve the
Company of any obligation hereunder, except to the extent that its ability to
defend is actually impaired by such failure or delay. Such Underwriter or
controlling person shall have the right to employ its or their own counsel in
any such case, but the fees and expenses of such counsel shall be at the expense
of such Underwriter or such controlling person unless the employment of such
counsel shall have been authorized in writing by the Company in connection with
the defense of such action or the Company shall not have employed counsel to
27
have charge of the defense of such action within a reasonable time or such
indemnified party or parties shall have reasonably concluded (based on the
advice of counsel) that there may be defenses available to it or them which are
different from or additional to those available to the Company and which counsel
to the Underwriter believes may present a conflict for counsel representing the
Company and the Underwriter (in which case the Company shall not have the right
to direct the defense of such action on behalf of the indemnified party or
parties), in any of which events such fees and expenses shall be borne by the
Company and paid as incurred (it being understood, however, that the Company
shall not be liable for the expenses of more than one separate firm of attorneys
for the Underwriters or controlling persons in any one action or series of
related actions in the same jurisdiction representing the indemnified parties
who are parties to such action). Anything in this paragraph to the contrary
notwithstanding, the Company shall not be liable for any settlement of any such
claim or action effected without its written consent.
(b) Each Underwriter agrees, severally and not jointly, to indemnify,
defend and hold harmless the Company, the Subsidiaries, their trustees and
directors, the officers that signed the Registration Statement and any person
who controls the Company or any Subsidiary within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act from and against any loss,
expense, liability, damage or claim (including the reasonable cost of
investigation) which, jointly or severally, the Company or any such person may
incur under the Securities Act, the Exchange Act or otherwise, insofar as such
loss, expense, liability, damage or claim arises out of or is based upon any
untrue statement or alleged untrue statement of a material fact contained in and
in conformity with information furnished in writing by such Underwriter through
the Representative to the Company expressly for use in the Registration
Statement (or in the Registration Statement as amended by any post-effective
amendment thereof by the Company) or in a Prospectus, or arises out of or is
based upon any omission or alleged omission to state a material fact in
connection with such information required to be stated either in the
Registration Statement or Prospectus or necessary to make such information, in
the light of the circumstances under which made, not misleading. The statements
set forth under the caption "Underwriting" regarding (i) concessions to dealers
in connection with the sale of Shares and (ii) stabilizing in the Preliminary
Prospectus and the Prospectus (to the extent such statements relate to the
Underwriters) constitute the only information furnished by or on behalf of any
Underwriter through the Representative to the Company for purposes of Section
3(k) and this Section 9.
If any action is brought against the Company or any such person in
respect of which indemnity may be sought against any Underwriter pursuant to the
foregoing paragraph, the Company or such person shall promptly notify the
Representative in writing of the institution of such action and the
Representative, on behalf of the Underwriters, shall assume the defense of such
action, including the employment of counsel and payment of expenses. The Company
or such person shall have the right to employ its own counsel in any such case,
but the fees and expenses of such counsel shall be at the expense of the Company
or such person unless the employment of such counsel shall have been authorized
in writing by the Representative in connection with the defense of such action
or the Representative shall not have employed counsel to have charge of the
defense of such action within a reasonable time or such indemnified party or
parties shall have reasonably concluded (based on the advice of counsel) that
there may be defenses available to it or them which are different from or
additional to those available to the Underwriters (in which case the
Representative shall not have the right to direct
28
the defense of such action on behalf of the indemnified party or parties), in
any of which events such fees and expenses shall be borne by such Underwriter
and paid as incurred (it being understood, however, that the Underwriters shall
not be liable for the expenses of more than one separate firm of attorneys in
any one action or series of related actions in the same jurisdiction
representing the indemnified parties who are parties to such action). Anything
in this paragraph to the contrary notwithstanding, no Underwriter shall be
liable for any settlement of any such claim or action effected without the
written consent of the Representative.
(c) If the indemnification provided for in this Section 9 is unavailable to
an indemnified party under subsections (a) and (b) of this Section 9 in respect
of any losses, expenses, liabilities, damages or claims referred to therein,
then each applicable 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, expenses, liabilities, damages or
claims (i) in such proportion as is appropriate to reflect the relative benefits
received by the Company on the one hand and the Underwriters on the other hand
from the offering of the Shares or (ii) if (but only 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 Company on the one hand and of the
Underwriters on the other in connection with the statements or omissions which
resulted in such losses, expenses, liabilities, damages or claims, as well as
any other relevant equitable considerations. The relative benefits received by
the Company on the one hand and the Underwriters on the other shall be deemed to
be in the same proportion as the total proceeds from the offering (net of
underwriting discounts and commissions but before deducting expenses) received
by the Company bear to the underwriting discounts and commissions received by
the Underwriters. The relative fault of the Company on the one hand and of the
Underwriters on the other shall be determined by reference to, among other
things, whether the untrue statement or alleged untrue statement of a material
fact or omission or alleged omission relates to information supplied by the
Company or by the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The amount paid or payable by a party as a result of the losses,
claims, damages and liabilities referred to above shall be deemed to include any
legal or other fees or expenses reasonably incurred by such party in connection
with investigating or defending any claim or action.
(d) The Company, on the one hand, and the Underwriters, on the other, agree
that it would not be just and equitable if contribution pursuant to this Section
9 were determined by pro rata allocation (even if the Underwriters were treated
as one entity for such purpose) or by any other method of allocation which does
not take account of the equitable considerations referred to in subsection
(c)(i) and, if applicable (ii), above. Notwithstanding the provisions of this
Section 9, no Underwriter shall be required to contribute any amount in excess
of the underwriting discounts and commissions applicable to the Shares purchased
by such Underwriter. 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 Underwriters' obligations to contribute pursuant to this
Section 9 are several in proportion to their respective underwriting commitments
and not joint.
10. Survival: The indemnity and contribution agreements contained in
Section 9 and the covenants, warranties and representations of the Company and
the Subsidiaries contained in
29
Sections 3, 4 and 5 of this Agreement shall remain in full force and effect
regardless of any investigation made by or on behalf of any Underwriter, or any
person who controls any Underwriter within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, or by or on behalf of the
Company, the Subsidiaries, their trustees or directors and officers or any
person who controls the Company, any Subsidiary within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act, and shall survive any
termination of this Agreement or the sale and delivery of the Shares. The
Company and each Underwriter agree promptly to notify the others of the
commencement of any litigation or proceeding against it and, in the case of the
Company, against any of the Company's officers and directors, in connection with
the sale and delivery of the Shares, or in connection with the Registration
Statement or Prospectus.
11. Notices: Except as otherwise herein provided, all statements, requests,
notices and agreements shall be in writing or by telegram and, if to the
Underwriters, shall be sufficient in all respects if delivered to Friedman,
Billings, Xxxxxx & Co., Inc., 0000 00xx Xxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxx 00000,
Attention: Syndicate Department; and if to the Company, shall be sufficient in
all respects if delivered to the Company at the offices of the Company at 00
Xxxxxx Xxxx Xxxx, Xxxxx Xxxx, Xxx Xxxx 00000.
12. Governing Law; Consent to Jurisdiction; Headings: THIS AGREEMENT SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES. The parties hereto agree
to be subject to, and hereby irrevocably submit to, the nonexclusive
jurisdiction of any United States Federal or Virginia state court sitting in
Alexandria, Virginia, in respect of any suit, action or proceeding arising out
of or relating to this Agreement or the transactions contemplated herein, and
irrevocably agree that all claims in respect of any such suit, action or
proceeding may be heard and determined in any such court. Each of the parties
hereto irrevocably waives, to the fullest extent permitted by applicable law,
any objection to the laying of the venue of any such suit, action or proceeding
brought in any such court and any claim that any such suit, action or proceeding
has been brought in an inconvenient forum. The section headings in this
Agreement have been inserted as a matter of convenience of reference and are not
a part of this Agreement.
13. Parties in Interest: The Agreement herein set forth has been and is
made solely for the benefit of the Underwriters, the Company and the controlling
persons, directors and officers referred to in Sections 9 and 10 hereof, and
their respective successors, assigns, executors and administrators. No other
person, partnership, association or corporation (including a purchaser, as such
purchaser, from any of the Underwriters) shall acquire or have any right under
or by virtue of this Agreement.
14. Counterparts: This Agreement may be signed by the parties in
counterparts which together shall constitute one and the same agreement among
the parties.
30
If the foregoing correctly sets forth the understanding among the
Company and the Underwriters, please so indicate in the space provided below for
the purpose, whereupon this Agreement shall constitute a binding agreement among
the Company and the Underwriters.
Very truly yours,
ONE LIBERTY PROPERTIES, INC.
------------------------------------
By:
Its:
31
Accepted and agreed to as of the date first above written:
FRIEDMAN, BILLINGS, XXXXXX & CO., INC.
BY: FRIEDMAN, BILLINGS, XXXXXX & CO., INC.
-------------------------------------
By:
---------------------------------
Its: Managing Director
For themselves and as Representative of the other Underwriters named on Schedule
I hereto.
32
SCHEDULE I
Number of Initial
Underwriter Shares to be Purchased
Friedman, Billings, Xxxxxx & Co., Inc.
Total 2,500,000
SCHEDULE II
SUBSIDIARIES OF THE COMPANY
State of
Company Organization
OLP Action, Inc. Michigan
OLP Arby's II South Carolina
OLP Iowa, Inc. Delaware
OLP Texas, Inc. Texas
OLP-TSA Georgia, Inc. Georgia
XXX Xxxxx Drive Houston, Inc. Texas
OLP Greenwood Village, Colorado, Inc. Colorado
OLP Ft. Xxxxx, Inc. Florida
OLP Rabro Drive Corp. New York
OLP Chattanooga, Inc. Tennessee
OLP Columbus, Inc. Ohio
OLP Mesquite, Inc. Texas
OLP South Highway Houston, Inc. Texas
XXX Xxxxxx, Inc. New York
OLP Palm Beach, Inc. Florida
OLP New Hyde Park, Inc. New York
OLP Champaign, Inc. Illinois
OLP Batavia, Inc. New York
OLP Hanover PA, Inc. Pennsylvania
OLP Grand Rapids, Inc. Michigan
OLP El Paso, Inc. Texas
OLP Plano, Inc. Texas
OLP Xxxxxxxx, Inc. New York
OLP Hauppauge, LLC New York
OLP Ronkonkoma, LLC New York
OLP Plano 1, L.P. Texas
OLP El Paso 1, L.P. Texas
OLP Plano, LLC Delaware
OLP El Paso 1, LLC Delaware
OLP Hanover 1, LLC Pennsylvania
OLP Theatres, LLC Delaware
OLP Norwalk, LLC
H-R Norwalk, L.P.
Elpans, LLC
Zero City, LLC
OLP Holdings, LLC
SCHEDULE III
Other Transaction Documents
None.
SCHEDULE IV
Persons Subject to Lock-Up Agreements
NAME SHARES
Xxxxxxx X. Xxxxx
Xxxxxxx Xxxxx
Xxxxxxx Xxxxx
Xxxxxxx Xxxxxxx
Xxxxxx Xxxxxxxxxx
Xxxxx X. Xxxxxx
Xxxxxx Xxxxxxxx
Xxxx X. Xxxxx
Xxxx X. Xxxxx
Xxxxx Xxxxxxxx
Xxxxxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxx
Xxxxxxx Xxxxxxxxx
Xxxxx X. Xxxxx
Xxxxxx Xxxxxx
Xxxxxxxx Xxxx
[Xxxxxxx X. Xxxxxx, Xx.]
Xxxxx Investors L.P.
