1
EXHIBIT 1.01
EXECUTION VERSION
CAPITAL AUTOMOTIVE REIT
3,350,000 Shares of Beneficial Interest
UNDERWRITING AGREEMENT
August 2, 2001
Credit Suisse First Boston Corporation
As Representative of the Several Underwriters
Eleven Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Dear Sirs:
1. Introductory. Capital Automotive REIT, a Maryland real estate
investment trust (the "COMPANY"), proposes to issue and sell to Credit Suisse
First Boston Corporation ("CSFBC") and the several Underwriters named in
Schedule A hereto (collectively, the "UNDERWRITERS") for whom you are acting as
representative (the "REPRESENTATIVE") 3,350,000 common shares (the "FIRM
SECURITIES") of beneficial interest of the Company, $.01 par value per share
(the "COMMON SHARES"), and also proposes to issue and sell to the Underwriters,
at the option of the Underwriters, an aggregate of not more than 502,500
additional shares (the "OPTIONAL SECURITIES") of its Securities as set forth
below. The Firm Securities and the Optional Securities are herein collectively
called the "OFFERED SECURITIES". The Company hereby agrees with the Underwriters
as follows:
2. Representations and Warranties of the Company with Respect to
Registration Under the Act. The Company represents and warrants to, and agrees
with, the several Underwriters that:
(a) A registration statement on Form S-3 (File No.
333-73181) with respect to the Offered Securities, including a base
prospectus dated March 18, 1999 (the "BASE PROSPECTUS"), was prepared by
the Company in conformity with the requirements of the Securities Act of
1933, as amended (the "ACT"), and the rules and regulations (the "1933
ACT RULES AND REGULATIONS") of the Securities and Exchange Commission
(the "COMMISSION") thereunder, was filed with the Commission and was
declared effective on March 18, 1999. No stop order suspending the
effectiveness of such registration statement has been issued, and no
proceeding for that purpose has been instituted or, to the knowledge of
the Company, threatened by the Commission. A preliminary prospectus
supplement (the "PRELIMINARY PROSPECTUS") setting forth the terms of the
offering, sale and plan of distribution of the Offered Securities and
additional information was prepared
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August 2, 2001
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and filed pursuant to Rule 424(b) of the 1933 Act Rules and Regulations
on July 24, 2001. A final prospectus supplement (the "PROSPECTUS
SUPPLEMENT") setting forth the final terms of the offering, sale and
plan of distribution of the Offered Securities and additional
information concerning the Company and its business has been or will be
so prepared and will be filed pursuant to Rule 424(b) of the 1933 Act
Rules and Regulations on or before the second business day after the
date hereof (or such earlier time as may be required by the 1933 Act
Rules and Regulations). Copies of such registration statement, the
Preliminary Prospectus, the Prospectus Supplement and all documents
incorporated by reference therein that were filed with the Commission on
or prior to the date of this Underwriting Agreement (including one fully
executed copy of the registration statement and of each amendment
thereto for each Representative and its counsel) have been delivered or
made available to CSFBC and its counsel. The registration statement,
including the Base Prospectus, as it may have heretofore been amended,
is referred to herein as the "REGISTRATION STATEMENT." The term
"PROSPECTUS" as used herein means the Base Prospectus together with the
Preliminary Prospectus and the Prospectus Supplement. Any reference
herein to the Registration Statement or the Prospectus or any amendment
or supplement thereto shall be deemed to refer to and include the
documents incorporated by reference therein, and any reference herein to
the terms "AMEND," "AMENDMENT" or "SUPPLEMENT" with respect to the
Registration Statement or the Prospectus shall be deemed to refer to and
include the filing after the execution hereof of any Incorporated
Documents. As used herein, the term "INCORPORATED DOCUMENTS" means the
documents which are incorporated by reference in this Registration
Statement, the Prospectus or any amendment or supplement thereto filed
prior to the date hereof or during the period the Prospectus is required
to be delivered in connection with the sale of the Offered Securities by
the Underwriters or any dealer. For purposes of this Underwriting
Agreement, all references to the Registration Statement, the Prospectus,
any preliminary prospectus or to any amendment or supplement thereto
shall be deemed to include any copy filed with the Commission pursuant
to its Electronic Data Gathering Analysis and Retrieval System (XXXXX),
and such copy shall be identical in content to any Prospectus delivered
to the Underwriter for use in connection with the offering of the
Offered Securities.
(b) The Company and the transactions contemplated by this
Agreement meet the requirements and the conditions for using a
registration statement on Form S-3 under the Act and the 1933 Act Rules
and Regulations.
(c) Each part of the Registration Statement, when such part
became or becomes effective, and the Prospectus and any amendment or
supplement thereto, on the date of filing thereof with the Commission
and at the Closing Date conformed or will conform in all material
respects with the requirements of the Act and the 1933 Act Rules and
Regulations; each part of the Registration Statement, when such part
became or becomes effective, or when such part was filed with the
Commission, did not or will not contain an untrue statement of a
material fact or omit to state a material fact required to
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be stated therein or necessary to make the statements therein not
misleading; the Prospectus and any amendment or supplement thereto, on
the date of filing thereof with the Commission and at the Closing Date
did not or will not include an untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading; except that the foregoing shall not apply to statements in,
or omissions from, any such document in reliance upon, and in conformity
with, written information concerning the Underwriters that was furnished
to the Company by any Underwriter through the Representative
specifically for use in the preparation thereof, it being understood and
agreed that the only such information is that described as such in
Section 7(b) hereof.
(d) The Incorporated Documents when they became or become
effective under the Act or were or are filed with the Commission under
the Act or the Securities Exchange Act of 1934, as amended (the
"EXCHANGE ACT"), as the case may be, conformed or will conform in all
material respects with the requirements of the Act, the 1933 Act Rules
and Regulations, the Exchange Act and/or the rules and regulations of
the Commission under the Exchange Act (the "EXCHANGE ACT RULES AND
REGULATIONS"), as applicable and did not or will not include an untrue
statement of a material fact or omit to state a material fact necessary
to make the statements therein, in light of the circumstances in which
they were made, not misleading.
(e) The consolidated financial statements of the Company,
together with the related schedules and notes thereto, set forth or
included or incorporated by reference in the Registration Statement and
Prospectus fairly present the financial condition of the Company and its
consolidated subsidiaries as of the dates indicated and the results of
operations, changes in financial position, stockholders' equity and cash
flows for the periods therein specified, in conformity with generally
accepted accounting principles consistently applied throughout the
periods involved (except as otherwise stated therein). The summary and
selected financial and statistical data included or incorporated by
reference in the Registration Statement and the Prospectus present
fairly the information shown therein and, to the extent based upon or
derived from the financial statements, have been compiled on a basis
consistent with the financial statements presented therein. In addition,
all financial statements required by Rule 3-14 of Regulation S-X ("RULE
3-14") have been included or incorporated by reference in the
Registration Statement and the Prospectus and any such financial
statements are in conformity with such requirements. No other financial
statements are required to be set forth or to be incorporated by
reference in the Registration Statement or the Prospectus under the Act
or the 1933 Act Rules and Regulations thereunder.
(f) The descriptions in the Registration Statement and the
Prospectus of the contracts, leases and other legal documents therein
described present fairly the information required to be shown, and there
are no contracts, leases, or other documents of a character required to
be described in the Registration Statement or the Prospectus or
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August 2, 2001
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to be filed as exhibits to the Registration Statement which are not
described or filed as required; there are no legal or governmental
proceedings pending or, to the knowledge of the Company and Capital
Automotive L.P., a Delaware limited partnership (the "Partnership"),
threatened to which the Company, the Partnership or any subsidiary is
subject that are required to be described in the Registration Statement
or the Prospectus and are not so described; to the knowledge of the
Company and the Partnership, there are no statutes or regulations
applicable to the Company, the Partnership or any of the subsidiaries or
certificates, permits or other authorizations from governmental
regulatory officials or bodies required to be obtained or maintained by
the Company, the Partnership or any of their subsidiaries of a character
required to be disclosed and properly described therein; all agreements
between the Company, the Partnership or any of their subsidiaries and
third parties expressly referenced in the Prospectus are legal, valid
and binding obligations of the Company, the Partnership or one or more
of their subsidiaries, enforceable in accordance with their respective
terms, except to the extent enforceability may be limited by bankruptcy,
insolvency, reorganization or other laws of general applicability
relating to or affecting creditors' rights and by general equity
principles.
(g) Xxxxxx Xxxxxxxx LLP, whose reports are incorporated by
reference in the Registration Statement, are and, during the periods
covered by their reports, were independent public accountants as
required by the Act and the 1933 Act Rules and Regulations.
3. Representations and Warranties of the Company and the
Partnership. The Company and the Partnership represent and warrant to, and agree
with, the several Underwriters that:
(a) The Company has been duly organized and is an existing
real estate investment trust in good standing under the laws of the
State of Maryland, with trust power and authority to own its properties
and conduct its business as described in the Prospectus; and the Company
is duly qualified to do business as a foreign corporation in good
standing in all other jurisdictions in which its ownership or lease of
property or the conduct of its business requires such qualification,
except where the failure, individually or on the aggregate, to so
register or qualify does not have a material adverse effect on the
condition (financial or otherwise), business, properties or results of
operations of the Company, the Partnership and their subsidiaries, taken
as a whole (a "MATERIAL ADVERSE EFFECT").
(b) The Partnership and each subsidiary of the Company or
the Partnership is existing and in good standing under the laws of the
respective jurisdiction of incorporation or formation, with partnership,
corporate or limited liability company power and authority, as
applicable, to own its properties and conduct its business as described
in the Prospectus; the Partnership and each subsidiary of the Company or
the Partnership is duly qualified to do business as a foreign entity in
good standing in all
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August 2, 2001
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other jurisdictions in which its ownership or lease of property or the
conduct of its business requires such qualification, except where the
failure, individually or in the aggregate, to so register and qualify
does not have a Material Adverse Effect; all of the issued and
outstanding equity interests of each subsidiary of the Company or the
Partnership have been duly authorized and validly issued and are fully
paid and nonassessable; and the equity interests of each subsidiary
owned by the Company or the Partnership, directly or through
subsidiaries, are owned free from liens, encumbrances and defects.
Immediately prior to the execution of this Agreement, the Company owns
an approximately 1% general partnership interest and an approximately
71.8% limited partnership interest in the Partnership.
(c) The Company has an authorized, issued and outstanding
capitalization as set forth in the Prospectus under the caption
"Capitalization," except for (i) 320,000 common shares issued subsequent
to June 30, 2001 upon the redemption of outstanding Partnership Units,
(ii) 5,001 common shares issued subsequent to June 30, 2001 upon the
exercise of outstanding warrants, and (iii) 342 common shares issued
subsequent to June 30, 2001 in connection with the Company's dividend
reinvestment and share purchase plan. As of August 2, 2001, 21,986,926
Common Shares were issued and outstanding and no shares of any other
class of shares of beneficial interest were issued and outstanding; the
issuance and sale of the Offered Securities have been duly authorized by
all appropriate action of the Company and, when the Offered Securities
have been delivered and paid for in accordance with this Agreement on
each Closing Date (as defined below), such Offered Securities will be,
validly issued, fully paid and nonassessable and will conform to the
description thereof contained in the Prospectus; all outstanding shares
of beneficial interest of the Company are validly issued, fully paid and
nonassessable, except for 11 shares issued to officers, trustees,
employees and consultants of the Company in connection with the
Company's initial public offering (the "IPO SHARES") and 100 shares
issued in May 2001 to an unaffiliated third party as a door prize in
connection with marketing efforts of the Company (the "Bonus Shares"
and, together with the IPO Shares, the "EXCEPTED SHARES"); all of the
issued and outstanding units of partnership interest in the Partnership
("PARTNERSHIP UNITS") have been duly authorized by the Company as
General Partner of the Partnership; all of the issued and outstanding
shares of beneficial interest of the Company and outstanding Partnership
Units have been offered, sold and issued by the Company or the
Partnership in compliance with all applicable laws, including without
limitation, federal and state securities laws, except that the issuance
of the Excepted Shares were not duly authorized under Title 8 of the
Maryland General Corporation Law ("TITLE 8") by the Company's Board of
Trustees and the Bonus Shares are not fully paid and nonassessable under
Title 8 because no consideration has yet been paid for the Bonus Shares;
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 beneficial interest of the
Company or any security convertible into or exchangeable for shares of
beneficial
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interest of the Company, and the shareholders of the Company have no
preemptive or similar rights with respect to any shares of beneficial
interest of the Company.
(d) Except as disclosed in the Prospectus, there are no
contracts, agreements or understandings between the Company or the
Partnership and any person that would give rise to a valid claim against
the Company or any Underwriter for a brokerage commission, finder's fee
or other like payment in connection with the offering, issuance and sale
of the Offered Securities.
(e) Except as described in the Prospectus, there are no
contracts, agreements or understandings between the Company or the
Partnership and any person granting such person the right to require the
Company to file a registration statement under the Act with respect to
any securities of the Company owned or to be owned by such person or to
require the Company to include such securities in the securities
registered pursuant to the Registration Statement or in any securities
being registered pursuant to any other registration statement filed by
the Company under the Act.
(f) The Company has filed a Notification of Listing
Additional Securities and all required supporting documents with respect
to the Offered Securities with the Nasdaq Stock Market's National
Market, and the Offered Securities have been listed for trading on the
Nasdaq Stock Market's National Market.
(g) No consent, approval, license, authorization,
certificate, permit or order of, or filing with, any governmental agency
or body or any court is required for the consummation of the
transactions contemplated by this Agreement in connection with the
issuance and sale of the Offered Securities by the Company, except such
as have been obtained and made under the Act and such as may be required
under state securities laws.
(h) The execution, delivery and performance of this
Agreement and the issuance and sale of the Offered Securities will not
result in a breach or violation of any of the terms and provisions of,
or constitute a default under, (i) any statute, any rule, regulation or
order of any governmental agency or body or any court, domestic or
foreign, having jurisdiction over the Company, the Partnership or any of
their subsidiaries or any of their real properties and all other
properties and assets owned by them ("Properties," or individually, a
"Property"), (ii) any agreement or instrument to which the Company, the
Partnership or any such subsidiary is a party or by which the Company,
the Partnership or any such subsidiary is bound or to which any of the
Properties of the Company, the Partnership or any such subsidiary is
subject, or (iii) the charter, by-laws, partnership agreement,
certificate of limited partnership, operating agreement or other
organizational documents of the Company, the Partnership or any such
subsidiary.
(i) The Company, has full power and authority to authorize,
issue and sell the Offered Securities as contemplated by this Agreement.
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(j) This Agreement has been duly authorized, executed and
delivered by the Company and the Partnership.
(k) Except as disclosed in the Prospectus, the Company, the
Partnership or their subsidiaries have good and marketable title to all
Properties, in each case free from liens, encumbrances and defects that
would materially and adversely affect the value thereof or materially
interfere with the use made or presently contemplated to be made thereof
by them; the Company, the Partnership or the applicable subsidiary has
obtained an owner's title insurance policy in an amount at least equal
to the cost of acquisition from a title insurance company with respect
to each of its real estate properties and has obtained a commitment to
obtain such an owner's title insurance policy with respect to each
pending property acquisition described in the Prospectus; except as
disclosed in the Prospectus, the Company, the Partnership and their
subsidiaries hold any leased real or personal property under valid and
enforceable leases with no exceptions that would materially interfere
with the use made or to be made thereof by them; except as disclosed in
the Prospectus or as generally described in "Item 1. BUSINESS" under the
heading "THE PROPERTIES, LEASES, TYPICAL LEASE TERMS AND DEALERSHIPS -
Leases and Typical Lease Terms -- Right of First Negotiation, First
Offer and Offer to Purchase Property" in the Company's annual report on
Form 10-K for the 2000 fiscal year, no person has an option or right of
first refusal to purchase all or part of any Property or any proposed
acquisition or any interest therein; neither the Company, the
Partnership nor any of their subsidiaries has knowledge of any pending
or threatened condemnation proceeding, zoning change, or other
proceeding or action that would have a material and adverse effect on
the size of, use of, improvements on, construction on or access to any
particular Property.
(l) The Company, the Partnership and their subsidiaries
possess adequate permits, licenses, franchises, certificates,
authorities, consents, orders or approvals issued by appropriate
governmental agencies or bodies necessary to conduct the business now
conducted by them or contemplated by the Prospectus, except to the
extent that any failure to have any such permits, licenses, franchises,
certificates, authorities, consents, orders or approvals that would
individually or in the aggregate have a Material Adverse Effect, and the
Company, the Partnership and their subsidiaries are not aware of any
proceedings relating to the revocation or modification of same.
(m) No labor dispute with the employees of the Company, the
Partnership or any subsidiary exists or, to the knowledge of the
Company, is imminent that might have a Material Adverse Effect.
(n) The Company, the Partnership and their subsidiaries own,
possess or can acquire on reasonable terms, adequate trademarks, trade
names and other rights to inventions, know-how, patents, copyrights,
confidential information and other intellectual property (collectively,
"INTELLECTUAL PROPERTY RIGHTS") necessary to conduct the business
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now operated by them, or presently employed by them, and have not
received any notice of infringement of or conflict with asserted rights
of others with respect to any intellectual property rights that, if
determined adversely to the Company, the Partnership or any of their
subsidiaries, would individually or in the aggregate have a Material
Adverse Effect.
(o) Except as otherwise disclosed in the Prospectus or as
would not have a material and adverse effect with respect to any
particular Property, (i) neither the Company nor the Partnership 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 hereof,
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 Property, except in material
compliance with applicable laws; (ii) to the knowledge of the Company
and the Partnership, the properties are 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, (collectively, "ENVIRONMENTAL LAWS"), and the
Company and the Partnership are in compliance with all licenses,
permits, registrations and government authorizations necessary to
operate under all applicable Environmental Laws in all material
respects; (iii) neither the Company nor the Partnership has received any
written or oral notice from any governmental entity or any other person
and there is no pending, or, to the knowledge of the Company and the
Partnership threatened claim, litigation or any administrative agency
proceeding that: (A) alleges a violation of any Environmental Laws by
the Company or the Partnership; (B) that the Company or the Partnership
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 properties; or (D) alleges that the Company or the
Partnership is liable for any contamination of the environment,
contamination of the Properties, 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 properties or
elsewhere) involving Hazardous Materials, whether arising under the
Environmental Laws common law principles, or other legal standards. In
the ordinary course of its business, the Company and the Partnership
conduct or review Phase I environmental assessments on each of the
Properties at the time such Property is acquired and periodic reviews of
the effect of Environmental Laws on the business, operations and
properties of the Company and the Partnership.
(p) Except as disclosed in the Prospectus, there are no
pending actions, suits or proceedings against or affecting the Company,
the Partnership or any of their
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subsidiaries or any of the respective Properties that, if determined
adversely to the Company, the Partnership or such subsidiaries, would
individually or in the aggregate have a Material Adverse Effect, or
would materially and adversely affect the ability of the Company or the
Partnership to perform its obligations under this Agreement; and no such
actions, suits or proceedings are, to the Company's or the Partnership's
knowledge, threatened or contemplated.
(q) Except as disclosed in the Prospectus, since the date of
the latest audited financial statements included or incorporated by
reference in the Prospectus there has been no material adverse change,
nor any development or event involving a prospective material adverse
change, in the condition (financial or other), business, properties or
results of operations of the Company, the Partnership and their
subsidiaries taken as a whole, and, except as disclosed in or the
Prospectus, there has been no dividend or distribution of any kind
declared, paid or made by the Company on any class of its shares of
beneficial interest.
(r) The system of internal accounting controls of the
Company, the Partnership and their subsidiaries, taken as a whole, is
sufficient to meet the broad objectives of internal accounting controls
insofar as those that would be material in relation to the Company's
financial statements; and, to the Company's and Partnership's knowledge,
neither the Company, the Partnership nor any of their subsidiaries, nor
any employee or agent thereof, has made any payment of funds of the
Company, the Partnership or any of their subsidiaries, as the case may
be, or received or retained any funds, and no funds of the Company, the
Partnership or any of their subsidiaries, as the case may be, have been
set aside to be used for any payment, in each case in violation of any
law, rule or regulation.
(s) The Company is not and, after giving effect to the
offering and sale of the Offered Securities and the application of the
proceeds thereof as described in the Prospectus, will not be an
"INVESTMENT COMPANY" as defined in the Investment Company Act of 1940
(the "1940 ACT").
(t) The Second Amended and Restated Limited Partnership
Agreement of the Partnership, as amended (the "PARTNERSHIP AGREEMENT"),
has been duly and validly authorized, executed and delivered by the
Company and, to the knowledge of the Company, all other partners of the
Partnership, and constitutes a valid and binding agreement of the
Company and, to the knowledge of the Company, all other partners of the
Partnership, enforceable in accordance with its terms, except as may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting creditors' rights generally or by general principles of
equity.
(u) Neither the Company, the Partnership nor any subsidiary
is in breach of, or in default under (nor has any event occurred which
with notice, lapse of time, or both
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would constitute a breach of, or default under), (i) its respective
declaration of trust, articles of incorporation, charter, by-laws,
certificate of limited partnership, partnership agreement or operating
agreement, as the case may be, or (ii) any obligation, agreement,
covenant or condition contained in any license, indenture, mortgage,
deed of trust, loan or credit agreement or other agreement or instrument
to which the Company, the Partnership or such subsidiary is a party or
by which any of them or their respective properties is bound except in
the case of clause (ii) for such breaches or defaults which would not
have a Material Adverse Effect.
(v) Each of the Company, the Partnership and their
subsidiaries has filed on a timely basis all necessary federal, state,
local and foreign income and franchise 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 the Partnership, nor does the Company, the
Partnership or any subsidiary know of any tax deficiency which is likely
to be asserted against any such entity; all tax liabilities, if any, are
adequately provided for on the respective books of the entities.
(w) The Company is organized 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; the Partnership will be treated as a partnership for federal
income tax purposes and not as a corporation or association taxable as a
corporation.
(x) Each of the Company, the Partnership and their
subsidiaries maintains or causes tenants to maintain insurance (issued
by insurers of recognized financial responsibility) of the types and in
the amounts the Company, the Partnership and their subsidiaries deem
adequate and consistent with industry practices, if any, for their
business 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, the Partnership and their subsidiaries against theft, damage,
destruction, acts of vandalism and all other risks customarily insured
against, all of which insurance is in full force and effect.
(y) Except as otherwise disclosed in the Prospectus, there
are no material outstanding loans or advances or material guarantees of
indebtedness by the Company, the Partnership or any subsidiary to or for
the benefit of any of the officers or trustees of the Company or any of
their family members.
(z) In connection with the offering of the Offered
Securities, 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 Act or the
1933 Act Rules and Regulations; the Company has not distributed and will
not
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distribute any Prospectus or other offering material in connection with
the offer and sale of the Offered Securities, except as contemplated
herein.
(aa) None of the entities which prepared appraisals of the
Company's, the Partnership's or any of their subsidiaries' Properties or
Phase I environmental assessment reports with respect to the Properties
was employed for such purpose on a contingent basis or, to the knowledge
of the Company or the Partnership, has any substantial interest in the
Company or the Partnership, and none of their directors, officers or
employees is connected with the Company or the Partnership as a
promoter, selling agent, voting trustee, officer or employee.
4. Purchase, Sale and Delivery of Offered Securities. On the basis
of the representations, warranties and agreements herein contained, but subject
to the terms and conditions herein set forth, the Company agrees to sell to the
Underwriters, and the Underwriters agree, severally and not jointly, to purchase
from the Company, at a purchase price of $16.12 per share, the respective
numbers of shares of Firm Securities set forth opposite the names of the
Underwriters in Schedule A hereto.
The Company will deliver the Firm Securities to CSFBC for the accounts
of the Underwriters, at the offices of CSFBC, Eleven Madison Avenue, New York,
N.Y. 10010-3629, against payment of the purchase price in Federal (same day)
funds by official bank check or checks or wire transfer to an account at a bank
acceptable to Credit Suisse First Boston Corporation ("CSFBC") drawn to the
order of the Company at 10:00 A.M., New York time, on August 8, 2001, or at such
other time not later than seven full business days thereafter as CSFBC and the
Company determine, such time being herein referred to as the "FIRST CLOSING
DATE". For purposes of Rule 15c6-1 under the Securities Exchange Act of 1934,
the First Closing Date (if later than the otherwise applicable settlement date)
shall be the settlement date for payment of funds and delivery of securities for
all the Offered Securities sold pursuant hereto. The certificates for the Firm
Securities so to be delivered will be in definitive form, in such denominations
and registered in such names as CSFBC requests and will be made available for
checking and packaging at the above office of CSFBC at least 24 hours prior to
the First Closing Date.
In addition, upon written notice from CSFBC given to the Company from
time to time not more than 30 days subsequent to the date of the Prospectus, the
Underwriters may purchase all or less than all of the Optional Securities at the
purchase price per share to be paid for the Firm Securities, less an amount per
share equal to any dividends or distributions per common share declared by the
Company and payable on the Firm Securities but not payable on the Optional
Securities. The Company agrees to sell to the Underwriters the number of shares
of Optional Securities specified in such notice, and the Underwriters agree,
severally and not jointly, to purchase such Optional Securities. Such Optional
Securities shall be purchased for the account of each Underwriter in the same
proportion as the number of shares of Firm Securities set forth opposite such
Underwriter's name in Schedule A hereto bears to the total number of
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shares of Firm Securities (subject to adjustment by CSFBC to eliminate
fractions) and may be purchased by the Underwriters only for the purpose of
covering over-allotments made in connection with the sale of the Firm
Securities. No Optional Securities shall be sold or delivered unless the Firm
Securities previously have been, or simultaneously are, sold and delivered. The
right to purchase the Optional Securities or any portion thereof may be
exercised from time to time and to the extent not previously exercised may be
surrendered and terminated at any time upon notice by CSFBC to the Company.
Each time for the delivery of and payment for the Optional Securities,
being herein referred to as an "OPTIONAL CLOSING DATE", which may be the First
Closing Date (the First Closing Date and each Optional Closing Date, if any,
being sometimes referred to as a "CLOSING DATE"), shall be determined by CSFBC
but shall be not later than five full business days after written notice of
election to purchase Optional Securities is given. The Company will deliver the
Optional Securities being purchased on each Optional Closing Date to CSFBC for
the accounts of the several Underwriters, at the above office of CSFBC, against
payment of the purchase price therefor in Federal (same day) funds by official
bank check or checks or wire transfer to an account at a bank acceptable to
CSFBC drawn to the order of the Company. The certificates for the Optional
Securities being purchased on each Optional Closing Date will be in definitive
form, in such denominations and registered in such names as CSFBC requests upon
reasonable notice prior to such Optional Closing Date and will be made available
for checking and packaging at the above office of CSFBC at a reasonable time in
advance of such Optional Closing Date.
5. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Offered Securities for sale to the public as
set forth in the Prospectus.
6. Certain Agreements of the Company. The Company agrees with the
several Underwriters that:
(a) The Company will file the Prospectus Supplement with the
Commission pursuant to and in accordance with Rule 424(b)(2), or if
applicable and consented to by CSFBC, Rule 424(b)(5).
(b) The Company will advise CSFBC promptly of any proposal
to amend or supplement the Registration Statement as filed or the
Prospectus and will not effect such amendment or supplementation without
CSFBC's consent, not to be withheld unreasonably; and, 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, the Company will endeavor to cause such post-effective
amendment to become effective as soon as possible and will advise CSFBC
promptly of the effectiveness of such post-effective amendment and of
any request by the Commission for amendment or supplementation of a
Registration Statement or the Prospectus or of the institution by the
Commission of any stop order proceedings in respect of the Registration
Statement. The
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August 2, 2001
Page 13
Company will use its good faith reasonable best efforts to prevent the
issuance of any such stop order and to obtain as soon as possible its
lifting, if issued.
(c) If, at any time when a prospectus relating to the
Offered Securities is required to be delivered under the Act in
connection with sales by any Underwriter or dealer, any event occurs as
a result of which the Prospectus as then amended or supplemented would
include an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading, or if it
is necessary at any time to amend the Prospectus to comply with the Act,
the Company will promptly notify CSFBC of such event and will promptly
prepare and file with the Commission, at its own expense, an amendment
or supplement which will correct such statement or omission or an
amendment which will effect such compliance. Neither CSFBC's consent to,
nor the Underwriters' delivery of, any such amendment or supplement
shall constitute a waiver of any of the conditions set forth in Section
7.
(d) As soon as practicable but not later than 16 months
after the date of this Agreement, the Company will make generally
available to its securityholders an earnings statement covering a period
of at least 12 months beginning after the Effective Date of the
Registration Statement (or, if later, the Effective Date of any
Additional Registration Statement) which will satisfy the provisions of
Section 11(a) of the Act.
(e) The Company will furnish to CSFBC copies of each
Registration Statement (two of which will include copies of original
signature pages and all exhibits thereto), each related preliminary
prospectus, and, so long as a prospectus relating to the Offered
Securities is required to be delivered under the Act in connection with
sales by any Underwriter or dealer, the Prospectus and all amendments
and supplements to such documents, in each case in such quantities as
CSFBC requests. The Prospectus shall be so furnished on or prior to 3:00
P.M., New York time, on the business day following the later of the
execution and delivery of this Agreement or the filing of the Prospectus
Supplement under Rule 424. All other documents shall be so furnished as
soon as available. The Company will pay the expenses of printing and
distributing to the Underwriters all such documents.
(f) The Company will arrange for the qualification of the
Offered Securities for sale under the laws of such jurisdictions as
CSFBC designates and will continue such qualifications in effect so long
as required for the distribution; provided that in no event shall the
Company be obligated to qualify to do business in any jurisdiction where
it is not now so qualified or to take any action which would subject it
to service of process in suits other than those arising out of the
offering or sale of the Offered Securities, in any jurisdiction where it
is not now subject.
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August 2, 2001
Page 14
(g) During the period of five years hereafter, the Company
will furnish to CSFBC and, upon request, to each of the other
Underwriters, as soon as practicable after the end of each fiscal year,
a copy of its annual report to stockholders for such year; and the
Company will furnish to CSFBC (i) as soon as available during the first
year after this Agreement, and upon request during the second through
fifth years after this Agreement, a copy of each report and any
definitive proxy statement of the Company filed with the Commission
under the Exchange Act or mailed to stockholders, and (ii) from time to
time, such other information concerning the Company as CSFBC may
reasonably request.
(h) The Company and the Partnership will pay all expenses
incident to the performance of their obligations under this Agreement,
for any filing fees and other expenses (including fees and disbursements
of counsel) incurred in connection with qualification of the Offered
Securities for sale under the laws of such jurisdictions as CSFBC
designates and the printing of memoranda relating thereto, for the
filing fee incident to the review by the National Association of
Securities Dealers, Inc. of the Offered Securities, for any travel
expenses of the Company's officers and employees and any other expenses
of the Company in connection with attending or hosting meetings with
prospective purchasers of the Offered Securities and for expenses
incurred in distributing preliminary prospectuses and the Prospectus
(including any amendments and supplements thereto) to the Underwriters.
(i) For a period of 90 days after the date of the public
offering of the Offered Securities, the Company will not offer, sell,
contract to sell, pledge or otherwise dispose of, directly or
indirectly, or file with the Commission a registration statement under
the Act relating to, any additional shares of its beneficial interest or
securities convertible into or exchangeable or exercisable for any
shares of its beneficial interest, or publicly disclose the intention to
make any such offer, sale, pledge, disposition or filing, without the
prior written consent of CSFBC, except for (i) issuances of Common
Shares pursuant to the conversion or exchange of convertible or
exchangeable securities or the exercise of warrants or options, in each
case outstanding on the date hereof, (ii) grants of employee stock
options pursuant to the terms of a plan in effect on the date hereof,
(iii) issuances of Common Shares pursuant to the exercise of such
options or the exercise of any other employee stock options outstanding
on the date hereof, (iv) issuances of shares of beneficial interest of
the Company and Partnership Units in connection with the acquisition of
Properties and in connection with joint ventures and similar
arrangements, so long as the recipients agree not to sell or transfer
the shares of beneficial interest of the Company or Partnership Units
for a period of 90 days after the date of the public offering of the
Offered Securities without the prior written consent of CSFBC, (v) the
filing of registration statements on Form S-3 with the Commission
registering for resale Common Shares to be issued upon redemption of
Partnership Units (other than Partnership Units held by the Company) for
Common Shares in accordance with the Company's customary practices, and
(vi) issuances, for no consideration, of no more than 500 shares to one
or
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August 2, 2001
Page 15
more persons unaffiliated with the Company and the Partnership as door
or drawing prizes in connection with Company's marketing efforts, or
(vii) issuances of Common Shares pursuant to the Company's dividend
reinvestment or share purchase plan.
(j) The Company and the Partnership will use the net
proceeds received from the sale of the Offered Securities in the manner
specified in the Prospectus under the caption "Use of Proceeds".
(k) The Company, the Partnership and any of their
subsidiaries have not taken, and will not take, directly or indirectly,
any action designed to or that might reasonably be expected to cause or
result in stabilization or manipulation of the price of the Common
Shares or to facilitate the offer and sale of the Offered Securities in
violation of Regulation M.
(l) The Company will use its best efforts to maintain the
uninterrupted quotation of the Company's Common Shares on the Nasdaq
National Market, or in lieu thereof, on the New York Stock Exchange.
(m) Until such time, if any, as the Company determines to
revoke its election to be taxed as a real estate investment trust under
the Code and such determination is approved by the Company's
shareholders in accordance with the terms of the Company's Declaration
of Trust, the Company and the Partnership will use their best efforts to
(i) meet the requirements to qualify as a real estate investment trust
under the Code, and (ii) to cause each of their subsidiaries that is
organized as a partnership to be treated as a partnership for federal
income tax purposes.
(n) The Company and the Partnership will conduct their
affairs in such a manner so as to ensure that neither the Company, the
Partnership nor any subsidiary will be deemed to be an "investment
company" or an entity "controlled" by an investment company within the
meaning of the 1940 Act.
7. Conditions of the Obligations of the Underwriters. The
obligations of the several Underwriters to purchase and pay for the Firm
Securities on the First Closing Date and the Optional Securities to be purchased
on each Optional Closing Date will be subject to the accuracy of the
representations and warranties on the part of the Company and the Partnership
herein, to the accuracy of the statements of Company officers made pursuant to
the provisions hereof, to the performance by the Company of its obligations
hereunder and to the following additional conditions precedent:
(a) CSFBC shall have received a letter, dated the date of
delivery thereof of Xxxxxx Xxxxxxxx LLP confirming that they are
independent public accountants within the meaning of the Act and the
1933 Act Rules and Regulations thereunder and stating to the effect
that:
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August 2, 2001
Page 16
(i) in their opinion the financial statements and
schedules examined by them and included in the
Registration Statement comply as to form in all material
respects with the applicable accounting requirements of
the Act and the 1933 Act Rules and Regulations;
(ii) they have performed the procedures specified by
the American Institute of Certified Public Accountants
for a review of interim financial information as
described in Statement of Auditing Standards No. 71,
Interim Financial Information, on the unaudited
financial statements included in the Registration
Statement;
(iii) on the basis of the review referred to in clause
(ii) above, a reading of the latest available interim
financial statements of the Company, inquiries of
officials of the Company who have responsibility for
financial and accounting matters and other specified
procedures, nothing came to their attention that caused
them to believe that:
(A) the unaudited financial statements
included in the Registration Statement do not
comply as to form in all material respects with
the applicable accounting requirements of the
Act and the 1933 Act Rules and Regulations or
any material modifications should be made to
such unaudited financial statements for them to
be in conformity with generally accepted
accounting principles;
(B) the net income and net income per share
amounts for the six-month periods ended June 30,
2001 and 2000 included in the Prospectus do not
agree with the amounts set forth in the
unaudited consolidated financial statements for
those same periods or were not determined on a
basis substantially consistent with that of the
corresponding amounts in the audited statements
of income;
(C) at the date of the latest available
balance sheet read by such accountants, or at a
subsequent specified date not more than three
business days prior to the date of this
Agreement, there was any change in the shares of
beneficial interest or any increase in debt of
the Company and its consolidated subsidiaries
or, at the date of the latest available balance
sheet read by such accountants, there was any
decrease in consolidated net assets, as compared
with amounts shown on the latest balance sheet
included in the Prospectus; or
(D) for the period from the closing date of
the latest income statement included in the
Prospectus to the closing date of the
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Credit Suisse First Boston Corporation
August 2, 2001
Page 17
latest available income statement read by such
accountants there were any decreases, as
compared with the corresponding period of the
previous year and with the period of
corresponding length ended the date of the
latest income statement included in the
Prospectus, in net operating income or in the
total or per share amounts of consolidated net
income,
except in all cases set forth in clauses (C) and (D)
above for changes, increases or decreases which the
Prospectus discloses have occurred or may occur or which
are described in such letter; and
(iv) they have compared specified dollar amounts (or
percentages derived from such dollar amounts) and other
financial information contained in the Registration
Statements (in each case to the extent that such dollar
amounts, percentages and other financial information are
derived from the general accounting records of the
Company and its subsidiaries subject to the internal
controls of the Company's accounting system or are
derived directly from such records by analysis or
computation) with the results obtained from inquiries, a
reading of such general accounting records and other
procedures specified in such letter and have found such
dollar amounts, percentages and other financial
information to be in agreement with such results, except
as otherwise specified in such letter.
(b) No stop order suspending the effectiveness of the
Registration Statement or any part thereof shall have been issued and no
proceedings for that purpose shall have been instituted or, to the
knowledge of the Company or the Representative, shall be contemplated by
the Commission.
(c) Subsequent to the execution and delivery of this
Agreement, there shall not have occurred (i) any change, or any
development or event involving a prospective change, in the condition
(financial or other), business, properties or results of operations of
the Company and its subsidiaries taken as one enterprise which, in the
judgment of a majority in interest of the Underwriters including CSFBC,
is material and adverse and makes it impractical or inadvisable to
proceed with completion of the public offering or the sale of and
payment for the Offered Securities; (ii) any downgrading in the rating
of any debt securities of the Company by any "nationally recognized
statistical rating organization" (as defined for purposes of Rule 436(g)
under the Act), or any public announcement that any such organization
has under surveillance or review its rating of any debt securities of
the Company (other than an announcement with positive implications of a
possible upgrading, and no implication of a possible downgrading, of
such rating); (iii) any material suspension or material limitation of
trading in securities generally on the New York Stock Exchange, or any
setting of minimum prices for trading
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Credit Suisse First Boston Corporation
August 2, 2001
Page 18
on such exchange, or any suspension of trading of any securities of the
Company on any exchange or in the over-the-counter market; (iv) any
banking moratorium declared by U.S. Federal or New York authorities; or
(v) any outbreak or escalation of major hostilities in which the United
States is involved, any declaration of war by Congress or any other
substantial national or international calamity or emergency if, in the
judgment of a majority in interest of the Underwriters including CSFBC,
the effect of any such outbreak, escalation, declaration, calamity or
emergency makes it impractical or inadvisable to proceed with completion
of the public offering or the sale of and payment for the Offered
Securities.
(d) The Representative shall have received an opinion, dated
such Closing Date, of Xxxx Xxxxxxx LLP, counsel for the Company and the
Partnership (which opinion shall state that counsel to the Underwriters
shall be entitled to rely on such opinion with respect to matters of
Maryland law in issuing the opinion required by Section 7(e) hereof), to
the effect that:
(i) The Company is an existing real estate
investment trust in good standing under the laws of the
State of Maryland, with trust power and authority to own
or lease its Properties and conduct its business as
described in the Prospectus; and the Company is duly
qualified to do business as a foreign real estate
investment trust in good standing in all other
jurisdictions in which its ownership or lease of
property or the conduct of its business requires such
qualification, except where the failure, individually or
in the aggregate, to so register or qualify does not
have a Material Adverse Effect.
(ii) The Partnership is an existing limited
partnership in good standing under the laws of the State
of Delaware, with partnership power and authority to own
or lease its properties and conduct its business as
described in the Prospectus, and the Partnership is duly
qualified to do business as a foreign limited
partnership in good standing in all other jurisdictions
in which its ownership or lease of Property or the
conduct of its business require such qualification,
except where the failure, individually or in the
aggregate, to so register or qualify does not have a
Material Adverse Effect; and at the Closing Date, the
Company will be the sole general partner of the
Partnership and will own an approximately 1% general
partnership interest and an approximately 71.8% limited
partnership interest in the Partnership.
(iii) The Company has an authorized, issued and
outstanding capitalization as set forth in the
Prospectus under the caption "Capitalization," except
for (i) 320,000 common shares issued subsequent to June
30, 2001 upon the redemption of outstanding Partnership
Xxxxx,
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Credit Suisse First Boston Corporation
August 2, 2001
Page 19
(ii) 5,001 common shares issued subsequent to June 30,
2001 upon the exercise of outstanding warrants, and
(iii) 342 common shares issued subsequent to June 30,
2001 in connection with our dividend reinvestment and
share purchase plan. As of August 2, 2001, 21,986,926
Common Shares were issued and outstanding and no shares
of any other class of shares of beneficial interest were
issued and outstanding; the issuance and sale of the
Offered Securities has been duly authorized by all
appropriate action of the Company, and, when the Offered
Securities have been delivered and paid for in
accordance with this Agreement on each Closing Date (as
defined below), such Offered Securities will have been,
validly issued, fully paid and nonassessable and will
conform to the description thereof contained in the
Prospectus; all outstanding shares of beneficial
interest of the Company, other than the Excepted Shares,
are validly issued, fully paid and nonassessable; the
Partnership Units have been duly authorized by the
Company as General Partner of the Partnership; all of
the issued and outstanding shares of beneficial interest
of the Company and outstanding Partnership Units have
been offered, sold and issued by the Company or the
Partnership in compliance with all applicable laws,
including without limitation, federal and state
securities laws, except that the issuance of the
Excepted Shares were not duly authorized under Title 8
by the Company's Board of Trustees and the Bonus Shares
are not fully paid and nonassessable under Title 8
because no consideration has yet been paid for the Bonus
Shares; 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 beneficial interest
of the Company or any security convertible into or
exchangeable for shares of beneficial interest of the
Company, and the shareholders of the Company have no
preemptive or similar rights with respect to the
Securities;
(iv) Except as described in the Prospectus or as set
forth in the Partnership Agreement, there are no
contracts, agreements or understandings known to such
counsel between the Company and any person granting such
person the right to require the Company to file a
registration statement under the Act with respect to any
securities of the Company owned or to be owned by such
person or to require the Company to include such
securities in the securities registered pursuant to the
Registration Statement or in any securities being
registered pursuant to any other registration statement
filed by the Company under the Act;
(v) The Company is not and, after giving effect to
the offering and sale of the Offered Securities and the
application of the proceeds thereof as
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Credit Suisse First Boston Corporation
August 2, 2001
Page 20
described in the Prospectus, will not be an "investment
company" as defined in the 1940 Act;
(vi) No consent, approval, authorization or order of,
or filing with, any governmental agency or body or any
court is required for the consummation of the
transactions contemplated by this Agreement in
connection with the issuance or sale of the Offered
Securities by the Company, except such as have been
obtained and made under the Act and such as may be
required under state securities laws;
(vii) The execution, delivery and performance of this
Agreement and the issuance and sale of the Offered
Securities will not result in a breach or violation of
any of the terms and provisions of, or constitute a
default under, (i) to such counsel's knowledge, any
statute, any rule, regulation or order of any
governmental agency or body or any court having
jurisdiction over the Company or any subsidiary of the
Company or any of their Properties, or (ii) to such
counsel's knowledge, any agreement or instrument to
which the Company or any such subsidiary is a party or
by which the Company or any such subsidiary is bound or
to which any of the properties of the Company or any
such subsidiary is subject, or (iii) the charter or
by-laws of the Company, the Partnership Agreement, or
the organizational documents of CARS-DB4, L.P., MMR
Holdings, LLC, MMR Tennessee, LLC, CARS-DB1, LLC and, to
the knowledge of such counsel, any other subsidiary of
the Company or the Partnership;
(viii) Neither the Company, the Partnership nor, to the
knowledge of such counsel, any subsidiary 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), (i) its
respective declaration of trust, articles of
incorporation, charter, by-laws, certificate of limited
partnership, partnership agreement or operating
agreement, as the case may be, or (ii) any obligation,
agreement, covenant or condition contained in any
license, indenture, mortgage, deed of trust, loan or
credit agreement or other agreement or instrument to
which the Company, the Partnership or such subsidiary is
a party or by which any of them or their respective
properties is bound, except in the case of (ii) for such
breaches or defaults which do not have a Material
Adverse Effect.
(ix) The Registration Statement was declared
effective under the Act as of the date and time
specified in such opinion, the Prospectus was filed with
the Commission pursuant to the subparagraph of Rule
424(b) specified in such opinion on the date specified
therein, and, to the knowledge of such counsel, no stop
order suspending the effectiveness of
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Credit Suisse First Boston Corporation
August 2, 2001
Page 21
the Registration Statement or any part thereof has been
issued and no proceedings for that purpose have been
instituted or are pending or contemplated under the Act,
and the Registration Statement and the Prospectus, and
each amendment or supplement thereto, as of their
respective effective or issue dates, complied as to form
in all material respects with the requirements of the
Act and the 1933 Act Rules and Regulations; such counsel
have no reason to believe that any part of a
Registration Statement or any amendment thereto, as of
its effective date or as of such Closing Date, contained
any untrue statement of a material fact or omitted to
state any material fact required to be stated therein or
necessary to make the statements therein not misleading
or that the Prospectus or any amendment or supplement
thereto, as of its issue date or as of such Closing
Date, contained any untrue statement of a material fact
or omitted to state any material fact necessary in order
to make the statements therein, in the light of the
circumstances under which they were made, not
misleading; the descriptions in the Registration
Statement and Prospectus of statutes, legal and
governmental proceedings and contracts and other
documents are accurate and fairly present the
information required to be shown; and such counsel do
not know of any legal or governmental proceedings
required to be described in the Registration Statement
or the Prospectus which are not described as required or
of any contracts or documents of a character required to
be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the
Registration Statement which are not described and filed
as required; it being understood that such counsel need
express no opinion as to the financial statements or
other financial data contained in the Registration
Statement or the Prospectus; and
(x) Each of the Company and the Partnership has full
legal right, power and authority to enter into, deliver
and perform this Agreement and the Company has full
legal right, power and authority to issue, sell and
deliver the Offered Securities. This Agreement has been
duly authorized, executed and delivered by the Company
and the Partnership.
(xi) Except as disclosed in the Prospectus, the
Company, the Partnership or their subsidiaries have good
and marketable title to all Properties, in each case
free from liens, encumbrances and defects, except as
disclosed in the Prospectus, or such as would materially
and adversely affect the value thereof to the Company's
business or materially interfere with the use made or
presently contemplated to be made thereof by them;
except as disclosed in the Prospectus, the Company, the
Partnership and their subsidiaries hold any leased real
or personal property under valid and enforceable leases
with no exceptions that would materially interfere with
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Credit Suisse First Boston Corporation
August 2, 2001
Page 22
the use made or to be made thereof by them; except as
disclosed in the Prospectus or as generally described in
"Item 1. BUSINESS" under the heading "THE PROPERTIES,
LEASES, TYPICAL LEASE TERMS AND DEALERSHIPS - Leases and
Typical Lease Terms -- Right of First Negotiation, First
Offer and Offer to Purchase Property" in the Company's
annual report on Form 10-K for the 2000 fiscal year, no
person has an option or right of first refusal to
purchase all or part of any Property or any proposed
acquisition or any interest therein; such counsel does
not have knowledge of any pending or threatened
condemnation proceeding, zoning change, or other
proceeding or action that would have a material and
adverse effect on the size of, use of, improvements on,
construction on or access to any particular Property.
(xii) The Company, the Partnership and their
subsidiaries possess adequate permits, licenses,
franchises, certificates, authorities, consents, orders
or approvals issued by appropriate governmental agencies
or bodies necessary to conduct the business now
conducted or contemplated by the Prospectus, except to
the extent that any failure to have any such permits,
licenses, franchises, certificates, authorities,
consents, orders or approvals would not have,
individually or in the aggregate, a Material Adverse
Effect, and have not received any notice of proceedings
relating to the revocation or modification of any such
permits, licenses, franchises, certificates,
authorities, consents, orders or approvals that, if
determined adversely to the Company, the Partnership or
any of their subsidiaries, would individually or in the
aggregate have a Material Adverse Effect.
(xiii) The Company, the Partnership and their
subsidiaries own, possess or can acquire on reasonable
terms, Intellectual Property presently employed by them
and material to the business now operated by them, or
presently employed by them, and have not received any
notice of infringement of or conflict with asserted
rights of others with respect to any intellectual
property rights that, if determined adversely to the
Company, the Partnership or any of their subsidiaries,
would individually or in the aggregate have a Material
Adverse Effect.
(xiv) Except as disclosed in the Prospectus, there are
no pending actions, suits or proceedings against or
affecting the Company, the Partnership or any of their
subsidiaries or any of the respective Properties that,
if determined adversely to the Company, the Partnership
or such subsidiaries, would individually or in the
aggregate have a Material Adverse Effect, or would
materially and adversely affect the ability of the
Company or the Partnership to perform its obligations
under this
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Credit Suisse First Boston Corporation
August 2, 2001
Page 23
Agreement; and no such actions, suits or proceedings are
threatened or, to such counsel's knowledge,
contemplated.
(xv) The Partnership Agreement has been duly and
validly authorized, executed and delivered by the
Company, and to the knowledge of such counsel, all other
partners of the Partnership, and constitutes a valid and
binding agreement of the Company and, to the knowledge
of such counsel, all other partners of the Partnership,
enforceable in accordance with its terms, except as may
be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights
generally or by general principles of equity.
(e) The Representative shall have received from Hunton &
Xxxxxxxx, counsel for the Underwriters, such opinion or opinions, dated
such Closing Date, with respect to the incorporation of the Company, the
validity of the Offered Securities delivered on such Closing Date, the
Registration Statement, the Prospectus and other related matters as
CSFBC may require, and the Company shall have furnished to such counsel
such documents as they request for the purpose of enabling them to pass
upon such matters.
(f) The Representative shall have received a certificate,
dated such Closing Date, of the President or any Vice President and the
principal financial or accounting officer of the Company in which such
officers, to the best of their knowledge after reasonable investigation,
shall state that: the representations and warranties of the Company and
the Partnership in this Agreement are true and correct; the Company and
the Partnership have complied with all agreements and satisfied all
conditions on their part to be performed or satisfied hereunder at or
prior to such Closing Date; no stop order suspending the effectiveness
of any Registration Statement has been issued and no proceedings for
that purpose have been instituted or, to the Company's knowledge, are
contemplated by the Commission; and, subsequent to the date[s] of the
most recent financial statements in the Prospectus, there has been no
material adverse change, nor any development or event involving a
prospective material adverse change, in the condition (financial or
other), business, properties or results of operations of the Company and
its subsidiaries taken as a whole except as set forth in or contemplated
by the Prospectus or as described in such certificate.
(g) The Representative shall have received a letter, dated
such Closing Date, of Xxxxxx Xxxxxxxx LLP which meets the requirements
of subsection (a) of this Section, except that the specified date
referred to in such subsection will be a date not more than three days
prior to such Closing Date for the purposes of this subsection.
CSFBC acknowledges its receipt of "lock-up" letters (which are
satisfactory to the Representative and which have a term of 90 days from the
date of the Prospectus
24
Credit Suisse First Boston Corporation
August 2, 2001
Page 24
Supplement) from each of the executive officers and trustees of the Company and
Xxxxxxxx, Billings, Ramsey, Inc. & Co. and FBR Asset Investment Corporation.
The Company and the Partnership will furnish CSFBC with such conformed
copies of such opinions, certificates, letters and documents as CSFBC reasonably
requests. CSFBC may in its sole discretion waive on behalf of the Underwriters
compliance with any conditions to the obligations of the Underwriters hereunder,
whether in respect of an Optional Closing Date or otherwise.
8. Indemnification and Contribution.
(a) The Company and the Partnership will jointly and
severally indemnify and hold harmless each Underwriter, its partners,
directors and officers and each person, if any, who controls such
Underwriter within the meaning of Section 15 of the Act, against any
losses, claims, damages or liabilities, joint or several, to which such
Underwriter may become subject, under the Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any Registration
Statement, the Prospectus, or any amendment or supplement thereto, or
any related Preliminary Prospectus, or arise out of or are based upon
the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse each Underwriter for any
legal or other expenses reasonably incurred by such Underwriter in
connection with investigating or defending any such loss, claim, damage,
liability or action as such expenses are incurred; provided, however,
that the Company and the Partnership will not be liable in any such case
to the extent that any such loss, claim, damage or liability arises out
of or is based upon an untrue statement or alleged untrue statement in
or omission or alleged omission from any of such documents in reliance
upon and in conformity with written information furnished to the Company
by any Underwriter through CSFBC specifically for use therein, it being
understood and agreed that the only such information furnished by any
Underwriter consists of the information described as such in subsection
(b) below.
(b) Each Underwriter will severally and not jointly
indemnify and hold harmless the Company, its trustees and officers, the
Partnership and each person, if any who controls the Company or the
Partnership within the meaning of Section 15 of the Act, against any
losses, claims, damages or liabilities to which the Company or the
Partnership may become subject, under the Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any Registration
Statement, the Prospectus, or any amendment or supplement thereto, or
any related Preliminary Prospectus, or arise out of or are based upon
the omission or the alleged omission to state therein a material fact
required to be stated therein or necessary
25
Credit Suisse First Boston Corporation
August 2, 2001
Page 25
to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information furnished to the Company
or the Partnership by such Underwriter through CSFBC specifically for
use therein, and will reimburse any legal or other expenses reasonably
incurred by the Company in connection with investigating or defending
any such loss, claim, damage, liability or action as such expenses are
incurred, it being understood and agreed that the only such information
furnished by any Underwriter consists of the following information in
the Prospectus furnished on behalf of each Underwriter: the concession
and reallowance figures appearing in the fourth paragraph under the
caption "Underwriting," and the information contained in the 11th and
12th paragraphs under the caption "Underwriting," including the table
underneath the first paragraph.
(c) Promptly after receipt by an indemnified party under
this Section of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made
against the indemnifying party under subsection (a) or (b) above, notify
the indemnifying party of the commencement thereof; but the omission so
to notify the indemnifying party will not relieve it from any liability
which it may have to any indemnified party otherwise than under
subsection (a) or (b) above. In case any such action is brought against
any indemnified party and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to
participate therein and, to the extent that it may wish, jointly with
any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall
not, except with the consent of the indemnified party, be counsel to the
indemnifying party), and after notice from the indemnifying party to
such indemnified party of its election so to assume the defense thereof,
the indemnifying party will not be liable to such indemnified party
under this Section for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof other
than reasonable costs of investigation. In no event shall the
indemnifying party be liable for fees and expenses of more than one
counsel, in addition to local counsel and counsel for the indemnifying
party, for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction, unless
there are multiple indemnified parties in such proceedings and any
indemnified party is advised by counsel that representation of multiple
indemnified parties by the same counsel would be inappropriate due to an
actual or potential conflict of interest. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened action in respect of which any
indemnified party is or could have been a party and indemnity could have
been sought hereunder by such indemnified party unless such settlement
(i) includes an unconditional release of such indemnified party from all
liability on any claims that are the subject matter of such action and
(ii) does not include a statement as to, or an admission of, fault,
culpability or a failure to act by or on behalf of an indemnified party.
26
Credit Suisse First Boston Corporation
August 2, 2001
Page 26
(d) If the indemnification provided for in this Section is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a
result of the losses, claims, damages or liabilities referred to in
subsection (a) or (b) above (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company and the
Partnership on the one hand and the Underwriters on the other from the
offering of the Offered Securities or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion
as is appropriate to reflect not only the relative benefits referred to
in clause (i) above but also the relative fault of the Company and the
Partnership on the one hand and the Underwriters on the other in
connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities as well as any other relevant
equitable considerations. The relative benefits received by the Company
and the Partnership on the one hand and the Underwriters on the other
shall be deemed to be in the same proportion as the total net proceeds
from the offering (before deducting expenses) received by the Company
bear to the total underwriting discounts and commissions received by the
Underwriters, in each case as set forth on the cover page of the
Prospectus Supplement. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied in writing by the
Company or the Underwriters (as set forth in the last sentence of
subsection (b) above) and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such untrue
statement or omission. The amount paid by an indemnified party as a
result of the losses, claims, damages or liabilities referred to in the
first sentence of this subsection (d) shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any action or claim which is
the subject of this subsection (d). Notwithstanding the provisions of
this subsection (d), no Underwriter shall be required to contribute any
amount in excess of the amount by which the total price at which the
Offered Securities underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue
or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. The Underwriters'
obligations in this subsection (d) to contribute are several in
proportion to their respective underwriting obligations set forth
opposite their respective names on Schedule A hereto (or as increased
pursuant to Section 9 hereof) and not joint.
(e) The obligations of the Company and the Partnership under
this Section shall be in addition to any liability which the Company and
the Partnership may otherwise have and shall extend, upon the same terms
and conditions, to each person, if any, who controls any Underwriter
within the meaning of the Act; and the obligations of
27
Credit Suisse First Boston Corporation
August 2, 2001
Page 27
the Underwriters under this Section shall be in addition to any
liability which the respective Underwriters may otherwise have and shall
extend, upon the same terms and conditions, to each director of the
Company, to each officer of the Company who has signed the Registration
Statement and to each person, if any, who controls the Company within
the meaning of the Act.
9. Default of Underwriters. If any Underwriter or Underwriters
default in their obligations to purchase Offered Securities hereunder on either
the First or any Optional Closing Date and the aggregate number of shares of
Offered Securities that such defaulting Underwriter or Underwriters agreed but
failed to purchase does not exceed 10% of the total number of shares of Offered
Securities that the Underwriters are obligated to purchase on such Closing Date,
CSFBC may make arrangements satisfactory to the Company for the purchase of such
Offered Securities by other persons, including any of the Underwriters, but if
no such arrangements are made by such Closing Date, the non-defaulting
Underwriters shall be obligated severally, in proportion to their respective
commitments hereunder, to purchase the Offered Securities that such defaulting
Underwriters agreed but failed to purchase on such Closing Date. If any
Underwriter or Underwriters so default and the aggregate number of shares of
Offered Securities with respect to which such default or defaults occur exceeds
10% of the total number of shares of Offered Securities that the Underwriters
are obligated to purchase on such Closing Date and arrangements satisfactory to
CSFBC and the Company for the purchase of such Offered Securities by other
persons are not made within 36 hours after such default, this Agreement will
terminate without liability on the part of any non-defaulting Underwriter or the
Company, except as provided in Section 10 (provided that if such default occurs
with respect to Optional Securities after the First Closing Date, this Agreement
will not terminate as to the Firm Securities or any Optional Securities
purchased prior to such termination). As used in this Agreement, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section. Nothing herein will relieve a defaulting Underwriter from liability for
its default.
10. Survival of Certain Representations and Obligations; Expenses.
The respective indemnities, agreements, representations, warranties and other
statements of the Company or its officers and of the several Underwriters set
forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation, or statement as to the results thereof,
made by or on behalf of any Underwriter, the Company or any of their respective
representatives, officers or directors or any controlling person, and will
survive delivery of and payment for the Offered Securities. If this Agreement is
terminated pursuant to Section 9 or if for any reason the purchase of the
Offered Securities by the Underwriters is not consummated, the Company shall
remain responsible for the expenses to be paid or reimbursed by it pursuant to
Section 6 and the respective obligations of the Company and the Underwriters
pursuant to Section 8 shall remain in effect, and if any Offered Securities have
been purchased hereunder the representations and warranties in Section 2 and
Section 3 and all obligations under Section 6 shall also remain in effect. If
the purchase of the Offered Securities by the Underwriters is not consummated
for any reason other than solely because of the termination of this Agreement
pursuant to Section 9 or the occurrence of any event specified in clause (ii),
(iii) or (iv) of
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Credit Suisse First Boston Corporation
August 2, 2001
Page 28
Section 7(c), the Company will reimburse the Underwriters for all out-of-pocket
expenses (including reasonable fees and disbursements of counsel) incurred by
them in connection with the offering of the Offered Securities and the
performance of their obligations under this Agreement. In all other instances,
the Underwriters will be responsible for all of their out-of-pocket expenses
(including reasonable fees and disbursements of counsel) incurred by them in
connection with the offering of the Offered Securities or the performance of
their obligations under this Agreement. Nothing herein will relieve a defaulting
Underwriter from liability for its default.
11. Notices. All communications hereunder will be in writing and, if
sent to the Underwriters, will be mailed, delivered or telegraphed and confirmed
to CSFBC at Eleven Madison Avenue, New York, N.Y. 10010-3629, Attention:
Transactions Advisory Group, or, if sent to the Company, will be mailed,
delivered or telegraphed and confirmed to it at 0000 Xxxxxx Xxxx Xxxx, Xxxxx
000, XxXxxx, XX 00000, Attention: Xxxxx X. Xxx, Vice President and General
Counsel; provided, however, that any notice to an Underwriter pursuant to
Section 8 will be mailed, delivered or telegraphed and confirmed to such
Underwriter.
12. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and controlling
persons referred to in Section 8. No other person, other than the parties
hereto, controlling persons referred to in Section 8, officers, directors and
trustees, and their respective successors, heirs and legal representatives, will
have any right or obligation hereunder.
13. Representation of Underwriters. The Representative will act for
the several Underwriters in connection with the transactions contemplated by
this Agreement, and any action under this Agreement taken by CSFBC will be
binding upon all the Underwriters.
14. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
15. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO PRINCIPLES OF CONFLICTS OF LAWS.
The Company hereby submits to the non-exclusive jurisdiction of the
Federal and state courts in the Borough of Manhattan in The City of New York in
any suit or proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby.
[signature page follows]
29
If the foregoing is in accordance with CSFBC's understanding of our
agreement, kindly sign and return to the Company one of the counterparts hereof,
whereupon it will become a binding agreement between the Company and the several
Underwriters in accordance with its terms.
Very truly yours,
CAPITAL AUTOMOTIVE REIT
By: /s/ XXXXXX X. XXXXXX
------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Chief Executive Officer
CAPITAL AUTOMOTIVE L.P.
By: Capital Automotive REIT, its general
partner
By: /s/ XXXXXX X. XXXXXX
------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Chief Executive Officer
The foregoing Underwriting Agreement is hereby
confirmed and accepted as of the date first above
written.
CREDIT SUISSE FIRST BOSTON CORPORATION
By: /s/ XXXX X. XXXXXXXX
-----------------------------
Name: Xxxx X. Xxxxxxxx
Title: Managing Director
Acting on behalf of itself and as CSFBC of
the several Underwriters.
30
SCHEDULE A
NUMBER OF
UNDERWRITER FIRM SECURITIES
----------- ---------------
Credit Suisse First Boston Corporation 1,340,000
CIBC World Markets Corp. 603,000
Friedman, Billings, Xxxxxx & Co., Inc. 335,000
Xxxxxxx Xxxxx & Associates, Inc. 569,500
BB&T Capital Markets, a division of Xxxxx & Xxxxxxxxxxxx, Inc. 251,250
Xxxxxx, Xxxxx Xxxxx, Incorporated 251,250
=========
Total 3,350,000
