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Exhibit 1.1
Form of Underwriting Agreement
8,500,000 Shares
CAPTEC NET LEASE REALTY, INC.
Common Stock
UNDERWRITING AGREEMENT
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_______, 1997
Credit Suisse First Boston Corporation
Bear, Xxxxxxx & Co. Inc.
Prudential Securities Incorporated
XxXxxxxx & Company Securities, Inc.
Xxxxx Xxxxxxx Inc.
As Representatives of the Several Underwriters,
c/o Credit Suisse First Boston Corporation
Eleven Madison Avenue
New York, N.Y. 10010-3629
Dear Sirs:
1. Introductory. Captec Net Lease Realty, Inc., a Delaware corporation
("Company"), proposes to issue and sell 8,500,000 shares ("Firm Securities") of
its Common Stock ("Securities") and also proposes to issue and sell to the
Underwriters, at the option of the Underwriters, an aggregate of not more than
1,275,000 additional shares ("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
several Underwriters named in Schedule A hereto ("Underwriters") as follows:
2. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, the several Underwriters that:
(a) A registration statement (No. 333-34983) relating to the
Offered Securities, including a form of prospectus, has been filed with
the Securities and Exchange Commission ("Commission") and either (i)
has been declared effective under the Securities Act of 1933 ("Act")
and is not proposed to be amended or (ii) is proposed to be amended by
amendment or post-effective amendment. If such registration statement
("initial registration statement") has been declared effective, either
(i) an additional registration statement ("additional registration
statement") relating to the Offered Securities may have been filed with
the Commission pursuant to Rule 462(b) ("Rule 462(b)") under the Act
and, if so filed, has become effective upon filing pursuant to such
Rule and the Offered Securities all have been duly registered under the
Act pursuant to the initial registration statement and, if applicable,
the additional registration statement or (ii) such an additional
registration statement may be filed with the Commission pursuant to
Rule 462(b) and will become effective upon filing pursuant to such Rule
and upon such filing the Offered Securities will all have been duly
registered under the Act pursuant to the initial registration statement
and such additional registration statement. If the Company does not
propose to amend the initial registration statement or if an additional
registration statement has been filed and the Company does not propose
to amend it, and if any post-effective amendment to either such
registration statement has been filed with the Commission prior to the
execution and delivery of this Agreement, the most recent amendment (if
any) to each such registration statement has been declared effective by
the Commission
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or has become effective upon filing pursuant to Rule 462(c) ("Rule
462(c)") under the Act or, in the case of the additional registration
statement, Rule 462(b). For purposes of this Agreement, "Effective
Time" with respect to the initial registration statement or, if filed
prior to the execution and delivery of this Agreement, the additional
registration statement means (i) if the Company has advised the
Representatives that it does not propose to amend such registration
statement, the date and time as of which such registration statement,
or the most recent post-effective amendment thereto (if any) filed
prior to the execution and delivery of this Agreement, was declared
effective by the Commission or has become effective upon filing
pursuant to Rule 462(c), or (ii) if the Company has advised the
Representatives that it proposes to file an amendment or post-effective
amendment to such registration statement, the date and time as of which
such registration statement, as amended by such amendment or
post-effective amendment, as the case may be, is declared effective by
the Commission. If an additional registration statement has not been
filed prior to the execution and delivery of this Agreement but the
Company has advised the Representatives that it proposes to file one,
"Effective Time" with respect to such additional registration statement
means the date and time as of which such registration statement is
filed and becomes effective pursuant to Rule 462(b). "Effective Date"
with respect to the initial registration statement or the additional
registration statement (if any) means the date of the Effective Time
thereof. The initial registration statement, as amended at its
Effective Time, including all information contained in the additional
registration statement (if any) and deemed to be a part of the initial
registration statement as of the Effective Time of the additional
registration statement pursuant to the General Instructions of the Form
on which it is filed and including all information (if any) deemed to
be a part of the initial registration statement as of its Effective
Time pursuant to Rule 430A(b) ("Rule 430A(b)") under the Act, is
hereinafter referred to as the "Initial Registration Statement". The
additional registration statement, as amended at its Effective Time,
including the contents of the initial registration statement
incorporated by reference therein and including all information (if
any) deemed to be a part of the additional registration statement as of
its Effective Time pursuant to Rule 430A(b), is hereinafter referred to
as the "Additional Registration Statement". The Initial Registration
Statement and the Additional Registration Statement are herein referred
to collectively as the "Registration Statements" and individually as a
"Registration Statement". The form of prospectus relating to the
Offered Securities, as first filed with the Commission pursuant to and
in accordance with Rule 424(b) ("Rule 424(b)") under the Act or (if no
such filing is required) as included in a Registration Statement, is
hereinafter referred to as the "Prospectus". No document has been or
will be prepared or distributed in reliance on Rule 434 under the Act.
(b) If the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement: (i)
on the Effective Date of the Initial Registration Statement, the
Initial Registration Statement conformed in all respects to the
requirements of the Act and the rules and regulations of the Commission
("Rules and Regulations") and did not include any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading,
(ii) on the Effective Date of the Additional Registration Statement (if
any), each Registration Statement conformed, or will conform, in all
respects to the requirements of the Act and the Rules and Regulations
and did not include, or will not include, any untrue statement of a
material fact and did not omit, or will not omit, to state any material
fact required to be stated therein or necessary to make the statements
therein not misleading, and (iii) on the date of this Agreement, the
Initial Registration Statement and, if the Effective Time of the
Additional Registration Statement is prior to the execution and
delivery of this Agreement, the Additional Registration Statement each
conforms, and at the time of filing of the Prospectus pursuant to Rule
424(b) or (if no such filing is required) at the Effective Date of the
Additional Registration Statement in which the Prospectus is included,
each Registration Statement and the Prospectus will conform, in all
respects to the requirements of the Act and the Rules and Regulations,
and neither of such documents includes, or will include, any untrue
statement of a material fact or omits, or will omit, to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading. If the Effective Time of the Initial
Registration Statement is subsequent to the execution and delivery of
this Agreement: on the Effective Date of the Initial Registration
Statement, the Initial Registration Statement and the Prospectus will
conform in all respects to the requirements of the Act and the Rules
and Regulations, neither of such documents will include any untrue
statement of a material fact or will omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading, and no Additional Registration Statement has
been or will be filed. The two preceding sentences do not apply to
statements in or omissions from a Registration Statement or the
Prospectus based upon written information furnished to the Company by
any Underwriter
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through the Representatives specifically for use therein, it being
understood and agreed that the only such information is that described
as such in Section 7(b) hereof.
(c) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Delaware,
with power and authority (corporate and other) 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.
(d) Captec Net Lease Realty Advisors, Inc., a Delaware
corporation (the "Advisor") has been duly incorporated and is an
existing corporation in good standing under the laws of the State of
Delaware, with power and authority (corporate and other) to enter into
the Advisory Agreement, dated August 29, 1997 with the Company (the
"Advisory Agreement"), and to perform its obligations thereunder,
including managing the operations of the Company and providing it with
investment and financial advisory services; and the Advisor is duly
qualified to do business as a foreign corporation in good standing in
all other jurisdictions in which the conduct of its business pursuant
to the Advisory Agreement requires such qualification.
(e) Each of Captec Net Lease Realty, Inc., a Michigan
corporation, and Captec Net Lease Realty Advisors, Inc., a Michigan
corporation (the "Merged Companies"), was duly incorporated and
immediately prior to the Merger (as defined) was an existing
corporation in good standing under the laws of the State of Michigan,
with full power and authority (corporate and other) to own the
properties held by it prior to the Merger and enter into agreements and
conduct its business as described in the Prospectus; and each of the
Merged Companies was 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 required
such qualification immediately prior to the Merger except where such
failure to qualify would not have a material adverse affect on the
Company.
(f) Each of Captec Franchise Capital Partners L.P. III, a
Delaware limited partnership, and Captec Franchise Capital Partners
X.X. XX, a Delaware limited partnership (the "Partnerships"), has been
duly formed and is an existing partnership in good standing under the
laws of the State of Delaware, with power and authority to own its
properties and conduct its business as described in the Prospectus; and
each of the Partnerships is duly qualified to do business as a foreign
partnership in good standing in all other jurisdictions in which its
ownership or lease of property or the conduct of its business requires
such qualification.
(g) The execution, delivery, and performance of each of the
documents relating to the merger (the "Merger") of the Merged
Companies with and into the Company (the "Merger Documents"), was duly
and validly authorized by each of the parties thereto, and each Merger
Document was duly executed and delivered by each such party and
constitutes the legally valid and binding agreement of each such
party, enforceable against such party in accordance with its terms.
Each of the Merger Documents required to be filed has been duly filed
in Michigan and Delaware, and the Merger is effective in Michigan and
Delaware and has been consummated in accordance with the terms of the
Merger Documents and has vested in the Company all of the assets and
properties of the Merged Companies. The execution, delivery and
performance of the Merger Documents by each of the parties thereto and
the consummation of the transactions contemplated thereby (A) did not
require any consent, approval, authorization or other order of or
registration or filing with, any court, regulatory body,
administrative agency or other governmental body, agency or official
(except for the filings which were accomplished in Michigan and
Delaware of that certain certificate of merger of the Merged Companies
into the Company), or conflict with or constitute a breach of, or a
default under, the certificate or articles of incorporation, bylaws,
or other organizational documents, of any of the parties thereto and
(B) did not conflict with or constitute a breach of, or a default
under, any material agreement, indenture, lease or other instrument to
which any of the parties thereto is a party or by which any of them or
any of their respective properties may be bound, or violate any
statute, law, regulation or filing or judgment, injunction, order or
decree applicable to any of the parties thereto or any of their
respective properties, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of any of the
parties thereto pursuant to the terms of any agreement or instrument
to which any of them is a party or by which any of them may be
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bound or to which any of the property or assets of any of them is
subject. The Merger qualifies as a tax-free reorganization pursuant to
Section 368(a) of the Internal Revenue Code of 1986, as amended (the
"Code").
(h) The execution, delivery, and performance of each of the
documents relating to the exchange (the "Exchange") of 9,500 shares of
Redeemable Preferred Stock, $.01 par value, for 475,000 of Common Stock
(the "Exchange Documents"), was duly and validly authorized by the
Company and each Exchange Document was duly executed and delivered by
the Company and constitutes the legally valid and binding agreement of
the Company, enforceable against the Company in accordance with its
terms. Upon consummation of the offering, the Exchange will be
consummated in accordance with the terms of the Exchange Documents. The
execution, delivery and performance of the Exchange Documents by the
Company and the consummation of the transactions contemplated thereby
(A) will not require any consent, approval, authorization or other
order of or registration or filing with, any court, regulatory body,
administrative agency or other governmental body, agency or official,
or conflict with or constitute a breach of, or a default under, the
certificate or articles of incorporation, bylaws, or other
organizational documents, of the Company and (B) will not conflict with
or constitute a breach of, or a default under, any material agreement,
indenture, lease or other instrument to which the Company is a party or
by which it or any of its properties may be bound, or violate any
statute, law, regulation or filing or judgment, injunction, order or
decree applicable to the Company or any of its properties, or result in
the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company pursuant to the terms of any
agreement or instrument to which the Company is a party or by which the
Company may be bound or to which any of the property or assets of the
Company is subject. The Company will use its best efforts to effect the
Exchange.
(i) The execution, delivery, and performance of each of the
documents relating to the redemption (the "Redemption") by the Company
of 40,500 shares of Redeemable Preferred Stock, $.01 par value, (the
"Redemption Documents"), was duly and validly authorized by the
Company, and each Redemption Document was duly executed and delivered
by the Company and constitutes the legally valid and binding agreement
of the Company, enforceable against it in accordance with its terms.
Upon consummation of the offering, the Redemption will be consummated
in accordance with the terms of the Redemption Documents. The
execution, delivery and performance of the Redemption Documents by the
Company and the consummation of the transactions contemplated thereby
(A) will not require any consent, approval, authorization or other
order of or registration or filing with, any court, regulatory body,
administrative agency or other governmental body, agency or official,
or conflict with or constitute a breach of, or a default under, the
certificate or articles of incorporation, bylaws, or other
organizational documents, of the Company and (B) will not conflict with
or constitute a breach of, or a default under, any material agreement,
indenture, lease or other instrument to which the Company is a party or
by which the Company or any of its properties may be bound, or violate
any statute, law, regulation or filing or judgment, injunction, order
or decree applicable to the Company or any of its properties, or result
in the creation or imposition of any lien, charge or encumbrance upon
any property or assets of the Company pursuant to the terms of any
agreement or instrument to which the Company is a party or by which the
Company may be bound or to which any of the property or assets of the
Company is subject. The Company will use its best efforts to the effect
the Redemption.
(j) The execution, delivery, and performance of each of the
documents relating to the Company's purchase of the general partnership
interests in each of the Partnerships by the Company (the "Partnership
Purchase"), has been duly and validly authorized by each of the parties
thereto, and each document relating to the Partnership Purchase (the
"Partnership Purchase Document") has been duly executed and delivered
by each such party and constitutes the legally valid and binding
agreement of each such party, enforceable against such party in
accordance with its terms. Upon consummation of the offering and
obtaining the consents of the limited partners of each of the
Partnerships, the Partnership Purchase will be consummated in
accordance with the terms of the Partnership Purchase Documents. Except
for the consent required to be obtained from the limited partners of
the Partnerships and except as disclosed in the Prospectus, the
execution, delivery and performance of the Partnership Purchase
Documents by each of the parties thereto and the consummation of the
transactions contemplated thereby (A) will not require any consent,
approval, authorization or other order of or registration or filing
with, any court, regulatory body, administrative agency or other
governmental body, agency or official, or conflict with or constitute a
breach of, or a default under, the certificate or articles of
incorporation, bylaws, or other organizational documents, of any of the
parties thereto and (B) will not conflict
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with or constitute a breach of, or a default under, any material
agreement, indenture, lease or other instrument to which any of the
parties thereto is a party or by which any of them or any of their
respective properties may be bound, or violate any statute, law,
regulation or filing or judgment, injunction, order or decree
applicable to any of the parties thereto or any of their respective
properties, or result in the creation or imposition of any lien, charge
or encumbrance upon any property or assets of any of the parties
thereto pursuant to the terms of any agreement or instrument to which
any of them is a party or by which any of them may be bound or to which
any of the property or assets of any of them is subject. The
solicitation materials to be delivered in connection with obtaining the
consents of the limited partners of the Partnerships will conform in
all respects to the requirements of the Act and the Rules and
Regulations and will not include any untrue statement of a material
fact and will not omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading. The
Company will use its best efforts to obtain the consent of the limited
partners of the Partnerships in connection with the Partnership
Purchase and to effect the Partnership Purchase.
(k) Each of the Partnerships is properly treated as a
partnership for federal income tax purposes and not as an association
or publicly traded partnership taxable as a corporation;
(l) The Offered Securities and all other outstanding shares of
capital stock of the Company have been duly authorized; all outstanding
shares of capital stock of the Company are, and, when the Offered
Securities have been delivered and paid for in accordance with this
Agreement on each Closing Date (as defined below) and when the 9,500
shares of Redeemable Preferred Stock are exchanged for 475,000 of
Common Stock pursuant to the Exchange Documents (the "Exchanged
Securities"), such Offered Securities and Exchanged Securities will
have been, validly issued, fully paid and nonassessable and will
conform to the description thereof contained in the Prospectus; and the
stockholders of the Company have no preemptive rights with respect to
the Securities and no Securities issued by the Company have been issued
in violation of such preemptive rights (including all outstanding
shares of capital stock).
(m) Except as disclosed in the Prospectus, there are no
contracts, agreements or understandings between the Company 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 this offering, the Exchange, the Redemption
or the Partnership Purchase.
(n) Except as disclosed in the Prospectus, there are no
contracts, agreements or understandings 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 a Registration Statement or in any securities being
registered pursuant to any other registration statement filed by the
Company under the Act, or any such rights as to this offering have been
waived.
(o) Except as disclosed in the Prospectus, there are no
outstanding (A) securities, equity interests or obligations of the
Company or any of its subsidiaries convertible into or exchangeable for
any capital stock or equity interests (as the case may be) of the
Company or any such subsidiary, (B) warrants, rights or options to
subscribe for or purchase from the Company or any such subsidiary any
such capital stock or equity interests or any such convertible or
exchangeable securities, equity interests or obligations, or (C)
obligations of the Company or any such subsidiary to issue any shares
of capital stock, equity interests, any such convertible or
exchangeable securities, equity interests or obligations, or any such
warrants, rights or options.
(p) Except as disclosed in the Prospectus and except for
Captec Roasters LLC, the Company does not own any shares of stock or
any other equity securities of any corporation or have any equity
interest in any firm, partnership, association or other entity.
(q) The Offered Securities have been approved for listing on
the Nasdaq National Market subject to notice of issuance.
(r) 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
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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.
(s) 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, any statute, any rule, regulation or order
of any governmental agency or body or any court, domestic or foreign,
having jurisdiction over the Company or any of its properties, or any
indenture, mortgage, deed of trust, lease or any other agreement or
instrument to which the Company is a party or by which the Company is
bound or to which any of the properties of the Company or any such
subsidiary is subject, or the charter or by-laws of the Company, and
the Company has full power and authority to authorize, issue and sell
the Offered Securities as contemplated by this Agreement.
(t) This Agreement has been duly authorized, executed and
delivered by the Company.
(u) Commencing upon the First Closing Date (as defined) the
Company will be organized in conformity with the requirements for
qualification as a real estate investment trust (a "REIT") under the
Code, and the method of operation of the Company will enable, the
Company to continue to meet the requirements for taxation as a REIT
under the Code. All statements in the Prospectus regarding the
Company's qualification as a REIT are true, complete and correct in all
material respects.
(v) Coopers & Xxxxxxx LLP are independent public accountants
with respect to the Company as required by the Act.
(w) Except as disclosed in the Prospectus, the Company has
good and marketable title to all real properties and all other
properties and assets owned by it, including without limitation, all
mortgages, deeds of trust and other security interests held by or in
favor of the Company, in each case free from liens, encumbrances and
defects that would materially affect the value thereof or materially
interfere with the use made or to be made thereof by it; the Company
holds 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 it.
(x) With respect to each loan secured by real estate or
personal property in which the Company is the lender, the Company holds
a valid, perfected priority security interest in the applicable real or
personal property and the loan documents executed by or in favor of the
Company in connection with each such loan are valid and enforceable in
accordance with their respective terms.
(y) No default exists, and no event has occurred which, with
notice or lapse of time or both, would constitute a default in the due
performance and observance of any term, covenant or condition of any
indenture, mortgage, deed of trust, lease or other agreement or
instrument to which the Company is a party (including, without
limitation a default by any tenant of any portion of the property of
the Company or by any borrower under any loan made by the Company) or
by which the Company or any of its properties is bound which default
would have a material adverse affect on the property, business or
operations of the Company except such as have been irrevocably waived.
(z) No foreclosures have been instituted and none are
currently threatened with respect to any property or assets directly or
indirectly owned (whether now or in the past) by the Company.
(aa) The Company possesses adequate certificates, authorities
or permits issued by appropriate governmental agencies or bodies
necessary to conduct the business now operated by it except the failure
of which to possess would not individually or in the aggregate have a
material adverse effect on the Company, and has not received any notice
of proceedings relating to the revocation or modification of any such
certificate, authority or permit that, if determined adversely to the
Company would individually or in the aggregate have a material adverse
effect on the Company.
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(bb) To the best of the Company's knowledge after reasonable
investigation, each of the properties owned by the Company is in
substantial compliance with all presently applicable provisions of the
Americans with Disabilities Act and no failure of the Company to comply
with all presently applicable provisions of the Americans with
Disabilities Act would have a material adverse effect on the Company.
(cc) No labor dispute with the employees of the Company exists
or, to the knowledge of the Company, is imminent that might have a
material adverse effect on the Company.
(dd) The Company owns, possesses 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 now operated by it, or presently
employed by it, and has 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 would individually or in the aggregate have a material adverse
effect on the Company.
(ee) Except as disclosed in the Prospectus, the Company is
not, to the best of its knowledge after reasonable investigation, in
violation of any statute, any rule, regulation, decision or order of
any governmental agency or body or any court, domestic or foreign,
relating to the use, disposal or release of hazardous or toxic
substances or relating to the protection or restoration of the
environment or human exposure to hazardous or toxic substances
(collectively, "Environmental Laws"), does not own or operate any real
property contaminated with any substance that is subject to any
Environmental Laws, is not liable for any off-site disposal or
contamination pursuant to any Environmental Laws, and is not subject to
any claim relating to any Environmental Laws, which violation,
contamination, liability or claim would individually or in the
aggregate have a material adverse effect on the Company; and the
Company is not aware of any pending investigation which might lead to
such a claim.
(ff) The Company has provided the Representatives with all
environmental site assessments, investigations or other reports or
surveys in its possession regarding its properties or properties in
which the Company holds a security interest in connection with any laws
and regulations relating to health, safety and the environment.
(gg) Except as disclosed in the Prospectus, there are no
pending actions, suits, proceedings, inquiries, arbitrations,
investigations, litigation or governmental proceedings against or
affecting the Company or any of its respective properties that, if
determined adversely to the Company would individually or in the
aggregate have a material adverse effect on the condition (financial or
other), business, properties or results of operations of the Company,
or would materially and adversely affect the ability of the Company to
perform its obligations under this Agreement, or which are otherwise
material in the context of the sale of the Offered Securities; and no
such actions, suits, proceedings, inquiries, arbitrations,
investigations, litigation or governmental proceedings are threatened
or, to the Company's knowledge, contemplated. The Company is not a
party or subject to the provisions of any injunction, judgment, decree
or order of any court, regulatory body, administrative agency or other
governmental body which would individually or in the aggregate have a
material adverse effect on the Company.
(hh) The financial statements included in each Registration
Statement and the Prospectus present fairly the financial position of
the Company (or for dates and periods prior to the Merger, of the
Merged Companies) as of the dates shown and their results of operations
and cash flows for the periods shown, and such financial statements
have been prepared in conformity with generally accepted accounting
principles in the United States applied on a consistent basis; and the
schedules included in each Registration Statement present fairly the
information required to be stated therein and the assumptions used in
preparing the pro forma financial information included in each
Registration Statement and the Prospectus provide a reasonable basis
for presenting the significant effects directly attributable to the
transactions or events described therein, the related pro forma
adjustments give appropriate effect to those assumptions, and the pro
forma columns therein reflect the proper application of those
adjustments to the corresponding historical financial statement
amounts.
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(ii) Except as disclosed in the Prospectus, since the date of
the latest audited financial statements included 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, except as disclosed in or contemplated by the
Prospectus, there has been no dividend or distribution of any kind
declared, paid or made by the Company on any class of its capital
stock.
(jj) Except as disclosed in the Prospectus, since the date of
the latest audited financial statements included in the Prospectus none
of the properties owned by the Company has sustained any material loss
or interference from fire, flood, hurricane, accident or other
calamity, whether or not covered by insurance.
(kk) 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.
(ll) Neither the Company nor any of its affiliates does
business with the government of Cuba or with any person or affiliate
located in Cuba within the meaning of Section 517.075, Florida Statutes
and the Company agrees to comply with such Section if prior to the
completion of the distribution of the Offered Securities it commences
doing such business.
(mm) Except as disclosed in the Prospectus, the Company has
and maintains or causes to be maintained liability, property and
casualty insurance (insured by insurers of recognized financial
responsibility) in favor of the Company with respect to each of the
properties owned by the Company in an amount and on such terms as is
reasonable and customary for businesses of the type proposed to be
conducted by the Company, including, among other things, insurance
against theft, damage, destruction and acts of vandalism. The Company
has not received from any insurance company notice of any material
defects or deficiencies affecting the insurability of any such
property.
(nn) Title insurance in favor of the Company is in force with
respect to each of the real properties owned by the Company and/or in
which the Company holds a mortgage, deed of trust or other interests as
security for a loan to the owner thereof, in each case in an amount
previously disclosed to the Representatives.
(oo) Except as disclosed in the Prospectus, all entitlements
necessary for development of each of the properties owned by the
Company have been obtained, and no further governmental or regulatory
approvals are necessary for additional planned development of such
properties.
(pp) Except as disclosed in the Prospectus, the mortgages and
deeds of trust encumbering the properties owned or leased by the
Company are not convertible and such mortgages and deeds of trust are
not cross-defaulted or cross-collateralized.
(qq) No environmental engineering firm which prepared
environmental assessment reports (or other similar reports) with
respect to the properties owned by the Company as set forth in the
Registration Statement was employed for such purpose on a contingent
basis or has any substantial interest in the Company.
(rr) Each of the properties owned by the Company complies with
all applicable codes, laws and regulations (including, without
limitation, building and zoning codes and laws relating to handicapped
access), except as would not have a material adverse effect on the
Company.
(ss) The Company will apply the net proceeds from the offering
of the Offered Securities in the manner set forth under "Use of
Proceeds" in the Prospectus, and the Company will file timely and
accurate reports on Form SR with the Commission in accordance with Rule
463 under the Act or any successor provision.
3. 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
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of $_______ 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 the Representatives for
the accounts of the Underwriters, 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 Captec Net Lease Realty, Inc., account number
____________________, at the office of ____________________,
____________________, at __________ A.M., New York time, on _______________,
1997, 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 to the offering. 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 office of CSFBC, Eleven
Madison Avenue, New York, N.Y. 10010-3629, 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 Security to be paid for the Firm 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
bears to the total number of 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 the
Representatives for the accounts of the several Underwriters, 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 Captec Net Lease Realty, Inc., at the office of
____________________, ____________________. 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 office of CSFBC, Eleven Madison Avenue, New
York, N.Y. 10010-3629 at a reasonable time in advance of such Optional Closing
Date.
4. 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.
5. Certain Agreements of the Company. The Company agrees with the
several Underwriters that:
(a) If the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement, the
Company will file the Prospectus with the Commission pursuant to and in
accordance with subparagraph (1) (or, if applicable and if consented to
by CSFBC, subparagraph (4)) of Rule 424(b) not later than the earlier
of (A) the second business day following the execution and delivery of
this Agreement or (B) the fifteenth business day after the Effective
Date of the Initial Registration Statement. The Company will advise
CSFBC promptly of any such filing pursuant to Rule 424(b). If the
Effective Time of the Initial Registration Statement is prior to the
execution and delivery of this Agreement and an additional registration
statement is necessary to register a portion of the Offered Securities
under the Act but the Effective
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Time thereof has not occurred as of such execution and delivery, the
Company will file the additional registration statement or, if filed,
will file a post-effective amendment thereto with the Commission
pursuant to and in accordance with Rule 462(b) on or prior to 10:00
P.M., New York time, on the date of this Agreement or, if earlier, on
or prior to the time the Prospectus is printed and distributed to any
Underwriter, or will make such filing at such later date as shall have
been consented to by CSFBC.
(b) The Company will advise CSFBC promptly of any proposal to
amend or supplement the initial or any additional registration
statement as filed or the related prospectus or the Initial
Registration Statement, the Additional Registration Statement (if any)
or the Prospectus and will not effect such amendment or supplementation
without CSFBC's consent which consent shall not be unreasonably
withheld; and the Company will also advise CSFBC promptly of the
effectiveness of each Registration Statement (if its Effective Time is
subsequent to the execution and delivery of this Agreement) and of any
amendment or supplementation of a Registration Statement or the
Prospectus and of the institution by the Commission of any stop order
proceedings in respect of a Registration Statement and will use its
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
6.
(d) As soon as practicable, but not later than the
Availability Date (as defined below), 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
Initial Registration Statement (or, if later, the Effective Date of the
Additional Registration Statement) which will satisfy the provisions of
Section 11(a) of the Act. For the purpose of the preceding sentence,
"Availability Date" means the 45th day after the end of the fourth
fiscal quarter following the fiscal quarter that includes such
Effective Date, except that, if such fourth fiscal quarter is the last
quarter of the Company's fiscal year, "Availability Date" means the
90th day after the end of such fourth fiscal quarter.
(e) The Company will furnish to the Representatives copies of
each Registration Statement (four of which will be signed and will
include all exhibits), 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 Effective Time of the Initial
Registration Statement. 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.
(g) During the period of five years hereafter, the Company
will furnish to the Representatives 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 the Representatives (i) as soon as
available, a copy of each report and any definitive proxy statement of
the Company filed with the
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Commission under the Securities Exchange Act of 1934 or mailed to
stockholders, and (ii) from time to time, such other information
concerning the Company as CSFBC may reasonably request.
(h) The Company will pay all expenses incident to the
performance of its 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,
and the reasonable fees and disbursements of counsel to the
Underwriters in connection with, 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 180 days after the date of the initial
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 Securities or
securities convertible into or exchangeable or exercisable for any
shares of its Securities, or publicly disclose the intention to make
any such offer, sale, pledge, disposition or filing, without the prior
written consent of CSFBC except grants of employee stock options
pursuant to the terms of a plan in effect on the date hereof, issuances
of Securities pursuant to the exercise of such options or the exercise
of any other employee stock options outstanding on the date hereof and
issuances of Securities pursuant to the Company's dividend reinvestment
plan (if any).
(j) The Company will use its best efforts to meet the
requirements to qualify as a REIT under the Code at all times.
6. 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 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) The Representatives shall have received a letter, dated
the date of delivery thereof (which, if the Effective Time of the
Initial Registration Statement is prior to the execution and delivery
of this Agreement, shall be on or prior to the date of this Agreement
or, if the Effective Time of the Initial Registration Statement is
subsequent to the execution and delivery of this Agreement, shall be
prior to the filing of the amendment or post-effective amendment to the
registration statement to be filed shortly prior to such Effective
Time), of Coopers & Xxxxxxx LLP confirming that they are independent
public accountants within the meaning of the Act and the applicable
published Rules and Regulations thereunder and stating to the effect
that:
(i) in their opinion the financial statements and
schedules examined by them and included or incorporated by
reference in the Registration Statements comply as to form in
all material respects with the applicable accounting
requirements of the Act and the related published 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 Statements;
(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:
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(A) the unaudited financial data included in
the Registration Statements do not comply as to form
in all material respects with the applicable
accounting requirements of the Act and the related
published 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 unaudited consolidated total
revenues, net income and net income per share amounts
for the six-month periods ended June 30, 1996 and
June 30, 1997 included in the Prospectus 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 capital stock or any
increase in indebtedness of the Company 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 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 consolidated total revenues, 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;
(iv) they have read the unaudited pro forma
information included in the Registration Statement and made
inquiries of officials of the Company who have responsibility
for financial and accounting matters and other specified
procedures, and nothing came to their attention that caused
them to believe that the unaudited pro forma financial data
included in the Registration Statements do not comply as to
form in all material respects with the applicable accounting
requirements of the Act and the related published Rules and
Regulations or that the pro forma adjustments have not been
properly applied to the historical amounts in the compilation
of those statements; and
(v) they have compared specified amounts (or
percentages derived from such amounts) and other financial
information contained in the Registration Statements (in each
case to the extent that such 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 amounts, percentages and other
financial information to be in agreement with such results,
except as otherwise specified in such letter.
For purposes of this subsection, (i) if the Effective Time of the
Initial Registration Statement is subsequent to the execution and
delivery of this Agreement, "Registration Statements" shall mean the
initial registration statement as proposed to be amended by the
amendment or post-effective amendment to be filed shortly prior to its
Effective Time, (ii) if the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement but
the Effective Time of the Additional Registration is subsequent to such
execution and delivery, "Registration Statements" shall mean the
Initial Registration Statement and the additional registration
statement as proposed to be filed or as proposed to be amended by the
post-effective amendment to be filed shortly prior to its Effective
Time, and (iii) "Prospectus" shall mean the prospectus included in the
Registration Statements.
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(b) If the Effective Time of the Initial Registration
Statement is not prior to the execution and delivery of this Agreement,
such Effective Time shall have occurred not later than 10:00 P.M., New
York time, on the date of this Agreement or such later date as shall
have been consented to by CSFBC. If the Effective Time of the
Additional Registration Statement (if any) is not prior to the
execution and delivery of this Agreement, such Effective Time shall
have occurred not later than 10:00 P.M., New York time, on the date of
this Agreement or, if earlier, the time the Prospectus is printed and
distributed to any Underwriter, or shall have occurred at such later
date as shall have been consented to by CSFBC. If the Effective Time of
the Initial Registration Statement is prior to the execution and
delivery of this Agreement, the Prospectus shall have been filed with
the Commission in accordance with the Rules and Regulations and Section
5(a) of this Agreement. Prior to such Closing Date, no stop order
suspending the effectiveness of a Registration Statement shall have
been issued and no proceedings for that purpose shall have been
instituted or, to the knowledge of the Company or the Representatives,
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 which, in the judgment of a majority in interest of the
Underwriters including the Representatives, 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
suspension or limitation of trading in securities generally on the New
York Stock Exchange or the Nasdaq Stock Market's National Market, or
any setting of minimum prices for trading 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, New York or Florida 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 the
Representatives, 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 Representatives shall have received an opinion, dated
as of such Closing Date, of Xxxxx & Xxxxxxxxx, LLP, counsel for the
Company, to the effect that:
(i) The Company has been duly incorporated and is an
existing corporation in good standing under the laws of the
State of Delaware, with corporate 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;
(ii) The Advisor has been duly incorporated and is an
existing corporation in good standing under the laws of the
State of Delaware, with corporate power and authority to enter
into the Advisory Agreement and to perform its obligations
thereunder, including managing the operations of its Company
and providing it with investment and financial advisory
services; and the Advisor is duly qualified to do business as
a foreign corporation in good standing in all other
jurisdictions in the conduct of its business pursuant to the
Advisory Agreement requires such qualification;
(iii) Each of the Merged Companies was duly
incorporated and immediately prior to the Merger was an
existing corporation in good standing under the laws of the
State of Michigan, with full power and authority (corporate
and other) to own the properties held by it prior to the
Merger and enter into agreements and conduct its business as
described in the Prospectus; and each of the Merged Companies
was 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
required such qualification immediately prior to the Merger.
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(iv) The execution, delivery, and performance of each
of the Merger Documents was duly and validly authorized by
each of the parties thereto, and each Merger Document was duly
executed and delivered by each such party and constitutes the
legally valid and binding agreement of each such party,
enforceable against such party in accordance with its terms.
Each of the Merger Documents required to be filed has been
duly filed in Michigan and Delaware, and the Merger is
effective in Michigan and Delaware and has been consummated in
accordance with the terms of the Merger Documents and has
vested in the Company all of the assets and properties of the
Merged Companies. The execution, delivery and performance of
the Merger Documents by each of the parties thereto and the
consummation of the transactions contemplated thereby (A) did
not require any consent, approval, authorization or other
order of or registration or filing with, any court, regulatory
body, administrative agency or other governmental body, agency
or official (except for the filings which were accomplished in
Michigan and Delaware of those certain certificates of merger
of the Merged Companies into the Company), or conflict with or
constitute a breach of, or a default under, the certificate or
articles of incorporation, bylaws, or other organizational
documents, of any of the parties thereto and (B) did not
conflict with or constitute a breach of, or a default under,
any material agreement, indenture, lease or other instrument
known to such counsel after reasonable investigation to which
any of the parties thereto is a party or by which any of them
or any of their respective properties may be bound, or violate
any statute, law, regulation or filing or judgment,
injunction, order or decree applicable to any of the parties
thereto or any of their respective properties, or result in
the creation or imposition of any material lien, charge or
encumbrance upon any property or assets of any of the parties
thereto pursuant to the terms of any agreement or instrument
known to such counsel after reasonable investigation to which
any of them is a party or by which any of them may be bound or
to which any of the property or assets of any of them is
subject.
(v) The execution, delivery, and performance of each
of the Exchange Documents was duly and validly authorized by
the Company and each Exchange Document was duly executed and
delivered by the Company and constitutes the legally valid and
binding agreement of the Company, enforceable against the
Company in accordance with its terms. Upon consummation of the
offering, the Exchange will be consummated in accordance with
the terms of the Exchange Documents. The execution, delivery
and performance of the Exchange Documents by the Company and
the consummation of the transactions contemplated thereby (A)
will not require any consent, approval, authorization or other
order of or registration or filing with, any court, regulatory
body, administrative agency or other governmental body, agency
or official, or conflict with or constitute a breach of, or a
default under, the certificate or articles of incorporation,
bylaws, or other organizational documents, of the Company and
(B) will not conflict with or constitute a breach of, or a
default under, any material agreement, indenture, lease or
other instrument known to such counsel after reasonable
investigation to which the Company is a party or by which it
or any of its properties may be bound, or violate any statute,
law, regulation or filing or judgment, injunction, order or
decree applicable to the Company or any of its properties, or
result in the creation or imposition of any material lien,
charge or encumbrance upon any property or assets of the
Company pursuant to the terms of any agreement or instrument
to which the Company is a party or by which the Company may be
bound or to which any of the property or assets of the Company
is subject.
(vi) The execution, delivery, and performance of each
of the Redemption Documents was duly and validly authorized by
the Company, and each Redemption Document was duly executed
and delivered by the Company and constitutes the legally valid
and binding agreement of the Company, enforceable against it
in accordance with its terms. Upon consummation of the
offering, the Redemption will be consummated in accordance
with the terms of the Redemption Documents. The execution,
delivery and performance of the Redemption Documents by the
Company and the consummation of the transactions contemplated
thereby (A) will not require any consent, approval,
authorization or other order of or registration or filing
with, any court, regulatory body, administrative agency or
other governmental body, agency or official, or conflict with
or constitute a breach of, or a default under, the certificate
or articles of incorporation, bylaws, or other organizational
documents, of the Company and (B) will not conflict with or
constitute a breach of, or a default under, any material
agreement, indenture, lease or other instrument known to such
counsel after reasonable
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investigation to which the Company is a party or by which the
Company or any of its properties may be bound, or violate any
statute, law, regulation or filing or judgment, injunction,
order or decree applicable to the Company or any of its
properties, or result in the creation or imposition of any
material lien, charge or encumbrance upon any property or
assets of the Company pursuant to the terms of any agreement
or instrument known to such counsel after reasonable
investigation to which the Company is a party or by which the
Company may be bound or to which any of the property or assets
of the Company is subject.
(vii) The execution, delivery, and performance of
each of the Partnership Purchase Documents has been duly and
validly authorized by each of the parties thereto, and each of
the Purchase Documents has been duly executed and delivered by
each such party and constitutes the legally valid and binding
agreement of each such party, enforceable against such party
in accordance with its terms. Upon consummation of the
offering and obtaining the subsequent consents of the limited
partners of each of the Partnerships, the Partnership Purchase
will be consummated in accordance with the terms of the
Partnership Purchase Documents. Except for the consent
required to be obtained from the limited partners of the
Partnerships and except as disclosed in the Prospectus, the
execution, delivery and performance of the Partnership
Purchase Documents by each of the parties thereto and the
consummation of the transactions contemplated thereby (A) will
not require any consent, approval, authorization or other
order of or registration or filing with, any court, regulatory
body, administrative agency or other governmental body, agency
or official, or conflict with or constitute a breach of, or a
default under, the certificate or articles of incorporation,
bylaws, or other organizational documents, of any of the
parties thereto and (B) will not conflict with or constitute a
breach of, or a default under, any material agreement,
indenture, lease or other instrument known to such counsel
after reasonable investigation to which any of the parties
thereto is a party or by which any of them or any of their
respective properties may be bound, or violate any statute,
law, regulation or filing or judgment, injunction, order or
decree applicable to any of the parties thereto or any of
their respective properties, or result in the creation or
imposition of any material lien, charge or encumbrance upon
any property or assets of any of the parties thereto pursuant
to the terms of any agreement or instrument to which any of
them is a party or by which any of them may be bound or to
which any of the property or assets of any of them is subject.
(viii) The Company has an authorized and outstanding
capitalization as set forth in the Prospectus (which consists
of 50,000 shares of Redeemable Preferred Stock issued and
outstanding, none issued or outstanding as adjusted;
10,000,000 shares of Preferred Stock authorized, none issued
or outstanding as adjusted; 40,000,000 shares of Common Stock
authorized, 980,330 shares issued and outstanding, 9,955,330
as adjusted); the Offered Securities delivered on such Closing
Date, other outstanding shares of the Common Stock of the
Company have been duly authorized and validly issued, are
fully paid and nonassessable and conform to the description
thereof contained in the Prospectus; the stockholders of the
Company have no preemptive rights with respect to the
Securities or any other outstanding shares of the Common Stock
of the Company and no Securities issued by the Company have
been issued in violation of any such preemptive rights and the
Securities conform to the description contained in the
Prospectus;
(ix) Except as disclosed in the Prospectus, there are
no contracts, agreements or understandings 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, and all rights as to this offering have
been waived;
(x) 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;
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(xi) 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 or the Securities issued in
connection with the Exchange and the Redemption by the
Company, except such as have been obtained and made under the
Act and such as may be required under state securities laws;
(xii) The execution, delivery and performance of this
Agreement and the issuance and sale of the Offered Securities
and the Securities issued in connection with the Exchange and
Redemption will not result in a breach or violation of any of
the terms and provisions of, or constitute a default or event
which with notice and passage of time would constitute a
default or additional default under, any statute, any rule,
regulation or order of any governmental agency or body or any
court having jurisdiction over the Company of or any of its
properties, or any indenture, mortgage, deed of trust, lease
or any other agreement or instrument known to such counsel
after reasonable investigation to which the Company is a party
or by which the Company is bound or to which any of the
properties of the Company is subject, or the charter or
by-laws of the Company, and the Company has full corporate
power and authority to authorize, issue and sell the Offered
Securities and the Securities issued in connection with the
Exchange and the Redemption as contemplated by this Agreement;
(xiii) The statements set forth in the Prospectus
under the caption "Capital Stock of the Company", insofar as
they purport to constitute a summary of the terms of the
Securities, under the captions "Federal Income Tax
Considerations", "Shares Eligible for Future Sale", "ERISA
Considerations", and under the caption "Underwriting", insofar
as they purport to describe the provisions of the laws and
documents referred to therein, are accurate, complete and
fairly present the information required to be shown;
(xiv) The Initial Registration Statement was declared
effective under the Act as of the date and time specified in
such opinion, the Additional Registration Statement (if any)
was filed and became effective under the Act as of the date
and time (if determinable) specified in such opinion, the
Prospectus either was filed with the Commission pursuant to
the subparagraph of Rule 424(b) specified in such opinion on
the date specified therein or was included in the Initial
Registration Statement or the Additional Registration
Statement (as the case may be), and, to the best of the
knowledge of such counsel, no stop order suspending the
effectiveness of a 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
each 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 Rules and
Regulations; such counsel has 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, rules, regulations, orders,
injunctions, decrees, judgments, legal and governmental
proceedings and contracts and other documents are accurate and
complete and fairly present the information required to be
shown; and such counsel does not know of any legal or
governmental proceedings required to be described in a
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 a Registration Statement
or the Prospectus or to be filed as exhibits to a 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 Statements or the Prospectus;
(xv) This Agreement has been duly authorized,
executed and delivered by the Company;
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(xvi) To the best of such counsel's knowledge after
reasonable investigation, no default exists, and no event has
occurred which, with notice or lapse of time or both, would
constitute a default in the due performance and observance of
any term, covenant or condition of any indenture, mortgage,
deed of trust, lease or other agreement or instrument to which
the Company is a party (including, without limitation, a
default by any tenant of any portion of the property of the
Company or its subsidiaries) or by which the Company or any of
its properties is bound in any material adverse respect with
regard to property, business or operations of the Company,
except such as have been irrevocably waived;
(xvii) Except as disclosed in the Prospectus, to such
counsel's knowledge after reasonable investigation, there are
no outstanding (A) securities, equity interests or obligations
of the Company convertible into or exchangeable for any
capital stock or equity interests (as the case may be) of the
Company, (B) warrants, rights or options to subscribe for or
purchase from the Company any such capital stock or equity
interests or any such convertible or exchangeable securities,
equity interests or obligations, or (C) obligations of the
Company to issue any shares of capital stock, equity
interests, any such convertible or exchangeable securities,
equity interests or obligations, or any such warrants, rights
or options;
(xviii) The Merger qualifies as a tax-free
reorganization pursuant to Section 368(a) of the Code;
(xix) Commencing with the Company's taxable year
ending December 31, 1997, the Company will be organized in
conformity with the requirements for qualification as a REIT
under the Code, and the proposed method of operation of the
Company will enable the Company to continue to meet the
requirements for taxation as a REIT under the Code; and
(xx) Each of the Partnerships has been duly formed
and is an existing partnership in good standing under the laws
of the State of Delaware, with power and authority to own its
properties and conduct its business as described in the
Prospectus; and each of the Partnerships is duly qualified to
do business as a foreign partnership in good standing in all
other jurisdictions in which its ownership or lease of
property or the conduct of its business requires such
qualification; and
(xxi) Each of the Partnerships is properly treated as
a partnership for federal income tax purposes and not as an
association or publicly traded partnership taxable as a
corporation;
(e) The Representatives shall have received from Xxxxxx &
Xxxxxxx, 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 Statements, the Prospectus and other related matters
as the Representatives 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 Representatives shall have received a certificate,
dated as of such Closing Date, of the Chief Executive Officer and a
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 in this Agreement are true and correct; the Company has
complied with all agreements and satisfied all conditions on its 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 are contemplated by the Commission; the Additional
Registration Statement (if any) satisfying the requirements of
subparagraphs (1) and (3) of Rule 462(b) was filed pursuant to Rule
462(b), including payment of the applicable filing fee in accordance
with Rule 111(a) or (b) under the Act, prior to the time the Prospectus
was printed and distributed to any Underwriter; and, subsequent to the
date 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),
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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 Representatives shall have received letters, dated as
of such Closing Date, of Coopers & Xxxxxxx, LLP which meet 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.
(h) The Representatives shall have received from the Company
and each of the principal stockholders listed on the Principal
Stockholders table in the Prospectus, officers, directors and
affiliates a lockup agreement whereby each of the foregoing, for a
period of 180 days after the date of the initial public offering of the
Offered Securities 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 Securities or securities convertible into or
exchangeable or exercisable for any shares of the Securities, or
publicly disclose the intention to make any such offer, sale, pledge,
disposition or filing, without the prior written consent of CSFBC
except grants of employee stock options pursuant to the terms of a plan
in effect on the date hereof, issuances of Securities pursuant to the
exercise of such options or the exercise of any other employee stock
options outstanding on the date hereof.
(i) The Representatives shall have received on or before the
First Closing Date with respect to each of the properties owned by the
Company (the "Owned Properties"):
(i) An Extended ALTA Owner's Title Insurance Policy
(each, an "Owner's Title Policy") naming the Company, either
of the Merged Companies or their subsidiaries as named insured
and insuring the named insured that it owns fee title to the
real property described therein in an amount of the original
purchase price thereof, subject only to any material
exceptions to title as are described in the Prospectus, and
such other exceptions which do not adversely affect the
current or potential use to be made of such property (the
"Permitted Exceptions");
(ii) Either (A) a current "merger" or similar
endorsement to each Owner's Title Policy in the name of a
Merged Company issued by the original title insurer thereunder
(the "Original Title Insurer") or other title insurer
reasonably acceptable to the Representatives, to the effect
that the Merger shall not vitiate such Owner's Title Policy
and that the Company following the Merger shall have the same
rights to enforce or bring a claim under such Owner's Title
Policy as the original named insured or (B) a reliance letter
from the Original Title Insurer under each such Owner's Title
Policy in the name of a Merged Company reasonably acceptable
to the Representatives to the same effect as set forth in
clause (A) above;
(iii) Either (A) a current final "as-built" ALTA
survey of each Owned Property completed in accordance with the
Minimum Standard Detail requirements for ALTA/ACSM Land Title
Surveys, with additional Title A survey requirements, jointly
established and adopted by ALTA and ACSM in 1992 that meets
the requirements of a Class A Survey as defined therein or (B)
such other form of title survey which is in form and substance
satisfactory to the Representatives for each of the
Properties;
(iv) The Representatives shall have satisfied
themselves that (A) all utilities serving the Owned Properties
are adequate for the present use of the Owned Properties and
any expansions thereof described in the Prospectus; and (B)
all means of ingress and egress, parking, access to public
streets and drainage facilities are or will be available to
the Owned Properties and are adequate for the present use of
the Owned Properties and any expansions thereof described in
the Prospectus and are in compliance with applicable law;
(v) The Representatives shall have received and
approved with respect to each Owned Property, to the extent
applicable, (A) copies of the applicable zoning ordinances and
maps marked to show the location of such Owned Property and
certified by an appropriate governmental authority
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to be complete and accurate; (B) evidence that such zoning
ordinances and the general plans/specific plans and all other
land use regulations of the applicable municipal jurisdictions
and all covenants, conditions and restrictions, if any,
affecting the Owned Property permit the use of the Owned
Property for its current use (and reconstruction and
resumption of use in the event of damage, destruction, or
cessation of use) as a matter of right for an unlimited time
period and not merely as a legal non-conforming use; (C)
copies of all material licenses, certificates, approvals and
authorizations, including plot plan and subdivision approvals,
zoning variances and other material authorizations required by
governmental authorities or by any applicable covenants,
conditions and restrictions for the use and operation of such
Owned Property for current use;
(vi) The Representatives shall have received written
reports in form and substance satisfactory to the
Representatives from one or more qualified engineering firms
approved by Representatives to the effect that the
improvements on each Owned Property have been constructed in
compliance with, and currently are in compliance with, all
governmental requirements, including the Americans With
Disabilities Act, and with all restrictions of record
applicable thereto which affect the use of such Owned
Property, and that there are no material structural defects or
other material capital repairs required for such Owned
Property;
(vii) Such affidavits, certificates and instruments
of indemnification as shall be reasonably required by the
title company to issue the endorsement(s) or letters
contemplated by clause (ii) above or the Owner's Title
Policies pursuant to clause (i) above, as applicable;
(viii) UCC, judgment and tax lien searches confirming
that (A) the personal property comprising a part of or used or
useful in connection with the operation of each Owned Property
is subject to no liens other than Permitted Exceptions and (B)
that an appropriate UCC has been filed in each appropriate
jurisdiction evidencing the Company's interest in all personal
property owned by the Company and leased to other third
parties;
(ix) If such Owned Property is subject to a mortgage,
deed of trust or similar financing (an "Existing Mortgage")
which, as described in the Prospectus, is to be repaid with
the proceeds of the offering, a letter dated not earlier than
10 days prior to the First Closing Date from the holder of
such Existing Mortgage indicating the amount required to
satisfy all amounts then secured by such Existing Mortgage and
the additional amount required for each day after the date of
such letter necessary to satisfy all obligations secured
thereby, together with all documentation and consents
necessary to permit the repayment of all amounts owed and the
release of the Existing Mortgage; and if such property is
subject to an Existing Mortgage which, as described in the
Prospectus, is to remain of record after the offering, a
letter dated not earlier than 10 days prior to the First
Closing Date from the holder of such Existing Mortgage
indicating that the mortgagor or grantor under such Existing
Mortgage is not then in default, indicating the total
principal amount due under the Existing Mortgage, the date of
the last payment and principal and interest under such
mortgage, and to the extent required by the mortgage, the
holder of the Existing Mortgage's consent to this offering;
and
(x) A Phase I Environmental Report for each Owned
Property in form and substance acceptable to the
Representatives.
(j) The Representatives shall have received on or before the
First Closing Date with respect to each of the properties in which the
Company or its subsidiaries holds an interest as security for a loan
made to the owner thereof (the "Loan Properties");
(i) An Extended ALTA Lenders Policy of Title
Insurance naming the Company, the Merged Companies or their
subsidiaries as named insureds and insuring that such party
holds a priority security interest in the applicable Loan
Property, subject only to any such exceptions which do not
adversely affect the security for the loan made pursuant
thereto;
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(ii) Either (A) a current final "as-built" ALTA
survey of each Loan Property completed in accordance with the
Minimum Standard Detail requirements for ALTA/ACSM Land Title
Surveys, with additional Title A survey requirements, jointly
established and adopted by ALTA and ACSM in 1992 that meets
the requirements of a Class A Survey as defined therein or (B)
such other form of title survey which is in form and substance
satisfactory to the Representatives for each of the
Properties.
(iii) UCC searches confirming that a UCC has been
filed in each appropriate jurisdiction evidencing the
Company's security interest in any personal property
comprising the applicable Loan Property.
The Company will furnish the Representatives with such conformed copies of such
opinions, certificates, letters and documents as the Representatives reasonably
request. 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.
7. Indemnification and Contribution. (a) The Company will indemnify and
hold harmless each Underwriter 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 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 the
Representatives 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 against any losses, claims, damages or liabilities
to which the Company 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 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 by such Underwriter through the
Representatives 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 last paragraph at
the bottom of the cover page concerning the terms of the offering by the
Underwriters, the legend concerning over-allotments and stabilizing on the
inside front cover page, the concession and reallowance figures appearing in the
fourth paragraph under the caption "Underwriting" and the information contained
in the fifth paragraph under the caption "Underwriting".
(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
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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. 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 includes an
unconditional release of such indemnified party from all liability on any claims
that are the subject matter of such action.
(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 on the one hand and the Underwriters on the other from the offering
of the 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 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 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. 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 by the Company or the Underwriters 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 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 and not joint.
(e) The obligations of the Company under this Section shall be
in addition to any liability which the Company 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 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 a Registration Statement and to each person, if any, who controls
the Company within the meaning of the Act.
8. 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
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provided in Section 9 (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.
9. Survival of Certain Representations and Obligations. 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 8 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 5 and the respective
obligations of the Company and the Underwriters pursuant to Section 7 shall
remain in effect, and if any Offered Securities have been purchased hereunder
the representations and warranties in Section 2 and all obligations under
Section 5 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 8 or the occurrence of
any event specified in clause (iii), (iv) or (v) of Section 6(c), the Company
will reimburse the Underwriters for all out-of-pocket expenses (including fees
and disbursements of counsel) reasonably incurred by them in connection with the
offering of the Offered Securities.
10. Notices. All communications hereunder will be in writing and, if
sent to the Underwriters, will be mailed, delivered, telegraphed or sent via
facsimile and confirmed to the Representatives, c/o Credit Suisse First Boston
Corporation, Eleven Madison Avenue, New York, N.Y. 10010-3629, Attention:
Investment Banking Department--Transactions Advisory Group, or, if sent to the
Company, will be mailed, delivered or telegraphed and confirmed to it at 24
Xxxxx Xxxxx Xxxxxx Xxxxx, Xxx Xxxxx, Xxxxxxxx 00000, Attention: Xxxxxxx Xxxxx,
with a copy to Xxxxxx X. Xxxxx, Esq., Xxxxx & Xxxxxxxxx, LLP, 0000 Xxxxxxxx Xxxx
Xxxxxx, Xxxxxxxxx, Xxxx 00000; provided, however, that any notice to an
Underwriter pursuant to Section 7 will be mailed, delivered, telegraphed or sent
via facsimile and confirmed to such Underwriter.
11. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 7, and no other
person will have any right or obligation hereunder.
12. Representation of Underwriters. The Representatives will act for
the several Underwriters in connection with this financing, and any action under
this Agreement taken by the Representatives jointly or by CSFBC will be binding
upon all the Underwriters.
13. 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.
14. 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.
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If the foregoing is in accordance with the Representatives
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,
CAPTEC NET LEASE REALTY, INC.
By:
--------------------------------
Title:
The foregoing Underwriting Agreement is hereby
confirmed and accepted as of the date first above
written.
Acting on behalf of itself and as the
Representatives of the several
Underwriters.
CREDIT SUISSE FIRST BOSTON CORPORATION
BEAR, XXXXXXX & CO. INC.
PRUDENTIAL SECURITIES INCORPORATED
XXXXXXXX & COMPANY SECURITIES, INC.
XXXXX XXXXXXX INC.
By CREDIT SUISSE FIRST BOSTON CORPORATION
By
------------------------------------------
Title:
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SCHEDULE A
UNDERWRITER
-----------
NUMBER OF
FIRM SECURITIES
---------------
Credit Suisse First Boston Corporation......................
Bear, Xxxxxxx & Co. Inc.....................................
Prudential Securities Incorporated..........................
XxXxxxxx & Company Securities, Inc..........................
Xxxxx Xxxxxxx Inc..........................................
Total....................................................... 8,500,000
=========
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