Contract
Exhibit
1.1
EXECUTION
VERSION
3,000,000
Common Shares of Beneficial Interest
(Par
Value $0.0001 Per Share)
June 26,
2008
Wachovia
Capital Markets, LLC
As
Representative of the several Underwriters
c/o
Wachovia Capital Markets, LLC
000 Xxxx
Xxxxxx
Xxx Xxxx,
Xxx Xxxx 00000
Ladies
and Gentlemen:
Lexington Realty Trust, a Maryland real
estate investment trust (the “Company”), confirms
its agreement with Wachovia Capital Markets, LLC (“Wachovia”) and each
of the other Underwriters named in Schedule I hereto
(collectively, the “Underwriters,” which
term shall also include any underwriter substituted as hereinafter provided in
Section 10 hereof), for whom Wachovia is acting as the representative (in such
capacity, the “Representative”), with respect to the issue and sale of a total
of 3,000,000 shares (the (the “Initial Securities”)
of the Company’s common shares of beneficial interest classified as common
stock, par value $0.0001 per share (the “Common Shares”), and
the purchase by the Underwriter of the Initial Securities, and with respect to
the grant by the Company to the Underwriters of the option described in
Section 2(b) hereof to purchase all or any part of 450,000 additional
Common Shares to be issued and sold by the Company to the Underwriters to cover
over-allotments, if any. The Initial Securities to be purchased by
the Underwriters and all or any part of the 450,000 additional Common Shares
subject to the option described in Section 2(b) hereof (the “Option Securities”)
are hereinafter called, collectively, the “Securities.”
In addition to the Company, each of The
Lexington Master Limited Partnership, a Delaware limited partnership (the “MLP”), Lepercq
Corporate Income Fund L.P., a Delaware limited partnership, Leqercq Corporate
Income Fund II, L.P., a Delaware limited partnership, and Net 3 Acquisition
L.P., a Delaware limited partnership (each, an “Operating
Partnership” and collectively, the “Operating
Partnerships”), also confirms as follows its respective agreements with
the Underwriters.
Each of the Company and the Operating
Partnerships understands that the Underwriters proposes to make a public
offering of the Securities as soon as the Representative deems advisable after
this Agreement has been executed and delivered.
The Company has filed with the
Securities and Exchange Commission (the “Commission”) a
registration statement on Form S-3 (No. 333-121708) covering the registration of
the Securities and certain other securities of the Company under the Securities
Act of 1933, as amended (the “1933
Act”). Promptly after execution and delivery of this
Agreement, the
Company
will prepare and file a prospectus and the related prospectus supplement in
accordance with the provisions of Rule 430B (“Rule 430B”) of the
rules and regulations of the Commission under the 1933 Act (the “1933 Act
Regulations”) and paragraph (b) of Rule 424 (“Rule 424(b)”) of the
1933 Act Regulations. Any information included in such prospectus and
the related prospectus supplement that was omitted from such registration
statement at the time it became effective but that is deemed to be part of and
included in such registration statement pursuant to Rule 430B is referred to as
“Rule 430B
Information.” Each prospectus used in connection with the
offering of the Securities that omitted Rule 430B Information is herein called a
“preliminary
prospectus.” Such registration statement, at any given time,
together with the amendments thereto to such time, the exhibits and any
schedules thereto at such time, the documents incorporated by reference therein
pursuant to Item 12 of Form S-3 under the 1933 Act at such time, the documents
otherwise deemed to be a part thereof or included therein by 1933 Act
Regulations at such time and the Rule 430B Information, are herein called,
collectively, the “Registration
Statement.” Any registration statement filed pursuant to Rule
462(b) of the 1933 Act Regulations is herein referred to as the “Rule 462(b) Registration
Statement,” and after such filing the term “Registration Statement” shall
include the Rule 462(b) Registration Statement. The preliminary
prospectus supplement relating to the Securities, subject to completion, dated
June 25, 2008 (the “Preliminary Prospectus
Supplement”) and the related base prospectus dated January 31, 2005
(the “Base
Prospectus”) in the form first furnished (electronically or otherwise) to
the Underwriters for use in connection with the offering of the Securities or,
if not furnished to the Underwriters, in the form first filed by the Company
pursuant to Rule 424(b), together with the documents incorporated by reference
therein pursuant to Item 12 of Form S-3 under the 1933 Act, are herein called,
collectively, the “Preliminary
Prospectus.” The final prospectus supplement relating to the
Securities (the “Prospectus
Supplement”) and the Base Prospectus in the form first furnished
(electronically or otherwise) to the Underwriters for use in connection with the
offering of the Securities (whether to meet the requests of purchasers pursuant
to Rule 173 under the 1933 Act Regulations or otherwise) or, if not furnished to
the Underwriters, in the form first filed by the Company pursuant to Rule
424(b), together with the documents incorporated by reference therein pursuant
to Item 12 of Form S-3 under the 1933 Act, are herein called, collectively, the
“Prospectus.” For
purposes of this Agreement, all references to the Registration Statement, the
Preliminary Prospectus, the Prospectus or any amendment or supplement to any of
the foregoing shall be deemed to include the copy filed with the Commission
pursuant to its Electronic Data Gathering, Analysis and Retrieval system (“XXXXX”).
All references in this Agreement to
financial statements and schedules and other information which is “contained,”
“included” or “stated” in the Registration Statement, the Preliminary
Prospectus, the Disclosure Package (as hereinafter defined) or the Prospectus
(or other references of like import) shall be deemed to mean and include all
such financial statements and schedules and other information which is
incorporated by reference in or otherwise deemed by the 1933 Act Regulations to
be a part of or included in the Registration Statement, the Preliminary
Prospectus, the Disclosure Package or the Prospectus, as the case may be; and
all references in this Agreement to amendments or supplements to the
Registration Statement, the Preliminary Prospectus, the Disclosure Package or
the Prospectus shall be deemed to mean and include the filing of any document
under the Securities Exchange Act of 1934, as amended (the “1934 Act”), which is
incorporated by reference in or otherwise deemed by the
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1933 Act
Regulations to be a part of or included in the Registration Statement, the
Preliminary Prospectus, the Disclosure Package or the Prospectus, as the case
may be.
SECTION
1.
Representations and
Warranties.
(a) Representations and Warranties by
the Company and the Operating Partnerships. The Company and
each Operating Partnership, jointly and severally, represents and warrants to
the Underwriters as of the date hereof as of the Closing Date referred to in
Section 2(c) hereof, and as of each Option Closing Date (if any) referred
to in Section 2(b) hereof, and agrees with the Underwriters, as
follows:
(1) The
Company meets the requirements for use of Form S-3 under the 1933 Act. Each of
the Registration Statement and any Rule 462(b) Registration Statement has become
effective under the 1933 Act and no stop order suspending the effectiveness of
the Registration Statement or any Rule 462(b) Registration Statement has been
issued under the 1933 Act and no proceedings for that purpose have been
instituted or are pending or, to the knowledge of the Company, are contemplated
by the Commission, and any request on the part of the Commission for additional
information has been complied with.
At the
respective times the Registration Statement and any post-effective amendments
thereto became or become effective and at each deemed effective date of the
Registration Statement with respect to the Underwriters pursuant to Rule
430B(f)(2) of the 1933 Act Regulations, the Registration Statement and any
amendments and supplements thereto complied and will comply in all material
respects with the requirements of the 1933 Act and the 1933 Act Regulations and
did not and will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading.
The
Prospectus, and any amendments or supplements thereto, as of its date, at the
date hereof and at the Closing Date (and, if any Option Securities are
purchased, at the applicable Option Closing Date), complied and will comply in
all material respects with the requirements of the 1933 Act and the 1933 Act
Regulations and did not and will not include an untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
The
Preliminary Prospectus and the Prospectus filed as part of the Registration
Statement as originally filed or as part of any amendment thereto, or filed
pursuant to Rule 424 under the 1933 Act, complied when so filed in all material
respects with the 1933 Act and the 1933 Act Regulations and the Preliminary
Prospectus and the Prospectus delivered to the Underwriters for use in
connection with the offering of the Securities were identical to the
electronically transmitted copies thereof filed with the Commission pursuant to
XXXXX, except to the extent permitted by Regulation S-T.
As of the
Initial Sale Time (as defined below), the Preliminary Prospectus, any Issuer
Free Writing Prospectus (as defined below) identified on
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Schedule II
hereto, if any, and the information included on Schedule III
hereto, all considered together (collectively, the “Disclosure Package”),
did not include any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
The
representations and warranties in the preceding four paragraphs shall not apply
to statements in or omissions from the Registration Statement or any
post-effective amendment thereto, the Preliminary Prospectus or any amendments
or supplements thereto, the Disclosure Package or the Prospectus or any
amendments or supplements thereto made in reliance upon and in conformity with
information furnished to the Company in writing by the Representative expressly
for use therein (the “Underwriters’
Information”). The parties acknowledge and agree that the
Underwriters’ Information consists solely of the material included in (i) the
second paragraph after the first table under the caption “Underwriting,” (ii)
the first two paragraphs after the second table under the caption “Underwriting”
and (ii) the last paragraph under the caption “Underwriting” in the Preliminary
Prospectus and the Prospectus.
As used
in this subsection and elsewhere in this Agreement:
“Initial Sale Time”
means 8:00 a.m. (New York City time) on June 26, 2008 or such other time as
agreed by the Company and the Representative.
“Issuer Free Writing
Prospectus” means any “issuer free writing prospectus,” as defined in
Rule 433 of the 1933 Act Regulations (“Rule 433”), relating
to the Securities that (i) is required to be filed with the Commission by the
Company, (ii) is a “road show” that is a “written communication” within the
meaning of Rule 433(d)(8)(i), whether or not required to be filed with the
Commission or (iii) is exempt from filing pursuant to Rule 433(d)(5)(i) because
it contains a description of the Securities or of the offering that does not
reflect the final terms, in each case in the form filed or required to be filed
with the Commission or, if not required to be filed, in the form retained in the
Company’s records pursuant to Rule 433(g).
(2) The
documents incorporated or deemed to be incorporated by reference in the
Registration Statement and the Prospectus, when they became effective or at the
time they were or hereafter are filed with the Commission, complied and will
comply in all material respects with the requirements of the 1933 Act and the
1933 Act Regulations or 1934 Act and the rules and regulations of the Commission
thereunder (the “1934
Act Regulations”), as applicable, and, when read together with the other
information in the Prospectus, (a) at the time the Registration Statement became
effective, (b) at each deemed effective date with respect to the Underwriters
pursuant to Rule 430B(f)(2) of the 1933 Act Regulations and (c) at the Closing
Date (and, if any Option Securities are purchased, at each Option Closing Date),
did not and will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
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(3) At the
time of the most recent amendment to the Registration Statement for purposes of
complying with Section 10(a)(3) of the 1933 Act (whether such amendment was
by post-effective amendment, incorporated report filed pursuant to
Section 13 or 15(d) of the 1934 Act or form of prospectus) and at the date
hereof, the Company was and is a “well-known seasoned issuer” as defined in Rule
405 of the 1933 Act Regulations (“Rule 405”), including
not having been and not being an “ineligible issuer” as defined in Rule
405.
(4) As of the
date of the execution and delivery of this Agreement (with such date being used
as the determination date for purposes of this clause), the Company was not and
is not an ineligible issuer (as defined in Rule 405 of the 1933 Act
Regulations), without taking account of any determination by the Commission
pursuant to Rule 405 that it is not necessary that the Company be considered an
ineligible issuer (as defined in Rule 405).
(5) Each
Issuer Free Writing Prospectus listed in Schedule II
hereto, as of its issue date and at all subsequent times through the completion
of the public offer and sale of the Securities or until any earlier date as of
which the Company notified or notifies the Representative as described in
Section 3(e) of this Agreement, did not, does not and will not include any
information that conflicted, conflicts or will conflict with the information
contained in the Registration Statement, including any document incorporated by
reference therein that has not been superseded or modified. The
foregoing sentence does not apply to statements in or omissions from any Issuer
Free Writing Prospectus based upon and in conformity with the Underwriters’
Information.
(6) The
descriptions in the Registration Statement, the Disclosure Package and the
Prospectus of the contracts, leases and other legal documents therein described
present fairly the information required to be shown, and there are no contracts,
leases, or other documents of a character required to be described in the
Registration Statement, the Disclosure Package or the Prospectus or to be filed
as exhibits to the Registration Statement which are not described or filed as
required; there are no legal or governmental proceedings pending or threatened
to which the Company, the Operating Partnerships or any Subsidiary (as defined
below) is subject that are required to be described in the Registration
Statement, the Disclosure Package or the Prospectus and are not so described;
there are no statutes or regulations applicable to the Company, the Partnerships
or any Subsidiary or certificates, permits or other authorizations from
governmental regulatory officials or bodies required to be obtained or
maintained by the Company, the Partnerships or any Subsidiary of a character
required to be disclosed and properly described therein; all agreements between
the Company, the Partnerships or any Subsidiary and third parties expressly
referenced in the Disclosure Package and the Prospectus are legal, valid and
binding obligations of the Company, the Partnerships or the Subsidiary,
enforceable in accordance with their respective terms, except to the extent
enforceability may be limited by bankruptcy, insolvency, reorganization or other
laws of general applicability relating to or affecting creditors’ rights and by
general equity principles; there are no business relationships or related-party
transactions involving the Company, any Operating Partnership or any Subsidiary
required to be described in the
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Registration
Statement, Disclosure Package and the Prospectus which have not been so
described as required.
(7) KPMG LLP,
who certified the financial statements and supporting schedules incorporated by
reference in the Registration Statement, the Disclosure Package and the
Prospectus, is an independent registered public accounting firm with respect to
the Company as required by the 1933 Act and the 1933 Act Regulations, the 1934
Act, 1934 Act Regulations and the Public Company Accounting Oversight Board
(United States).
(8) The
financial statements of the Company and its subsidiaries, together with the
related schedules (if any) and notes (the “Company Financial
Statements”), incorporated by reference in the Registration Statement,
the Disclosure Package and the Prospectus, and any financial statements required
by Rule 3-14 of Regulation S-X (the “Acquisition Financial
Statements”), incorporated by reference in the Registration Statement,
the Disclosure Package and the Prospectus present fairly the financial position
of the Company and its consolidated subsidiaries at the dates indicated, or, if
applicable, with respect to the Acquisition Financial Statements, the respective
property or tenant; and all such financial statements have been prepared in
conformity with United States generally accepted accounting principles (“GAAP”) applied on a
consistent basis throughout the periods involved and comply with all applicable
accounting requirements under the 1933 Act and the 1933 Act Regulations and the
1934 Act and the 1934 Act Regulations. The supporting schedules, if
any, incorporated by reference in the Registration Statement, the Disclosure
Package and the Prospectus present fairly, in accordance with GAAP, the
information required to be stated therein. There are no financial
statements or schedules required to be included or incorporated by reference in
the Registration Statement, the Disclosure Package or the Prospectus under the
1933 Act or the 1933 Act Regulations which are not so included or
incorporated. If applicable, the unaudited pro forma financial
information (including the related notes) included or incorporated by reference
in the Registration Statement, the Disclosure Package or the Prospectus complies
as to form in all material respects with the applicable accounting requirements
of the 1933 Act and the 1933 Act Regulations, and management of the Company
believes that the assumptions underlying the pro forma adjustments are
reasonable. If applicable, such pro forma adjustments have been
properly applied to the historical amounts in the compilation of the information
and such information fairly presents with respect to the Company and its
consolidated subsidiaries, the financial position, results of operations and
other information purported to be shown therein at the respective dates and for
the respective periods specified. No pro forma financial information
is required to be included or incorporated by reference in the Registration
Statement, the Disclosure Package or the Prospectus which is not so included or
incorporated. Any non-GAAP financial measures, as defined under
Regulation G under the 1933 Act, included in the Registration Statement, the
Disclosure Package, and the Prospectus are permitted for use in documents filed
with the Commission. The ratio of earnings to fixed charges contained
in the Registration Statement, the Disclosure Package and the Prospectus has
been calculated in accordance with Item 503(d) of Regulation S-K.
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(9) The
Company has been duly organized and is an existing statutory real estate
investment trust in good standing under the laws of the State of Maryland, with
power and authority (trust and other) to own its properties and conduct its
business as described in the Disclosure Package and the Prospectus; and except
where the failure to so qualify or to be in good standing would not result in a
material adverse change in the condition (financial or other), earnings,
investment portfolio, business affairs or prospects of the Company, the
Operating Partnerships or the Subsidiaries, taken as a whole (a “Material Adverse
Effect”), the Company is duly qualified to do business as a foreign
entity in good standing in all other jurisdictions in which its ownership or
lease of property or the conduct of its business requires such
qualification.
(10) Exhibit
21 to the Company’s Annual Report on Form 10-K for the year ended December 31,
2007 is a true, correct and complete list, as of March 31, 2008, of all of the
subsidiaries of the Company controlled directly or indirectly by the Company
(each, a “Subsidiary” and
collectively, the “Subsidiaries”),
including the jurisdiction of incorporation or organization of each such
Subsidiary; and each Subsidiary that is a “significant subsidiary” as defined by
Rule 1-02 of Regulation S-X (each, a “Significant
Subsidiary” and collectively, the “Significant
Subsidiaries”) is included in Exhibit 21 thereto.
(11) Each
Operating Partnership and each Subsidiary has been duly incorporated or formed,
as the case may be, and each is existing and in good standing under the laws of
the respective jurisdiction of incorporation or formation, with power and
authority (corporate and other) to own or lease its properties and conduct its
business as described in the Disclosure Package and the Prospectus; except where
the failure to so qualify or to be in good standing would not result in a
Material Adverse Effect, each Operating Partnership and each Subsidiary is duly
qualified to do business as a foreign entity 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 (3) all of the issued and outstanding
equity interests of each Operating Partnership and each Subsidiary have been
duly authorized and validly issued and are fully paid and non-assessable; and
the equity interests of each Subsidiary owned by the Company or an Operating
Partnership, directly or through subsidiaries, are owned free from security
interests, liens, claims, encumbrances and defects, except where such security
interests, liens, claims, encumbrances and defects would not have a Material
Adverse Effect. Immediately prior to the consummation of the
transaction contemplated hereby and the applications of the net proceeds from
the sale of the Securities, the Company owns the sole general partnership
interest and a majority of the limited partnership interests in each Operating
Partnership.
(12) The
authorized shares of beneficial interest of the Company are as set forth in the
Company’s Quarterly Report on Form 10-Q for the quarter ended March 31,
2008. On the date of this Agreement, 61,093,901 Common Shares are
issued and outstanding. This Agreement and the issuance and sale of
the Securities hereunder has been duly authorized by all appropriate action of
the Company, all outstanding shares of beneficial interest of the Company are,
and, when the Securities have been delivered and paid for in accordance with
this Agreement on each Closing Date, such Securities
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will be,
validly issued, fully paid and non-assessable and will conform to the
description thereof contained in the Disclosure Package and the Prospectus; the
issued and outstanding units of limited partnership interest in the Operating
Partnerships (the “OP
Units”) have been duly authorized by the Operating Partnerships and
validly issued in accordance with the applicable Partnership Agreement; all of
the issued and outstanding shares of beneficial interest of the Company and
outstanding OP Units have been offered, sold and issued by the Company or the
applicable Operating Partnership in compliance with all applicable laws,
including without limitation, federal and state securities laws; except as
described in the Disclosure Package and the Prospectus, there is no outstanding
option, warrant or other right calling for the issuance of, and no commitment,
plan or arrangement to issue, any shares of beneficial interest of the Company
or equity interests in the Operating Partnerships or any security convertible
into or exchangeable for shares of beneficial interest of the Company or equity
interests in the Operating Partnerships, and the shareholders of the Company
have no preemptive or similar rights with respect to any shares of beneficial
interest of the Company.
(13) Except as
described in the Disclosure Package and the Prospectus, there are no contracts,
agreements or understandings between the Company or any of the Operating
Partnerships and any person that would give rise to a valid claim against the
Company or the Underwriters for a brokerage commission, finder’s fee or other
like payment in connection with the offering, issuance and sale of the
Securities.
(14) Except as
described in the Disclosure Package and the Prospectus, there are no contracts,
agreements or understandings between the Company or the Operating Partnerships
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 other than the
registration rights granted to (a) holders of limited partnership interests in
the Operating Partnerships, (b) Xxxxxxx Xxxxxx and (c) holders of the 5.45%
Exchangeable Guaranteed Notes due in 2027 issued by the MLP.
(15) The
Securities will be approved for listing on the New York Stock Exchange on or
prior to the First Closing Date, subject to final notice of
issuance.
(16) No
consent, approval, license, authorization, certificate, permit or order of, or
filing with, any governmental agency or body or any court is required for the
consummation of the transactions contemplated by this Agreement including the
valid authorization, issuance, sale and delivery of the Securities, except such
as may be required under the 1933 Act, the 1933 Act Regulations, the 1934 Act,
the 1934 Act Regulations, the rules of the New York Stock Exchange and state
securities laws.
(17) The
execution, delivery and performance of this Agreement and the issuance and sale
of the Securities will not result in a breach or violation of any of
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the terms
and provisions of, or constitute a default under, any statute, rule, regulation
or order of any governmental agency or body or any court, domestic or foreign,
having jurisdiction over the Company, the Operating Partnerships or the
Subsidiaries or any of their properties, or any agreement or instrument to which
the Company, the Operating Partnerships or Subsidiary is a party or by which the
Company, the Operating Partnerships or any Subsidiary is bound or to which any
of the Properties of the Company, the Operating Partnerships or any Subsidiary
is subject, or the charter, by-laws, partnership agreement, certificate of
limited partnership, operating agreement or other organizational documents of
the Company, the Operating Partnerships or any Subsidiary, and the Company, has
full power and authority to authorize, issue, sell and deliver the Securities as
contemplated by this Agreement.
(18) This
Agreement has been duly authorized, executed and delivered by the Company and
the Operating Partnerships and constitutes the legal, valid and binding
obligation of the Company and the Operating Partnerships enforceable against the
Company and the Operating Partnerships in accordance with its terms, except as
may be limited by bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting creditors’ rights generally or by general principles of
equity.
(19) Except as
described in the Disclosure Package and the Prospectus, the Company, the
Operating Partnerships or their Subsidiaries, and the Joint Ventures in which
the Company, the Operating Partnerships or their Subsidiaries has an ownership
interest, have good and marketable title to all real properties and all other
properties and assets owned by them (each, a “Property” and
collectively, the “Properties”), in each
case free from liens, encumbrances and defects, except where the existence of
any lien, encumbrance or defect would not have a Material Adverse Effect; the
Company, each Operating Partnership or the Subsidiary has obtained an owner’s
title insurance policy in an amount at least equal to the cost of acquisition
from a title insurance company with respect to each of its real estate
properties, except where the failure to obtain such owner’s title insurance
policy would not have a Material Adverse Effect; except as disclosed in the
Disclosure Package and the Prospectus, the Company, the Operating Partnerships
and the Subsidiaries hold any leased real or personal property under valid and
enforceable leases, except where the invalidity or unenforceability of such
leases, individually or collectively, would not have a Material Adverse Effect;
no person has an option or right of first refusal to purchase all or part of any
Property or any interest therein for other than the fair market value, except
where the exercise of such option or right would not have a Material Adverse
Effect; neither the Company, the Operating Partnerships nor any Subsidiary has
knowledge of any pending or threatened condemnation proceeding, zoning change,
or other proceeding or action that will in any material manner affect the size
of, use of, improvements on, construction on or access to any of the
Properties.
(20) The
Company, the Operating Partnerships and the Subsidiaries possess adequate
permits, licenses, franchises, certificates, authorities, consents, orders or
approvals issued by appropriate governmental agencies or bodies necessary to
conduct the business now conducted by them or contemplated by the Disclosure
Package and the Prospectus and have not received any notice of proceedings
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relating
to the revocation or modification of any such permits, licenses, franchises,
certificates, authorities, consents, orders or approvals that, if determined
adversely to the Company, the Operating Partnerships or any Subsidiary, would,
individually or in the aggregate, have a Material Adverse Effect.
(21) No labor
dispute with the employees of the Company, the Operating Partnerships or any
subsidiary exists or, to the knowledge of the Company, is imminent that might
have a Material Adverse Effect.
(22) The
Company, the Operating Partnerships and the Subsidiaries own, possess or can
acquire on reasonable terms, adequate trademarks, trade names and other rights
to inventions, know-how, patents, copyrights, confidential information and other
intellectual property (collectively, “intellectual property
rights”) necessary to conduct the business now operated by them, or
presently employed by them, and have not received any notice of infringement of
or conflict with asserted rights of others with respect to any intellectual
property rights that, if determined adversely to the Company, the Operating
Partnerships or any of the Subsidiaries, would individually or in the aggregate
have a Material Adverse Effect.
(23) Except as
otherwise described in the Disclosure Package and the Prospectus, neither the
Company, the Operating Partnerships nor any Subsidiary has authorized or
conducted or has knowledge of the generation, transportation, storage, presence,
use, treatment, disposal, release, or other handling of any hazardous substance,
hazardous waste, hazardous material, hazardous constituent, toxic substance,
pollutant, contaminant, asbestos, radon, polychlorinated biphenyls (“PCBs”), petroleum
product or waste (including crude oil or any fraction hereof, natural gas,
liquefied gas, synthetic gas or other material defined, regulated, controlled or
potentially subject to any remediation requirement under any environmental law
(collectively, “Hazardous
Materials”), on, in, under or affecting any Property, except in material
compliance with applicable laws; except as disclosed in the Disclosure Package
and the Prospectus, to the knowledge of the trustees and officers of the
Company, the Properties are in compliance with all federal, state and local
laws, ordinances, rules, regulations and other governmental requirements
relating to pollution, control of chemicals, management of waste (collectively,
“Environmental
Laws”), and the Company, the Operating Partnerships and the Subsidiaries
are in compliance with all licenses, permits, registrations and government
authorizations necessary to operate under all applicable Environmental Laws in
all material respects; except as otherwise described in the Disclosure Package
and the Prospectus, neither the Company, any Operating Partnership or any
Subsidiary has received any written or oral notice from any governmental entity
or any other person and there is no pending, or, to the knowledge of the
trustees and officers of the Company, threatened claim, litigation or any
administrative agency proceeding that: alleges a violation of any
Environmental Laws by the Company, the Operating Partnerships or any Subsidiary;
or that the Company, any Operating Partnership or any Subsidiary is a liable
party or a potentially responsible party under the Comprehensive Environmental
Response, Compensation and Liability Act, 42 U.S.C. § 9601, et. seq., or
any state superfund law; has resulted in or could result in the attachment of an
environmental lien on any of the properties; or alleges that the Company, any
Operating Partnership or any
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Subsidiary
is liable for any contamination of the environment, contamination of the
Property, damage to natural resources, property damage, or personal injury based
on their activities or the activities of their predecessors or third parties
(whether at the properties or elsewhere) involving Hazardous Materials, whether
arising under the Environmental Laws common law principles, or other legal
standards. In the ordinary course of its business, the Company, the
Operating Partnerships and the Subsidiaries conduct Phase I environmental
assessments on each of the Properties at the time such Property is acquired and
periodic reviews of the effect of Environmental Laws on the business, operations
and properties of the Company, the Operating Partnerships and the
Subsidiaries.
(24) Except as
described in the Disclosure Package and the Prospectus, there are no pending
actions, suits or proceedings against or affecting the Company, any Operating
Partnership or any Subsidiary or any of their respective Properties that, if
determined adversely to the Company, any Operating Partnership or such
Subsidiary, would individually or in the aggregate have a Material Adverse
Effect, or would materially and adversely affect the ability of the Company or
the Operating Partnerships to perform their obligations under this Agreement, or
which are otherwise material in the context of the offering, issuance, sale and
delivery of the Securities; and no such actions, suits or proceedings are
threatened or, to the Company’s or any Operating Partnership’s knowledge,
contemplated.
(25) Except as
described in the Disclosure Package and the Prospectus, since the date of the
latest audited financial statements included or incorporated by reference in the
Disclosure Package and the Prospectus there has been no material adverse change,
nor any development or event involving a prospective material adverse change in
the condition (financial or other), business, properties or results of
operations of the Company, the Operating Partnerships and the Subsidiaries,
taken as a whole, that would constitute a Material Adverse Effect, and, except
as disclosed in the Incorporated Documents and the Company’s press releases,
there has been no dividend or distribution of any kind declared, paid or made by
the Company on any class of its shares of beneficial interest.
(26) The
Company has implemented controls and other procedures that are designed to
ensure that information required to be disclosed by the Company in the reports
that it files or submits under the 1934 Act is recorded, processed, summarized
and reported, within the time periods specified in the Commission’s rules and
forms and is accumulated and communicated to the Company’s management, including
its chief executive officer and chief financial officer, or persons performing
similar functions, as appropriate to allow timely decisions regarding required
disclosure; and the Company makes and keeps books, records, and accounts, which,
in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the Company; and the Company maintains a system of
internal accounting controls sufficient to provide reasonable assurances that
(i) transactions are executed in accordance with management’s general or
specific authorization; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets;
(iii) access to assets is permitted only in accordance with management’s
general or specific
-11-
authorization;
and (iv) the recorded accountability for assets is compared with existing
assets at reasonable intervals and appropriate action is taken with respect to
any differences; and, to the Company’s and each Operating Partnership’s
knowledge, neither the Company, any Operating Partnership nor any Subsidiary,
nor any employee or agent thereof, has made any payment of funds of the Company,
the Operating Partnerships or any of the Subsidiaries, as the case may be, or
received or retained any funds, and no funds of the Company, the Operating
Partnerships or any of the Subsidiaries, as the case may be, have been set aside
to be used for any payment, in each case in violation of any law, rule or
regulation.
(27) Neither
the Company, any Operating Partnership or any Subsidiary is and, after giving
effect to the offering and sale of the Securities and the application of the
proceeds thereof as described in the Disclosure Package and the Prospectus, will
not be an “investment company” or a company “controlled” by an “investment
company” within the meaning of the Investment Company Act of 1940, as amended
(the “1940
Act”).
(28) The
Limited Partnership Agreement of each Operating Partnership, including any
amendments thereto (each a “Partnership
Agreement” and, together, the “Partnership
Agreements”), has been duly and validly authorized, executed and
delivered by all partners of the Operating Partnership and constitutes a valid
and binding agreement, enforceable in accordance with its terms, except as may
be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors’ rights generally or by general principles of
equity.
(29) The
Company, the Operating Partnership and the Subsidiaries have complied in all
respects with all laws, regulations and orders applicable to them or their
respective businesses, except as would not have a Material Adverse Effect;
neither the Company, the Operating Partnerships nor any Subsidiary is in breach
of, or in default under (nor has any event occurred which with notice, lapse of
time, or both would constitute a breach of, or default under), its respective
declaration of trust, by-laws, certificate of limited partnership, partnership
agreement or operating agreement, as the case may be, or in the performance or
observance of any material obligation, agreement, covenant or condition
contained in any material license, indenture, mortgage, deed of trust, loan or
credit agreement or other material agreement or instrument to which the Company,
any Operating Partnership or such Subsidiary is a party or by which any of them
or their respective properties is bound, except where such breach, default or
event would not have a Material Adverse Effect.
(30) Each of
the Company, the Operating Partnerships or the Subsidiaries has filed on a
timely basis all necessary federal, state, local and foreign income and
franchise tax returns, if any such returns were required to be filed, through
the date hereof and have paid all taxes shown as due thereon, except where
failure to so file or pay would not have a Material Adverse Effect; and no tax
deficiency has been asserted against the Company, any Operating Partnership or
any Subsidiary, nor, to the knowledge of the trustees and officers of the
Company, is any tax deficiency likely to be
-12-
asserted
against the Company or any Operating Partnership; all tax liabilities, if any,
are adequately provided for on the respective books of the
entities.
(31) Commencing
with its taxable year ended December 31, 1993, the Company has been organized
and operated in conformity with the requirements for qualification as a real
estate investment trust (“REIT”) under the
Internal Revenue Code of 1986, as amended, and the regulations and published
interpretations thereunder (the “Code”), and the
Company’s current and proposed method of operations will enable it to continue
to meet the requirements for taxation as a REIT under the Code; no transaction
or other event has occurred which could reasonably be expected to cause the
Company not to be able to qualify as a REIT for its taxable years ending
December 31, 2008 or future year.
(32) To the
Company’s and the MLP’s knowledge, commencing with its taxable year ended
December 31, 2006, Concord Debt Funding Trust (“Concord REIT”) has
been organized and operated in conformity with the requirements for
qualification as a REIT under the Code; to the Company’s and the MLP’s
knowledge, Concord REIT’s current and proposed method of operations will enable
Concord REIT to continue to meet the requirements for taxation as a REIT under
the Code; to the Company’s and the MLP’s knowledge, no transaction or other
event has occurred which could reasonably be expected to cause Concord REIT not
to be able to qualify as a REIT for its taxable years ending December 31, 2008
or future year.
(33) Each of
the Operating Partnerships has been and will continue to be treated as a
partnership for federal income tax purposes and not as a corporation or
association taxable as a corporation.
(34) Each of
the Company, each Operating Partnership and the Subsidiaries maintains insurance
(issued by insurers of recognized financial responsibility) of the types and in
the amounts generally deemed adequate, if any, for their respective businesses
and consistent with insurance coverage maintained by similar companies in
similar businesses, including, but not limited to, insurance covering real and
personal property owned or leased by the Company, the Operating Partnerships and
the Subsidiaries against theft, damage, destruction, acts of vandalism and all
other risks customarily insured against, all of which insurance is in full force
and effect.
(35) There are
no material outstanding loans or advances or material guarantees of indebtedness
by the Company, any Operating Partnership or any Subsidiary to or for the
benefit of any of the officers or trustees of the Company or any of their family
members.
(36) In
connection with the offering of the Securities, the Company has not offered and
will not offer its Common Shares or any other securities convertible into or
exchangeable or exercisable for Common Shares in a manner in violation of the
Act or the 1933 Act Rules and Regulations; the Company and its affiliates have
not distributed and will not distribute, prior to the completion of the
Underwriters’ distribution of the Securities, any written offering materials in
connection
-13-
with the
offer and sale of the Securities other than the Registration Statement, the
Preliminary Prospectus, the Prospectus or any Issuer Free Writing Prospectus set
forth on Schedule
II hereto.
(37) None of
the entities which prepared appraisals of the Properties or Phase I
environmental assessment reports with respect to such Properties was employed
for such purpose on a contingent basis or has any substantial interest in the
Company, any Operating Partnership or any Subsidiary, and none of their
trustees, trustees, managers, officers or employees is connected with the
Company, any Operating Partnership or any Subsidiary as a promoter, selling
agent, voting trustee, officer or employee.
(38) The
Company is in compliance with applicable provisions of the Xxxxxxxx-Xxxxx Act of
2002, as amended from time to time (the “Xxxxxxxx-Xxxxx Act”)
that are effective, including Section 404 thereof, and is actively taking steps
to ensure that it will be in compliance with other applicable provisions of the
Xxxxxxxx-Xxxxx Act upon the effectiveness of such provisions.
(39) The
Company is in material compliance with the current listing standards of the New
York Stock Exchange and has made all material filings and/or certifications to
the New York Stock Exchange on a timely basis.
(40) The
Company has implemented the “disclosure controls and procedures” (as defined in
Rules 13a-15(e) of the 0000 Xxx) required in order for the Chief Executive
Officer and Chief Financial Officer of the Company to engage in the review and
evaluation process mandated by the 1934 Act. The Company’s
“disclosure controls and procedures” are reasonably designed to ensure that all
information (both financial and non-financial) required to be disclosed by the
Company in the reports that it files or submits under the 1934 Act is recorded,
processed, summarized and reported within the specified time periods, and that
all such information is accumulated and communicated to the Company’s management
as appropriate to allow timely decisions regarding required disclosure and to
make the certifications of the Chief Executive Officer and Chief Financial
Officer of the Company required under the 1934 Act with respect to such
reports.
(41) The
section entitled “Management’s Discussion and Analysis of Financial Condition
and Results of Operation—Critical Accounting Policies” in the Company’s Annual
Report on Form 10-K for the year ended December 31, 2007 and Quarterly Report on
Form 10-Q for the quarter ended March 31, 2008, each of which is incorporated by
reference into the Registration Statement, the Disclosure Package and the
Prospectus, accurately and fully describes (i) accounting policies which the
Company believes are the most important in the portrayal of the financial
condition and results of operations of the Company and its consolidated
subsidiaries and which require management’s most difficult, subjective or
complex judgments (“critical accounting
policies”), (ii) judgments and uncertainties affecting the application of
critical accounting policies and (iii) the explanation of the likelihood that
materially different amounts would be reported under different conditions or
using different assumptions. The Company’s
-14-
board of
trustees, senior management and audit committee have reviewed and agreed with
the selection, application and disclosure of critical accounting policies and
have consulted with the Company’s legal advisers and independent accountants
with regard to such disclosure.
(42) Since the
date of the filing of the Company’s Annual Report 10-K for the year ended
December 31, 2007, the Company’s auditors and the audit committee of the board
of trustees of the Company (or persons fulfilling the equivalent function) have
not been advised of (i) any significant deficiencies in the design or operation
of internal controls over financial reporting which are reasonably likely to
adversely affect the Company’s ability to record, process, summarize and report
financial reporting or (ii) fraud, whether or not material, that involves
management or other employees who have a significant role in the Company’s
internal controls.
(43) Since the
date of the filing of the Company’s Annual Report on Form 10-K for the year
ended December 31, 2007, except as disclosed in the Disclosure Package and the
Prospectus or the Company’s Quarterly Report on Form 10-Q for the three months
ended March 31, 2008, there have been no significant changes in internal
controls or in other factors that could significantly affect internal controls,
including any corrective actions with regard to significant deficiencies in such
controls.
(44) Neither
Company’s nor any Operating Partnership’s or Subsidiary’s performance of its
respective obligations under the Joint Venture Agreements nor the consummation
of any transactions contemplated thereby nor the fulfillment of the terms
thereof by the Company or any Operating Partnership will conflict with or,
result in a breach or violation of (A) the charter, by-laws, partnership
agreement, operating agreement, limited liability company certificate or
certificate of limited partnership of the Company or any Operating Partnership;
(B) the terms of any material indenture, contract, lease, mortgage, deed of
trust, note agreement, loan agreement or other agreement, obligation, condition,
covenant or instrument to which the Company or such Operating Partnership is a
party or bound or to which its or their property is subject; or (C) any
statute, law, rule, regulation, judgment, order or decree applicable to the
Company or any Operating Partnership of any court, regulatory body,
administrative agency, governmental body, arbitrator or other authority having
jurisdiction over the Company or such Operating Partnership or any of its or
their properties or, result in the creation or imposition of any lien, charge,
claim or encumbrance upon any property or asset of the Company or any Operating
Partnership, except where such conflict, breach, violation, creation or
imposition, as the case may be, wound not have a Material Adverse
Effect.
(45) The form
of certificate used to evidence the Common Shares complies in all material
respects with all applicable statutory requirements, with any applicable
requirements of the Declaration of Trust and Bylaws of the Company and the
requirements of the New York Stock Exchange.
(46) Each of
the Company and the Operating Partnerships has not taken and will not take,
directly or indirectly, any action designed to or that would
-15-
constitute
or that might reasonably be expected to cause or result in the stabilization or
manipulation of the price of any security to facilitate the sale or resale of
the Securities.
(47) Except as
set forth in the Company’s financial statements, each of the Company, the
Operating Partnerships and the Subsidiaries do not have any material liabilities
under the Employee Retirement Income Security Act of 1974, as amended, or
Section 4975 of the Internal Revenue Code of 1986, as amended from time to
time.
(48) Except as
disclosed in the Disclosure Package and the Prospectus, neither the Company nor
any of its Subsidiaries has any outstanding borrowings from, or is a party to
any line of credit, credit agreement or other credit facility or otherwise has a
borrowing relationship with, any bank or other lending institution affiliated
with the Representative, and the Company does not intend to use any of the
proceeds from the sale of the Securities to repay any debt owed to the
Representative or any affiliate of the Representative.
(b) Officer’s
Certificates. Any certificate signed by any officer of the
Company, any general partner of the Operating Partnerships or any of
their subsidiaries delivered to the Underwriters or to counsel for the
Underwriters shall be deemed a representation and warranty by the Company or any
Operating Partnership to the Underwriters as to the matters covered
thereby.
SECTION
2.
Sale and Delivery to
Underwriters; Closing.
(a) Initial
Securities. On the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Company agrees to sell to the Underwriters, and the Underwriters agrees to
purchase from the Company, at a price of $13.76 per share (the “Purchase Price”), the
Initial Securities. Each Underwriter represents and warrants that (a)
it is purchasing the Initial Securities in its capacity as an underwriter and
(b) such number of the Initial Securities will be allocated and delivered
directly to the accounts of investors designated by such Underwriter to whom the
Underwriter has sold such Initial Securities so that the Underwriter will not at
any time have a beneficial ownership interest in more than 9.8% of the
outstanding Common Shares of the Company.
(b)
Option
Securities. In addition, on the basis of the representations
and warranties herein contained and subject to the terms and conditions set
forth herein, the Company hereby grants an option to the Underwriters to
purchase up to 450,000 additional Common Shares at a price per share equal to
the Purchase Price referred to in Section 2(a) above; provided that the
price per share for any Option Securities shall be reduced by an amount per
share equal to any dividends or distributions declared by the Company and
payable on the Initial Securities but not payable on such Option
Securities. The option hereby granted will expire at the close of
business on the 30th day after the date hereof and may be exercised in whole or
in part from time to time only for the purpose of covering over-allotments which
may be made in connection with the offering and distribution of the Initial
Securities upon notice by the Representative to the Company setting forth the
number of Option Securities as to which the Underwriters are then exercising the
option and the time and date of payment and delivery for
-16-
such
Option Securities. Any such time and date of delivery (an “Option Closing Date”)
shall be determined by the Representative, and may be the Closing Date (as
hereinafter defined), but shall not be later than seven full business days after
the exercise of said option, nor in any event prior to the Closing
Date.
(c) Payment. Payment
of the purchase price for, and delivery of certificates for, the Initial
Securities shall be made at the offices of Hunton & Xxxxxxxx LLP, 000 Xxxx
Xxxxxx, Xxx Xxxx, XX 00000-0000 or at such other place as shall be
agreed upon by the Underwriter and the Company, at 9:00 a.m. (New York City
time) on June 30, 2008, unless postponed in accordance with the provisions
of Section 10 of this Agreement, or such other time not later than ten business
days after such date as shall be agreed upon by the Representative and the
Company (such time and date of payment and delivery being herein called the
“Closing
Date”).
In
addition, in the event that any or all of the Option Securities are purchased by
the Underwriters, payment of the purchase price for, and delivery of
certificates for, such Option Securities shall be made at 9:00 a.m. at the
above-mentioned offices, or at such other place as shall be agreed upon by the
Representative and the Company, on each Option Closing Date as specified in the
notice from the Representative to the Company.
(d) Denominations;
Registration. Certificates for the Initial Securities and the
Option Securities, if any, shall be in such denominations and registered in such
names as the Representative may request in writing at least one full business
day before the Closing Date or the relevant Option Closing Date, as the case may
be. The certificates for the Initial Securities and the Option
Securities, if any, will be made available for examination and packaging by the
Underwriters in the City of New York not later than noon (New York time) on the
business day prior to the Closing Date or the relevant Option Closing Date, as
the case may be.
SECTION
3.
Covenants of the Company and
each of the Operating Partnerships. Each of the Company and
the Operating Partnerships, joint and severally, covenants with the Underwriters
as follows:
(a) Compliance with Securities
Regulations and Commission Requests. During the period from
the Initial Sale Time until the later of the Closing Date, any Option Closing
Date or such other date that, in the reasonable opinion of counsel for the
Underwriters the Company is subject to any of the requirements of Rule 430B, the
Company, subject to Section 3(b) of this Agreement, will comply with the
requirements of Rule 430B and will notify the Representative immediately, and
confirm the notice in writing, (i) of the receipt of any comments from the
Commission, (ii) of any request by the Commission for any amendment to the
Registration Statement or any amendment or supplement to the Preliminary
Prospectus or the Prospectus or for additional information, and (iii) of
the issuance by the Commission of any stop order suspending the effectiveness of
the Registration Statement or of any order preventing or suspending the use of
the Preliminary Prospectus, any Issuer Free Writing Prospectus or the Prospectus
or of the suspension of the qualification of the Securities for offering or sale
in any jurisdiction, or of the initiation or threatening of any proceedings for
any of such purposes. The Company will promptly effect the filings necessary
pursuant to Rule 424(b) in the manner and within the time period required by
Rule 424(b) (without reliance on Rule 424(b)(8)) and will
-17-
take such
steps as it deems necessary to ascertain promptly whether the form of prospectus
and prospectus supplement transmitted for filing under Rule 424(b) was received
for filing by the Commission and, in the event that either or both of them was
not, will promptly file such prospectus and/or prospectus
supplement. The Company will make every reasonable effort to prevent
the issuance of any stop order and, if any stop order is issued, to obtain the
lifting thereof at the earliest possible time.
(b) Filing of
Amendments. Prior to the completion of the distribution of the
Securities by the Underwriters, the Company will not use or file any amendment
or supplement to the Registration Statement, the Disclosure Package or the
Prospectus (including any amendment or supplement through incorporation by
reference of any report filed under the 1934 Act), without furnishing to the
Representative for review by the Underwriters a copy of each such proposed
amendment or supplement a reasonable amount of time prior to such proposed
filing or use, as the case may be, and will not file or use any such document
without the consent of the Representative.
(c) Delivery of Registration
Statements. The Company has furnished or will deliver to the
Underwriters and their counsel, without charge, a signed copy of the
Registration Statement as originally filed and of each amendment thereto
(including exhibits filed therewith) and signed copies of all consents and
certificates of experts). The copies of the Registration Statement and each
amendment thereto furnished to the Underwriters are identical to the
electronically transmitted copies thereof filed with the Commission pursuant to
XXXXX, except to the extent permitted by Regulation S-T.
(d) Delivery of
Prospectuses. The Company has delivered or will deliver to the
Underwriters, without charge, as many copies of the Prospectus as the
Underwriters reasonably requested and the Company hereby consents to the use of
such copies for purposes permitted by the 1933 Act. The Company will
furnish to the Underwriters, without charge, during the Prospectus Delivery
Period, such number of copies of the Prospectus (as amended or supplemented) as
the Underwriters may reasonably request. The Prospectus and any
amendments or supplements thereto furnished to the Underwriters will be
identical to the electronically transmitted copies thereof filed with the
Commission pursuant to XXXXX, except to the extent permitted by Regulation
S-T.
(e) Continued Compliance with Securities
Laws. The Company will comply with the 1933 Act and the 1933
Act Regulations so as to permit the completion of the distribution of the
Securities as contemplated in this Agreement, the Disclosure Package and the
Prospectus. If, prior to the completion of the distribution of the Securities by
the Underwriters, any event shall occur or condition shall exist as a result of
which it is necessary, in the opinion of counsel for the Underwriters or for the
Company, to amend the Registration Statement or amend or supplement the
Disclosure Package or the Prospectus in order that the Disclosure Package or the
Prospectus will not include any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein not
misleading in the light of the circumstances existing at the time it is
delivered to a purchaser, or if it shall be necessary, in the opinion of such
counsel, at any such time to amend the Registration Statement or amend or
supplement the Disclosure Package or the Prospectus in order to comply with the
requirements of the 1933 Act or the 1933 Act Regulations, the Company will
promptly prepare and file with
-18-
the
Commission, subject to Section 3(b) hereof, such amendment or supplement as
may be necessary to correct such statement or omission or to make the
Registration Statement or the Disclosure Package or the Prospectus comply with
such requirements, and the Company will furnish to the Underwriters such number
of copies of such amendment or supplement as the Underwriter may reasonably
request. If at any time following issuance of an Issuer Free Writing
Prospectus there occurred or occurs, prior to the completion of the distribution
of the Securities by the Underwriters, an event or development as a result of
which such Issuer Free Writing Prospectus conflicted or would conflict with the
information contained in the Registration Statement or any other registration
statement relating to the Securities or included or would include an untrue
statement of a material fact or omitted or would omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances prevailing at that subsequent time, not misleading, the Company
will promptly notify the Representative and will promptly amend or supplement,
at its own expense, such Issuer Free Writing Prospectus to eliminate or correct
such conflict, untrue statement or omission.
(f) Permitted Free Writing
Prospectuses. The Company agrees that, unless it obtains the
prior written consent of the Representative, it will not make any offer relating
to the Securities that would constitute an Issuer Free Writing Prospectus or
that would otherwise constitute a “free writing prospectus” (as defined in Rule
405 of the 1933 Act); provided
that the prior written consent of the Representative shall be deemed to
have been given in respect of any Free Writing Prospectuses listed in Schedule II
hereto. Any such free writing prospectus consented to by the Representative is
hereinafter referred to as a “Permitted Free Writing
Prospectus.” The Company agrees that (i) it has treated and
will treat, as the case may be, each Permitted Free Writing Prospectus as an
Issuer Free Writing Prospectus, and (ii) has complied and will comply, as the
case may be, with the requirements of Rules 164 and 433 of the 1933 Act
applicable to any Permitted Free Writing Prospectus, including in respect of
timely filing with the Commission, legending and record keeping.
(g) Blue Sky
Qualifications. The Company will use its best efforts, in
cooperation with the Underwriters, to qualify the Securities for offering and
sale under the applicable securities laws of such states and other jurisdictions
(domestic or foreign) as the Underwriters may designate and to maintain such
qualifications in effect for a period of not less than one year from the date of
this Agreement; provided,
however, that the Company shall not be obligated to file any general
consent to service of process or to qualify as a foreign corporation or as a
dealer in securities in any jurisdiction in which it is not so qualified or to
subject itself to taxation in respect of doing business in any jurisdiction in
which it is not otherwise so subject. In each jurisdiction in which
the Securities have been so qualified, the Company will file such statements and
reports as may be required by the laws of such jurisdiction to continue such
qualification in effect for a period of not less than one year from the date of
this Agreement.
(h) Rule 158. The
Company will timely file such reports pursuant to the 1934 Act as are necessary
in order to make generally available to its securityholders as soon as
practicable an earnings statement for the purposes of, and to provide the
benefits contemplated by, the last paragraph of Section 11(a) of the 1933
Act.
-19-
(i) Use of
Proceeds. The Company will use the net proceeds received by it
from the sale of the Securities in the manner specified in the Disclosure
Package and the Prospectus under “Use of Proceeds.”
(j)
Listing. The
Company will use its best efforts to effect the listing of the Securities on the
NYSE.
(k)
Restriction on Sale of
Securities. For a period of 90 days after the date of the
Prospectus Supplement (the “Lock-Up Period”), the
Company will not, directly or indirectly, (1) offer, pledge, sell, or contract
to sell any Common Shares, (2) sell any option or contract to sell any Common
Shares, (3) purchase any option or contract to sell any Common Shares, (4) grant
any option, right or warrant to purchase any Common Shares, (5) enter into any
swap or other agreement that transfers, in whole or in part, the economic
consequence of ownership of any Common Shares whether any such swap or
transaction is to be settled by delivery of shares or other securities, in cash
or otherwise, (6) take any of the foregoing actions with respect to any
securities convertible into or exchangeable or exercisable for or repayable with
Common Shares, (7) file with the Commission a registration statement under the
Act relating to any additional Common Shares or securities convertible into or
exchangeable or exercisable for its Common Shares, or (8) publicly disclose the
intention to take any of the foregoing actions, without the prior written
consent of the Underwriter, except issuances of Common Shares or any securities
convertible into or exchangeable or exercisable for or repayable with Common
Shares (A) in connection with any acquisitions, joint ventures or similar
arrangements, so long as the recipients of those shares agree not to sell or
transfer those shares in a public market transaction during the Lock-Up Period,
(B) upon the exercise of outstanding employee stock options, (C) and options
pursuant to employee benefit plans, (D) pursuant to non-employee director or
trustee stock plans, (E) pursuant to the Company’s dividend reinvestment plan,
or (F) upon conversion of any currently outstanding convertible or exchangeable
securities and other outstanding securities. Notwithstanding the
foregoing, in the event that either (x) during the last 17 days of the
Lock-Up Period, the Company issues an earnings release or (y) prior to the
expiration of such 90-day period, the Company announces that it will release
earnings results during the 16-day period beginning on the last day of such
90-day period, the restrictions described above shall continue to apply until
the expiration of the 18-day period beginning on the date of the earnings
release or the announcement of the material news or the occurrence of the
material event.
(l) Reporting
Requirements. The Company, during the Prospectus Delivery
Period, will file all documents required to be filed with the Commission
pursuant to, and in accordance with, the 1934 Act and the 1934 Regulations
within the time periods required by the 1934 Act and the 1934 Act
Regulations.
(m)
Preparation of
Prospectus. Immediately following the execution of this
Agreement, the Company will, subject to Section 3(b) hereof, prepare the
Prospectus containing the Rule 430B Information and other selling terms of the
Securities, the plan of distribution thereof and such other information as may
be required by the 1933 Act or the 1933 Act Regulations or as the Representative
and the Company may deem appropriate, and will file or transmit for filing with
the Commission, in accordance with Rule 424(b), copies of the
Prospectus.
-20-
(n)
REIT
Qualification. The Company will use its best efforts to cause
the Company to continue to meet the requirements to qualify as a “real estate
investment trust” under the Code for so long as the Company intends to so
qualify.
(o) Transfer
Agent. The Company shall engage and maintain, at its expense,
a registrar and transfer agent for the Common Shares.
(p) Company Not an “Investment
Company.” Each of the Company and the Operating Partnerships
is familiar with the 1940 Act and the rules and regulations thereunder and will
in the future conduct its and each such Operating Partnership’s affairs in such
a manner, and will use its best efforts, to ensure that the Company and each
such Operating Partnership will not be an “investment company” within the
meaning of the 1940 Act and the rules and regulations thereunder.
(q) No Price Stabilization or
Manipulation. The Company will not, and will use its best
efforts to cause its officers, trustees and affiliates not to, and the Operating
Partnerships will not, prior to the completion of the distribution of the
Securities by the Underwriters contemplated by this Agreement, (i) take,
directly or indirectly any action designed to stabilize or manipulate the price
of any security of the Company, or which may cause or result in, or which might
in the future reasonably be expected to cause or result in, the stabilization or
manipulation of the price of any security of the Company, to facilitate the sale
or resale of any of the Securities, (ii) sell, bid for, purchase or pay anyone
any compensation for soliciting purchases of the Securities or (iii) pay or
agree to pay to any person (other than the Underwriters) any compensation for
soliciting any order to purchase any other securities of the
Company.
SECTION
4.
Payment of
Expenses.
(a) Expenses. The
Company will pay all expenses incident to the performance of its obligations
under this Agreement, including (i) the preparation, printing and filing of
the Registration Statement (including financial statements and exhibits) as
originally filed and of each amendment thereto, (ii) the word processing,
printing and delivery to the Underwriters of this Agreement, any Agreement among
Underwriters and such other documents as may be required in connection with the
offering, purchase, sale, issuance and delivery of the Securities,
(iii) the preparation, issuance and delivery of the certificates for the
Securities to the Underwriters, including any stock or other transfer taxes and
any stamp or other duties payable, if any, upon the sale, issuance or delivery
of the Securities to the Underwriters, (iv) the fees and disbursements of
the counsel, accountants and other advisors to the Company, (v) the
qualification of the Securities under securities laws in accordance with the
provisions of Section 3(g) hereof, including filing fees and the reasonable
fees and disbursements of counsel for the Underwriters in connection therewith
and in connection with the preparation of the Blue Sky Survey and any
supplements thereto, (vi) all travel expenses of the Company’s officers and
employees and any other expense of the Company incurred in connection with
attending or hosting meetings with prospective purchasers of the Securities,
(vii) the printing and delivery to the Underwriters of copies of the
Prospectus and any amendments or supplements thereto, (viii) the
preparation, printing and delivery to the Underwriters of copies of the Blue Sky
Survey and any supplements thereto, (ix) the fees and expenses of the
transfer agent and registrar for the
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Securities,
(x) the fees and expenses incurred in connection with the listing of the
Securities on the NYSE, and (xi) the costs and expenses (including without
limitation any damages or other amounts payable in connection with legal or
contractual liability) associated with reforming any contracts for sale of the
Securities made by the Underwriters where such reformation relates to any
inaccuracy or breach of the representation set forth in the fifth paragraph of
Section 1(a)(1) of this Agreement.
(b) Termination of
Agreement. If this Agreement is terminated by the Underwriters
in accordance with the provisions of Section 5 or Section 9(a)(i), the
Company shall reimburse the Underwriters for all of their reasonable
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriters; provided, however, that the
Company shall not be required to reimburse more than $30,000 of the
Underwriters’ out-of-pocket expenses pursuant to this Section 4(b) if the sale
of the Securities provided for herein is not consummated because of a
termination of this Agreement by the Representative that results from any event
after the date of this Agreement but prior to delivery of and payment for the
Securities that has no direct relation to the Company or its business or
properties, including, but not limited to any of the events set forth in Section
9(a)(ii), Section 9(a)(iii) or Section 9(a)(iv) hereof.
SECTION
5.
Conditions of Underwriters’
Obligations. The obligations of the Underwriters hereunder are
subject to the accuracy of the representations and warranties of the Company and
the Operating Partnerships contained in this Agreement or in certificates of any
executive officer of the Company or Lex GP-1 Trust (“Lex GP”), as the
general partner of the Operating Partnerships, or any of the Subsidiaries
delivered pursuant to the provisions hereof, to the performance by the Company
and the Operating Partnerships of their respective covenants and other
obligations hereunder, and to the following further conditions:
(a) No Stop Orders; Filing of
Prospectus. At the Closing Date (or the applicable Option
Closing Date, as the case may be), no stop order suspending the effectiveness of
the Registration Statement shall have been issued under the 1933 Act or
proceedings therefor initiated or, to the knowledge of the Company, threatened
by the Commission, and any request on the part of the Commission for additional
information shall have been complied with to the satisfaction of counsel to the
Underwriters. The Prospectus shall have been filed with the
Commission pursuant to Rule 424(b) within the time period prescribed by such
Rule, and prior to the Closing Date, the Company shall have provided evidence
satisfactory to the Representative of such timely filing and such number of
copies of the Prospectus as the Underwriters shall have reasonably
requested.
(b) No Material Adverse
Change. At the Closing Date (or the applicable Option Closing
Date, as the case may be), there shall not have been, since the date hereof or
since the respective dates as of which information is given in the Prospectus
(exclusive of any amendments or supplements thereto subsequent to the date of
this Agreement), any material adverse change in the condition (financial or
otherwise), earnings, investment portfolio or business affairs or prospects of
the Company, the Operating Partnerships and the Subsidiaries taken as a whole,
whether or not arising in the ordinary course of business.
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(c) Opinions of Counsel for
Company. Paul, Hastings, Xxxxxxxx & Xxxxxx LLP, counsel
for the Company and the Operating Partnerships, shall have furnished to the
Representative, at the request of the Company and the Operating Partnerships,
their written opinion, dated the Closing Date, and addressed to the
Underwriters, addressing the matters set forth on Exhibit B-1 and Exhibit B-2, together
with signed or reproduced copies of such opinion for each of the
Underwriters. Xxxxxxx LLP, Maryland counsel for the Company, shall
have furnished to the Representative, at the request of the Company, their
written opinion, dated the Closing Date, and addressed to the Underwriter,
addressing the matters set forth on Exhibit C, together
with signed or reproduced copies of such opinion for each of the
Underwriters. Paul, Hastings, Xxxxxxxx & Xxxxxx LLP, tax counsel
for the Company and the Operating Partnerships, shall have furnished to the
Representative, at the request of the Company and the Operating Partnerships,
their written tax opinion, dated the Closing Date, and addressed to the
Underwriter, addressing the matters set forth on Exhibit D, together
with signed or reproduced copies of such opinion for each of the
Underwriters.
(d) Opinion of Counsel for
Underwriters. At the Closing Date, the Representative shall
have received an opinion, dated as of the Closing Date, of Hunton & Xxxxxxxx
LLP, counsel for the Underwriters, with respect to the issuance and sale of the
Securities, the Registration Statement, the Preliminary Prospectus, the
Disclosure Package and the Prospectus and such other related matters as the
Representative may reasonably request. In giving such opinion, Hunton
& Xxxxxxxx LLP may rely without investigation, as to all matters arising
under or governed by the laws of the State of Maryland, on the opinion of
Xxxxxxx LLP referred to in Section 5(c) above.
(e) Officers’
Certificate. At the Closing Date, the Representative shall
have received a certificate of the Chief Executive Officer and the Chief
Financial Officer of the Company, dated as of the Closing Date, to the effect
that (i) there has been no material adverse change as described in
Section 5(b) hereof, (ii) the representations and warranties of the
Company and the Operating Partnerships in this Agreement are true and correct
with the same force and effect as though expressly made at and as of the Closing
Date, (iii) the obligations of the Company and the Operating Partnerships
to be performed at or prior to the Closing Date under or pursuant to this
Agreement have been duly performed, (iv) no stop order suspending the
effectiveness of the Registration Statement has been issued and no proceedings
for that purpose have been instituted or are pending or, to their knowledge,
contemplated by the Commission and (v) none of the Registration Statement,
as of the date it first became effective, as of each deemed effective date with
respect to the Underwriters pursuant to Rule 430B(f)(2) of the 1933 Act
Regulations or as of the Closing Date, or the Disclosure Package, as of the
Initial Sale Time, or the Prospectus, as of the date of the Prospectus
Supplement or as of the Closing Date, contained or contains an untrue statement
of a material fact or omitted or omits to state a material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading.
(f) General Partner’s
Certificate. At the Closing Date, the Representative shall
have received a certificate signed by the secretary of Lex GP, in its capacity
as the general partner of each Operating Partnership, dated as of the Closing
Date, to the effect that (i) there has been no material adverse change as
described in Section 5(b) hereof, (ii) the representations and
warranties of the Operating Partnerships in this Agreement are true and
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correct
with the same force and effect as though expressly made at and as of the Closing
Date, and (iii) the obligations of the applicable Operating Partnership to
be performed at or prior to the Closing Date under or pursuant to this Agreement
have been duly performed.
(g) Accountant’s Comfort
Letter. At the time of the execution of this Agreement, the
Representative shall have received from KPMG LLP, a letter, dated the date of
this Agreement and in form and substance satisfactory to the Representative,
containing statements and information of the type ordinarily included in
accountants’ “comfort letters” to underwriters with respect to the financial
statements and certain financial information of the Company contained in the
Registration Statement, the Disclosure Package and the Prospectus.
(h) Bring-down Comfort
Letter. At the Closing Date, the Representative shall have
received from KPMG LLP, a letter, dated as of the Closing Date and in form and
substance satisfactory to the Representative, to the effect that they reaffirm
the statements made in the letter furnished pursuant to subsection (g) of this
Section 5, except that the specified date referred to for the carrying out
of procedures shall be a date not more than two business days prior to the
Closing Date.
(i) Approval of
Listing. At the Closing Date and each Option Closing Date, if
any, the Securities to be purchased by the Underwriters at such time shall have
been approved for listing on the NYSE, subject only to official notice of
issuance.
(j) Lock-up
Agreements. Prior to the date hereof, the Representative shall
have received an agreement substantially in the form of Exhibit A hereto
signed by each officer of the Company listed in Schedule IV
hereto and, prior to the Closing Date, from each trustee of the Company listed
in such schedule.
(k) No
Objection. Prior to the date of this Agreement, FINRA shall
have confirmed in writing that it has no objection with respect to the fairness
and reasonableness of the underwriting terms and arrangements.
(l) Conditions to Purchase of Option
Securities. In the event that the Underwriters exercise their
option provided in Section 2(b) hereof to purchase all or any portion of
the Option Securities on any Option Closing Date that is after the Closing Date,
the obligations of the Underwriters to purchase the applicable Option Securities
shall be subject to the conditions specified in the introductory paragraph of
this Section 5 and to the further condition that, at the applicable Option
Closing Date, the Representative shall have received:
(1) Officers’
Certificate. A certificate, dated such Option Closing Date, to
the effect set forth in, and signed by the Chief Executive Officer and the Chief
Financial Officer of the Company, as specified in Section 5(c) hereof,
except that the references in such certificate to the Closing Date shall be
changed to refer to such Option Closing Date.
(2) General Partner’s
Certificate. A certificate, dated such Option Closing Date, to
the effect set forth in, and signed by the secretary of Lex GP, in its capacity
as the general partner of each Operating Partnership, except that the
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references
in such certificate to the Closing Date shall be changed to refer to such Option
Closing Date.
(3) Opinions of Counsel for
Company. The opinions of (i) Paul, Hastings, Xxxxxxxx
& Xxxxxx LLP and (ii) Xxxxxxx LLP, in form and substance satisfactory
to counsel for the Underwriters, dated such Option Closing Date, relating to the
Option Securities to be purchased on such Option Closing Date and otherwise to
the same effect as the opinions required by Section 5(c)
hereof.
(4) Opinion of Counsel for
Underwriters. The opinion of Hunton & Xxxxxxxx LLP,
counsel for the Underwriters, dated such Option Closing Date, relating to the
Option Securities to be purchased on such Option Closing Date and otherwise to
the same effect as the opinion required by Section 5(d)
hereof.
(5) Bring-down Comfort
Letter. A letter from KPMG LLP, in form and substance
satisfactory to the Representative and dated such Option Closing Date,
substantially in the same form and substance as the letter furnished to the
Representative pursuant to Section 5(h) hereof, except that the “specified
date” in the letter furnished pursuant to this paragraph shall be a date not
more than two business days prior to such Option Closing Date.
(m) Additional
Documents. At the Closing Date and at each Option Closing
Date, counsel for the Underwriters shall have been furnished with such other
documents and opinions as they may reasonably require for the purpose of
enabling them to pass upon the issuance and sale of the Securities as herein
contemplated, or in order to evidence the accuracy of any of the representations
or warranties, or the fulfillment of any of the conditions, contained in this
Agreement; and all proceedings taken by the Company and the Operating
Partnerships in connection with the issuance and sale of the Securities as
herein contemplated and in connection with the other transactions contemplated
by this Agreement shall be satisfactory in form and substance to the
Representative and counsel for the Underwriters.
(n) Termination of
Agreement. If any condition specified in this Section 5
shall not have been fulfilled when and as required to be fulfilled, this
Agreement, or, in the case of any condition to the purchase of Option Securities
on an Option Closing Date which is after the Closing Date, the obligations of
the Underwriters to purchase the relevant Option Securities, may be terminated
by the Representative by notice to the Company at any time on or prior to the
Closing Date or such Option Closing Date, as the case may be, and such
termination shall be without liability of any party to any other party except as
provided in Section 4 hereof and except that Sections 1, 4, 6, 7 and 8
hereof shall survive any such termination and remain in full force and
effect.
SECTION
6.
Indemnification.
(a) Indemnification by the Company and
the Operating Partnership. Each of the Company and the
Operating Partnership, jointly and severally, agrees to indemnify and hold
harmless each Underwriter and each person, if any, who controls any Underwriter
within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act as follows:
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(1) against
any and all loss, liability, claim, damage and expense whatsoever, as incurred,
arising in whole or in part out of (A) any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement (or any
amendment thereto), including the Rule 430B Information, or the omission or
alleged omission therefrom of a material fact required to be stated therein or
necessary to make the statements therein not misleading or arising out of any
untrue statement or alleged untrue statement of a material fact included in the
Preliminary Prospectus (or any amendment or supplement thereto), any Issuer Free
Writing Prospectus, the Disclosure Package or the Prospectus (or any amendment
or supplement thereto), or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading, or (B) any breach
of any representation, warranty or covenant of each of the Company and the
Operating Partnership contained herein;
(2) against
any and all loss, liability, claim, damage and expense whatsoever, as incurred,
to the extent of the aggregate amount paid in settlement of any litigation, or
any investigation or proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever based upon any of (1) above; provided
that (subject to Section 6(d) below) any such settlement is effected with
the written consent of the Company; and
(3) against
any and all expense whatsoever, as incurred (including the fees and
disbursements of counsel chosen by the Representative), reasonably incurred in
investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any of (1) above, to the extent
that any such expense is not paid under (1) or (2) above,
provided, however, that this
indemnity agreement shall not apply to any loss, liability, claim, damage or
expense to the extent arising out of any untrue statement or omission or alleged
untrue statement or omission made in reliance upon and in conformity with
written information furnished to the Company by the Representative expressly for
use in the Registration Statement (or any amendment thereto), or the Preliminary
Prospectus (or any amendment or supplement thereto), in any Issuer Free Writing
Prospectus, the Disclosure Package or the Prospectus (or any amendment or
supplement thereto), which information is set forth in Section 1(a)(1)
hereof. The indemnity agreement set forth in this Section 6(a)
shall be in addition to any liabilities that the Company and each of the
Operating Partnerships may otherwise have.
(b) Indemnification by the
Underwriters. Each Underwriter severally agrees to indemnify
and hold harmless the Company, its trustees, each of its officers who signed the
Registration Statement, the Operating Partnership and the Manager and each
person, if any, who controls the Company, the Operating Partnership and the
Manager within the meaning of Section 15 of the 1933 Act or Section 20
of the 1934 Act against any and all loss, liability, claim, damage and expense
described in the indemnity contained in subsection (a) of this Section 6,
as incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement (or any
amendment thereto), the Preliminary Prospectus (or any amendment or supplement
thereto), any Issuer Free Writing Prospectus, the
-26-
Disclosure
Package or the Prospectus (or any amendment or supplement thereto) in reliance
upon and in conformity with written information furnished to the Company by the
Representative expressly for use in the Registration Statement (or any amendment
thereto), the Preliminary Prospectus (or any amendment or supplement thereto),
any Issuer Free Writing Prospectus, the Disclosure Package or the Prospectus (or
any amendment or supplement thereto), which information is described in
Section 1(a)(1) hereof.
(c) Actions against Parties;
Notification. Promptly after receipt by an indemnified party
under subsection (a) or (b) above of notice of the commencement of any action,
such indemnified party shall, if a claim in respect thereof is to be made
against an indemnifying party under such subsection, notify the indemnifying
party in writing of the commencement thereof; but the omission so to notify such
indemnifying party shall not relieve the indemnifying party from any liability
which it may have to any indemnified party under such subsection except to the
extent it has been materially prejudiced by such failure. In case any
such action shall be brought against any indemnified party and it shall notify
the indemnifying party of the commencement thereof, the indemnifying party shall
be entitled to participate therein and, to the extent that it shall wish,
jointly with any other indemnifying party similarly notified, to assume the
defense thereof, with counsel reasonably satisfactory to such indemnified party
(who shall not, except with the consent of the indemnified party, be counsel to
the indemnifying party), and, after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party under such
subsection for any legal or other expenses, in each case subsequently incurred
by such indemnified party, in connection with the defense thereof other than
reasonable costs of investigation. No indemnifying party shall,
without the written consent of the indemnified party, effect the settlement or
compromise of, or consent to the entry of any judgment with respect to, any
pending or threatened action or claim in respect of which indemnification or
contribution may be sought hereunder (whether or not the indemnified party is an
actual or potential party to such action or claim) unless such settlement,
compromise or judgment (i) includes an unconditional release of the indemnified
party from all liability arising out of such action or claim and (ii) does not
include any statement as to, or an admission of, fault, culpability or a failure
to act, by or on behalf of any indemnified party.
(d) Settlement Without Consent if
Failure to Reimburse. If at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel, such indemnifying party agrees that it shall
be liable for any settlement of the nature contemplated by Section 6(a)(2)
effected without its written consent if (i) such settlement is entered into more
than 45 days after delivery to such indemnifying party of the aforesaid request,
(ii) such indemnifying party shall have received notice of the terms of such
settlement at least 30 days prior to such settlement being entered into and
(iii) such indemnifying party shall not have reimbursed such indemnified party
in accordance with such request prior to the date of such
settlement.
SECTION
7.
Contribution. If
the indemnification provided for in Section 6 hereof is for any reason
unavailable to or insufficient to hold harmless an indemnified party in respect
of any losses, liabilities, claims, damages or expenses referred to therein,
then each indemnifying party shall contribute to the aggregate amount of such
losses, liabilities, claims, damages and expenses incurred by such indemnified
party, as incurred, (i) in such proportion as is appropriate
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to
reflect the relative benefits received by the Company and the Operating
Partnerships, on the one hand, and the Underwriters, on the other hand, from the
offering of the Securities pursuant to this Agreement or (ii) if the allocation
provided by clause (i) is not permitted by applicable law, in such proportion as
is appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the Company and the Operating
Partnerships, on the one hand, and of the Underwriters, on the other hand, in
connection with the inaccuracies, statements or omissions which resulted in such
losses, liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
The
relative benefits received by the Company and the Operating Partnership, on the
one hand, and the Underwriters, on the other hand, in connection with the
offering of the Securities pursuant to this Agreement shall be deemed to be in
the same respective proportions as the total net proceeds from the offering of
the Securities pursuant to this Agreement (before deducting expenses) received
by the Company and the total underwriting discount received by the Underwriters,
in each case as set forth on the cover of the Prospectus, bear to the aggregate
public offering price of the Securities as set forth on such cover.
The
relative fault of the Company and the Operating Partnerships, on the one hand,
and the Underwriters, on the other hand, shall be determined by reference to,
among other things, whether any such untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Company and the Operating Partnerships or by the
Underwriters and the parties’ relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
The
Company, the Operating Partnerships and the Underwriters agree that it would not
be just and equitable if contribution pursuant to this Section 7 were
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to above in this
Section 7. The aggregate amount of losses, liabilities, claims,
damages and expenses incurred by an indemnified party and referred to above in
this Section 7 shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in investigating, preparing or
defending against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever
based upon any such untrue or alleged untrue statement or omission or alleged
omission.
Notwithstanding
the provisions of this Section 7, the Underwriters shall not 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 each such Underwriter has
otherwise been required to pay by reason of any such untrue or alleged untrue
statement or omission or alleged omission.
No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f)
of the 0000 Xxx) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
For
purposes of this Section 7, each person, if any, who controls any
Underwriter within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act
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shall
have the same rights to contribution as such Underwriter, and each trustee of
the Company, each officer of the Company who signed the Registration Statement,
each Operating Partnerships; and each person, if any, who controls the Company
within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act shall have the same rights to contribution as the Company.
SECTION
8.
Representations, Warranties
and Agreements to Survive Delivery. All representations,
warranties and agreements contained in this Agreement or in certificates of
executive officers of the Company or Lex GP, as the general partner of the
Operating Partnerships, or any of the Subsidiaries, shall remain operative and
in full force and effect, regardless of any investigation made by or on behalf
of any Underwriters or controlling person, or by or on behalf of the Company or
the Operating Partnerships and shall survive delivery of the Securities to the
Underwriters.
SECTION
9.
Termination of
Agreement.
(a) Termination;
General. The Representative may terminate this Agreement, by
notice to the Company, at any time on or prior to the Closing Date (and, if any
Option Securities are to be purchased on an Option Closing Date which occurs
after the Closing Date, the Underwriter may terminate its option to purchase
such Option Securities by notice to the Company, at any time on or prior to such
Option Closing Date) (i) if there has been, since the time of execution of
this Agreement or since the respective dates as of which information is given in
the Disclosure Package or the Prospectus, any material adverse change in the
condition (financial or otherwise), earnings, investment portfolio or business
affairs or prospects of the Company, the Operating Partnerships and the
Subsidiaries taken as a whole, whether or not arising in the ordinary course of
business, or (ii) if there has occurred any material adverse change in the
financial markets in the United States or the international financial markets,
any new outbreak of hostilities or escalation of existing hostilities or other
calamity or crisis or any change or development involving a material adverse
change in national or international political, financial or economic conditions,
in each case the effect of which is such as to make it, in the judgment of the
Representative, impracticable or inadvisable to market the Securities or to
enforce contracts for the sale of the Securities, or (iii) if trading in
any securities of the Company has been suspended or materially limited by the
Commission or the NYSE, or if trading generally on the American Stock Exchange
or the NYSE or the Nasdaq Global Market has been suspended or materially
limited, or minimum or maximum prices for trading have been fixed, or maximum
ranges for prices have been required, by any of said exchanges or by such system
or by order of the Commission, FINRA or any other governmental authority, or a
material disruption has occurred in commercial banking or securities settlement
or clearance services in the United States, or (iv) if a banking moratorium
has been declared by Federal, Maryland or New York authorities.
(b) Liabilities. If
this Agreement is terminated pursuant to this Section 9, such termination
shall be without liability of any party to any other party except as provided in
Section 4 hereof, and provided further that Sections 1, 4, 6, 7 and 8
hereof shall survive such termination and remain in full force and
effect.
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SECTION
10.
Default by One or More of
the Underwriters. If one or more of the Underwriters shall
fail at Closing Date or an Option Closing Date to purchase the Securities which
it or they are obligated to purchase under this Agreement (the “Defaulted
Securities”), the Representative shall have the right, within 24 hours
thereafter, to make arrangements for one or more of the non defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Securities in such amounts as may be agreed upon and upon the
terms herein set forth; if, however, the Representatives shall not have
completed such arrangements within such 24 hour period, then:
(a) if the number of Defaulted Securities
does not exceed 10% of the number of Securities to be purchased on such date,
each of the non defaulting Underwriters shall be obligated, severally and not
jointly, to purchase the full amount thereof in the proportions that their
respective underwriting obligations hereunder bear to the underwriting
obligations of all non defaulting Underwriters; or
(b) (if the number of Defaulted Securities
exceeds 10% of the number of Securities to be purchased on such date, this
Agreement or, with respect to any Option Closing Date which occurs after the
Closing Date, the obligation of the Underwriters to purchase and of the Company
and the Selling Stockholders to sell the Option Securities that were to have
been purchased and sold on such Option Closing Date, shall terminate without
liability on the part of any non defaulting Underwriter.
No action taken pursuant to this
Section 10 shall relieve any defaulting Underwriter from liability in respect of
its default.
In the event of any such default which
does not result in a termination of this Agreement or, in the case of an Option
Closing Date which is after the Closing Date, which does not result in a
termination of the obligation of the Underwriters to purchase and the Company
and the Selling Stockholders to sell the relevant Option Securities, as the case
may be, the Representatives shall have the right to postpone Closing Date or the
relevant Option Closing Date, as the case may be, for a period not exceeding
seven days in order to effect any required changes in the Registration
Statement, the General Disclosure Packages or Prospectus or in any other
documents or arrangements. As used herein, the term “Underwriter”
includes any person substituted for an Underwriter under this Section
10.
SECTION
11.
Notices. All
notices and other communications hereunder shall be in writing and shall be
deemed to have been duly given if mailed or transmitted by any standard form of
telecommunication. Notices to the Underwriters shall be directed to
the them c/o Wachovia Capital Markets, LLC, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Equity Syndicate, with a copy to Hunton & Xxxxxxxx, LLP,
000 Xxxx Xxxx Xxxxxx, Xxxxxxxx, Xxxxxxxx 00000,
Attention: Xxxxxx X. XxXxx; notices to the Company and the
Operating Partnerships shall be directed to them c/o Lexington Realty Trust, Xxx
Xxxx Xxxxx, Xxxxx 0000, Xxx Xxxx, XX, Attention: Xxxxxx
Xxxxxxxxx, Esq., General Counsel, with a copy to Paul, Hastings, Xxxxxxxx &
Xxxxxx LLP, 00 Xxxx 00xx Xxxxxx,
Xxx Xxxx, XX 00000, Attention: Xxxx Xxxxxxxxxxx, Esq.
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SECTION
12.
Parties. This
Agreement shall each inure to the benefit of and be binding upon the
Underwriters, the Company and the Operating Partnerships and their respective
successors. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person, firm or corporation, other
than the Underwriters, the Company and the Operating Partnerships and their
respective successors and the controlling persons and officers and trustees
referred to in Sections 6 and 7 and their heirs and legal representatives, any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision herein contained. This Agreement and all conditions
and provisions hereof are intended to be for the sole and exclusive benefit of
the Underwriters and the Company, and the Operating Partnerships and their
respective successors, and said controlling persons and officers and trustees
and their heirs and legal representatives, and for the benefit of no other
person, firm or corporation. No purchaser of Securities from any
Underwriter shall be deemed to be a successor by reason merely of such
purchase.
SECTION
13.
GOVERNING LAW AND
TIME. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SPECIFIED TIMES OF
DAY REFER TO NEW YORK CITY TIME.
SECTION
14.
Effect of
Headings. The Section and Exhibit headings herein
are for convenience only and shall not affect the construction
hereof.
SECTION
15.
Absence of Fiduciary
Relationship. Each of the Company and the Operating Partnerships,
severally and not jointly, acknowledge and agree that:
(a) each of
the Underwriters is acting solely as an underwriter in connection with the
public offering of the Securities and no fiduciary, advisory or agency
relationship between the Company or any of the Operating Partnerships, on the
one hand, and any of the Underwriters, on the other hand, has been or will be
created in respect of any of the transactions contemplated by this Agreement,
irrespective of whether or not any of the Underwriters has advised or is
advising the Company or any of the Operating Partnerships on other matters, and
none of the Underwriters has any obligation to the Company or any of the
Operating Partnerships with respect to the transactions contemplated by this
Agreement except the obligations expressly set forth in this
Agreement;
(b) the
public offering price of the Securities and the price to be paid by the
Underwriters for the Securities set forth in this Agreement were established by
the Company following discussions and arms-length negotiations with the
Representative;
(c) it is
capable of evaluating and understanding, and understands and accepts, the terms,
risks and conditions of the transactions contemplated by this
Agreement;
(d) in
connection with each transaction contemplated by this Agreement and the process
leading to such transactions, each of the Underwriters is and has been acting
-31-
solely as
principal and not as fiduciary, advisor or agent of the Company or any of the
Operating Partnerships or any of their respective affiliates, stockholders (or
other equity holders), creditors or employees or any other party;
(e) none of
the Underwriters has provided any legal, accounting, regulatory or tax advice
with respect to the transactions contemplated by this Agreement and it has
consulted its own legal, accounting, regulatory and tax advisors to the extent
it has deemed appropriate;
(f) it is
aware that the Underwriters and their respective affiliates are engaged in a
broad range of transactions which may involve interests that differ from those
of the Company and the Operating Partnerships and that none of the Underwriters
has any obligation to disclose such interests and transactions to the Company or
any of the Operating Partnerships by virtue of any fiduciary,
advisory or agency relationship or otherwise; and
(g) it
waives, to the fullest extent permitted by law, any claims it may have against
any of the Underwriters for breach of fiduciary duty or alleged breach of
fiduciary duty and agrees that none of the Underwriters shall have any liability
(whether direct or indirect, in contract, tort or otherwise) to it in respect of
such a fiduciary duty claim or to any person asserting a fiduciary duty claim on
its behalf or in right of it or the Company or any shareholders, employees or
creditors of the Company or any partners, employees or creditors of any of the
Operating Partnerships.
[Signature Pages
Follow.]
-32-
If the foregoing is in accordance with
your understanding of our agreement, please sign and return to the Company a
counterpart hereof, whereupon this instrument, along with all counterparts, will
become a binding agreement among the Underwriters, the Company and the Operating
Partnerships in accordance with its terms.
| Very truly yours, | |||
| LEXINGTON REALTY TRUST | |||
| By: | |||
| Name: | Xxxxxx X. Xxxxxxxxx | ||
| Title: | Executive Vice President | ||
| THE LEXINGTON MASTER
LIMITED PARTNERSHIP |
|||
| By: | Lex GP-1 Trust, its General Partner | ||
| By: | |||
| Name: | Xxxxxx X. Xxxxxxxxx | ||
| Title: | Executive Vice President | ||
| LEPERCQ CORPORATE INCOME FUND L.P. | |||
| By: | Lex GP-1 Trust, its General Partner | ||
| By: | |||
| Name: | Xxxxxx X. Xxxxxxxxx | ||
| Title: | Executive Vice President | ||
| LEQERCQ CORPORATE INCOME FUND II, L.P. | |||
| By: | Lex GP-1 Trust, its General Partner | ||
| By: | |||
| Name: | Xxxxxx X. Xxxxxxxxx | ||
| Title: | Executive Vice President | ||
[Signature Page to Underwriting
Agreement]
| NET 3 ACQUISITION L.P. | |||
| By: | Lex GP-1 Trust, its General Partner | ||
| By: | |||
| Name: | Xxxxxx X. Xxxxxxxxx | ||
| Title: | Executive Vice President | ||
[Signature Page to Underwriting
Agreement]
CONFIRMED
AND ACCEPTED, as of the
date first
above written:
WACHOVIA
CAPITAL MARKETS, LLC
By:
WACHOVIA CAPITAL MARKETS, LLC
| By: | |
|
Authorized
Signatory
|
For
itself and as Representative of the Underwriters named in Schedule I
hereto.
Schedule
I
|
Name of
Underwriter
|
Number
of
Initial
Securities
|
|
Wachovia
Capital Markets, LLC
|
2,700,000
|
|
Xxxxx,
Xxxxxxxx & Xxxxx, Inc.
|
300,000
|
|
Total
|
3,000,000
|
Schedule II
Issuer
Free Writing Prospectuses
None.
Schedule III
Oral
Pricing Information
The underwriters orally conveyed the
following information to purchasers at or prior to the Initial Sale
Time:
|
·
|
The
public offering price is $14.00 per
share.
|
|
·
|
The
number of common shares sold in the offering is 3,000,000
shares.
|
|
·
|
Lexington
Realty Trust granted the underwriters an option to purchase up to an
additional 450,000 common shares to cover any
over-allotments.
|
|
·
|
Lexington
Realty Trust expects that the net proceeds from the sale of
3,000,000 common shares will be approximately $41.0 million,
after deducting the underwriting discount and Lexington Realty Trust’s
estimated offering expenses. If the underwriters exercise their
over-allotment option in full, Lexington Realty Trust expects that the net
proceeds will be approximately $47.2
million.
|
|
·
|
The
trade date is June 26, 2008.
|
|
·
|
The
underwriters expect to deliver the shares to purchasers on an accelerated
“T+2” settlement basis. Accordingly, the closing date will be Monday, June
30, 2008.
|
Schedule IV
Trustees
and Executive Officers Required to Execute Lock-Up Agreements
Xxxxxx
Xxxxxxxxx
Xxxxxxxx
Xxxxxx
Xxxxxxxx
Xxxxxxxx
X. Xxxxxx
Xxxxx
Xxxxxx
First
Xxxxxxx
X. Xxxxx
Xxxx X.
Xxxxxxxx
Xxxxx
Xxxxxxxx
Xxxx
Xxxxxxx Xxxxxxx
Xxxxx X.
Xxxxx
E. Xxxxxx
Xxxxxxx
Xxxx X.
Xxxx
Exhibit A
Form
of Lock-Up Agreement
June ___,
2008
Wachovia
Capital Markets, LLC
As
Representative of the several Underwriters
c/o
Wachovia Capital Markets, LLC
000 Xxxx
Xxxxxx
Xxx Xxxx,
Xxx Xxxx 00000
Attention:
Equity Capital Markets
Re: Proposed Public Offering by
Lexington Realty Trust
Ladies
and Gentlemen:
We refer you to the proposed
Underwriting Agreement (the “Underwriting
Agreement”) among Lexington Realty Trust, a Maryland real estate
investment trust (the “Company”), and The
Lexington Master Limited Partnership, Lepercq Corporate Income Fund, L.P., a
Delaware limited partnership, Lepercq Corporate Income Fund II, L.P., a Delaware
limited partnership, and Net 3 Acquisition, L.P., a Delaware limited partnership
(collectively, the “Operating
Partnerships”), and Wachovia Capital Markets, LLC Wachovia Capital
Markets, LLC (“Wachovia”), as
representative of a group of underwriters (the “Underwriters”),
relating to a proposed underwritten public offering of common shares (the
“Common Shares”) of the Company.
In recognition of the benefit that such
an offering will confer upon the undersigned, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
undersigned agrees with the Underwriter that, during a period of 90 days from
the date of the Underwriting Agreement (the “Lock-Up Period”), the
undersigned will not, without the prior written consent of Wachovia, directly or
indirectly, (1) offer, sell, contract to sell, pledge or otherwise dispose of
(or enter into any transaction which is designed to, or might reasonably be
expected to, result in the disposition (whether by actual disposition or
effective economic disposition due to cash settlement or otherwise), or (2)
establish or increase a put equivalent position or establish, liquidate or
decrease a call equivalent position within the meaning of Section 16 of the
Securities Exchange Act of 1934, as amended, and the rules and regulations of
the Securities and Exchange Commission promulgated thereunder with respect to,
any shares of beneficial interest of the Company or any securities convertible
into or exercisable or exchangeable for such shares of beneficial interest, nor
will the undersigned publicly announce an intention to effect any of the
foregoing.
In the event that either during the
last 17 days of the Lock-Up Period, the Company issues an earnings release or
prior to the expiration of the Lock-Up Period, the Company announces that it
will release earnings results during the 16-day period beginning on the last day
of the Lock-Up Period, the restrictions described above shall continue to apply
until the
A-1
expiration
of the 18-day period beginning on the date of the earnings release or the
announcement of the material news or the occurrence of the material event,
unless Wachovia Capital Markets, LLC waive such extension.
If for any reason the Underwriting
Agreement shall be terminated prior to the Closing Date (as defined in the
Underwriting Agreement), the agreement set forth above shall likewise be
terminated. The foregoing restrictions shall not apply to (1) the exercise by
the undersigned of outstanding stock options held by the undersigned, provided
that the common shares received by the undersigned upon any such exercise shall
be subject to the provisions of this agreement during the Lock-Up Period or (2)
securities disposed of privately through bona fide gifts to family
members or to others approved by you, so long as the recipients agree to be
bound by the same restrictions set forth herein during the Lock-Up
Period.
The undersigned hereby further agrees
that, during the Lock-Up Period, the undersigned (1) will not file or
participate in the filing with the Securities and Exchange Commission of any
registration statement, amendment to a registration statement, or circulate or
participate in the circulation or filing of any preliminary or final prospectus
or other disclosure document with respect to any proposed offering or sale of
any shares of beneficial interest of the Company or any securities convertible
into or exercisable or exchangeable for such shares of beneficial interest and
(2) will not exercise any rights the undersigned may have to require
registration with the Securities and Exchange Commission of any proposed
offering or sale of such shares of beneficial interest.
The undersigned hereby represents and
warrants that this letter agreement constitutes the legal, valid and binding
obligation of the undersigned, enforceable in accordance with its
terms. Upon request, the undersigned will execute any additional
documents necessary in connection with enforcement hereof. Any
obligations of the undersigned shall be binding upon the successors and assigns
of the undersigned from the date first above written.
The Company is not a party to or an
intended beneficiary of this letter agreement.
This letter agreement shall be governed
by and construed in accordance with the laws of the State of New
York.
Delivery of a signed copy of this
letter by telecopier or facsimile transmission shall be effective as delivery of
the original hereof.
[Signature page
follows.]
A-2
In witness whereof, the undersigned has
executed and delivered this agreement as of the date first set forth
above.
| Yours very truly, | |||
[Signature page to Lock-Up
Agreement]
A-3
