Exhibit 99.3
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KEYSTONE PROPERTY TRUST
(a Maryland real estate investment trust)
PLACEMENT AGENCY AGREEMENT
Dated: September 4, 2002
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KEYSTONE PROPERTY TRUST
(a Maryland real estate investment trust)
PLACEMENT AGENCY AGREEMENT
September 4, 2002
Xxxxxxx Xxxxx & Co.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
4 World Financial Center
New York, New York 10080
Ladies and Gentlemen:
Keystone Property Trust, a Maryland statutory real estate investment trust
(including its predecessor the "Company"), confirms its agreement with Xxxxxxx
Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated ("Xxxxxxx Xxxxx"
or the "Placement Agent"), to act as exclusive placement agent for the Company
with respect to the issue and sale by the Company to the investors listed on
SCHEDULE I hereto (collectively, the "Funds"), for which Xxxxx & Steers Capital
Management, Inc. acts as investment advisor, of 1,970,000 common shares of
beneficial interest, par value $.001 per share, of the Company (the "Common
Shares"). The 1,970,000 Common Shares are hereinafter called the "Securities."
It is contemplated that the Securities will be issued by the Company to the
Funds at a purchase price per share of $16.415 in an aggregate principal amount
anticipated to be $32,337,550. In acting as the Placement Agent, Xxxxxxx Xxxxx
will seek to place the securities with the Funds on a reasonable best efforts
basis, acting as the Company's agent and not as a principal in the placement of
the Securities. Xxxxxxx Xxxxx may separately engage, at its own expense and with
the prior approval of the Company, sub-agents as it may deem necessary or
appropriate.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-58971) covering the
registration of the Securities under the Securities Act of 1933, as amended (the
"1933 Act"), including the related preliminary prospectus or prospectuses.
Promptly after execution and delivery of this Agreement, the Company will either
(i) prepare and file a prospectus in accordance with the provisions of Rule 430A
("Rule 430A") of the rules and regulations of the Commission under the 1933 Act
(the "1933 Act Regulations"), if applicable, and paragraph (b) of Rule 424
("Rule 424(b)") of the 1933 Act Regulations or (ii) if the Company has elected
to rely upon Rule 434 ("Rule 434") of the 1933 Act Regulations, prepare and file
a term sheet (a "Term Sheet") in accordance with the provisions of Rule 434 and
Rule 424(b). The information included in any such prospectus or in any such Term
Sheet, as the case may be, that was omitted from such
registration statement at the time it became effective but that is deemed to be
part of such registration statement at the time it became effective, if
applicable, (a) pursuant to paragraph (b) of Rule 430A is referred to as "Rule
430A Information" or (b) pursuant to paragraph (d) of Rule 434 is referred to as
"Rule 434 Information." Each prospectus used before such registration statement
became effective, and any prospectus that omitted, as applicable, the Rule 430A
Information or the Rule 434 Information, that was used after such effectiveness
and prior to the execution and delivery of this Agreement, is herein called a
"preliminary prospectus." Such registration statement, including the exhibits
thereto, schedules thereto, if any, and the documents incorporated by reference
therein pursuant to Item 12 of Form S-3 under the 1933 Act, at the time it
became effective and including the Rule 430A Information and the Rule 434
Information, as applicable, is herein called 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 final prospectus, including the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 under the 1933
Act, in the form first furnished to the Funds in connection with the offering of
the Securities is herein called the "Prospectus." If Rule 434 is relied on, the
term "Prospectus" shall refer to the preliminary prospectus together with the
Term Sheet and all references in this Agreement to the date of the Prospectus
shall mean the date of the Term Sheet. For purposes of this Agreement, all
references to the Registration Statement, any preliminary prospectus, the
Prospectus or any Term Sheet 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, any preliminary prospectus 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 the Registration Statement, any preliminary prospectus or the
Prospectus, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement, any preliminary
prospectus 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 the Registration Statement, such
preliminary prospectus or the Prospectus, as the case may be.
The term "Subsidiary" means a corporation or a partnership a majority of
the outstanding voting stock, partnership or membership interests, as the case
may be, of which is owned or controlled, directly or indirectly, by the Company,
Keystone Operating Partnership, L.P., a Delaware limited partnership (the
"Operating Partnership"), or by one or more other Subsidiaries of the Company or
the Operating Partnership.
SECTION 1. Representations and Warranties.
(a) REPRESENTATIONS AND WARRANTIES BY THE COMPANY AND THE OPERATING
PARTNERSHIP. Each of the Company and the Operating Partnership represents and
warrants to the Placement Agent as of the date hereof, as of the Closing Time
referred to in Section 2(b) hereof, and agrees with the Placement Agent, as
follows:
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(i) COMPLIANCE WITH REGISTRATION REQUIREMENTS. The Company meets
the requirements for use of Form S-3 under the 1933 Act. The
Registration Statement, including 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, any Rule
462(b) Registration Statement and any post-effective amendments
thereto (including the filing of the Company's most recent Annual
Report on Form 10-K with the Commission) became effective, at the date
of this Agreement and at the Closing Time, the Registration Statement,
the Rule 462(b) 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. Neither the
Prospectus nor any amendments or supplements thereto at the time the
Prospectus or any such amendment or supplement was issued and at the
Closing Time included or will include an untrue statement of a
material fact or omitted or will 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. If Rule 434
is used, the Company will comply with the requirements of Rule 434.
The representations and warranties in this subsection shall not apply
to statements in or omissions from the Registration Statement or the
Prospectus made in reliance upon and in conformity with information
furnished to the Company in writing by Xxxxxxx Xxxxx expressly for use
in the Registration Statement or Prospectus.
Each 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
Regulations and each preliminary prospectus and the Prospectus
delivered to the Funds in connection with this offering was identical
to the electronically transmitted copies thereof filed with the
Commission pursuant to XXXXX, except to the extent permitted by
Regulation S-T.
If a Rule 462(b) Registration Statement is required in connection
with the offering and sale of the Securities, the Company has complied
or will comply with the requirements of Rule 111 under the 1933 Act
Regulations relating to the payment of filing fees thereof.
(ii) INCORPORATED DOCUMENTS. 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
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together with the other information in the Prospectus, at the time the
Registration Statement became effective, at the time the Prospectus
was issued and at the Closing Time, 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.
(iii) INDEPENDENT ACCOUNTANTS. The accountants who certified the
financial statements and supporting schedules included in the
Registration Statement were independent public accountants as required
by the 1933 Act and the 1933 Act Regulations.
(iv) FINANCIAL STATEMENTS. The financial statements included in
the Registration Statement and the Prospectus, together with the
related schedules and notes, present fairly the financial position of
the Company and its consolidated subsidiaries at the dates indicated
and the statement of operations, stockholders' equity and cash flows
of the Company and its consolidated subsidiaries for the periods
specified; said financial statements have been prepared in conformity
with generally accepted accounting principles ("GAAP") applied on a
consistent basis throughout the periods involved. The supporting
schedules, if any, included in the Registration Statement and
Prospectus present fairly in accordance with GAAP the information
required to be stated therein. The selected financial data and the
summary financial information included in the Registration Statement
and Prospectus present fairly the information shown therein and have
been compiled on a basis consistent with that of the audited financial
statements included in the Registration Statement and Prospectus. In
addition, any pro forma financial information included in the
Registration Statement and the Prospectus present fairly the
information shown therein, have been prepared in accordance with the
Commission's rules and guidelines with respect to pro forma financial
statements and have been properly compiled on the bases described
therein, and the assumptions used in the preparation thereof are
reasonable and the adjustments used therein are appropriate to give
effect to the transactions and circumstances referred to therein. All
historical financial statements and information and all pro forma
financial statements and information relating to the Company or any
entity acquired or to be acquired by the Company required by the 1933
Act, the 1933 Act Regulations, the 1934 Act and the 1934 Act
Regulations are included, or incorporated by reference, in the
Registration Statement and Prospectus.
(v) NO MATERIAL ADVERSE CHANGE IN BUSINESS. Since the respective
dates as of which information is given in the Registration Statement
and the Prospectus, except as otherwise stated therein, (A) there has
been no material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects
of the Company, the Operating Partnership and the Subsidiaries
considered as one enterprise, whether or not arising in the ordinary
course of business (a "Material Adverse Effect"), (B) no casualty loss
or condemnation or other adverse event with respect to any of the
interests held directly or indirectly in any of the real properties or
real property interests, including without limitation, any interest or
participation, direct or indirect, in any mortgage obligation owned,
directly or indirectly, by the Company, the Operating Partnership or
any Subsidiary (the "Properties") has occurred which would be material
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with respect to the Company, the Operating Partnership and the
Subsidiaries considered as one enterprise, (C) there have been no
transactions entered into by the Company, the Operating Partnership or
any Subsidiary, other than those in the ordinary course of business,
which are material with respect to the Company, the Operating
Partnership and the Subsidiaries considered as one enterprise, (D)
except for regular quarterly dividends on the Common Shares in amounts
per share that are consistent with past practice, regular quarterly
distributions on the Company's Series A and Series C Convertible
Preferred Stock (collectively, the "Preferred Stock"), and regular
quarterly distributions on the common and preferred units of the
Operating Partnership (the "Units"), there has been no dividend or
distribution of any kind declared, paid or made by the Company on any
class of its capital stock or any distribution by the Operating
Partnership with respect to its Units, and (E) there has been no
increase in long-term debt or decrease in the capital of the Company,
the Operating Partnership or any Subsidiary.
(vi) GOOD STANDING OF THE COMPANY. The Company has been duly
formed and is validly existing as a statutory real estate investment
trust in good standing under Title 8 of the Corporations and
Associations Article of the Annotated Code of Maryland (the "Maryland
REIT law") and has trust power and authority to own, lease and operate
its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under this
Agreement; and the Company is duly qualified and registered as a
foreign real estate investment trust and is in good standing in each
jurisdiction in which such qualification or registration is required,
whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure so to qualify or to be
in good standing would not result in a Material Adverse Effect.
(vii) GOOD STANDING OF THE OPERATING PARTNERSHIP. The Operating
Partnership is duly organized and validly existing as a limited
partnership in good standing under the laws of the State of Delaware,
with partnership power and authority to own, lease and operate its
properties, to conduct the business in which it is engaged and
proposes to engage as described in the Prospectus and to enter into
and perform its obligations under this Agreement. The Operating
Partnership is duly qualified or registered as a foreign partnership
and is in good standing in each jurisdiction in which such
qualification or registration is required, whether by reason of the
ownership or leasing of property or the conduct of business, except
where the failure to so qualify or register would not result in a
Material Adverse Effect. The Company is the sole general partner of
the Operating Partnership. The Amended and Restated Agreement of
Limited Partnership of the Operating Partnership, dated as of October
13, 1999, as amended through July 19, 2002 (the "Operating Partnership
Agreement"), is in full force and effect.
(viii) GOOD STANDING OF SUBSIDIARIES. The Operating Partnership
is the only Subsidiary that is a "significant subsidiary" of the
Company (as such term is defined in Rule 1-02 of Regulation S-X). The
only Subsidiaries of the Company are (a) the Subsidiaries listed on
Exhibit 21 to the Registration Statement and (b) certain other
Subsidiaries which, considered in the aggregate as a single
Subsidiary, do not constitute a "significant subsidiary" as defined in
Rule 1-02 of Regulation S-X.
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(ix) CAPITALIZATION. As of the date of this Agreement, the
authorized capital stock of the Company consists of 59,200,000 Common
Shares and 5,800,000 preferred shares, par value $.001 per share, of
which 19,167,471 Common Shares, 800,000 shares of Series A Convertible
Preferred Stock, 800,000 shares of Series C Convertible Preferred
Stock and no shares of Series B Convertible Preferred Stock are issued
and outstanding on the date hereof. All issued and outstanding shares
of beneficial interest of the Company have been duly authorized and
validly issued and are fully paid and non-assessable and have been
offered and sold or exchanged by the Company in compliance with all
applicable laws (including, without limitation, federal and state
securities laws); none of the outstanding shares of beneficial
interest of the Company were issued in violation of the preemptive or
other similar rights of any securityholder of the Company.
(x) AUTHORIZATION OF UNITS. All issued and outstanding Units have
been duly authorized and are validly issued, fully paid and
non-assessable and have been offered and sold or exchanged by the
Operating Partnership in compliance with all applicable laws
(including, without limitation, federal and state securities laws).
Except for (i) any outstanding convertible preferred units, (ii) a
third party interest in Keystone Cranbury West, LLC that can be
exchanged for Units (the "Cranbury Interest") and (iii) units that may
be issued pursuant to the option agreement between the Operating
Partnership and Xxxxxxxx Investments, Inc., dated as of December 14,
1998 (the "Xxxxxxxx Agreement"), there are no Units reserved for any
purpose and there are no outstanding securities convertible into or
exchangeable for any Units and no outstanding options, rights
(preemptive or otherwise) or warrants to purchase or to subscribe for
Units.
(xi) AUTHORIZATION AND DESCRIPTION OF SECURITIES. The Securities
to be purchased by the Funds from the Company have been duly
authorized for issuance and sale to the Funds and, when issued and
delivered by the Company against payment of the consideration set
forth herein, will be validly issued, fully paid and non-assessable.
The Common Shares conform to all statements relating thereto contained
in the Prospectus and such description conforms to the rights set
forth in the instruments defining the same; no holder of the
Securities will be subject to personal liability by reason of being
such a holder; and except for the preemptive purchase rights of the
holders of the Company's Series A Preferred Stock (the "Series A
Purchase Rights"), the issuance of the Securities is not subject to
the preemptive or other similar rights of any securityholder of the
Company.
(xii) AUTHORIZATION OF AGREEMENT. This Agreement has been duly
authorized, executed and delivered by the Company and the Operating
Partnership.
(xiii) ABSENCE OF DEFAULTS AND CONFLICTS. None of the Company,
the Operating Partnership or any Subsidiary is in violation of its
declaration of trust, partnership agreement, charter, by-laws or other
governing instrument ("Governing Instruments") or in default in the
performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, deed of
trust, loan or credit agreement, note, lease or other agreement or
instrument to which the Company, the Operating
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Partnership or any Subsidiary is a party or by which it or any of them
may be bound, or to which any of the property or assets of the
Company, the Operating Partnership or any Subsidiary is subject
(collectively, "Agreements and Instruments") except for such
violations or defaults that would not result in a Material Adverse
Effect; and the execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated herein and in
the Prospectus (including the issuance and sale of the Securities and
the use of the proceeds from the sale of the Securities as described
in the Prospectus under the caption "Use of Proceeds") and compliance
by the Company and the Operating Partnership with their respective
obligations hereunder have been duly authorized by all necessary
requisite action and do not and will not, whether with or without the
giving of notice or passage of time or both, conflict with or
constitute a breach of, or default or Repayment Event (as defined
below) under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company, the
Operating Partnership or any Subsidiary pursuant to, the Agreements
and Instruments (except for such conflicts, breaches, defaults or
Repayment Events or liens, charges or encumbrances that would not
result in a Material Adverse Effect), nor will such action result in
any violation of the provisions of the Governing Instruments of the
Company, the Operating Partnership or any Subsidiary or any applicable
law, statute, rule, regulation, judgment, order, writ or decree of any
government, government instrumentality or court, domestic or foreign,
having jurisdiction over the Company, the Operating Partnership or any
Subsidiary or any of their assets, properties or operations, except
for such violations that would not have a Material Adverse Effect. As
used herein, a "Repayment Event" means any event or condition which
gives the holder of any note, debenture or other evidence of
indebtedness (or any person acting on such holder's behalf) the right
to require the repurchase, redemption or repayment of all or a
material portion of such indebtedness by the Company, the Operating
Partnership or any Subsidiary.
(xiv) ABSENCE OF LABOR DISPUTE. No labor dispute with the
employees of the Company, the Operating Partnership or any Subsidiary
exists or, to the knowledge of the Company or the Operating
Partnership, is imminent, and the Company and the Operating
Partnership are not aware of any existing or imminent labor
disturbance by the employees of any of its or any Subsidiary's
principal suppliers, manufacturers, customers or contractors, which,
in either case, may reasonably be expected to result in a Material
Adverse Effect.
(xv) ABSENCE OF PROCEEDINGS. There is no action, suit,
proceeding, inquiry or investigation before or brought by any court or
governmental agency or body, domestic or foreign, now pending, or, to
the knowledge of the Company or the Operating Partnership, threatened,
against or affecting the Company, the Operating Partnership or any
Subsidiary, which is required to be disclosed in the Registration
Statement (other than as disclosed therein), or which might reasonably
be expected to result in a Material Adverse Effect or the consummation
of the transactions contemplated in this Agreement or the performance
by the Company or the Operating Partnership of their respective
obligations hereunder. The aggregate of all pending legal or
governmental proceedings to which the Company, the Operating
Partnership or any Subsidiary is a party or of which any of their
respective properties or assets is the subject which are not described
in the Registration Statement, including ordinary routine litigation
could not reasonably be expected to result in a Material Adverse
Effect.
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(xvi) ACCURACY OF EXHIBITS. There are no contracts or documents
which are required to be described in the Registration Statement, the
Prospectus or the documents incorporated by reference therein or to be
filed as exhibits thereto which have not been so described and filed
as required.
(xvii) REIT QUALIFICATION. Commencing with its taxable year ended
December 31, 1993, the Company has been, and upon the sale of the
Securities, the Company will continue to be organized and operated in
conformity with the requirements for qualification and taxation as a
real estate investment trust (a "REIT") under the Internal Revenue
Code of 1986, as amended (the "Code"), and the Company's proposed
method of operation as described in the Prospectus will enable it to
continue to meet the requirements for qualification and taxation as a
REIT under the Code, and no actions have been taken (or not taken
which are required to be taken) which would cause such qualification
to be lost.
(xviii) INVESTMENT COMPANY ACT. Each of the Company, the
Operating Partnership and any Subsidiary is not, and upon the issuance
and sale of the Securities as herein contemplated and the application
of the net proceeds therefrom as described in the Prospectus will not
be, an "investment company" or an entity "controlled" by an
"investment company" as such terms are defined in the Investment
Company Act of 1940, as amended (the "1940 Act").
(xix) POSSESSION OF INTELLECTUAL PROPERTY. The Company, the
Operating Partnership and any Subsidiary own or possess, or can
acquire on reasonable terms, adequate patents, patent rights,
licenses, inventions, copyrights, know-how (including trade secrets
and other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures), trademarks, service marks, trade
names or other intellectual property (collectively, "Intellectual
Property") necessary to carry on the business now operated by them,
and neither the Company, the Operating Partnership or any Subsidiary
has received any written notice or is otherwise aware of any
infringement of or conflict with asserted rights of others with
respect to any Intellectual Property or of any facts or circumstances
which would render any Intellectual Property invalid or inadequate to
protect the interest of the Company, the Operating Partnership or any
Subsidiary therein, and which infringement or conflict (if the subject
of any unfavorable decision, ruling or finding) or invalidity or
inadequacy, singly or in the aggregate, would result in a Material
Adverse Effect.
(xx) ABSENCE OF FURTHER REQUIREMENTS. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or
agency is necessary or required for the performance by the Company or
the Operating Partnership of their respective obligations hereunder,
in connection with the offering, issuance or sale of the Securities
hereunder or the consummation of the transactions contemplated by this
Agreement, except as such as has already been obtained or as required
under such securities laws or under the rules of the National
Association of Securities Dealers, Inc.
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(xxi) POSSESSION OF LICENSES AND PERMITS. Each of the Company,
the Operating Partnership and the Subsidiaries possess such permits,
licenses, approvals, consents and other authorizations (collectively,
"Governmental Licenses") issued by the appropriate federal, state,
local or foreign regulatory agencies or bodies necessary to conduct
the business now operated by them except where failure to possess any
such Governmental Licenses would not result in a Material Adverse
Event; the Company, the Operating Partnership and their Subsidiaries
are in compliance with the terms and conditions of all such
Governmental Licenses, except where the failure so to comply would
not, singly or in the aggregate, result in a Material Adverse Effect;
all of the Governmental Licenses are valid and in full force and
effect, except when the invalidity of such Governmental Licenses or
the failure of such Governmental Licenses to be in full force and
effect would not result in a Material Adverse Effect; and none of the
Company, the Operating Partnership or any of the Subsidiaries has
received any notice of proceedings relating to the revocation or
modification of any such Governmental Licenses which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or
finding, would result in a Material Adverse Effect.
(xxii) TITLE TO PROPERTY. (A) The Company, the Operating
Partnership, the Subsidiaries or any joint venture partnership in
which the Company, the Operating Partnership or any Subsidiary owns an
interest, as the case may be, have good and marketable fee simple
title or leasehold title, as the case may be, to all real property
owned or leased, as applicable, by the Company, the Operating
Partnership, the Subsidiaries or the applicable joint venture
partnership, respectively, and good title to all other properties
owned by them, and any improvements thereon and all other assets that
are required for the operation of such properties in the manner in
which they currently are operated, free and clear of all liens,
encumbrances, claims, security interests and defects, except such as
are Permitted Encumbrances (as defined below); (B) all material liens,
charges, encumbrances, claims or restrictions on or affecting any of
the Properties and the assets of any of the Company, the Operating
Partnership, the Subsidiaries or any joint venture partnership in
which the Company, the Operating Partnership or any Subsidiary owns an
interest that are required to be disclosed in the Prospectus are
disclosed therein; (C) each of the Properties complies with all
applicable codes, laws and regulations (including, without limitation,
building and zoning codes, laws and regulations and laws relating to
access to the Properties), except if and to the extent disclosed in
the Prospectus and except for such failures to comply that would not
in the aggregate have a Material Adverse Effect; (D) there are in
effect for the assets of each of the Company, the Operating
Partnership, the Subsidiaries or any joint venture partnership in
which the Company, the Operating Partnership or any Subsidiary owns an
interest, insurance policies covering the risks and in amounts that
are commercially reasonable for the types of assets owned by them and
that are consistent with the types and amounts of insurance typically
maintained by prudent owners of properties similar to such assets in
the markets in which such assets are located, and none of the Company,
the Operating Partnership, the Subsidiaries or any joint venture
partnership in which the Company, the Operating Partnership or any
Subsidiary owns an interest has received from any insurance company
notice of any material defects or deficiencies affecting the
insurability of any such assets or any notices of cancellation or
intent to cancel any such policies; and (E) neither the Company nor
the Operating Partnership has any knowledge of any pending or
threatened,
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litigation, moratorium, condemnation proceedings, zoning change, or
other similar proceeding or action that could in any manner affect the
size of, use of, improvements on, construction on, access to or
availability of utilities or other necessary services to the
Properties, except such proceedings or actions that would not have a
Material Adverse Effect. All of the leases and subleases material to
the business of the Company, the Operating Partnership and the
Subsidiaries considered as one enterprise, and under which the
Company, the Operating Partnership or any Subsidiary holds Properties
described in the Prospectus, are in full force and effect, and none of
the Company, the Operating Partnership or any Subsidiary has received
any notice of any material claim of any sort that has been asserted by
anyone adverse to the rights of the Company, the Operating Partnership
or any Subsidiary under any of the leases or subleases mentioned
above, or affecting or questioning the rights of the Company, the
Operating Partnership or any Subsidiary of the continued possession of
the leased or subleased premises under any such lease or sublease.
"Permitted Encumbrance" shall mean (a) liens on Properties securing
any of the Company, the Operating Partnership, any Subsidiary or joint
venture partnership obligations, (b) other liens which are expressly
described in, or which are incorporated by reference into, the
Prospectus and (c) customary easements and encumbrances and other
exceptions to title which do not materially impair the operation,
development or use of the Properties for the purposes intended
therefor as contemplated in the Prospectus.
(xxiii) ENVIRONMENTAL LAWS. Except as described in the
Registration Statement and except as would not, singly or in the
aggregate, result in a Material Adverse Effect, to the knowledge of
the Company, the Operating Partnership and any Subsidiary, as the case
may be (A) none of the Company, the Operating Partnership or any of
the Subsidiaries is in violation of any federal, state, local or
foreign statute, law, rule, regulation, ordinance, code, policy or
rule of common law or any judicial or administrative interpretation
thereof, including any judicial or administrative order, consent,
decree or judgment, relating to pollution or protection of human
health, the environment (including, without limitation, ambient air,
surface water, groundwater, land surface or subsurface strata) or
wildlife, including, without limitation, laws and regulations relating
to the release or threatened release of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances,
petroleum or petroleum products (collectively, "Hazardous Materials")
or to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Hazardous Materials
(collectively, "Environmental Laws"), (B) the Company, the Operating
Partnership and the Subsidiaries have all permits, authorizations and
approvals required under any applicable Environmental Laws and are
each in compliance with their requirements, (C) there are no pending
or threatened administrative, regulatory or judicial actions, suits,
demands, demand letters, claims, liens, notices of noncompliance or
violation, investigation or proceedings relating to any Environmental
Law against the Company, the Operating Partnership or any of the
Subsidiaries and (D) there are no events or circumstances that might
reasonably be expected to form the basis of an order for clean-up or
remediation, or an action, suit or proceeding by any private party or
governmental body or agency, against or affecting the Company, the
Operating Partnership or any of the Subsidiaries relating to Hazardous
Materials or any Environmental Laws.
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(xxiv) TAX RETURNS. The Company, the Operating Partnership and
any Subsidiary, as the case may be, have filed all federal, state,
local and foreign income tax returns which have been required to be
filed (except in any case in which an extension has been granted or
the failure to so file would not result in a Material Adverse Effect)
and has paid all taxes required to be paid and any other assessment,
fine or penalty levied against it, to the extent that any of the
foregoing is due and payable, except, in all cases, for any such tax,
assessment, fine or penalty that is being contested in good faith.
(xxv) ENVIRONMENTAL CONSULTANTS. None of the environmental
consultants which prepared environmental and asbestos inspection
reports with respect to the Properties was employed for such purpose
on a contingent basis or has any substantial interest in the Company,
the Operating Partnership or any Subsidiary and none of them nor any
of their directors, officers or employees is connected with the
Company, the Operating Partnership or any Subsidiary as a promoter,
selling agent, trustee, director, officer or employee.
(xxvi) TITLE INSURANCE. The Company, the Operating Partnership
and any Subsidiary, as the case may be, have obtained, title insurance
on the fee interests and leasehold interests in each of the Properties
in an amount at least equal to the greater of (A) the mortgage
indebtedness on each such Property or (B) the purchase price paid for
each such Property (in the case of any Property having been acquired
by the Operating Partnership via an exchange of Units for ownership
interests in the entity holding such property, the "purchase price" of
such Property being deemed to be the sum of (i) the per-share price of
the Common Shares of the Company on the date such interests were
exchanged for Units multiplied by the number of Units exchanged for
such interests in the entity holding such Property and (ii) the amount
of any assumed indebtedness secured by such Property).
(xxvii) ABSENCE OF REGULATION M VIOLATION. None of the Company,
the Operating Partnership, the Subsidiaries, nor any of their
respective trustees, directors, officers, members or controlling
persons, has taken or will take, directly or indirectly, any action
resulting in a violation of Regulation M under the 1934 Act, or
designed to cause or result in, or that has constituted or that
reasonably might be expected to constitute, the stabilization or
manipulation of the price of any security of the Company to facilitate
the sale or resale of the Securities.
(xxviii) REGISTRATION RIGHTS. There are no persons with
registration rights or other similar rights to have any securities
registered pursuant to the Registration Statement.
(b) OFFICER'S CERTIFICATES. Any certificate signed by any officer of the
Company, or any authorized representative of the Operating Partnership or any of
their subsidiaries delivered to the Placement Agent or to counsel for the
Placement Agent shall be deemed a representation and warranty by such person or
entity, as the case may be, to the Placement Agent as to the matters covered
thereby.
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SECTION 2. PLACEMENT AGENT FEES.
(a) On the basis of the representations and warranties herein contained and
subject to the terms and conditions herein set forth, the Company agrees to pay
Xxxxxxx Xxxxx a fee (the "Fee") of $1,031,172.00 for its services pursuant to
this Agreement.
(b) On the date in which the Funds purchase the Securities from the Company
in accordance with this Agreement (the "Closing Time"), the Company shall pay
the Fee to the Placement Agent in cash by wire transfer of immediately available
funds to a bank account designated by the Placement Agent.
SECTION 3. COVENANTS OF THE COMPANY. Each of the Company and the Operating
Partnership covenants with the Placement Agent as follows:
(a) COMPLIANCE WITH SECURITIES REGULATIONS AND COMMISSION REQUESTS. The
Company will comply with the requirements of Rule 430A or Rule 434, as
applicable, and will notify the Placement Agent immediately, and confirm the
notice in writing, (i) when any post-effective amendment to the Registration
Statement shall become effective, or any supplement to the Prospectus or any
amended Prospectus shall have been filed, (ii) of the receipt of any comments
from the Commission, (iii) of any request by the Commission for any amendment to
the Registration Statement or any amendment or supplement to the Prospectus or
for additional information, and (iv) 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 any preliminary 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) and will take such steps as it deems necessary to ascertain
promptly whether the form of prospectus transmitted for filing under Rule 424(b)
was received for filing by the Commission and, in the event that it was not, it
will promptly file such prospectus. 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 moment.
(b) CONTINUED COMPLIANCE WITH SECURITIES LAWS. The Company will comply with
the 1933 Act and the 1933 Act Regulations and the 1934 Act and the 1934 Act
Regulations so as to permit the completion of the distribution of the Securities
as contemplated in this Agreement and in the Prospectus. If at any time when a
prospectus is required by the 1933 Act to be delivered in connection with sales
of the Securities, any event shall occur or condition shall exist as a result of
which it is necessary, in the opinion of counsel for the Placement Agent or for
the Company, to amend the Registration Statement or amend or supplement the
Prospectus in order that the Prospectus will not include any untrue statements
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 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 the Commission such amendment or supplement as may be necessary to
correct such statement or omission or to make the Registration Statement or the
Prospectus comply with such requirements, and the Company
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will furnish to the Placement Agent such number of copies of such amendment or
supplement as the Placement Agent may reasonably request.
(c) BLUE SKY QUALIFICATIONS. The Company will use its best efforts, in
cooperation with the Placement Agent, to qualify the Securities for offering and
sale under the applicable securities laws of such states and other jurisdictions
(domestic or foreign) as the Placement Agent may designate and to maintain such
qualifications in effect for a period of not less than one year from the later
of the effective date of the Registration Statement and any Rule 462(b)
Registration Statement; 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 effective date of the Registration Statement and any Rule
462(b) Registration Statement.
(d) 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.
(e) REPORTING REQUIREMENTS. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, will
file all documents required to be filed with the Commission pursuant to the 1934
Act within the time periods required by the 1934 Act and the 1934 Act
Regulations.
(f) 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 Prospectus under
"Use of Proceeds."
(g) REIT QUALIFICATION. The Company will use its best efforts to continue
to meet the requirement to qualify as a "real estate investment trust" under the
Code for each of its taxable years for so long as the board of trustees deems it
in the best interests of the Company's shareholders to remain so qualified.
(h) LISTING. The Company will use its best efforts to effect the listing of
the Securities on the New York Stock Exchange.
(i) NO MANIPULATION OF MARKET FOR SECURITIES. Except for the authorization
of actions permitted to be taken by the Placement Agent as contemplated herein
or in the Prospectus, neither the Company nor the Operating Partnership will (a)
take, directly or indirectly, any action designed to cause or to result in, or
that might reasonably be expected to constitute, the stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the Securities, and (b) until the Closing Time (i) sell, bid for or
purchase the Securities or pay any person any compensation for soliciting
purchases of the Securities or (ii) pay or agree to pay to any person any
compensation for soliciting another to purchase any other securities of the
Company.
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(j) RULE 462(b) REGISTRATION STATEMENT. If the Company elects to rely upon
Rule 462(b), the Company shall file a Rule 462(b) Registration Statement with
the Commission in compliance with Rule 462(b) by 10:00 P.M., Washington, D.C.
time, on the date of this Agreement, and the Company shall at the time of filing
either pay to the Commission the filing fee for the Rule 462(b) Registration
Statement or give irrevocable instructions for the payment of such fee pursuant
to Rule 111(b) under the 1933 Act.
SECTION 4. PAYMENT OF EXPENSES.
(a) EXPENSES. The Company will pay or cause to be paid 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 preparation, printing and delivery to the Placement
Agent of this Agreement and such other documents as may be required in
connection with the offering, purchase, sale, issuance or delivery of the
Securities, (iii) the preparation, issuance and delivery of the certificates for
the Securities to the Funds, including any stock or other transfer taxes and any
stamp or other duties payable upon the sale, issuance or delivery of the
Securities to the Funds, (iv) the fees and disbursements of the Company's
counsel, accountants and other advisors, (v) the qualification of the Securities
under securities laws in accordance with the provisions of Section 3(c) hereof,
including filing fees and the reasonable fees and disbursements of counsel for
the Placement Agent in connection therewith and in connection with the
preparation of the Blue Sky Survey and any supplement thereto, (vi) the printing
and delivery to the Placement Agent of copies of each of the preliminary
prospectus, Prospectus and any amendments or supplements thereto, (vii) the fees
and expenses of any transfer agent or registrar for the Securities, and (viii)
the fees and expenses incurred in connection with the listing of the Securities
on the New York Stock Exchange.
(b) TERMINATION OF AGREEMENT. If this Agreement is terminated by the
Placement Agent in accordance with the provisions of Section 5 or Section
9(a)(i) or (iii) (with respect to the first clause only), the Company shall
reimburse the Placement Agent for all of its out-of-pocket expenses, including
the reasonable fees and disbursements of counsel for the Placement Agent.
SECTION 5. CONDITIONS OF PLACEMENT AGENT'S OBLIGATIONS. The obligations of
the Placement Agent hereunder are subject to the accuracy of the representations
and warranties of the Company and the Operating Partnership contained in Section
1 hereof or in certificates of any officer or authorized representative of the
Company or the Operating Partnership delivered pursuant to the provisions
hereof, to the performance by the Company or the Operating Partnership of its
covenants and other obligations hereunder, and to the following further
conditions:
(a) EFFECTIVENESS OF REGISTRATION STATEMENT. The Registration Statement,
including any Rule 462(b) Registration Statement, has become effective and at
Closing Time no stop order suspending the effectiveness of the Registration
Statement shall have been issued under the 1933 Act or proceedings therefor
initiated or threatened by the Commission, and any request on the part of the
Commission for additional information shall have been complied with to the
reasonable satisfaction of counsel to the Placement Agent. A prospectus
containing the Rule 430A Information shall have been filed with the Commission
in accordance with Rule 424(b) (or
14
a post-effective amendment providing such information shall have been filed and
declared effective in accordance with the requirements of Rule 430A) or, if the
Company has elected to rely upon Rule 434, a Term Sheet shall have been filed
with the Commission in accordance with Rule 424(b).
(b) OPINION OF COUNSEL FOR COMPANY. At Closing Time, the Placement Agent
shall have received the favorable opinions, dated as of Closing Time, of
Xxxxxxxx Chance Xxxxxx & Xxxxx LLP, Xxxxx Xxxxxxx LLP, Xxxx, Block, Xxxxxx and
Xxxxx-Xxxxx LLP, each counsel for the Company and the Operating Partnership, in
form and substance satisfactory to counsel for the Placement Agent, to the
effect set forth in EXHIBIT A hereto and to such further effect as counsel to
the Placement Agent may reasonably request.
(c) OPINION OF COUNSEL FOR PLACEMENT AGENT. At Closing Time, the Placement
Agent shall have received the favorable opinion, dated as of Closing Time, of
Xxxxxx Xxxxxx Xxxxx & Xxxx LLP, counsel for the Placement Agent, with respect to
the matters set forth in clauses (i) (with respect to the first sentence only),
(iv) (with respect to the second sentence solely as to preemptive or other
similar rights arising by operation of law or under the charter or by-laws of
the Company), (vi), (vii), (xi) (solely as to the information in the Prospectus
under "Description of Capital Stock--Common Shares"), the first paragraph
following (xviii) and the last paragraph of EXHIBIT A hereto. In giving such
opinion such counsel may rely, as to all matters governed by the laws of
jurisdictions other than the law of the State of New York and the federal law of
the United States, upon the opinions of counsel satisfactory to the Placement
Agent. Such counsel may also state that, insofar as such opinion involves
factual matters, they have relied, to the extent they deem proper, upon
certificates of officers of the Company, the Operating Partnership and the
Subsidiaries and certificates of public officials.
(d) OFFICERS' CERTIFICATES. At Closing Time, there shall not have been,
since the date hereof or since the respective dates as of which information is
given in the Prospectus, any material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or business prospects of the
Company, the Operating Partnership, and the Subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, and the
Placement Agent shall have received a certificate of the President or a Vice
President of the Company, on behalf of the Company and as general partner of the
Operating Partnership, and of the chief financial or chief accounting officer of
the Company, on behalf of the Company and as general partner of the Operating
Partnership, dated as of Closing Time, to the effect that (i) there has been no
such material adverse change, (ii) the representations and warranties in Section
1(a) hereof are true and correct with the same force and effect as though
expressly made at and as of Closing Time, (iii) each of the Company and the
Operating Partnership has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied at or prior to Closing Time,
and (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 are contemplated by the Commission. In addition, at
Closing Time, the Placement Agent shall have received a certificate of the chief
executive officer and chief financial officer of the Company, on behalf of the
Company and as general partner of the Operating Partnership, to the effect as
counsel to the Placement Agent may reasonably request.
15
(e) ACCOUNTANT'S COMFORT LETTER. At Closing Time, the Placement Agent shall
have received from KPMG LLP a letter dated such date, in form and substance
satisfactory to the Placement Agent, containing statements and information of
the type ordinarily included in accountants' "comfort letters" to underwriters
with respect to the financial statements and certain financial information
contained in the Registration Statement and the Prospectus.
(f) APPROVAL OF LISTING. At Closing Time, the Securities shall have been
approved for listing on the New York Stock Exchange, subject only to official
notice of issuance.
(g) ADDITIONAL DOCUMENTS. At Closing Time, counsel for the Placement Agent
shall have been furnished with such documents and opinions as they may 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, herein contained; and all proceedings taken by the Company in
connection with the issuance and sale of the Securities as herein contemplated
shall be reasonably satisfactory in form and substance to the Placement Agent
and counsel for the Placement Agent.
(h) 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 may be terminated by the Placement Agent by notice to the Company at
any time at or prior to Closing Time and such termination shall be without
liability of any party to any other party except as provided in Section 4 and
except that Sections 1, 6, 7, 8 and 12 shall survive any such termination and
remain in full force and effect.
SECTION 6. INDEMNIFICATION.
(a) INDEMNIFICATION OF PLACEMENT AGENT. Each of the Company and the
Operating Partnership agrees, jointly and severally, to indemnify and hold
harmless the Placement Agent and each person, if any, who controls the Placement
Agent within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934
Act, and any director, officer, employee or affiliate thereof as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or any amendment thereto), including the Rule 430A Information and the
Rule 434 Information, if applicable, 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 any
preliminary prospectus 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; PROVIDED,
HOWEVER, that neither the Company nor the Operating Partnership shall be
required under this subsection (a)(i) to indemnify the Placement Agent with
respect to any preliminary prospectus to the extent that any loss, claim,
damage or expense of the Placement Agent results solely from an untrue
statement of a material fact contained in, or the omission of a material
fact from, such preliminary prospectus which untrue statement or omission
16
was corrected in the Prospectus and which corrected Prospectus was
furnished by the Company to the Placement Agent but was not sent or given
by the Placement Agent to the purchaser of the Securities at or prior to
the written confirmation of such sale.
(ii) 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 such untrue statement or omission, or any such
alleged untrue statement or omission; provided any such settlement is
effected with the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred (including
the fees and disbursements of counsel chosen by the Placement Agent),
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
such untrue statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under (i) or (ii)
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
Placement Agent expressly for use in the Registration Statement (or any
amendment thereto), including the Rule 430A Information and the Rule 434
Information, if applicable, or any preliminary prospectus or the Prospectus (or
any amendment or supplement thereto).
(b) INDEMNIFICATION OF COMPANY, DIRECTORS AND OFFICERS. The Placement Agent
agrees to indemnify and hold harmless the Company and the Operating Partnership,
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, and any officer, director,
trustee, employee or affiliate thereof, against any and all loss, liability,
claim, damage and expense described in the indemnity contained in subsection (a)
of this Section, 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), including the Rule 430A Information and
the Rule 434 Information, if applicable, or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Company by the Placement
Agent expressly for use in the Registration Statement (or any amendment thereto)
or such preliminary prospectus or the Prospectus (or any amendment or supplement
thereto).
(c) ACTIONS AGAINST PARTIES; NOTIFICATION. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the
17
case of parties indemnified pursuant to Section 6(a) above, counsel to the
indemnified parties shall be selected by the Placement Agent, and, in the case
of parties indemnified pursuant to Section 6(b) above, counsel to the
indemnified parties shall be selected by the Company. An indemnifying party may
participate at its own expense in the defense of any such action; provided,
however, that counsel to the indemnifying party shall not (except with the
consent of the indemnified party) also be counsel to the indemnified party. In
no event shall the indemnifying parties be liable for fees and expenses of more
than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 or Section
7 hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.
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 to reflect the relative benefits received by the Company and the
Operating Partnership on the one hand and the Placement Agent 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 Partnership on the one hand and of the Placement Agent on the other
hand in connection with the 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 Placement Agent 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 bear to the Fee received by the Placement Agent.
The relative fault of the Company and the Operating Partnership on the one
hand and the Placement Agent 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 or the Operating Partnership or by the
Placement Agent and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
18
The Company, the Operating Partnership and the Placement Agent 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 Placement Agent shall
not be required to contribute any amount in excess of the amount by which the
total price of the Common Shares placed by it exceeds the amount of any damages
which the Placement Agent 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 1933 Act) 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 the
Placement Agent 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 Placement
Agent, and each trustee of the Company, each officer of the Company who signed
the Registration Statement, 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. For purposes of this
Section 7, the Company and the Operating Partnership shall be deemed one party,
jointly and severally liable for any obligations hereunder.
SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY.
All representations, warranties and agreements contained in this Agreement or in
certificates of officers of the Company or the Operating Partnership submitted
pursuant hereto, shall remain operative and in full force and effect, regardless
of any investigation made by or on behalf of the Placement Agent or controlling
person, or by or on behalf of the Company or the Operating Partnership, and
shall survive delivery of the Securities to the Funds.
SECTION 9. TERMINATION OF AGREEMENT.
(a) TERMINATION; GENERAL. The Placement Agent may terminate this Agreement,
by notice to the Company, at any time at or prior to Closing Time (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 Prospectus, any material adverse
change in the condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Company, the Operating Partnership and any
of the Subsidiaries considered as one enterprise, 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, any outbreak of
hostilities or escalation thereof or other calamity or
19
crisis or any change or development involving a prospective 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 Placement Agent,
impracticable or inadvisable to place the Securities with the Funds, or (iii) if
trading in any securities of the Company has been suspended or materially
limited by the Commission or the New York Stock Exchange, or if trading
generally on the American Stock Exchange or the New York Stock Exchange or in
the Nasdaq National 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, the National Association of Securities Dealers, Inc. 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 either Federal or New York
authorities.
(b) LIABILITIES. If this Agreement is terminated pursuant to this Section,
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, 6,
7, 8 and 12 shall survive such termination and remain in full force and effect.
SECTION 10. 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
Placement Agent shall be directed to it at 0 Xxxxx Xxxxxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, xxxxxxxxx of Xxxx X. Xxxx XXX; notices to the Company
and the Operating Partnership shall be directed to it at 000 Xxxx Xxxxx
Xxxxxxxxx Xxxxxx, Xxxxx 000, Xxxx Xxxxxxxxxxxx, XX 00000, attention of
General Counsel.
SECTION 11. PARTIES. This Agreement shall each inure to the benefit of and
be binding upon the Placement Agent, the Company and the Operating Partnership
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 Placement Agent, the Company and the Operating
Partnership and their respective successors and the controlling persons and
officers and directors 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 Placement Agent and the Company and their respective
successors, and said controlling persons and officers and directors and their
heirs and legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Securities from the Placement Agent shall be deemed
to be a successor by reason merely of such purchase.
SECTION 12. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED IN SAID STATE. UNLESS OTHERWISE EXPLICITLY
PROVIDED, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 13. EFFECT OF HEADINGS. The Article and Section headings herein and
the Table of Contents are for convenience only and shall not affect the
construction hereof.
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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 Placement Agent, the Company and the Operating Partnership in accordance
with its terms.
Very truly yours,
KEYSTONE PROPERTY TRUST
By: /s/ XXXX X. XXXXX
-------------------------------------
Name: Xxxx X. Xxxxx
Title: Senior Vice President and Secretary
KEYSTONE OPERATING PARTNERSHIP, L.P.
By: Keystone Property Trust, its general partner
By: /s/ XXXX X. XXXXX
--------------------------------------
Name: Xxxx X. Xxxxx
Title: Senior Vice President and Secretary
CONFIRMED AND ACCEPTED,
as of the date first above written:
XXXXXXX XXXXX & CO.
XXXXXXX LYNCH, XXXXXX, XXXXXX & XXXXX
INCORPORATED
By: /s/ XXXX X. CASE III
-------------------------------
Authorized Signatory
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SCHEDULE I
INVESTORS
Berkeley Regional Insurance Company
Xxxxx & Steers Equity Income Fund, Inc.
Xxxxx & Steers Special Equity Fund, Inc.
New York State Teachers' Retirement System
Xxxxx & Steers Total Return Realty Fund, Inc.
Xxxxx & Steers Advantage Income Realty Fund, Inc.
Xxxxx & Steers Quality Income Realty Fund, Inc.
Xxxxx & Steers Premium Income Realty Fund, Inc.
Signet Star Reinsurance Company
United Mine Workers of America 1974 Pension Trust
Admiral Insurance Company
EXHIBIT A
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO SECTION 5(b)
(i) The Company has been duly organized and is validly existing as a
statutory real estate investment trust under Maryland REIT Law and is in good
standing with the State Department of Assessment and Taxation of Maryland. The
Company has the trust power and authority to own, lease and operate its
properties and to conduct its business as described in the Prospectus and the
Company's declaration of trust and to enter into and perform its obligations
under the Placement Agency Agreement and the Purchase Agreement, and is duly
qualified or registered as a foreign real estate investment trust to transact
business and is in good standing in each jurisdiction identified in SCHEDULE 1
to our opinion.
(ii) All of the outstanding 19,167,471 common shares of beneficial interest
of the Company, 800,000 shares of Series A convertible preferred stock and
800,000 shares of Series C convertible preferred stock have been duly
authorized; all such issued and outstanding shares of beneficial interest of the
Company are validly issued, fully paid and non-assessable and conform, in all
material respects, to the description thereof contained in the Prospectus; to
our knowledge, no shares of beneficial interest of the Company are reserved for
any purpose except as described in the Prospectus and for common shares of
beneficial interest reserved for issuance in connection with the (i) conversion
of the Preferred Stock, (ii) the conversion or exchange of Units and (iii) the
exercise of Options issued under the Plans. To our knowledge and except for the
Company's outstanding series of Preferred Stock, the Units or Options issued
under the Plans, there are no outstanding securities convertible into or
exchangeable for any shares of beneficial interest of the Company and no
outstanding preemptive or other similar rights (except for the Common Shares
Purchase Rights, if any, and the Series A Purchase Rights) to purchase or
subscribe for such shares of beneficial interest or any other securities of the
Company arising under Maryland REIT Law or under the declaration of trust or
by-laws of the Company or any contracts to which the Company is a party of which
we are aware.
(iii) All of the outstanding 5,811,359 common units, 800,000 Series A
Convertible Preferred Units, 300,000 Series B Convertible Preferred Units,
1,664,965 Series C Convertible Preferred Units, 450,700 Series D Convertible
Preferred Units and 800,000 Series F Convertible Preferred Units have been duly
authorized by the Operating Partnership and, assuming that the holders of Units,
as limited partners of the Operating Partnership, do not participate in the
control of the business of the Operating Partnership, the Units represent valid
and, subject to the qualifications set forth herein, fully paid and
nonassessable limited partner interests in the Operating Partnership as to which
the limited partners holding Units, in their capacity as limited partners of the
Operating Partnership, have no liability in excess of their obligations to make
contributions to the Operating Partnership, their obligations to make other
payments provided for in the Operating Partnership Agreement and their share of
the Operating Partnership's assets and undistributed profits (subject to the
obligation of a limited partner of the Operating Partnership to repay any funds
wrongfully distributed to it). To our knowledge, except as described in the
Prospectus and except for common units exchangeable or convertible for preferred
units and the Cranbury Interest, no Units are reserved for any purpose, there
are no outstanding securities convertible into or exchangeable for any Units and
there are no preemptive or other similar rights
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purchase or subscribe for Units or any other securities of the Operating
Partnership arising under the DRULPA (as defined below) or under the Operating
Partnership Agreement or any contracts to which the Operating Partnership is a
party of which we are aware.
(iv) The Securities to be purchased by the Funds from the Company have been
duly authorized for issuance and sale to the Funds, and when issued and
delivered by the Company pursuant to the Purchase Agreement against payment of
consideration, will be validly issued and, subject to the qualifications set
forth herein, fully paid and nonassessable; except for the preemptive purchase
rights under the Subscription Agreement, dated July 7, 1998 (the "Common Shares
Purchase Rights"), if any, and the Series A Purchase Rights, the issuance and
sale of the Securities by the Company is not subject to any preemptive or other
similar rights to purchase or subscribe for shares of beneficial interest of the
Company arising under Maryland REIT Law, the declaration of trust and by-laws of
the Company or any contract to which the Company is a party of which we are
aware.
(v) The Operating Partnership has been duly organized and is validly
existing as a limited partnership in good standing under the laws of the State
of Delaware and has the requisite power and authority to own, lease and operate
its properties and to conduct the business in which it is engaged as described
in the Operating Partnership Agreement and the Prospectus and is duly qualified
or registered as a foreign limited partnership to transact business and is in
good standing in each jurisdiction listed in SCHEDULE 2 to our opinion.
(vi) The execution and delivery of the Placement Agency Agreement have been
duly authorized by all necessary action of the Company and the Operating
Partnership, and the Placement Agency Agreement has been duly executed and
delivered by the Company and the Operating Partnership.
(vii) The Registration Statement, at the time that it became effective, and
the Prospectus, as of its date and as of the date hereof (in each case, other
than documents incorporated by reference therein and the financial statements,
supporting schedules and other financial data included or incorporated by
reference therein or omitted therefrom and for statistical information derived
from such financial statements, supporting schedules or other financial data, as
to which no opinion is rendered), complied as to form, in all material respects,
with the applicable requirements of the Securities Act and the Regulations.
(viii) The documents incorporated by reference in the Prospectus (other
than the financial statements, supporting schedules and other financial data
included or incorporated by reference therein or omitted therefrom and for
statistical information derived from such financial statements, supporting
schedules or other financial data, as to which no opinion is rendered), when
they became effective or were filed with the Commission, as the case may be,
complied as to form, in all material respects, with the requirements of the 1933
Act, the Regulations, the Securities and Exchange Act of 1934, as amended, and
the rules and regulations of the Commission thereunder, as applicable.
(ix) The form of certificate used to evidence the common shares of
beneficial interest of the Company complies, in all material respects, with all
applicable Maryland REIT Law
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requirements, with any applicable requirements of the declaration of trust and
by-laws of the Company and the requirements of the New York Stock Exchange.
(x) To our knowledge and except as described or incorporated by reference
in the Prospectus, there is not pending or threatened any action, suit,
proceeding, inquiry or investigation, to which the Company, the Operating
Partnership or any Subsidiary is a party, or to which the property of the
Company, the Operating Partnership or any Subsidiary is subject, before or
brought by any court or governmental agency or body, domestic or foreign, which
might reasonably be expected to result in a Material Adverse Effect or to affect
the consummation of the transactions contemplated in the Placement Agency
Agreement or the performance by the Company or the Operating Partnership of
their respective obligations thereunder.
(xi) The information in the Base Prospectus under "Description of Shares of
Beneficial Interest--Common Shares," "Description of Shares of Beneficial
Interest--Preferred Shares," and "Certain Federal Income Tax Considerations" to
the extent that it constitutes matters of law, summaries of legal matters, the
Company's declaration of trust and by-laws, legal proceedings or legal
conclusions, has been reviewed by us and is correct in all material respects.
(xii) To our knowledge, there are no Maryland, New York, DRULPA or U.S.
federal securities statutes or regulations that are required to be described in
the Prospectus that are not described as required.
(xiii) Commencing with its taxable year ended December 31, 1993, the
Company was organized and has been operated in conformity with the requirements
for qualification as a real estate investment trust under the Internal Revenue
Code of 1986, as amended (the "Code") and the proposed method of operation of
the Company and the Operating Partnership, as described in the Prospectus and as
represented by the Company and the Operating Partnership, will permit the
Company to continue to so qualify.
(xiv) All descriptions in the Registration Statement of contracts and other
documents which are filed as exhibits to the 10-K, to the Quarterly Reports on
Form 10-Q filed with the Commission on May 15, 2002 and August 14, 2002 (the
"10-Qs"), and to the Current Report on Form 8-K of the Company filed with the
Commission on March 5, 2002 (the "8-Ks") to which the Company, the Operating
Partnership or any Subsidiary is a party are accurate in all material respects.
To our knowledge, there are no franchises, contracts, indentures, mortgages,
loan agreements, notes, leases or other instruments required to be described or
referred to therein or filed or incorporated by reference as exhibits thereto
that were not so filed, incorporated by reference or described as required. To
our knowledge, (i) neither the Company nor the Operating Partnership is in
violation of its Governing Instruments and (ii) except that the Company did not
provide a notice in connection with the Common Shares Purchase Rights, if any,
no default by the Company or the Operating Partnership exists in the due
performance or observance of any material obligation, agreement, covenant or
condition contained in any agreement filed as an exhibit to the 10-K, the 10-Qs,
or the 8-Ks, except for such defaults that would not result in a Material
Adverse Effect.
A-3
(xv) No filing with, or authorization, approval, consent, license, order,
registration, qualification or decree of, any U.S. federal, Maryland, Delaware
or New York State court or governmental authority or agency, domestic or foreign
(other than under the Securities Act and the Regulations, which have been
obtained, or as may be required under the securities or blue sky laws of the
various states or the rules and regulations of the NASD, as to which we express
no opinion) is necessary or required in connection with the due authorization,
execution and delivery of the Placement Agency Agreement or for the offering,
issuance, sale or delivery of the Securities.
(xvi) The execution, delivery and performance of the Placement Agency
Agreement by the Company and the Operating Partnership and the consummation of
the transactions contemplated in the Placement Agency Agreement and in the
Prospectus (including the issuance and sale of the Securities and the use of the
proceeds from the sale of the Securities as described in the Prospectus under
the caption "Use of Proceeds") and compliance by the Company and the Operating
Partnership with their respective obligations under the Placement Agency
Agreement does not and will not (i) except that the Company did not provide a
notice in connection with the Common Shares Purchase Rights, if any, whether
with or without the giving of notice or lapse of time or both, conflict with or
constitute a breach of, or default or Repayment Event under, or result in the
creation or imposition of any material lien, charge or encumbrance upon any
material property or assets of the Company or the Operating Partnership pursuant
to any contract listed as an exhibit to the 10-K, the 10-Qs or the 8-Ks to which
the Company or the Operating Partnership is a party or by which it or any of
them may be bound or to which any of the property or assets of the Company or
the Operating Partnership is subject, (ii) result in any violation of the
provisions of the Governing Instruments of the Company or the Operating
Partnership, or (iii) result in any violation of any applicable Maryland, New
York, DRULPA or U.S. federal securities law, statute, rule, regulation,
judgement, order, writ or decree, known to us, of any Maryland, Delaware, New
York or U.S. federal government, government instrumentality or court, domestic
or foreign, having jurisdiction over the Company or the Operating Partnership or
any of their respective assets or properties, except in the case of clauses (i)
and (iii) above, for such violations, conflicts, breaches or defaults or liens,
charges, encumbrances or Repayment Events that would not result in a Material
Adverse Effect.
(xvii) To our knowledge, there are no persons with registration rights (or
other similar rights) to have any securities of the Company registered pursuant
to the Registration Statement or otherwise registered by the Company under the
Securities Act in connection with the issuance and sale of the Securities.
(xviii) Neither the Company nor the Operating Partnership is an "investment
company" or an entity "controlled" by an "investment company," as such terms are
defined in the 1940 Act.
In addition, we have participated in the preparation of the Registration
Statement and the Prospectus and participated in discussions with certain
officers, trustees and employees of the Company, representatives of KPMG LLP,
the independent accountants who examined the interim financial statements of the
Company included or incorporated by reference in the Registration Statement and
the Prospectus, and you and your representatives and we have reviewed certain
trust and partnership records and documents. While we have not independently
verified and are not passing upon, and do not assume any responsibility for, the
accuracy,
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completeness or fairness of the information contained in the Registration
Statement and the Prospectus (including any of the documents incorporated by
reference therein except as set forth in opinion (xi) above), on the basis of
such participation and review, nothing has come to our attention that would lead
us to believe that the Registration Statement (except for financial statements,
supporting schedules and other financial data included or incorporated by
reference therein or omitted therefrom and for statistical information derived
from such financial statements, supporting schedules or other financial data, as
to which we do not express any belief), at the time such Registration Statement
became effective (including the filing of the Company's Annual Report on Form
10-K for the year ended December 31, 2001 with the Commission), contained an
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not misleading
or that the Prospectus (except for financial statements, supporting schedules
and other financial data included or incorporated by reference therein or
omitted therefrom and for statistical information derived from such financial
statements, supporting schedules or other financial data, as to which we do not
express any belief), at the time the Prospectus was issued, or at the Closing
Time, included or includes 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.
The opinions set forth in this letter relate only to the federal securities
laws of the United States, and the laws of the State of New York, the Maryland
REIT Law and the Revised Uniform Limited Partnership Act of Delaware ("DRULPA").
With respect to matters concerning the DRULPA involved in the opinions set forth
above, we draw to your attention that the members of our firm are not admitted
to practice law in the State of Delaware. To the extent that any opinions stated
herein relate to the laws of the State of Maryland, with your permission and
without independent investigation, we have relied upon the opinion of Xxxxx
Xxxxxxx LLP, dated the date hereof, a copy of which has been delivered to you.
Our opinion, to the extent based upon such reliance, is limited by the
qualifications, assumptions and conditions set forth in such opinion in addition
to those set forth herein. We express no opinion (A) as to the enforceability of
forum selection clauses in the federal courts or (B) with respect to the
requirements of, or compliance with, any state securities or blue sky or real
estate syndication laws.
We have been informed by the Staff of the Commission that the Registration
Statement is effective under the Securities Act and, to our knowledge, no stop
order suspending the effectiveness of the Registration Statement has been issued
under the Securities Act or proceedings therefor initiated or threatened by the
Commission.
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