Exhibit 10.1
PURCHASE AGREEMENT
This Purchase Agreement (this "Agreement"), dated as of February 17,
2004, is by and among BNP Residential Properties Inc., a Maryland corporation
(the "Seller"), each Purchaser listed under the heading "Name of Direct
Purchaser" on Schedule A (each, a "Direct Purchaser") and each Investment
Adviser listed under the heading "Investment Advisers" on the signature pages
hereto (each, an "Investment Adviser") who are entering into this Agreement on
behalf of themselves (as to paragraph 4 of this Agreement) and those Purchasers
which are a fund or individual or other investment advisory client of such
Investment Adviser listed under their respective names on Schedule A (each, a
"Client"). Each of the Direct Purchasers and Clients are referred to herein as
individually, a "Purchaser" and collectively, the "Purchasers."
WHEREAS, the Purchasers desire to purchase from the Seller, and the
Seller desires to issue and sell to the Purchasers, in the aggregate
1,175,519.00 shares of common stock, par value $0.01 per share, of the Seller
(the "Shares"), with the number of Shares acquired by each Purchaser set forth
on Schedule A.
NOW, THEREFORE, in consideration of the mutual promises herein
contained, the parties hereto agree as follows:
1. Purchase and Sale. Subject to the terms and conditions hereof, each
Purchaser hereby agrees to purchase from the Seller, and the Seller agrees to
issue and sell to the Purchasers, the Shares at a price per share of $11.75 for
an aggregate purchase amount of $13,812,348.25 (the "Purchase Price"), with the
number of Shares to be acquired by each Purchaser as set forth on Schedule A.
2. Representations and Warranties of Purchaser. Each Purchaser
represents and warrants with respect to itself that:
(a) Due Authorization. Such Purchaser is duly authorized to purchase
the Shares. This Agreement has been duly authorized, executed and
delivered by such Purchaser and constitutes a legal, valid and binding
agreement of such Purchaser, enforceable against such Purchaser in
accordance with its terms except as may be limited by (i) the effect of
bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to or affecting the rights or remedies of creditors or
(ii) the effect of general principles of equity, whether enforcement is
considered in a proceeding in equity or at law and the discretion of
the court before which any proceeding therefor may be brought.
(b) Information. Such Purchaser has received publicly available
information, including quarterly and annual reports and information,
documents and other reports with respect to the Company filed with the
Securities and Exchange Commission (the "SEC") pursuant to the
Securities and Exchange Act of 1934 as amended (the "Exchange Act"),
furnished to such Purchaser or otherwise publicly available (the
"Information").
(c) Ownership of Shares of Common Stock. As of the date hereof and
after giving effect to the issuance and sale of the Shares pursuant to
this Agreement, such Purchaser, together with its respective
subsidiaries and affiliates, will beneficially own
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(as defined under Section 13(d) of the Exchange Act) less than 5% of
the issued and outstanding shares of common stock of the Company.
(d) Purchaser Knowledge and Status. Such Purchaser is an "accredited
investor" (as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation
D under the Act (as defined below)) and has such knowledge and
experience in financial and business matters as to be capable of
evaluating the merits and risks of its investment in the Shares, and it
and any accounts for which it is acting are each able to bear the
economic risk of such Purchaser's or its investment. Such Purchaser
understands that the Shares are "restricted securities" and have not
been registered under the Act and is acquiring the number of Shares
provided herein in the ordinary course of its business and for its own
account for investment only, has no present intention of distributing
any of such Shares and has no arrangement or understanding with any
other persons regarding the distribution of such Shares (this
representation and warranty not limiting such Purchaser's right to sell
Shares pursuant to the Registration Statement or otherwise). No person
is authorized to make any representation in connection with the
placement and sale of the Shares other than as set forth herein, and no
person is authorized to provide any information that is inconsistent to
that in the Information. Such Purchaser acknowledges that it has not
received or relied on any such representations or information.
3. Representations and Warranties of Seller. The Seller represents and
warrants that:
(a) As of the date of Closing and after giving effect to sale of the
Shares pursuant to this Agreement, the Seller will meet the
requirements for use of Form S-3 under the Securities Act of 1933, as
amended (the "Act"). Any reference in this Agreement to the Information
shall be deemed to refer to and include the documents incorporated by
reference therein as of the date hereof or the date of the Information,
as the case may be.
(b) Since the date as of which information is given in the Information,
except as otherwise stated therein, (A) there has been no material
adverse change or any development involving a prospective material
adverse change in or affecting the condition, financial or otherwise,
or in the earnings, business affairs or business prospects of the
Seller and the subsidiaries of the Seller, if any (the "Subsidiaries")
considered as one enterprise, whether or not arising in the ordinary
course of business, (B) there have been no transactions entered into by
the Seller or any of its Subsidiaries, other than those in the ordinary
course of business, which are material with respect to the Seller and
its Subsidiaries considered as one enterprise, and (C) other than
regular quarterly dividends, there has been no dividend or distribution
of any kind declared, paid or made by the Seller on any class of its
shares of common stock.
(c) The Seller has been duly incorporated and is validly existing in
good standing under the laws of the State of Maryland. Each of the
Subsidiaries of the Seller has been duly organized and is validly
existing in good standing under the laws of its jurisdiction of
organization. Each of the Seller and its Subsidiaries has the required
power and authority to own and lease its properties and to conduct its
business as described in the Information; and each of the Seller and
its Subsidiaries is duly qualified
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to transact business in each jurisdiction in which such qualification
is required, whether by reason of the ownership or leasing of property
or the conduct of business, except where the failure to so qualify
would not have a material adverse effect on the condition, financial or
otherwise, or the earnings, business affairs or business prospects of
the Seller and its Subsidiaries considered as one enterprise.
(d) As of the date hereof, the authorized capital stock of the Seller
consisted of 100,000,000 shares of common stock and 10,000,000 shares
of convertible preferred stock, par value $.01 per share, of which
5,921,961 shares of common stock and 909,090 shares of Series B
Cumulative Convertible Preferred Stock, are issued and outstanding. The
issued and outstanding shares of common stock of Seller have been duly
authorized and validly issued and are fully paid and non-assessable;
the Shares have been duly authorized, and when issued and delivered as
contemplated hereby, will be validly issued, fully paid and
non-assessable and will be listed, subject to notice of issuance, on
the American Stock Exchange ("AMEX"), subsequent to Closing upon the
Seller's Registration Statement being declared effective by the SEC;
the Shares and the shares of common stock of the Seller conform to all
statements relating thereto contained in the Information; and the
issuance of the Shares is not subject to preemptive or other similar
rights. No order halting or suspending trading in securities of the
Seller nor prohibiting the sale of such securities has been issued to
and is outstanding against the Seller or its directors, officers or
promoters and no investigations or proceedings for such purposes are
pending or threatened.
(e) Neither the Seller nor any of its Subsidiaries is in violation of
its organizational documents or in default in the performance or
observance of any material obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, loan agreement, note,
lease or other instrument or agreement to which the Seller or any of
its Subsidiaries 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 Seller or any of its
Subsidiaries is subject where such violation or default would have a
material adverse effect on the condition, financial or otherwise, or
the earnings, business affairs or business prospects of the Seller and
its Subsidiaries considered as one enterprise; and, the execution,
delivery and performance of this Agreement, and the issuance and
delivery of the Shares and the consummation of the transactions
contemplated herein have been duly authorized by all necessary action
and will not conflict with or constitute a material breach of, or
default under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Seller or any
of its Subsidiaries pursuant to, any contract, indenture, mortgage,
loan agreement, note, lease or other instrument or agreement to which
the Seller or any of its Subsidiaries 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
Seller or any of its Subsidiaries is subject, nor will any such action
result in any violation of the provisions of the articles of
incorporation, by-laws or other organizational documents of the Seller
or any of its Subsidiaries or any applicable law, administrative
regulation or administrative or court decree.
(f) The Seller is organized in conformity with the requirements for
qualification and, as of the date hereof and as of the Closing,
operates in a manner that
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qualifies it as a "real estate investment trust" under the Internal
Revenue Code of 1986, as amended, and the rules and regulations
thereunder and will be so qualified after giving effect to the sale of
the Shares.
(g) The Seller is not required to be registered under the Investment
Company Act of 1940, as amended.
(h) There is no action, suit or proceeding before or by any court or
governmental agency or body, domestic or foreign, now pending, or, to
the knowledge of the Seller, threatened or contemplated, against or
affecting the Seller or any of its Subsidiaries, which is required to
be disclosed in the Information (other than as disclosed therein), or
which might result in any material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or
business prospects of the Seller and its Subsidiaries considered as one
enterprise, or which might materially and adversely affect their
respective property or assets or which might materially and adversely
affect the consummation of this Agreement; all pending legal or
governmental proceedings to which the Seller or any of its Subsidiaries
is a party or of which any of their respective property or assets is
the subject which are not described in the Information, including
ordinary routine litigation incidental to its business, are, considered
in the aggregate, not material to the business of the Seller and its
Subsidiaries considered as one enterprise.
(i) No authorization, approval or consent of any court or United States
federal or state governmental authority or agency is necessary in
connection with the sale of the Shares hereunder.
(j) No authorization, approval or consent of the shareholders of the
Seller is required or necessary in connection with the sale of the
Shares pursuant to the articles of incorporation, by-laws or other
organizational documents of the Seller or the rules and regulations of
AMEX.
(k) The Shares will be issued and sold pursuant to the registration
exemption provided by Regulation D and Section 4(2) of the Act as a
transaction not involving a public offering and the requirements of any
other applicable state securities laws and the respective rules and
regulations thereunder in those United States jurisdictions in which
Xxxxx & Steers Capital Advisors, LLC notifies the Seller that the
Shares are being offered for sale.
(l) The Seller and its Subsidiaries possess such material certificates,
authorities or permits issued by the appropriate state, federal or
foreign regulatory agencies or bodies necessary to conduct the business
now conducted by them, and neither the Seller nor any of its
Subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such certificate, authority or permit
which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would materially and adversely affect the
condition, financial or otherwise, or the earnings, business affairs or
business prospects of the Seller and its subsidiaries considered as one
enterprise, nor, to the knowledge of the Seller, are any such
proceedings threatened or contemplated.
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(m) The Seller has full power and authority to enter into this
Agreement, and this Agreement has been duly authorized, executed and
delivered by the Seller and constitutes a legal, valid and binding
agreement of Seller, enforceable against Seller in accordance with its
terms except as may be limited by (i) the effect of bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating
to or affecting the rights or remedies of creditors or (ii) the effect
of general principles of equity, whether enforcement is considered in a
proceeding in equity or at law and the discretion of the court before
which any proceeding therefor may be brought.
(n) The Seller has good and marketable title to all of the properties
and assets reflected in the audited financial statements contained in
the Information, subject to no lien, mortgage, pledge or encumbrance of
any kind except those reflected in such financial statements (or as
otherwise described in the Information) or which are not material or
which constitute customary provisions of mortgage loans secured by the
Seller's properties creating obligations of the Seller with respect to
proceeds of the properties, environmental liabilities and other
customary protections for the mortgagees.
4. Representation and Warranty of the Investment Advisers. To induce
Seller to enter into this Agreement, each of the Investment Advisers hereby,
jointly and severally, represent and warrant that:
(a) It is an "investment adviser" as such term is defined under the
Investment Advisers Act of 1940, as amended (the "Advisers Act"), and
is duly registered with the SEC or, in the case of Pinnacle Trust, a
Texas trust company, is an investment adviser not required to be so
registered pursuant to an exemption under the Advisers Act.
(b) It is duly organized, validly existing and in good standing under
the laws of its state of organization. It is duly qualified to do
business and is in good standing in each jurisdiction where its
ownership or leasing of property or assets or the conduct of its
business requires it to be so qualified. It has in effect all federal,
state, local and foreign governmental authorizations necessary for it
to own or lease its properties and assets and to carry on its business
as it is now conducted.
(c) It has been duly authorized to act as investment adviser on behalf
of each of the Clients listed under its name on Schedule A hereto.
(d) It has the power and authority to enter into and execute this
Agreement on behalf of each of the Clients listed under its name on
Schedule A hereto.
(e) This Agreement has been duly executed and delivered by it and
constitutes a legal, valid and binding agreement of such Investment
Adviser, enforceable against it in accordance with its terms except as
may be limited by (i) the effect of bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or
affecting the rights or remedies of creditors or (ii) the effect of
general principles of equity, whether enforcement is considered in a
proceeding in equity or at law and the discretion of the court before
which any proceeding therefor may be brought.
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(f) In connection with the execution, delivery or performance of this
Agreement, it is not required to make or obtain any consents or
approvals of, or filings or registrations with, any court,
administrative agency or commission or other governmental authority or
instrumentality, including the SEC, or with any third party.
(g) Neither the Investment Adviser nor any "person associated with an
investment adviser" (as defined in the Advisers Act) thereof, as
applicable, is ineligible pursuant to Section 203 of the Advisers Act
to serve as an investment adviser or as an associated person to a
registered investment adviser or has committed any act enumerated in
Rule 206(4)-(4)(b) under the Advisers Act.
(h) The Purchasers understand and agree that each certificate or other
document evidencing any of the Shares shall be endorsed with the legend
in substantially the form set forth below as well as any other legends
required by applicable law and the Purchasers covenant that the
Purchasers shall not transfer the shares represented by any such
certificate without complying with the restrictions on transfer
described in the legends endorsed on such certificate and understands
that the Seller shall refuse to register any transfer of Shares not
complying with the following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED ("SECURITIES ACT"), OR
REGISTERED OR QUALIFIED UNDER ANY APPLICABLE STATE SECURITIES LAWS.
THESE SECURITIES MAY NOT BE OFFERED, SOLD, TRANSFERRED, HYPOTHECATED,
PLEDGED OR OTHERWISE ASSIGNED UNLESS (A) COVERED BY AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND REGISTERED OR
QUALIFIED UNDER APPLICABLE STATE SECURITIES LAWS OR (B) EXEMPTIONS FROM
SUCH REGISTRATION OR QUALIFICATION REQUIREMENTS ARE AVAILABLE. AS A
CONDITION TO PERMITTING ANY TRANSFER OF THESE SECURITIES, THE COMPANY
MAY REQUIRE THAT IT BE FURNISHED WITH AN OPINION OF COUNSEL ACCEPTABLE
TO THE COMPANY TO THE EFFECT THAT NO REGISTRATION OR QUALIFICATION IS
LEGALLY REQUIRED FOR SUCH TRANSFER.
5. Registration of the Shares; Compliance With the Act.
(a) Registration Procedures and Expenses. The Seller shall:
(1) subject to receipt of the necessary information from the
Purchasers, as soon as practicable, but in no event later than thirty
(30) days following the Closing, use best efforts to prepare and file
with the SEC a Registration Statement on Form S-3 or any other
appropriate registration statement of the Seller (the "Registration
Statement") relating to the resale of the Shares by the Purchasers from
time to time.
(2) as soon as practicable, but in no event later than thirty (30) days
following the Closing, use best efforts to list the Shares on AMEX for
the resale of the Shares on
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AMEX or through the automated quotation system of NASDAQ or the
facilities of any national securities exchange on which the common
stock of the Seller is then traded or in privately-negotiated
transactions;
(3) use best efforts to cause the Registration Statement to become
effective under the Act, no later than fifteen (15) days after the date
of filing with the SEC, if the Registration Statement is not reviewed
by the SEC, or no later than one hundred and twenty (120) days after
the Closing, if the Registration Statement is reviewed by the SEC;
(4) except as provided in Section 5(a)(7) below, use best efforts to
prepare and file with the SEC such amendments and supplements to the
Registration Statement and the prospectus used in connection therewith
as may be necessary to (a) keep the Registration Statement continuously
effective (b) maintain the Registration Statement free of, in the case
of the Registration Statement, any untrue statement of a material fact
or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading and, in the
case of the prospectus (including all amendments or supplements to the
prospectus), any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they
were made, not misleading, in the case of clause (a) and (b), until the
earlier of (i) the second anniversary of the date of Closing, (ii) the
date on which the Purchasers may sell all Shares then held by the
Purchasers within a three-month period without restriction by reason of
Rule 144 under the Act ("Rule 144") or any other rule of similar
effect, or (iii) such time as all Shares purchased by the Purchasers
have been sold pursuant to a registration statement;
(5) so long as the Registration Statement is effective covering the
resale of Shares owned by the Purchasers, use best efforts to furnish
to the Purchasers with respect to the Shares registered under the
Registration Statement (and to each underwriter, if any, of such
Shares) such reasonable number of copies of prospectuses (including all
amendments or supplements to the prospectus) and such other documents
as the Purchasers may reasonably request, in order to facilitate the
public sale or other disposition of all or any of the Shares by the
Purchasers; provided, however, that the obligation of the Seller to
deliver copies of prospectuses to the Purchasers shall be subject to
the receipt by the Seller of reasonable assurances from the Purchasers
that the Purchasers will comply with the applicable provisions of the
Act and of such other securities laws as may be applicable in
connection with any use of such prospectuses;
(6) notify the Purchasers and their respective counsel of the happening
of any event, the existence of any condition or any information
becoming known to the Seller that makes any statement made in the
Registration Statement or the prospectus (including all amendments or
supplements to the prospectus) or any document incorporated or deemed
to be incorporated therein by reference untrue in any material respect
or that requires the making of any changes in or amendments or
supplements to such Registration Statement, prospectus or documents so
that, in the case of the Registration Statement, it will not contain
any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements
therein not misleading,
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and that in the case of the prospectus, it will not contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading.
(7) use commercially reasonable efforts to restrict any suspension on
the use of the prospectus forming a part of the Registration Statement
to no more than twenty (20) business days and to restrict suspensions
within any 365-day period to no more than forty (40) business days in
such period;
(8) use best efforts to file documents required of the Seller for
normal blue sky clearance in states specified in writing by the
Purchasers; provided, however, that the Seller shall not be required to
qualify to do business or consent to service of process in any
jurisdiction in which it is not now so qualified or has not so
consented;
(9) bear all expenses in connection with the procedures in paragraphs
(1) through (7) of this Section 5(a) and the registration of the Shares
pursuant to the Registration Statement, other than fees and expenses,
if any, of counsel or other advisers to the Purchasers or underwriting
discounts, brokerage fees and commissions incurred by the Purchasers;
(10) with a view to making available to Purchasers the benefits of Rule
144 (or its successor rule) and any other rule or regulation of the SEC
that may at any time permit Purchasers to sell Shares to the public
without registration, the Seller covenants and agrees to: (i) make and
keep public information available, as those terms are understood and
defined in Rule 144, until the earlier of (A) such date as all of
Purchasers' Shares may be resold within a given three-month period
pursuant to Rule 144 or any other rule of similar effect or (B) such
date as all of Purchasers' Shares shall have been resold; (ii) file
with the SEC in a timely manner all reports and other documents
required of the Seller under the Act and under the Exchange Act; and
(iii) furnish to the Purchasers upon request, as long as the Purchasers
own any Shares, (A) a written statement by the Seller that it has
complied with the reporting requirements of the Act and the Exchange
Act, (B) a copy of the most recent annual report on Form 10-K or
quarterly report of the Seller on Form 10-Q, and (C) such other
information as may be reasonably requested in order to avail the
Purchasers of any rule or regulation of the SEC that permits the
selling of any such Shares without registration; and
(11) in the event that the Seller has not filed the Registration
Statement with the SEC within thirty (30) days following the Closing,
then, within five business days after the date thirty (30) days
following the Closing and after the end of each 30-day period
thereafter, to the extent the Registration Statement has not been filed
as of the applicable date, the Seller shall pay to each Purchaser an
amount in cash equal to $0.05 per Share held by each Purchaser.
(12) in the event that the Seller has filed the Registration Statement
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(i) and the SEC has elected not to review such Registration
Statement (or has cleared all comments it has offered on the
Registration Statement), then, within five business days after
the date fifteen (15) days following the notice from the SEC
of a decision not to review the Registration Statement (or of
a decision that it has cleared all comments it has offered on
the Registration Statement) and each fifteen (15) day period
thereafter, if such Registration Statement has not been
declared effective, the Seller shall pay to each Purchaser an
amount in cash equal to $0.05 per Share held by each
Purchaser, and
(ii) if the SEC has elected to review such Registration
Statement, then,
(A) if the Seller has not provided a good faith
written response to substantially all of the SEC's
comments contained in the SEC's first comment letter
within a period of thirty (30) days of receipt of
such letter, and for each thirty (30) day period
thereafter (the end of each such period being a
"First Response Deadline") until such response is
filed, the Seller shall pay to each Purchaser an
amount in cash equal to $0.05 per share (pro-rated
for each period subsequent to the initial First
Response Deadline) held by each Purchaser within five
business days of each First Response Deadline, and
(B) if the Seller has not provided a good faith
written response to substantially all of the SEC's
comments contained in any subsequent SEC comment
letter within a period of fifteen (15) days of
receipt of such letter, and for each thirty (30) day
period thereafter (the end of each such period being
a "Subsequent Response Deadline") until such response
is filed, the Seller shall pay to each Purchaser an
amount in cash equal to $0.05 per share (pro-rated
for each period subsequent to the initial Subsequent
Response Deadline) held by each Purchaser within five
business days of each Subsequent Response Deadline
(b) Indemnification. For the purpose of this Section 5(b):
(i) the term "Purchaser(s)" shall include the Purchaser(s) and
any affiliate of such Purchaser; and
(ii) the term "Registration Statement" shall include any final
prospectus, exhibit, supplement or amendment included in or
relating to the Registration Statement referred to in Section
5(a).
(1) The Seller agrees to indemnify and hold harmless each of the
Purchasers and each person, if any, who controls any Purchaser within
the meaning of the Act, against any losses, claims, damages,
liabilities or expenses, joint or several, to which such Purchasers or
such controlling party may become subject, under the Act, the Exchange
Act, or any other federal or state statutory law or regulation, or at
common law or otherwise (including in settlement of any litigation, if
such settlement is effected with the written consent of the Seller),
insofar as such losses, claims, damages, liabilities or expenses
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(or actions in respect thereof as contemplated below) arise out of or
are based upon any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement, including the
prospectus (including all amendments or supplements to the prospectus),
financial statements and schedules, and all other documents filed as a
part thereof, as amended at the time of effectiveness of the
Registration Statement, including any information deemed to be a part
thereof as of the time of effectiveness pursuant to paragraph (b) of
Rule 430A, or pursuant to Rule 434, of the rules and regulations
promulgated under the Act, or the prospectus, in the form first filed
with the SEC pursuant to Rule 424(b) of the Regulations, or filed as
part of the Registration Statement at the time of effectiveness if no
Rule 424(b) filing is required (the "Prospectus"), or any amendment or
supplement thereto, or (in the case of the Registration Statement or
any amendment thereof) arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, or
(in the case of the Prospectus and any amendment thereof or supplement
thereto) arise out of or are based upon the omission or alleged
omission to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
in which they were made, not misleading, or arise out of or are based
in whole or in part on any inaccuracy in the representations and
warranties of the Seller contained in this Agreement, or any failure of
the Seller to perform its obligations hereunder or under law, and will
reimburse each Purchaser and each such controlling person for any legal
and other expenses reasonably incurred as such expenses are reasonably
incurred by such Purchaser or such controlling person in connection
with investigating, defending, settling, compromising or paying any
such loss, claim, damage, liability, expense or action; provided,
however, that the Seller will not be liable in any such case to the
extent that any such loss, claim, damage, liability or expense arises
out of or is based upon (i) an untrue statement or alleged untrue
statement or omission or alleged omission made in the Registration
Statement, the Prospectus or any amendment or supplement thereto in
reliance upon and in conformity with written information furnished to
the Seller by or on behalf of any Purchaser expressly for use therein,
or (ii) the inaccuracy of any representations made by such Purchaser
herein or (iii) any statement or omission in any Prospectus that is
corrected in any subsequent Prospectus that was delivered to the
Purchasers prior to the pertinent sale or sales by the Purchasers.
(2) Each Purchaser will severally indemnify and hold harmless the
Seller, each of its directors, each of its officers who signed the
Registration Statement and each person, if any, who controls the Seller
within the meaning of the Act, against any losses, claims, damages,
liabilities or expenses to which the Seller, each of its directors,
each of its officers who signed the Registration Statement or
controlling person may become subject, under the Act, the Exchange Act,
or any other federal or state statutory law or regulation, or at common
law or otherwise (including in settlement of any litigation, if such
settlement is effected with the written consent of such Purchaser)
insofar as such losses, claims, damages, liabilities or expenses (or
actions in respect thereof as contemplated below) arise out of or are
based upon (i) the inaccuracy of any representation made by such
Purchaser herein or (ii) any untrue or alleged untrue statement of any
material fact contained in the Registration Statement, the Prospectus,
or any amendment or supplement thereto, or (in the case of the
Registration Statement or any amendment thereof) the omission or
alleged omission to state therein a material fact required to be stated
therein
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or necessary to make the statements therein not misleading, or (in the
case of the Prospectus and any amendment thereof or supplement thereto)
the omission or alleged omission to state a material fact required to
be stated therein or necessary to make the statements therein, in light
of the circumstances in which they were made, not misleading, in each
case to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission was made in
the Registration Statement, the Prospectus, or any amendment or
supplement thereto, in reliance upon and in conformity with written
information furnished to the Seller by or on behalf of such Purchaser
expressly for use therein, and will reimburse the Seller, each of its
directors, each of its officers who signed the Registration Statement
or controlling person for any legal and other expense reasonably
incurred, as such expenses are reasonably incurred by the Seller, each
of its directors, each of its officers who signed the Registration
Statement or controlling person in connection with investigating,
defending, settling, compromising or paying any such loss, claim,
damage, liability, expense or action.
(3) Promptly after receipt by an indemnified party under this Section
5(b) or notice of the threat or commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made
against an indemnifying party under this Section 5(b), promptly notify
the indemnifying party in writing thereof, but the omission so to
notify the indemnifying party will not relieve it from any liability
which it may have to any indemnified party for contribution or
otherwise to the extent it is not prejudiced as a result of such
failure. In case any such action is brought against any indemnified
party and such indemnified party seeks or intends to seek indemnity
from an indemnifying party, the indemnifying party will be entitled to
participate in, and, to the extent that it may wish, jointly with all
other indemnifying parties similarly notified, to assume the defense
thereof with counsel reasonably satisfactory to such indemnified party;
provided, however, if the defendants in any such action include both
the indemnified party and the indemnifying party and the indemnified
party shall have reasonably concluded that there may be a conflict
between the positions of the indemnifying party and the indemnified
party in conducting the defense of any such action or that there may be
legal defenses available to it and/or other indemnified parties which
are different from or additional to those available to the indemnifying
party, the indemnified party or parties shall have the right to select
separate counsel to assume such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified
party or parties. Upon receipt of notice from the indemnifying party to
such indemnified party of its election so to assume the defense of such
action and approval by the indemnified party of counsel, the
indemnifying party will not be liable to such indemnified party under
this Section 5(b) for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof unless
(i) the indemnified party shall have employed such counsel in
connection with the assumption of legal defenses in accordance with the
proviso to the preceding sentence (it being understood, however, that
the indemnifying party shall not be liable for the expenses of more
than one separate counsel, reasonably satisfactory to the indemnifying
party, representing the indemnified parties who are parties to such
action) or (ii) the indemnified party shall not have employed counsel
reasonably satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of commencement
of action, in each of which cases the reasonable fees and expenses of
counsel shall be at the expense of the indemnifying party.
13
(4) If the indemnification provided for in this Section 5(b) is
required by its terms but is for any reason held to be unavailable to
or otherwise insufficient to hold harmless an indemnified party under
paragraphs (1), (2) or (3) of this Section 5(b) in respect to any
losses, claims, damages, liabilities or expenses referred to herein,
then each applicable indemnifying party shall contribute to the amount
paid or payable by such indemnified party as a result of any losses,
claims, damages, liabilities or expenses referred to herein (i) in such
proportion as is appropriate to reflect the relative benefits received
by the Seller and the Purchasers from the placement of Shares or (ii)
if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but the
relative fault of the Seller and the Purchasers in connection with the
statements or omissions or inaccuracies in the representations and
warranties in this Agreement which resulted in such losses, claims,
damages, liabilities or expenses, as well as any other relevant
equitable considerations. The respective relative benefits received by
the Seller on the one hand and each Purchaser on the other shall be
deemed to be in the same proportion as the amount paid by such
Purchaser to the Seller pursuant to this Agreement for the Shares
purchased by such Purchaser that were sold pursuant to the Registration
Statement bears to the difference (the "Difference") between (x) the
amount such Purchaser paid for the Shares pursuant to this Agreement
and (y) the closing price of the common stock of the Seller on AMEX on
the date of the Closing (as defined below). The relative fault of such
selling Purchaser and each Purchaser shall be determined by reference
to, among other things, whether the untrue or alleged statement of a
material fact or the omission or alleged omission to state a material
fact or the inaccurate or the alleged inaccurate representation and/or
warranty relates to information supplied by the Seller or by such
Purchaser and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission. The amount paid or payable by a party as a result of the
losses, claims, damages, liabilities and expenses referred to above
shall be deemed to include, subject to the limitations set forth in
paragraph (3) of this Section 5(b), any legal or other fees or expenses
reasonably incurred by such party in connection with investigating or
defending any action or claim. The provisions set forth in paragraph
(3) of this Section 5(b) with respect to the notice of the threat or
commencement of any threat or action shall apply if a claim for
contribution is to be made under this paragraph (4); provided, however
that no additional notice shall be required with respect to any threat
or action for which notice has been given under paragraph (3) for the
purposes of indemnification. The Seller and each Purchaser agree that
it would not be just and equitable if contribution pursuant to this
Section 5(b) were determined solely by pro rata allocation (even if the
Purchasers were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable
considerations referred to in this paragraph. Notwithstanding the
provisions of this Section 5(b), no Purchaser shall be required to
contribute any amount in excess of the amount by which the Difference
exceeds the amount of any damages that such Purchaser has otherwise
been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Purchasers'
obligations to contribute pursuant to this Section 5(b) are several and
not joint.
14
(5) With respect to RMR Real Estate Fund, a Massachusetts business
trust (the "Trust"), reference is made to Article X, Section 2 of the
Trust's declaration of trust, which is on file with the Secretary of
State of The Commonwealth of Massachusetts. Notwithstanding anything
else in this Agreement to the contrary, this Agreement has been
executed by or on behalf of the Trust, by the Trustee or Trustees or by
an officer or officers of the Trust in their capacity as such and not
individually and, further, neither the shareholders of the Trust nor
the Trustee nor any officers, employees, or agents (including the
Trust's advisor) of the Trust shall be liable under this Agreement and
all persons otherwise making a claim under this agreement shall look
solely to the Trust estate for the payment of any such claim or for the
performance thereof.
6. Conditions to Obligations of the Parties. As a condition to Closing,
(i) each of the representations and warranties of the parties hereto shall be
true and correct in all respects, (ii) the Purchasers shall have received an
opinion from Xxxxxx & Bird LLP, dated as of February 20, 2004, substantially in
the form attached hereto as Exhibit A, and (iii) the Purchasers shall have
received a comfort letter from Ernst & Young LLP, dated as of February 17, 2004,
substantially in the form attached hereto as Exhibit B.
7. Closing. Provided that the conditions set forth in Section 6 hereto
have been met or waived at such time, the transactions contemplated hereby shall
be consummated on February 20, 2004, or at such other time and date as the
parties hereto shall agree (each such time and date of payment and delivery
being herein called the "Closing"). At the Closing, settlement shall occur
through Xxxxxxxx & Company, or an affiliate thereof, on a delivery versus
payment basis through the DTC ID System.
8. Governing Law. This Agreement shall be construed in accordance with
and governed by the substantive laws of the State of New York, without regard to
conflict of laws principles. Any right to trial by jury in any action,
proceeding or counterclaim (whether based upon contract, tort or otherwise)
related to or arising out of the issuance and sale of the Shares, and the
Purchasers' activities pursuant to, or the performance by the Purchasers of the
services contemplated by, this Agreement is hereby waived. The Seller hereby
submits to the non-exclusive jurisdiction of the federal and New York State
courts located in the City of New York in connection with any dispute related to
this Agreement or any of the matters contemplated hereby. The Seller agrees that
any legal suit, action or proceeding brought by the Purchasers, any of their
respective affiliates or any indemnified party to enforce any rights under or
with respect to this Agreement or the Offer may be instituted in any state or
federal court in the City of New York, State of New York, waives to the fullest
extent permitted by law any objection which it may now or hereafter have to the
laying of venue of any such suit, action or proceeding and irrevocably submits
to the non-exclusive jurisdiction of any such court in any such suit, action or
proceeding. Nothing in this Section 8 shall affect the right of the Purchasers,
any of their respective affiliates or any indemnified party to serve process in
any manner permitted by law or limit the right of the Purchasers, any of their
respective affiliates or any indemnified party to bring proceedings against the
company in the courts of any jurisdiction or jurisdictions.
15
9. Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto with respect to the subject matter hereof and may be
amended only in a writing that is executed by each of the parties hereto.
10. Successors and Assigns. This Agreement, including any right to
indemnity or contribution hereunder, shall inure to the benefit of and be
binding upon the Seller and the Purchasers and such other parties entitled to
indemnification pursuant to the terms of Section 5(b), and the respective
successors and assigns of such parties. Nothing in this Agreement is intended,
or shall be construed, to give to any other person or entity any right hereunder
or by virtue hereof. This Agreement may not be assigned by the Seller or the
Purchasers without the prior written consent of the other party hereto.
11. Counterparts. In the event that any provision hereof shall be
determined to be invalid or unenforceable in any respect, such determination
shall not affect such provision in any other respect or any other provision
hereof, which shall remain in full force and effect. This Agreement may be
executed in separate counterparts, each of which shall be deemed an original,
and all of which together shall be deemed to constitute one and the same
instrument.
16
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed and delivered as of the date first above written.
BNP RESIDENTIAL PROPERTIES INC.
By: /s/ Xxxxxx X. Xxxxx
----------------------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Chairman and CFO
17
DIRECT PURCHASERS:
RMR REAL ESTATE FUND
By: /s/ Xxxxxx X. X'Xxxxx
----------------------------------------------------
Name: Xxxxxx X. X'Xxxxx
Title: President
MONMOUTH CAPITAL CORP.
By: /s/ Xxxxxx X. Xxxxx
----------------------------------------------------
Name: Xxxxxx X. Xxxxx
Title: President
UNITED MOBILE HOMES, INC.
By: /s/ Xxxxxx X. Xxxxx
----------------------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Chairman of the Board
18
SALIENT TOTAL RETURN FUND, L.P.
By: Salient Capital Management, LLC,
as general partner
By: /s/ Xxxxxx X. Xxxxxxxxx
----------------------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Manager
MILLENCO, L.P.
By: /s/ Xxxxxxxx Xxxxxx
----------------------------------------------------
Name: Xxxxxxxx Xxxxxx
Title: COO
19
INVESTMENT ADVISERS:
KENSINGTON INVESTMENT GROUP, INC., on behalf of itself (solely
with respect to paragraph 4) and each Client set forth
under its name on Schedule A
By: /s/ Xxxx X. Xxxx
----------------------------------------------------
Name: Xxxx X. Xxxx
Title: EVP
XXXXXXXXX XXXXXX MANAGEMENT, INC., on behalf of itself (solely
with respect to paragraph 4) and each Client set forth
under its name on Schedule A)
By: /s/ Xxxxxx X. Xxxxx
----------------------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Portfolio Manager
CLIFFWOOD PARTNERS LLC, on
behalf of itself (solely with respect to
paragraph 4) and each Client set forth under
its name on Schedule A
By: /s/ Xxxx Xxxx
----------------------------------------------------
Name: Xxxx Xxxx
Title: CEO
XXXXX XXXXXXXX CAPITAL ADVISORS, L.P., on behalf of itself
(solely with respect to paragraph 4) and each Client set
forth under its name on Schedule A
By: /s/ Xxxxx Xxxxxxxxxx
----------------------------------------------------
Name: Xxxxx Xxxxxxxxxx
Title: General Counsel
20
PINNACLE TRUST CO., LTA, on behalf of itself (solely with
respect to paragraph 4) and each Client set forth under
its name on Schedule A
By: /s/ Xxxxx X. Xxxxxxxx
----------------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Director - REITs
CLARION CRA REAL ESTATE SECURITIES L.P., on behalf of itself
(solely with respect to paragraph 4) and each Client set
forth under its name on Schedule A
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Senior Director
K.G. XXXXXXX & ASSOCIATES,
LLC, on behalf of itself (solely with
respect to paragraph 4) and each Client
set forth under its name on Schedule A
By: /s/ Xxxxx Xxxxx
----------------------------------------------------
Name: Xxxxx Xxxxx
Title: Portfolio Manager
21
CASHEL CAPITAL ADVISORS, INC., on behalf of itself (solely
with respect to paragraph 4) and each Client set forth
under its name on Schedule A
By: /s/ Xxxxxxxxxxx X. Xxxxxx
----------------------------------------------------
Name: Xxxxxxxxxxx X. Xxxxxx
Title: President
22
