PREFERRED APARTMENT COMMUNITIES, INC. Shares of Class A Common Stock FORM OF UNDERWRITING AGREEMENT
PREFERRED
APARTMENT COMMUNITIES, INC.
Shares
of Class A Common Stock
FORM OF UNDERWRITING
AGREEMENT
________________,
2010
XXXX
Capital Partners LLC
00
Xxxxxxxxx Xxxxx
Xxxxxxx
Xxxxx, Xxxxxxxxxx 00000
Xxxxxxxx
& Strudwick, Incorporated
000 Xxxx
Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxx,
Xxxxxxxx 00000
As
Representatives of the several Underwriters
Ladies
and Gentlemen:
Preferred Apartment Communities, Inc.,
a Maryland corporation (the “Company”),
Preferred Apartment Communities Operating Partnership, L.P., a Delaware limited
partnership (the “Operating
Partnership” and, together with the Company, the “REIT
Entities”), and Preferred Apartment Advisors, LLC, a Delaware limited
liability company (the “Advisor” and, collectively with the REIT Entities, the
“Transaction Entities”)
confirm their respective agreement with each of the Underwriters listed on Schedule I
(collectively, the “Underwriters”),
for whom XXXX Capital Partners LLC and Xxxxxxxx & Strudwick,
Incorporated (“A&S”)
are acting as representatives (in such capacity, the “Representatives”),
with respect to (i) the sale by the Company of up to 6,000,000 shares of
Class A Common Stock (the “Initial
Shares”), par value $.01 per share, of the Company (the “Common
Shares”), and the purchase by the Underwriters, acting severally and not
jointly, of the respective number of Initial Shares set forth opposite the names
of the Underwriters in Schedule I
hereto, and (ii) the grant of the option described in Section 1(b) to
purchase all or any part of 900,000 additional Common Shares to cover
over-allotments (the “Option
Shares”), if any, from the Company to the Underwriters, acting severally
and not jointly, in proportion to the number of Initial Shares set forth
opposite the names of the Underwriters in Schedule I
hereto. The Initial Shares to be purchased by the Underwriters and
all or any part of the Option Shares subject to the option described in Section l(b) are
hereinafter called, collectively, the “Shares.”
The Transaction Entities understand
that the Underwriters propose to make a public offering of the Shares as soon as
the Underwriters deem advisable after this Agreement has been executed and
delivered.
Capitalized terms used but not
otherwise defined herein shall have the respective meanings given to those terms
in the Prospectus (as herein defined).
The
Company has filed with the Securities and Exchange Commission (the “Commission”)
a registration statement on Form S-11 (No. 333-168407), including the
related preliminary prospectus or prospectuses, covering the registration of the
sale of the Shares under the Securities Act of 1933, as amended (the “Securities
Act”). Promptly after execution and delivery of this
Agreement, the Company will 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
Securities Act (the “Securities Act
Regulations”) and Rule 424(b) (“Rule
424(b)”) of the Securities Act Regulations. The information
included in such prospectus that was omitted from the registration statement at
the time it became effective but that is deemed to be part of the registration
statement at the time it became effective pursuant to Rule 430A(b) is referred
to as “Rule
430A Information.” The registration statement, including the
amendments thereto, the exhibits and any schedules thereto, at the time it
became effective, and including the Rule 430A Information, is herein called the
“Registration
Statement.” Any registration statement filed pursuant to Rule
462(b) of the Securities 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. Each prospectus used prior to the effectiveness of the
Registration Statement, and any prospectus that omitted the Rule 430A
Information that was used after such effectiveness and prior to the execution
and delivery of this Agreement, is herein called a “preliminary
prospectus.” The final prospectus in the form first furnished
to the Underwriters for use in connection with the offering of the Shares is
herein called the “Prospectus.” For
purposes of this Agreement, all references to the Registration Statement, any
preliminary prospectus, the Prospectus or any amendment or supplement to any of
the foregoing shall be deemed to include the copy filed with the Commission
pursuant to its Electronic Data Gathering, Analysis and Retrieval system (“XXXXX”). For
purposes of this Agreement, the following shall have the meaning ascribed to
them:
“General
Disclosure Package” shall mean collectively, (i) the preliminary
prospectus that is generally distributed to investors and used to offer the
Shares, (ii) the Issuer Free Writing Prospectuses (defined below), if any, set
forth in Schedule
II hereto (iii) any other Free Writing Prospectus (defined below), if
any, set forth in Schedule II hereto
that the parties hereto shall hereafter expressly agree in writing to treat as
part of the General Disclosure Package, and (iv) the pricing information and
other information, if any, set forth in Schedule II
hereto.
“Free Writing
Prospectus” shall mean a free writing prospectus as defined in Rule 405
of the Securities Act.
“Issuer Free
Writing Prospectus” shall mean an issuer free writing prospectus, as
defined in Rule 433 (“Rule 433”)
of the Securities Act.
The
Company and the Underwriters agree that up to 2.0% of the Shares to be purchased
by the Underwriters (the “Reserved
Shares”) shall be reserved for sale by the Underwriters to certain
eligible employees and persons having business relationships with the Company
(the “Invitees”),
as part of the distribution of the Shares by the Underwriters, subject to the
terms of this Agreement, the applicable rules, regulations and interpretations
of the Financial Industry Regulatory Authority, Inc. (“FINRA”)
and all other applicable laws, rules and regulations. To the extent
that such Reserved Shares are not orally confirmed for purchase by Invitees by
the end of the first business day after the date of this Agreement, such
Reserved Shares may be offered to the public as part of the offering of Shares
contemplated hereby.
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Concurrently with or immediately prior
to the Closing Date (as hereinafter defined), the Company will have completed
the formation transactions described in the General Disclosure Package and the
Prospectus. As part of these transactions, (i) the Underwriters will
purchase the Initial Shares and offer them in a public offering as contemplated
hereunder, (ii) the Transaction Entities will enter into the Management
Agreement (the “Management
Agreement”), (iii) the Company will contribute a portion of the proceeds
of the offering to the Operating Partnership in exchange for units of limited
partner interest in the Operating Partnership (the “Operating
Partnership Units”) and (iv) the Company will enter into a registration
rights agreement with the Private Placement Purchaser (as defined below) in the
concurrent private placement (the “Registration
Rights Agreement”) (the foregoing transactions, as more particularly
described in the Prospectus, are referred to herein as the “Formation
Transactions”).
The
Company and Xxxxxxxx Opportunity Fund, LLC (the “Private Placement
Purchaser”) entered into a subscription agreement (the “Private Placement
Agreement” and together with this Agreement, the Management Agreement,
the Registration Rights Agreement and the Operating Partnership Agreement, the
“Operative
Documents”) pursuant to which the Company has agreed to sell to the
Private Placement Purchaser and the Private Placement Purchaser, has agreed to
purchase from the Company, at a purchase price per share equal to the purchase
price per share set forth in Section 1(a), 500,000
shares of Common Shares (the “Private Placement
Shares”).
The Transaction Entities and the
Underwriters agree as follows:
1. Sale and
Purchase.
(a) Initial
Shares. Upon the basis of the warranties and representations
and other terms and conditions herein set forth, at the purchase price per share
of $10.00, the Company agrees to sell to the Underwriters the Initial Shares and
each Underwriter agrees, severally and not jointly, to purchase from the Company
the number of Initial Shares set forth in Schedule I hereto
opposite such Underwriter’s name, plus any additional number of Initial Shares
which such Underwriter may become obligated to purchase pursuant to the
provisions of Section
10, subject in each case, to such adjustments among the Underwriters as
the Representatives in their sole discretion shall make to eliminate any sales
or purchases of fractional shares.
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(b) Option Shares. In
addition, upon the basis of the warranties and representations and other terms
and conditions herein set forth, at the purchase price per share set forth in
Section 1(a),
the Company hereby grants an option to the Underwriters, acting severally and
not jointly, to purchase the Option Shares in proportion to the number of
Initial Shares set forth opposite the names of the Underwriters in Schedule I hereto,
plus any additional number of Option Shares which such Underwriter may become
obligated to purchase pursuant to the provisions of Section
10. The option hereby granted will expire 30 days after the
date hereof and may be exercised in whole or in part from time to time (but not
more than twice) only for the purpose of covering over-allotments which may be
made in connection with the offering and distribution of the Initial Shares upon
notice by the Representatives to the Company setting forth the number of Option
Shares as to which the several Underwriters are then exercising the option and
the time and date of payment and delivery for such Option Shares. Any
such time and date of delivery (a “Date of
Delivery”) shall be determined by the Representatives, but shall not be
later than three full business days (or earlier, without the consent of the
Company, than two full business days) after the exercise of said option, nor in
any event prior to the Closing Date, as hereinafter defined. If the
option is exercised as to all or any portion of the Option Shares, the Company
will sell to each Underwriter the proportion of the total number of Option
Shares then being purchased which the number of Initial Shares set forth in
Schedule I
hereto opposite the name of such Underwriter bears to the total number of
Initial Shares, and each of the Underwriters, acting severally and not jointly,
will purchase that proportion of the total number of Option Shares then being
purchased which the number of Initial Shares set forth in Schedule I hereto
opposite the name of such Underwriter bears to the total number of Initial
Shares, subject in each case to such adjustments among the Underwriters as the
Representatives in their sole discretion shall make to eliminate any sales or
purchases of fractional shares. The Underwriters may from time to
time increase or decrease the public offering price of the Option Shares after
the initial public offering to such extent as the Underwriters may
determine.
2. Payment and
Delivery. Payment of the purchase price for, and delivery of
certificates for or book-entry credits representing, the Initial Shares shall be
made at the offices of Xxxxxxxxx Xxxxxxxxx, A Professional Corporation, 0000
Xxxx Xxxx Xxxxxx, Xxxxxxxx, Xxxxxxxx 00000-0000, or at such other place as shall
be agreed upon by the Representatives and the Company, at
9:00 A.M. (New York City time) on the third (fourth, if the
pricing occurs after 4:30 P.M. (New York City time) on any given day)
business day after the date hereof, or such other time not later than ten
business days after such date as shall be agreed upon by the Representatives and
the Company (such time and date of payment and delivery being herein called the
“Closing
Date”).
In
addition, in the event that any or all of the Option Shares are purchased by the
Underwriters, payment of the purchase price for, and delivery of certificates
for or book-entry credits representing, such Option Shares shall be made at the
above-mentioned offices, or at such other place as shall be agreed upon by the
Representatives and the Company, on each Date of Delivery as specified in the
notice from the Representatives to the Company.
Payment
shall be made to the Company by wire transfer of immediately available funds to
a bank account designated by the Company against delivery to the Representatives
for the respective accounts of the Underwriters of certificates for or
book-entry credits representing the Shares to be purchased by
them. It is understood that each Underwriter has authorized each
Representative, for its account, to accept delivery of, receipt for, and make
payment of the purchase price for, the Initial Shares and the Option Shares, if
any, which it has agreed to purchase.
3. Representations and
Warranties by the Transaction Entities. Each of the
Transaction Entities, jointly and severally, represents and warrants to each
Underwriter as of the date hereof, the Closing Date and any Date of Delivery,
and agrees with each Underwriter, as follows:
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(a) Registration Statement and
Prospectuses. Each of the Registration Statement, any Rule
462(b) Registration Statement and any post-effective amendment and supplement
thereto has become effective under the Securities Act and no stop order
suspending the effectiveness of the Registration Statement, any Rule 462(b)
Registration Statement or any post-effective amendment thereto has been issued
under the Securities Act, no order preventing or suspending the use of any
preliminary prospectus or the Prospectus has been issued and no proceedings for
those purposes have been instituted or are pending or, to the Company’s
knowledge, contemplated. Any request on the part of the Commission
for additional information has been complied with.
Each of
the Registration Statement, any Rule 462(b) Registration Statement and any
post-effective amendment and supplement thereto, at the time it became
effective, at the Closing Date and at each Date of Delivery, complied and will
comply in all material respects with the requirements of the Securities Act and
the Securities Act Regulations. Each preliminary prospectus
(including the preliminary prospectus filed as part of the Registration
Statement as originally filed or as part of any amendment thereto), at the time
it was filed, complied in all material respects with the Securities Act
Regulations and each preliminary prospectus included in the General Disclosure
Package and the Prospectus delivered to the Underwriters for use in connection
with this offering of Shares was identical to the electronically transmitted
copies thereof filed with the Commission pursuant to XXXXX, except to the extent
permitted by Regulation S-T of the Securities Act. The Prospectus,
any preliminary prospectus and any supplement thereto or prospectus wrapper
prepared in connection therewith, at their respective times of issuance and at
the Closing Date, complied and will comply in all material respects with any
applicable laws or regulations of foreign jurisdictions in which the Prospectus
and any such preliminary prospectus, as amended or supplemented, if applicable,
are distributed in connection with the offer and sale of Reserved
Shares.
(b) Accurate
Disclosure. None of the Registration Statement, any Rule
462(b) Registration Statement or any post-effective amendment and supplement
thereto, at the respective times the Registration Statement, any Rule 462(b)
Registration Statement and any post-effective amendments and supplements thereto
became effective, at the Closing Date and at each Date of Delivery, contained,
contains or will contain an untrue statement of a material fact or omitted,
omits or will 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 amendment or supplement thereto (including any prospectus
wrapper), as of its date, at the time of any filing pursuant to Rule 424(b), at
the Closing Date and at each Date of Delivery, included, includes or will
include an untrue statement of a material fact or omitted, omits 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. As of the date hereof, at the Closing Date and at each
Date of Delivery, neither (i) the General Disclosure Package nor
(ii) any individual Issuer Free Writing Prospectus, when considered
together with the General Disclosure Package, included, includes or will include
any untrue statement of a material fact or omitted, omits or will omit to state
any material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading. The representations, warranties and agreements in Sections 3(a),
3(b), 3(c) and 3(uu) shall not apply
to statements in or omissions from the Registration Statement (or any amendment
thereto), including the Rule 430A Information, the General Disclosure Package ,
any individual Issuer Free Writing Prospectus or the Prospectus made in reliance
upon and in conformity with written information furnished to the Company by any
Underwriter through the Representatives expressly for use
therein. For purposes of this Agreement, the only information so
furnished shall be the information under the heading “Underwriting” in the
Registration Statement, the General Disclosure Package or the Prospectus
(collectively, the “Underwriter
Information”).
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(c) Issuer Free Writing
Prospectuses. No Issuer Free Writing Prospectus, if any,
conflicts or will conflict with the information contained in the Registration
Statement or the Prospectus, and any preliminary or other prospectus deemed to
be a part thereof that has not been superseded or modified. Each
Issuer Free Writing Prospectus, if any, conformed or will conform in all
material respects to the requirements of the Securities Act and the Securities
Act Regulations on the date of first use, and the Company has complied with any
filing requirements applicable to such Issuer Free Writing Prospectus pursuant
to the Securities Act Regulations. The Company has not made any offer
relating to the Shares that would constitute an Issuer Free Writing Prospectus
without the prior written consent of the Representatives, provided that such
consent is deemed to have been given with respect to each Issuer Free Writing
Prospectus identified on Schedule II
hereto. The Company has retained in accordance with the Securities
Act Regulations all Issuer Free Writing Prospectuses that were not required to
be filed pursuant to the Securities Act Regulations.
(d) Company Not Ineligible
Issuer. At the time of filing the Registration Statement, any
Rule 462(b) Registration Statement and any post-effective amendments thereto and
at the date hereof, the Company was not and is not an “ineligible issuer,” as
defined in Rule 405 (“Rule 405”)
of the Securities Act Regulations, without taking account of any determination
by the Commission pursuant to Rule 405 that it is not necessary that the Company
be considered an ineligible issuer.
(e) Independent
Accountants. The accountants who certified the financial
statements and supporting schedules included in the Registration Statement are
independent public accountants with respect to the Company as required by the
Securities Act and the Securities Act Regulations.
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(f) Financial Statements; Non-GAAP
Financial Measures. The financial statements included in the
Registration Statement, the Prospectus, together with the related schedules and
notes, present fairly in all material respects the financial position of the
entities purported to be shown thereby (including 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
in the United States (“GAAP”)
applied on a consistent basis throughout the periods involved. The
supporting schedules, if any, present fairly in all material respects in
accordance with GAAP the information required to be stated
therein. The selected financial data and the summary financial
information included in the Prospectus present fairly in all material respects
the information shown therein and have been compiled on a basis consistent with
that of the audited financial statements included in the Registration
Statement. The pro forma financial statements and the related notes
thereto included in the Registration Statement and the Prospectus present fairly
in all material respects the information shown therein, have been prepared in
all material respects 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 subject to such rules and guidelines, 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. Except as included therein, no
historical or pro forma financial statements or supporting schedules are
required to be included or incorporated by reference in the Registration
Statement, the General Disclosure Package or the Prospectus under the Securities
Act or the Securities Act Regulations. All disclosures contained in
the Registration Statement, the General Disclosure Package or the Prospectus
regarding “non-GAAP financial measures” (as such term is defined by the rules
and regulations of the Commission) comply in all material respects with
Regulation G of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”) and Item 10 of Regulation S-K of the Securities Act, to the
extent applicable.
(g) No Material Adverse Change in
Business. Since the respective dates as of which information
is given in the Registration Statement, the General Disclosure Package or the
Prospectus, except as otherwise stated therein, (i) there has been no
material adverse change, whether or not arising in the ordinary course of
business, in or affecting any of the properties described in the Prospectus as
owned, leased or under contract by the Company or its Subsidiaries (the “Properties”)
or in the condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Company and its Subsidiaries considered as
one enterprise (a “Material Adverse
Effect”), (ii) there have been no transactions entered into by the
Company or any of its Subsidiaries, other than those in the ordinary course of
business, which are material with respect to the Company and its Subsidiaries
considered as one enterprise, and (iii) there has been no dividend or
distribution of any kind declared, paid or made by any of the Transaction
Entities on any class of its capital stock, Operating Partnership Units or other
form of ownership interests.
(h) Good Standing of the
Company. The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the State of
Maryland and has corporate 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, the other Operative
Documents and the various other agreements required thereunder to which it is a
party; and the Company is duly qualified as a foreign corporation to transact
business and is in good standing in each other jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except for such jurisdictions where the
failure so to qualify or to be in good standing would not reasonably be expected
to result in a Material Adverse Effect.
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(i)
Good
Standing of Operating Partnership. The Operating Partnership
has been duly formed and is validly existing as a limited partnership in good
standing under the laws of the State of Delaware, is duly qualified to do
business and is in good standing as a foreign limited partnership in each
jurisdiction in which its ownership or lease of property and other assets or the
conduct of its business requires such qualification, except where the failure to
so qualify would not reasonably be expected to result in a Material Adverse
Effect, and has all power and authority necessary to own or hold its properties
and other assets, to conduct the business in which it is engaged and to enter
into and perform its obligations under this Agreement, the other Operative
Documents and the various other agreements required thereunder to which it is a
party. At the Closing Date, the Company will be the sole general
partner of the Operating Partnership. At the Closing Date, the
Agreement of Limited Partnership of the Operating Partnership in the form
provided to the Representatives prior to the date hereof (the “Operating
Partnership Agreement”), will be in full force and effect, and the
aggregate percentage interests of the Company and the limited partners in the
Operating Partnership will be as set forth in the Prospectus; provided that to the
extent any portion of the Underwriter’s option to purchase the Option Shares is
exercised at the Closing Date, the percentage interest of such partners in the
Operating Partnership will be adjusted accordingly. Additionally, to
the extent any portion of such overallotment option is exercised subsequent to
the Closing Date, the Company will contribute the net proceeds from the sale of
the Option Shares to the Operating Partnership in exchange for a number of
Operating Partnership Units equal to the number of Option Shares
issued.
(j)
Good Standing of
the Advisor. The Advisor has been duly organized and is
validly existing as a limited liability company in good standing under the laws
of the State of Delaware and has corporate power and authority to conduct its
business as described in the Prospectus and to enter into and perform its
obligations (i) under this Agreement and the other Operative Documents to
which it is a party and (ii) in connection with the Formation Transactions;
and the Advisor is duly qualified as a foreign corporation to transact business
and is in good standing in each other jurisdiction in which such qualification
is required, except for such jurisdictions where the failure so to qualify or to
be in good standing would not reasonably be expected to result in a Material
Adverse Effect.
(k) Good Standing of
Subsidiaries. Each “significant subsidiary” of the Company (as
such term is defined in Rule 1-02 of Regulation S-X of the Securities Act)
(after giving effect to the Formation Transactions) (each a “Subsidiary”
and, collectively, the “Subsidiaries”)
has been duly organized and is validly existing in good standing under the laws
of the jurisdiction of its incorporation or organization, has corporate or
similar power and authority to own, lease and operate its properties and to
conduct its business as described in the Prospectus and is duly qualified to
transact business and is in good standing 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 or
to be in good standing would not reasonably be expected to result in a Material
Adverse Effect; except as otherwise disclosed in the Prospectus, all of the
issued and outstanding capital stock or equity interests of each such Subsidiary
has been duly authorized and validly issued, is fully paid and non-assessable
and is owned by the Company, directly or through subsidiaries, free and clear of
any material security interest, mortgage, pledge, lien, encumbrance, claim or
equity; none of the outstanding shares of capital stock of any Subsidiary was
issued in violation of the preemptive or similar rights of any securityholder of
such Subsidiary. The only Subsidiaries of the Company are the
subsidiaries listed on Exhibit 21 to the Registration
Statement.
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(l)
Capitalization. The
authorized, issued and outstanding capital stock of the Company is as set forth
in the Prospectus under the caption “Capitalization” (except for subsequent
issuances, if any, pursuant to this Agreement, pursuant to reservations,
agreements or employee benefit plans referred to in the Prospectus or pursuant
to the exercise of convertible or exchangeable securities or options referred to
in the Prospectus). The shares of issued and outstanding capital
stock have been duly authorized and validly issued and are fully paid and
non-assessable; and none of the outstanding shares of capital stock was issued
in violation of the preemptive or other similar rights of any securityholder of
the Company. Except as disclosed in the Prospectus, (i) other
than with respect to the Operating Partnership Units disclosed in the
Prospectus, no shares of capital stock of the Company are reserved for any
purpose, (ii) except for the Operating Partnership Units, there are no
outstanding securities convertible into or exchangeable for any shares of
capital stock of the Company, and (iii) there are no outstanding options,
rights (preemptive or otherwise) or warrants to purchase or subscribe for shares
of capital stock or any other securities of the Company.
(m) Authorization and Description of
Operating Partnership Units. The Operating Partnership Units
to be issued in the Formation Transactions have been duly authorized for
issuance by the Operating Partnership and its general partner and, at the
Closing Date, will be validly issued. The issuance and sale by the
Operating Partnership of the Operating Partnership Units in connection with the
Formation Transactions are exempt from the registration requirements of the
Securities Act and applicable state securities and blue sky laws, and are not in
violation of the preemptive or other similar rights of any security holder of
the Operating Partnership. Except as disclosed in the Prospectus, no
Operating Partnership Units are reserved for any purpose and there are no
outstanding securities convertible into or exchangeable for any Operating
Partnership Units and no outstanding options, rights (preemptive or otherwise)
or warrants to purchase or subscribe for Operating Partnership Units or other
securities of the Operating Partnership. The terms of the Operating
Partnership Units conform in all material respects to statements and
descriptions related thereto contained in each of the Prospectus.
(n) Authorization of
Agreement. This Agreement has been duly authorized, executed
and delivered by each of the Transaction Entities.
(o) Authorization and Enforceability of
Operative Documents. (i) At or prior to the Closing Date,
the Operating Partnership Agreement will have been duly and validly authorized,
executed and delivered by the Company and the Operating Partnership (and, to the
knowledge of the Transaction Entities, by each other party thereto) and will be
a valid and binding agreement of the Company and the Operating Partnership (and,
to the knowledge of the Transaction Entities, of each other party thereto),
enforceable against the Company and the Operating Partnership (and, to the
knowledge of the Transaction Entities, against each other party thereto) in
accordance with its terms; (ii) at or prior to the Closing Date, the Management
Agreement will have been duly and validly authorized, executed and delivered by
the Company, the Operating Partnership and the Advisor and will be a valid and
binding agreement of the Company, the Operating Partnership and the Advisor,
enforceable against the Company, the Operating Partnership and the Advisor in
accordance with its terms; and (iii) the Private Placement Agreement has
been duly authorized, executed and delivered by the Company (and, to the
knowledge of the Company, by each other party thereto) and is a valid and
binding agreement of the Company, enforceable against the Company in accordance
with its terms; except in each case
as enforceability may be limited by applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and similar laws relating to
or affecting creditors’ rights and remedies generally, and subject, as to
enforceability, to general principles of equity and, with respect to equitable
relief, the discretion of the court before which any proceeding therefor may be
brought (regardless of whether enforcement is sought in a proceeding at law or
in equity), and with respect to indemnification or contribution thereunder,
except as rights may be limited by applicable law or policies underlying such
law.
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(p) Authorization and Description of
Shares. The Shares to be purchased by the Underwriters and the
Private Placement Shares have been duly authorized for issuance and sale to the
Underwriters or the Private Placement Purchaser, respectively, pursuant to this
Agreement or the Private Placement Agreement, as applicable, and, when
(i) the Shares have been issued and delivered by the Company pursuant to
this Agreement against payment of the consideration set forth herein and
(ii) the Private Placement Shares have been issued and delivered by the
Company pursuant to the Private Placement Agreement against payment of the
consideration set forth therein, such Shares and Private Placement Shares, as
applicable, will be validly issued and fully paid and
non-assessable. The issuance and sale by the Company of the Private
Placement Shares at or prior to the Closing Date are exempt from the
registration requirements of the Securities Act and applicable state securities
and blue sky laws. The Common Shares conform in all material respects
to all statements relating thereto contained in the Prospectus and such
description conforms in all material respects to the rights set forth in the
instruments defining the same; and no holder of the Shares will be subject to
personal liability by reason of being such a holder. The certificates
to be used to evidence the Shares will, at the Closing Date, be in due and
proper form and will comply in all material respects with all applicable legal
requirements, the requirements of the charter and bylaws of the Company and the
requirements of the NYSE Amex. The issuance of the Shares and the
Private Placement Shares is not subject to any preemptive or other similar
rights of any securityholder of the Company.
(q) Registration
Rights. There are no persons with registration rights or other
similar rights to have any securities registered pursuant to the Registration
Statement or otherwise registered by any of the Transaction Entities under the
Securities Act, other than pursuant to the Registration Rights
Agreement.
(r) [Reserved]
-10-
(s) Absence of Defaults and
Conflicts. None of the Transaction Entities, nor any of their
Subsidiaries (i) is in violation of its charter, by-laws, certificate of
limited partnership, agreement of limited partnership or similar organizational
document or (ii) is 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 any of the Transaction Entities or any of
their Subsidiaries is a party or by which it or any of them may be bound, or to
which any of the Properties or any other properties or assets of the Transaction
Entities or any of their Subsidiaries is subject (collectively, “Agreements and
Instruments”), except for such defaults that would not reasonably be
expected to result, singly or in the aggregate, in a Material Adverse
Effect. The execution, delivery and performance of this Agreement and
the other Operative Documents and the consummation of the transactions
contemplated herein and in the Registration Statement (including the issuance
and sale of the Shares and the Private Placement Shares and the use of the
proceeds from the sale of the Shares as described in the General Disclosure
Package and Prospectus under the caption “Use of Proceeds”) and compliance by
the Transaction Entities with their obligations hereunder and thereunder have
been duly authorized by all necessary corporate or limited partnership action,
as applicable, 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 Transaction Entities 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 reasonably be expected to
result, singly or in the aggregate, in a Material Adverse Effect). No
such action will result in any violation of (A) the provisions of the
charter, by-laws, certificate of limited partnership, agreement of limited
partnership or similar organizational document of any of the Transaction
Entities or any of their Subsidiaries or (B) 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
Transaction Entities or any of their Subsidiaries or any of their assets,
properties or operations, except in the case of clause (B) only, for any
such violation that would not reasonably be expected to result in 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 portion of such indebtedness by the Transaction Entities or any of
their Subsidiaries.
(t)
[Reserved]
(u)
Absence of
Proceedings. Except as disclosed in the Prospectus, there is
no action, suit, proceeding, inquiry or investigation pending, or, to the
knowledge of the Company, threatened, against or affecting the Transaction
Entities or any of its Subsidiaries, which is required to be disclosed in the
Registration Statement (other than as disclosed therein), or which would
reasonably be expected to result in a Material Adverse Effect, or which would
reasonably be expected to materially and adversely affect the consummation of
the transactions contemplated in this Agreement or the performance by the
Company of its obligations hereunder; and the aggregate of all pending legal or
governmental proceedings to which the Company or any such Subsidiary is a party
or of which any of their respective property or assets is the subject which are
not described in the Prospectus, including ordinary routine litigation
incidental to the business, would not reasonably be expected to result in a
Material Adverse Effect.
(v) [Reserved]
(w) Accuracy of
Exhibits. There are no contracts or documents that are
required to be filed as exhibits to the Registration Statement pursuant to the
Securities Act Regulations that have not been so filed as
required.
-11-
(x) No Finder’s
Fee. Except for the Underwriters’ discounts and commissions
payable by the Company to the Underwriters in connection with the offering of
the Shares contemplated herein or as otherwise disclosed in the Prospectus and
except for any fees payable in connection with the engagement of International
Assets Advisory, LLC pursuant to the letter agreements between the Company and
International Assets Advisory, LLC, and A&S and International Assets
Advisory, LLC, respectively, none of the Transaction Entities has incurred any
liability for any brokerage commission, finder’s fees or similar payments in
connection with the offering of the Shares contemplated hereby.
(y) 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 of its obligations hereunder, in connection with the offering,
issuance or sale of the Shares hereunder or the consummation of the transactions
contemplated by this Agreement, or under the Operative Documents, except
(i) such as have been already obtained under the Securities Act, the
Securities Act Regulations, the rules of the NYSE Amex, state securities laws or
the rules of FINRA and (ii) such as have been obtained under the laws and
regulations of jurisdictions outside the United States in which the Reserved
Shares are offered.
(z) Possession of Licenses and
Permits. Except as described in the Prospectus, each of the
Transaction Entities and their 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 under applicable law to conduct the
business now operated by them, except where the failure so to possess would not
reasonably be expected to result, singly or in the aggregate, in a Material
Adverse Effect; each of the Transaction Entities 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 reasonably be expected to
result, singly or in the aggregate, 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 reasonably be expected to
result, singly or in the aggregate, in a Material Adverse Effect; and, except as
described in the Prospectus, none of the Transaction Entities nor any of their
Subsidiaries has received any notice of proceedings relating to the revocation
or modification of any such Governmental Licenses that, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding, would
reasonably be expected to result in a Material Adverse Effect.
-12-
(aa) Title to
Property. (i) At the Closing Date, the Operating
Partnership or a Subsidiary thereof will have good and marketable title (fee or,
in the case of ground leases and as disclosed in the Prospectus, leasehold) to
each Property, free and clear of all mortgages, pledges, liens, claims, security
interests, restrictions or encumbrances of any kind, except such as (A) are
described in the Prospectus or (B) do not, singly or in the aggregate,
materially affect the value of such Property and do not materially interfere
with the use made and proposed to be made of such Property by the Transaction
Entities or any of their Subsidiaries; (ii) neither the Transaction
Entities nor any of their Subsidiaries owns any real property other than the
Properties; (iii) each of the ground leases and subleases of real property,
if any, material to the business of the Transaction Entities and their
Subsidiaries, considered as one enterprise, and under which the Transaction
Entities or any of their Subsidiaries holds Properties described in the
Prospectus, is in full force and effect, with such exceptions as are not
material and do not materially interfere with the use made or proposed to be
made of such real property by any of the Transaction Entities or any of their
Subsidiaries, and none of the Transaction Entities nor any of their Subsidiaries
has any notice of any material claim of any sort that has been asserted by any
ground lessor or sublessor under a ground lease or sublease threatening the
rights of the Transaction Entities or any of their Subsidiaries to the continued
possession of the leased or subleased premises under any such ground lease or
sublease; (iv) no tenant under any of the leases at the Properties has a
right of first refusal to purchase the premises demised under such lease;
(v) 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 reasonably be expected to result, singly or in the aggregate, in a
Material Adverse Effect; (vi) except if and to the extent disclosed in the
General Disclosure Package or the Prospectus, no Transaction Entity has
knowledge of any pending or threatened condemnation proceedings, zoning change
or other proceeding or action that will materially affect the use or value of
any of the Properties; and (vii) the mortgages and deeds of trust that
encumber the Properties are not convertible into equity securities of the entity
owning such Property and said mortgages and deeds of trust are not
cross-defaulted or cross-collateralized with any property other than other
Properties.
(bb) Utilities. To the
knowledge of the Transaction Entities, water, stormwater, sanitary sewer,
electricity and telephone service are all available at the property lines of
each Property over duly dedicated streets or perpetual easements of record
benefiting the applicable Property.
(cc) Possession of Intellectual
Property. The Transaction Entities and their Subsidiaries 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”) reasonably necessary to conduct the business now operated by
them. None of the Transaction Entities nor any of their Subsidiaries has
received any 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 that would render any Intellectual Property invalid
or inadequate to protect the interest of the Transaction Entities or any of
their Subsidiaries 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 reasonably be expected to result in a Material
Adverse Effect.
-13-
(dd) Environmental
Laws. Except as described in the Prospectus and except as
would not reasonably be expected to result, singly or in the aggregate, in a
Material Adverse Effect, (i) none of the Transaction Entities nor any of
their 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,
asbestos-containing materials or mold (collectively, “Hazardous
Materials”) or to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of Hazardous Materials
(collectively, “Environmental
Laws”), (ii) the Transaction Entities and their Subsidiaries have
all Governmental Licenses required under any applicable Environmental Laws and
are each in compliance with their requirements, (iii) 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 any of
the Transaction Entities or any of their Subsidiaries, and (iv) there are
no events or circumstances that would 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
or any of its Subsidiaries relating to Hazardous Materials or any Environmental
Laws.
(ee) Accounting Controls and Disclosure
Controls. The Company and each of its Subsidiaries
(i) have taken all necessary actions to ensure that, within the time period
required, the Company and its Subsidiaries will maintain effective internal
control over financial reporting (as defined under Rule 13a-15 and 15d-15 under
the rules and regulations of the Commission under the Exchange Act (the “Exchange Act
Regulations”)), and (ii) currently maintain a system of internal
accounting controls sufficient to provide reasonable assurances that
(A) transactions are executed in accordance with management’s general or
specific authorization; (B) transactions are recorded as necessary to
permit preparation of financial statements in conformity with GAAP and to
maintain accountability for assets; (C) access to assets is permitted only
in accordance with management’s general or specific authorization; and
(D) the recorded accountability for assets is compared with the existing
assets at reasonable intervals and appropriate action is taken with respect to
any differences. Except as described in the Prospectus, since the
Company’s inception, there has been no material weakness in the Company’s
internal control over financial reporting (whether or not
remediated). The Company’s auditors and the Audit Committee of the
Board of Directors of the Company, or if no such Audit Committee exists, the
full Board of Directors of the Company, have been advised of: (1) all
significant deficiencies and material weaknesses in the design or operation of
internal controls over financial reporting that have adversely affected or are
reasonably likely to adversely affect the Company’s ability to record, process,
summarize and report financial information; and (2) any fraud, whether or
not material, that involves management or other employees who have a significant
role in the Company’s internal controls over financial reporting. The
Company and its Subsidiaries have established a system of disclosure controls
and procedures (as defined in Rule 13a-15 and Rule 15d-15 under the Exchange Act
Regulations) that are designed to ensure that information required to be
disclosed by the Company in the reports that it files or submits under the
Exchange Act is recorded, processed, summarized and reported, within the time
periods specified in the Commission’s rules and forms, and is accumulated and
communicated to the Company’s management, including its principal executive
officer or officers and principal financial officer or officers, as appropriate,
to allow timely decisions regarding disclosure.
-14-
(ff) Compliance with the Xxxxxxxx-Xxxxx
Act. The Company has taken all necessary actions to ensure
that, at the time of effectiveness of the Registration Statement, it will be in
compliance in all material respects with all provisions of the Xxxxxxxx-Xxxxx
Act of 2002 and all rules and regulations promulgated thereunder or implementing
the provisions thereof (the “Xxxxxxxx-Xxxxx
Act”) that are then in effect and which the Company is required to comply
with as of the effectiveness of the Registration Statement, and is actively
taking steps to ensure that it will be in compliance in all material respects
with other provisions of the Xxxxxxxx-Xxxxx Act not currently in effect, upon
the effectiveness of such provisions.
(gg) Payment of
Taxes. All material U.S. federal income tax returns of the
Company and its Subsidiaries required by law to be filed have been filed in a
timely manner, and all such tax returns are correct and complete in all material
respects and all taxes shown by such returns have been paid, except taxes and
assessments against which appeals have been or will be promptly taken and as to
which adequate reserves have been provided. The Company and its
Subsidiaries have filed in a timely manner all tax returns that are required to
have been filed by them pursuant to applicable foreign, state, local or other
law (other than U.S. federal income tax law), except insofar as the failure to
file such returns would not reasonably be expected to result in a Material
Adverse Effect, and all such tax returns are correct and complete in all
material respects. The Company and its Subsidiaries have paid all
material taxes (other than U.S. federal income taxes) due, except for such
taxes, if any, as are being contested in good faith and as to which adequate
reserves have been provided. The charges, accruals, and reserves on
the books of the Company in respect of taxes for any years not finally
determined are adequate to meet any assessments or re-assessments for additional
tax for any years not finally determined, except to the extent of any inadequacy
that would not reasonably be expected to result in a Material Adverse
Effect.
(hh) Insurance. The
Transaction Entities and their Subsidiaries carry or are entitled to the
benefits of insurance, with financially sound and reputable insurers, in such
amounts and covering such risks as is generally maintained by companies of
established repute engaged in the same or similar business, and all such
insurance is in full force and effect. None of the Transaction
Entities has any reason to believe that it or any of its Subsidiaries will not
be able (i) to renew, if desired, its existing insurance coverage as and
when such policies expire, or (ii) to obtain comparable coverage from
similar institutions as may be necessary or appropriate to conduct its business
as now conducted and at a cost that would not reasonably be expected to result
in a Material Adverse Effect. Neither of the Company nor any of its
Subsidiaries has been denied any insurance coverage that it has sought or for
which it has applied. The Transaction Entities, directly or
indirectly, have obtained title insurance on the fee or leasehold interests, as
the case may be, in each of the Properties, in an amount equal to no less than
eighty percent (80%) of the purchase price of each such
Property.
(ii) Investment Company
Act. None of the Transaction Entities are required, and upon
the issuance and sale of the Shares and the Private Placement Shares as herein
contemplated and the application of the net proceeds therefrom as described in
the Prospectus will be required, to register as an “investment company” under
the Investment Company Act of 1940, as amended (the “Investment
Company Act”).
-15-
(jj) Absence of
Manipulation. None of the Transaction Entities, nor any of
their respective affiliates, as such term is defined in Rule 501(b) under the
Securities Act (each, an “Affiliate”),
has taken or will take, directly or indirectly, any action that is designed to
or that has constituted or that would reasonably be expected to cause or result
in stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares.
(kk) Foreign Corrupt Practices
Act. None of the Transaction Entities, nor, to the knowledge
of any of the Transaction Entities, any director, officer, agent, employee,
Affiliate or other person acting on behalf of any of the Transaction Entities or
any of their Subsidiaries are aware of or has taken any action, directly or
indirectly, that would result in a violation by such persons of the Foreign
Corrupt Practices Act of 1977, as amended, and the rules and regulations
thereunder and have instituted policies and procedures which are reasonably
expect to ensure continued compliance therewith.
(ll) Money Laundering
Laws. The operations of each of the Transaction Entities and
their Subsidiaries are and have been conducted at all times in compliance with
applicable financial recordkeeping and reporting requirements of the Currency
and Foreign Transactions Reporting Act of 1970, as amended, the money laundering
statutes of all jurisdictions, the rules and regulations thereunder and any
related or similar rules, regulations or guidelines, issued, administered or
enforced by any governmental agency (collectively, the “Money Laundering
Laws”) and no action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving any of the
Transaction Entities or any of their Subsidiaries with respect to the Money
Laundering Laws is pending or, to the best knowledge of any of the Transaction
Entities, threatened.
(mm) OFAC. None of the
Transaction Entities, any of their Subsidiaries and, to the knowledge of any of
the Transaction Entities, any director, officer, agent, employee or Affiliate of
any of the Transaction Entities is currently subject to any U.S. sanctions
administered by the Office of Foreign Assets Control of the
U.S. Treasury Department (“OFAC”);
and the Company will not directly or indirectly use the proceeds of the offering
and the issuance of the Private Placement Shares, or lend, contribute or
otherwise make available such proceeds to any of its Subsidiaries, joint venture
partners or other person, for the purpose of financing the activities of any
person currently subject to any U.S. sanctions administered by
OFAC.
(nn) Lending
Relationship. Except as disclosed in the Prospectus, none of
the Transaction Entities (i) have any material lending or other
relationship with any bank or lending Affiliate of any Underwriter or
(ii) intend to use any of the proceeds from the sale of the Shares
hereunder to repay any outstanding debt owed to any Affiliate of any
Underwriter.
(oo) Statistical and Market-Related
Data. Any statistical and market-related data included in the
General Disclosure Package or the Prospectus are based on or derived from
sources that the Company believes to be reliable and accurate in all material
respects and, to the extent required, the Company has obtained the written
consent to the use of such data from such sources.
-16-
(pp) Approval of
Listing. The Shares have been approved for listing on the NYSE
Amex, subject to notice of issuance.
(qq) Prior Sales of Common Shares or
Operating Partnership Units. Except as disclosed in the
Registration Statement or the Prospectus, the Company has not sold, issued or
distributed any Common Shares and the Operating Partnership has not sold, issued
or distributed any Operating Partnership Units and, except as disclosed in the
Registration Statement, General Disclosure Package or the Prospectus, there is
no current plan for the sale, issuance or distributions of any Common Shares or
securities convertible into Common Shares.
(rr) Real Estate Investment
Trust. Commencing with its taxable year ending
December 31, 2010, the Company intends to be organized in conformity with
the requirements for qualification as a real estate investment trust (“REIT”)
under the Internal Revenue Code of 1986, as amended (the “Code”),
and the Company’s proposed method of operation is intended to enable it to meet
the requirements for qualification and taxation as a REIT under the
Code. All statements regarding the Company’s qualification and
taxation as a REIT and descriptions of the Company’s organization and proposed
method of operation (inasmuch as they relate to the Company’s qualification and
taxation as a REIT) set forth in the Registration Statement, the Prospectus or
General Disclosure Package are accurate and fair summaries, so far as they
relate to matters of fact, of the tax matters described therein in all material
respects.
(ss) No Restrictions on Distributions or
Repayment. Except as described in the Prospectus, the
Operating Partnership is not currently prohibited, directly or indirectly, from
paying any distributions to the Company to the extent permitted by applicable
law, from making any other distribution on the Operating Partnership’s Units, or
from repaying the Company for any loans or advances made by the Company to the
Operating Partnership.
(tt) No Equity
Awards. Except for grants which are subject to consummation of
the offering of the Shares or are otherwise disclosed in the Prospectus, the
Company has not granted to any person or entity, a stock option or other
equity-based award to purchase Common Shares, pursuant to an equity-based
compensation plan or otherwise.
(uu) Foreign
Jurisdictions. The Company represents and warrants to the
Underwriters that (i) the General Disclosure Package, Prospectus and
Registration Statement comply, and any further amendments or supplements thereto
will comply, with any applicable laws or regulations of foreign jurisdictions in
which the General Disclosure Package, Prospectus and Registration Statement, as
amended or supplemented, if applicable, are distributed in connection with the
Reserved Shares, and (ii) no Governmental License other than such as have
been obtained or made, is necessary under the securities laws and regulations of
foreign jurisdictions in which the Reserved Shares are offered outside the
United States. The Company has not offered, or caused the
Underwriters to offer, Reserved Shares to any person with the specific intent to
unlawfully influence (A) a customer or supplier of the Company to alter the
customer’s or supplier’s level or type of business with the Company, or
(B) a trade journalist or publication to write or publish favorable
information about the Company or its products.
-17-
(vv) Officer’s
Certificates. Any certificate signed by any officer of the
Company and delivered to the Representatives or counsel for the Underwriters in
connection with the offering of the Shares shall be deemed a representation and
warranty by the Company, as to matters covered thereby, to each
Underwriter.
4. Covenants of the Transaction
Entities. Each of the
Transaction Entities, jointly and severally, covenants with each Underwriter as
follows:
(a) Compliance with Securities
Regulations and Commission Requests. The Company, subject to
Section 4(b),
will comply with the requirements of Rule 430A, and will notify the
Representatives immediately, and confirm the notice in writing, (i) when
any post-effective amendment to the Registration Statement shall become
effective, or any amendment or supplement to the 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, (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 Shares for offering or sale in any
jurisdiction, or of the initiation or threatening of any proceedings for any of
such purposes or of any examination pursuant to Section 8(e) of the
Securities Act concerning the Registration Statement and (v) if the Company
becomes the subject of a proceeding under Section 8A of the Securities Act
in connection with the offering of the Shares. The Company will
effect all filings required under Rule 424(b), in the manner and within the time
period required by Rule 424(b) (without reliance on Rule 424(b)(8)), and will
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 reasonable efforts to prevent the
issuance of any stop order and, if any stop order is issued, to obtain the
withdrawal thereof at the earliest possible moment.
(b) Filing of Amendments and Exchange
Act Documents. The Company will give the Representatives
notice of its intention to file or prepare any amendment to the Registration
Statement (including any filing under Rule 462(b)) or any amendment, supplement
or revision to either the prospectus included in the Registration Statement at
the time it became effective or to the Prospectus, and will furnish the
Representatives with copies of any such documents a reasonable amount of time
prior to such proposed filing or use, as the case may be, and will not file or
use any such document to which the Representatives or counsel for the
Underwriters shall reasonably object. The Company will give the
Representatives notice of its intention to make any filings pursuant to the
Exchange Act or the Exchange Act Regulations from the date hereof to the Closing
Date and will furnish the Representatives with copies of any such documents a
reasonable amount of time prior to such proposed filing, as the case may be, and
will not file or use any such document to which the Representatives or counsel
for the Underwriters shall reasonably object.
-18-
(c) Delivery of Registration
Statements. The Company has furnished or will deliver to the
Representatives and counsel for the Underwriters, without charge, signed copies
of the Registration Statement as originally filed and of each amendment thereto
(including exhibits filed therewith) and signed or conformed copies of all
consents and certificates of experts, and will also deliver to the
Representatives, without charge, a conformed copy of the Registration Statement
as originally filed and of each amendment thereto (without exhibits) for each of
the Underwriters. The copies of the Registration Statement and each
amendment thereto furnished to the Underwriters will be identical to the
electronically transmitted copies thereof filed with the Commission pursuant to
XXXXX, except to the extent permitted by Regulation S-T of the Securities
Act.
(d) Delivery of
Prospectuses. The Company has delivered to each Underwriter,
without charge, as many copies of each preliminary prospectus as such
Underwriter reasonably requested, and the Company hereby consents to the use of
such copies for purposes permitted by the Securities Act. The Company
will furnish to each Underwriter, without charge, during the period when the
Prospectus is (or, but for the exception afforded by Rule 172 of the Securities
Act Regulations (“Rule
172”), would be) required to be delivered under the Securities Act, such
number of copies of the Prospectus (as amended or supplemented) as such
Underwriter may reasonably request. The Prospectus and any amendments
or supplements thereto furnished to the Underwriters will be identical to the
electronically transmitted copies thereof filed with the Commission pursuant to
XXXXX, except to the extent permitted by Regulation S-T of the Securities
Act.
(e) Continued Compliance with Securities
Laws. The Company will comply with the Securities Act and the
Securities Act Regulations so as to permit the completion of the distribution of
the Shares as contemplated in this Agreement and in the
Prospectus. If at any time when a prospectus is (or, but for the
exception afforded by Rule 172, would be) required by the Securities Act to be
delivered in connection with sales of the Shares, any event shall occur or
condition shall exist as a result of which it is necessary, in the opinion of
counsel for the Underwriters or for the Company, to (i) amend the
Registration Statement in order that the Registration Statement will not include
any 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, (ii) amend or supplement the General Disclosure Package or the
Prospectus in order that the General Disclosure Package or the Prospectus, as
the case may be, will not include any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements therein
not misleading in the light of the circumstances existing at the time it is
delivered to a purchaser, or (iii) amend the Registration Statement or
amend or supplement the General Disclosure Package or the Prospectus in order to
comply with the requirements of the Securities Act or the Securities Act
Regulations, the Company will promptly prepare and file with the Commission,
subject to Section 4(b),
such amendment or supplement as may be necessary to correct such statement or
omission or to make the Registration Statement, the General Disclosure Package
or the Prospectus comply with such requirements, and the Company will furnish to
the Underwriters such number of copies of such amendment or supplement as the
Underwriters may reasonably request. If at any time following
issuance of an Issuer Free Writing Prospectus there occurred or occurs an event
or development as a result of which such Issuer Free Writing Prospectus
conflicted or would conflict with the information contained in the Registration
Statement relating to the Shares or included or would include an untrue
statement of a material fact or omitted or would omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances existing at that subsequent time, not misleading, the Company will
promptly notify the Representatives and will promptly amend or supplement, at
its own expense, such Issuer Free Writing Prospectus to eliminate or correct
such conflict, untrue statement or omission; provided that this
sentence shall not apply to statements in or omissions from any Issuer Free
Writing Prospectus based upon and in conformity with the Underwriter
Information.
-19-
(f) Blue Sky
Qualifications. The Company will use its commercially
reasonable efforts, in cooperation with the Underwriters, to qualify the Shares
for offering and sale under the applicable securities laws of such states and
other jurisdictions (domestic or foreign) as the Representatives 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.
(g) Rule 158. The
Company will timely file such reports pursuant to the Exchange 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 to the
Underwriters the benefits contemplated by, the last paragraph of
Section 11(a) of the Securities Act.
(h) Use of
Proceeds. The Company will use the net proceeds received by it
from the sale of the Shares and the Private Placement Shares in the manner
specified in the Prospectus under “Use of Proceeds.”
(i) Listing. The
Company will use its commercially reasonable efforts to effect the listing of
the Common Shares (including the Shares) on the NYSE Amex.
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(j) Restriction on Sale of
Shares. During a period of 180 days from the date of the
Prospectus (the “Lock-Up
Period”), the Transaction Entities will not, without the prior written
consent of the Representatives (i) directly or indirectly, offer, pledge,
sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to purchase or
otherwise transfer or dispose of any Common Shares or any securities convertible
into or exercisable or exchangeable for Common Shares or file any registration
statement under the Securities Act with respect to any of the foregoing (except
for a registration statement on Form S-8 relating to the Company’s equity
incentive plan) or (ii) enter into any swap or any other agreement or any
transaction that transfers, in whole or in part, directly or indirectly, the
economic consequence of ownership of the Common Shares, whether any such swap or
transaction described in clause (i) or (ii) above is to be settled by
delivery of Common Shares or such other securities, in cash or
otherwise. The foregoing sentence shall not apply to (A) the
Shares to be sold hereunder, (B) any Common Shares issued or options to
purchase Common Shares granted pursuant to existing employee benefit plans of
the Company referred to in the Prospectus, (C) any Common Shares issued
pursuant to any non-employee director stock plan or dividend reinvestment plan
referred to in the Prospectus, (D) any Common Shares or Operating
Partnership Units issued in connection with the formation of the Operating
Partnership, (E) the Private Placement Shares, (F) Common Shares, in
the aggregate not to exceed 10% of the number of Common Shares outstanding,
issued in connection with other acquisitions of real property or real property
companies; provided, however, that the
recipients of Common Shares issued in connection with such an acquisition shall
be required to agree in writing not to sell, offer, dispose of or otherwise
transfer any such shares during the remainder of the Lock-Up Period without the
prior written consent of the Representatives (which consent may be withheld at
the sole discretion of the Representatives), or (G) Common Shares
transferred in accordance with Article IV of the Company’s
charter. Notwithstanding the foregoing, if (1) during the last
17 days of the Lock-Up Period the Company issues an earnings release or material
news or a material event relating to the Company occurs, or (2) prior to
the expiration of the Lock-Up Period, the Company announces that it will release
earnings results or becomes aware that material news or a material event will
occur during the 16-day period beginning on the last day of the Lock-Up Period,
the restrictions imposed in this Section 4(j) shall
continue to apply until the expiration of the 18-day period beginning on the
issuance of the earnings release or the occurrence of the material news or
material event.
(k) Reporting
Requirements. The Company, during the period when the
Prospectus is (or, but for the exception afforded by Rule 172, would be)
required to be delivered under the Securities Act, will file all documents
required to be filed with the Commission pursuant to the Exchange Act within the
time periods required by the Exchange Act and the rules and regulations of the
Commission thereunder. Additionally, the Company shall report the use
of proceeds from the issuance of the Shares as may be required under Rule 463
under the Securities Act.
(l) Compliance with FINRA
Rules. The Company hereby agrees that it will use commercially
reasonable efforts to ensure that the Reserved Shares will be restricted as
required by FINRA or the FINRA rules from sale, transfer, assignment, pledge or
hypothecation for a period of three months following the date of this
Agreement. The Underwriters will notify the Company as to which
persons will need to be so restricted. At the request of the
Underwriters, the Company will direct the transfer agent to place a stop
transfer restriction upon such securities for such period of
time. Should the Company release, or seek to release, from such
restrictions any of the Reserved Shares, the Company agrees to reimburse the
Underwriters for any reasonable expenses (including, without limitation, legal
expenses) they incur in connection with such release.
(m) Issuer Free Writing
Prospectuses. The Company agrees that, unless it obtains the
prior written consent of the Representatives, not to be unreasonably withheld,
it will not make any offer relating to the Shares that would constitute an
Issuer Free Writing Prospectus or that would otherwise constitute a “free
writing prospectus,” or a portion thereof, required to be filed by the Company
with the Commission or retained by the Company under Rule 433 (“Rule 433”) of
the Securities Act; provided that the
Representatives will be deemed to have consented to the Issuer Free Writing
Prospectuses listed on Schedule C-1 and any “road show that is a written
communication” within the meaning of Rule 433(d)(8)(i). Any such free
writing prospectus consented to by the Representatives is hereinafter referred
to as a “Permitted Free Writing Prospectus.” The Company represents that it has
treated or agrees that it will treat each Permitted Free Writing Prospectus as
an “issuer free writing prospectus,” as defined in Rule 433, and that it has
complied and will comply with the applicable requirements of Rule 433 with
respect thereto, including timely filing with the Commission where required,
legending and record keeping.
-21-
(n) Absence of
Manipulation. Except as contemplated herein or in the General
Disclosure Package and the Prospectus, none of the Transaction Entities will
take, directly or indirectly, any action designed to or that would constitute or
that might reasonably be expected to cause or result in, stabilization or
manipulation of the price of any securities of the Company to facilitate the
sale or resale of the Shares.
(o) Qualification and Taxation as a
REIT. The Company will use its commercially reasonable efforts
to meet the requirements for qualification and taxation as a REIT under the Code
for its taxable year ending December 31, 2010, and the Company will use its
commercially reasonable efforts to continue to qualify for taxation as a REIT
under the Code unless and until the Company’s board of directors determines in
good faith that it is no longer in the best interests of the Company and its
stockholders to be so qualified.
(p) Xxxxxxxx-Xxxxx. Each
of the Transaction Entities will comply in all material respects with all
applicable provisions of the Xxxxxxxx-Xxxxx Act that are in effect.
5. Conditions of Underwriters’
Obligations. The obligations
of the several Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Transaction Entities contained in Section 3 or in
certificates of any officer of the Transaction Entities or any of their
Subsidiaries delivered pursuant to the provisions hereof, to the performance in
all material respects by the Transaction Entities of their 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 Date no stop
order suspending the effectiveness of the Registration Statement shall have been
issued under the Securities 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 Underwriters. A prospectus containing the Rule 430A
Information shall have been filed with the Commission in the manner and within
the time frame required by Rule 424(b) without reliance on Rule 424(b)(8) or a
post-effective amendment providing such information shall have been filed and
declared effective in accordance with the requirements of Rule
430A.
(b) Opinions of Counsel for
Company. On the Closing Date, the Representatives shall have
received the favorable opinions, dated as of the Closing Date, of each of
Proskauer Rose LLP and Xxxxxxx LLP, counsel for the Company, in form and
substance reasonably satisfactory to counsel for the Underwriters, together with
signed or reproduced copies of such opinions for each of the other Underwriters
and to such further effect as counsel to the Underwriters may reasonably
request. In giving each such opinion such counsel may state that,
insofar as such opinion involves factual matters, they have relied, to the
extent they deem proper, upon certificates of officers of the Transaction
Entities and their Subsidiaries and certificates of public
officials.
-22-
(c) Tax Opinion. On
the Closing Date, the Representatives shall have received the favorable tax
opinion, dated as of the Closing Date, of Proskauer Rose LLP, tax counsel for
the Company, in form and substance reasonably satisfactory to counsel for the
Underwriters, together with signed or reproduced copies of such opinion for each
of the other Underwriters. In giving such opinion such counsel may
state that, insofar as such opinion involves factual matters, they have relied,
to the extent they deem proper, upon certificates of officers of the Transaction
Entities and their Subsidiaries and certificates of public
officials.
(d) Opinion of Counsel for
Underwriters. On the Closing Date, the Representatives shall
have received the favorable opinion, dated as of the Closing Date, of Xxxxxxxxx
Xxxxxxxxx, a Profession Corporation, counsel for the Underwriters, together with
signed or reproduced copies of such opinion for each of the other Underwriters
with respect to the issuance and sale of the Shares delivered at the Closing
Date, the Registration Statement, the Prospectus and other related matters as
the Representatives may reasonably require, and the Transaction Entities shall
have furnished to such counsel such documents as they reasonably request for the
purpose of enabling them to pass upon such matters. In giving such opinion such
counsel may state that, insofar as such opinion involves factual matters, they
have relied, to the extent they deem proper, upon certificates of officers of
the Transaction Entities and their Subsidiaries and certificates of public
officials.
(e) Officers’
Certificate. On the Closing Date, there shall not have been,
since the date hereof or since the respective dates as of which information is
given in the General Disclosure Package or the Prospectus, any material adverse
change in the condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Transaction Entities and their Subsidiaries
considered as one enterprise, whether or not arising in the ordinary course of
business, and the Representatives shall have received a certificate of each of
(x) the Chief Executive Officer, the President or a Vice President of the
Company and of the chief financial or chief accounting officer of the Company
and (y) the general partner of the Operating Partnership or the Chief Executive
Officer, the President or a Vice President of the Operating Partnership and of
the chief financial or chief accounting officer of the Operating Partnership,
dated as of Closing Date, to the effect that (i) there has been no such
material adverse change, (ii) the representations and warranties of the
Transaction Entities in Section 3 are
true and correct with the same force and effect as though expressly made at and
as of Closing Date, except that any representations and warranties expressly
made as of a specified date shall only need to have been true and correct as of
such specified date, (iii) the Transaction Entities have complied in all
material respects with all agreements and satisfied all conditions on their part
to be performed or satisfied at or prior to Closing Date, and (iv) no stop
order suspending the effectiveness of the Registration Statement under the
Securities Act has been issued, no order preventing or suspending the use of the
preliminary prospectus or the Prospectus has been issued and no proceedings for
those purposes have been instituted or are pending or, to their knowledge,
contemplated by the Commission.
-23-
(f) Accountant’s Comfort
Letter. At the time of the execution of this Agreement, the
Representatives shall have received from PricewaterhouseCoopers LLP a letter
dated such date, in form and substance reasonably satisfactory to the
Representatives, together with signed or reproduced copies of such letter for
each of the other Underwriters 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, the General Disclosure Package and the
Prospectus.
(g) Bring-down Comfort
Letter. On the Closing Date, the Representatives shall have
received from PricewaterhouseCoopers LLP a letter, dated as of Closing Date, to
the effect that they reaffirm the statements made in the letter furnished
pursuant to Section
5(f), except that the “specified date” referred to shall be a date not
more than three business days prior to the Closing Date.
(h) Approval of
Listing. At Closing Date, the Shares shall have been approved
for listing on the NYSE Amex, subject only to official notice of
issuance.
(i) No
Objection. FINRA has confirmed that it has not raised any
objection with respect to the fairness and reasonableness of the underwriting
terms and arrangements.
(j) Lock-up
Agreements. At the date of this Agreement, the Representatives
shall have received a lock-up agreement in form and substance reasonably
satisfactory to it (the “Lock-Up
Agreement”) signed by each of the persons listed on Schedule III
hereto.
(k) [Reserved]
(l) Private Placement
Closing. The Company shall have issued and sold the Private
Placement Shares to the Private Placement Purchaser.
(m) Conditions to Purchase of Option
Shares. In the event that the Underwriters exercise their
option provided in Section 1(b) to
purchase all or any portion of the Option Shares, the representations and
warranties of the Transaction Entities contained herein and the statements in
any certificates furnished by the Transaction Entities or any of their
Subsidiaries hereunder shall be true and correct as of each Date of Delivery,
except that any representations and warranties expressly made as of a specified
date shall only need to have been true and correct as of such specified date,
and, at the relevant Date of Delivery, the Representatives shall have
received:
(i) Officers’
Certificate. A certificate, dated such Date of Delivery, of
the Chief Executive Officer, the President or a Vice President of the Company
and of the chief financial or chief accounting officer of the Company,
confirming that the certificate delivered at the Closing Date pursuant to Section 5(e)
remains true and correct in all material respects as of such Date of
Delivery.
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(ii)
Opinions of Counsel
for Company. The favorable opinions of each of Proskauer
Rose LLP and Xxxxxxx LLP, counsel for the Company, in form and substance
reasonably satisfactory to counsel for the Underwriters, dated such Date of
Delivery, relating to the Option Shares to be purchased on such Date of Delivery
and otherwise to the same effect as the opinions required by Section 5(b). In
giving each such opinion such counsel may state that, insofar as such opinion
involves factual matters, they have relied, to the extent they deem proper, upon
certificates of officers of the Transaction Entities and their Subsidiaries and
certificates of public officials.
(iii)
Tax
Opinion. The favorable tax opinion of Proskauer Rose LLP, tax
counsel for the Company, in form and substance reasonably satisfactory to
counsel for the Underwriters, dated such Date of Delivery, relating to the
Option Shares to be purchased on such Date of Delivery and otherwise to the same
effect as the opinion required by Section 5(c). In
giving such opinion such counsel may state that, insofar as such opinion
involves factual matters, they have relied, to the extent they deem proper, upon
certificates of officers of the Transaction Entities and their Subsidiaries and
certificates of public officials.
(iv)
Opinion of Counsel for
Underwriters. The favorable opinion of Xxxxxxxxx Xxxxxxxxx, a
Professional Corporation, counsel for the Underwriters, dated such Date of
Delivery, relating to the Option Shares to be purchased on such Date of Delivery
and otherwise to the same effect as the opinion required by Section 5(d). In
giving such opinion such counsel may state that, insofar as such opinion
involves factual matters, they have relied, to the extent they deem proper, upon
certificates of officers of the Transaction Entities and their Subsidiaries and
certificates of public officials.
(v) Bring-down Comfort
Letter. A letter from PricewaterhouseCoopers LLP, in form and
substance reasonably satisfactory to the Representatives and dated such Date of
Delivery, in the same form and substance as the letter furnished to the
Representatives pursuant to Section 5(g),
except that the “specified date” in the letter furnished pursuant to this
paragraph shall be a date not more than three business days prior to such Date
of Delivery.
(n)
Additional
Documents. On the Closing Date and on each Date of Delivery
counsel for the Underwriters shall have been furnished with such documents and
opinions as they may reasonably require for the purpose of enabling them to pass
upon the issuance and sale of the Shares 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 Shares as
herein contemplated shall be reasonably satisfactory in form and substance to
the Representatives and counsel for the Underwriters.
(o)
Termination of
Agreement. If any condition specified in this Section shall
not have been fulfilled when and as required to be fulfilled, this Agreement,
or, in the case of any condition to the purchase of Option Shares on a Date of
Delivery which is after the Closing Date, the obligations of the several
Underwriters to purchase the relevant Option Shares may be terminated by the
Representatives by notice to the Company at any time at or prior to Closing Date
or such Date of Delivery, as the case may be, and such termination shall be
without liability of any party to any other party except as provided in Section 4 and
except that Sections
3, 6,
7, 8 and 16 shall survive any
such termination and remain in full force and effect.
-25-
6. Indemnification.
(a) Indemnification of
Underwriters. The REIT Entities jointly and severally agree to
indemnify and hold harmless each Underwriter, its Affiliates, its selling agents
and each person, if any, who controls any Underwriter within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act as
follows:
(i)
against any and all loss, liability, claim, damage and expense whatsoever
(“Losses”),
as incurred, as to which such indemnified party may become subject as a result
of a written claim made by a third party under any applicable law, domestic or
foreign, or otherwise, and related to or arising out of (A) any untrue statement
or alleged untrue statement of a material fact contained in the Registration
Statement (or any amendment thereto), including the Rule 430A Information of the
General Disclosure Package, 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, in the light of the circumstances under which they were
made;
(ii)
against any and all Losses, 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, in each case based upon any such untrue statement or omission, or
any such alleged untrue statement or omission; provided, that any
such settlement is effected with the written consent of the Company;
and
(iii)
against any and all Losses, as incurred (including the fees and disbursements of
a single counsel chosen by the Representatives), 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, in each case 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 Losses to the extent (x) arising out
of or based on any untrue statement or omission or alleged untrue statement or
omission made in the Registration Statement (or any amendment thereto),
including the Rule 430A Information or the General Disclosure Package in
reliance upon and in conformity with the Underwriter Information, or (y) found
in a final, non-appealable judgment by a court to have resulted from the bad
faith, gross negligence or willful misconduct of the party seeking
indemnification.
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(b) Indemnification of Company,
Directors and Officers. Each Underwriter severally, and not
jointly, agrees to indemnify and hold harmless the REIT Entities, each of their
respective directors, officers, employees, attorneys and agents, each of their
respective officers who signed the Registration Statement, and each person, if
any, who controls each of the REIT Entities within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act,
against any and all Losses described in the indemnity contained in Section 6(a), as
incurred, but only (x) 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 or the General
Disclosure Package in reliance upon and in conformity with the Underwriter
Information, or (y) if found in a final, non-appealable judgment by a court to
have resulted from the bad faith, gross negligence or willful misconduct of any
Underwriter, its Affiliates, its selling agents and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act.
(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 prejudiced as a
result thereof. If any such claim shall be brought against an
indemnified party, and it shall notify the indemnifying party thereof, the
indemnifying party shall be entitled to participate therein and, to the extent
that it wishes, jointly with any other similarly notified indemnifying party, to
assume the defense thereof with counsel reasonably satisfactory to the
indemnified party.
After
notice from the indemnifying party to the indemnified party of its election to
assume the defense of such claim or action, the indemnifying party shall not be
liable to the indemnified party under this Section 6 for
any legal or other expenses subsequently incurred by the indemnified party in
connection with the defense thereof other than reasonable costs of
investigation; provided, however, that the
Representatives shall have the right to employ one counsel to represent jointly
the Representatives and those other Underwriters and their respective directors,
officers and controlling persons who may be subject to liability arising out of
any claim in respect of which indemnity may be sought by the Underwriters
against the REIT Entities under this Section 6
if: (i) the Company and the Underwriters shall have so mutually
agreed; (ii) the Company has failed within a reasonable time to retain
counsel reasonably satisfactory to the Underwriters; (iii) counsel for the
Underwriters shall have reasonably concluded that there are legal defenses
available to them that are different from or in addition to those available to
the REIT Entities; or (iv) the named parties in any such proceeding
(including any impleaded parties) include both the Underwriters or their
respective directors, officers or controlling persons, on the one hand, and the
REIT Entities, on the other hand, and representation of both sets of parties by
the same counsel would be inappropriate due to actual conflicts of interests
between them, and in any such event the fees and expenses of such separate
counsel shall be paid by the REIT Entities. 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.
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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
(whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (A) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (B) 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.
(d) [Reserved]
(e) Indemnification for Reserved
Shares. In connection with the offer and sale of the Reserved
Shares, the REIT Entities jointly and severally agree to indemnify and hold
harmless the Underwriters, their Affiliates and selling agents and each person,
if any, who controls any Underwriter within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act,
from and against any and all Losses (including, without limitation, any legal or
other expenses reasonably incurred in connection with defending, investigating
or settling any such action or claim), as incurred, (i) arising out of the
violation of any applicable laws or regulations of foreign jurisdictions where
Reserved Shares have been offered; (ii) arising out of any untrue statement
or alleged untrue statement of a material fact contained in any prospectus
wrapper or other material prepared by or with the consent of the Company for
distribution to Invitees in connection with the offering of the Reserved Shares
or caused by any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading but not with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made therein in reliance upon and in conformity
with the Underwriter Information; (iii) caused by the failure of
any Invitee to pay for and accept delivery of Reserved Shares which have been
orally confirmed for purchase by any Invitee by the end of the first business
day after the date of the Agreement; or (iv) related to, or arising out of
or in connection with, the offering of the Reserved Shares.
7. Contribution. If
the indemnification provided for in Section 6 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, (a) in such proportion as is appropriate to reflect the
relative benefits received by the REIT Entities on the one hand and the
Underwriters on the other hand from the offering of the Shares pursuant to this
Agreement, or (b) if the allocation provided by clause (a) is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (a) above but also the
relative fault of the REIT Entities on the one hand and of the Underwriters on
the other hand in connection with the statements or omissions, or in connection
with any violation of the nature referred to in Section 6(e),
which resulted in such losses, liabilities, claims, damages or expenses, as well
as any other relevant equitable considerations. The relative benefits
received by the REIT Entities on the one hand and the Underwriters on the other
hand in connection with the offering of the Shares pursuant to this Agreement
shall be deemed to be in the same respective proportions as the total net
proceeds from the offering of the Shares pursuant to this Agreement (before
deducting expenses) received by the REIT Entities and the total underwriting
discount received by the Underwriters, in each case as set forth on the cover of
the Prospectus, bear to the aggregate initial public offering price of the
Shares as set forth on the cover of the Prospectus.
-28-
The
relative fault of the REIT Entities on the one hand and the Underwriters on the
other hand shall be determined by reference to, among other things, whether any
such untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by the
REIT Entities or by the Underwriters and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission or any violation of the nature referred to in Section 6(e).
The REIT
Entities and the Underwriters agree that it would not be just and equitable if
contribution pursuant to this Section 7 were
determined by pro rata allocation (even if the Underwriters 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 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, no
Underwriter shall be required to contribute any amount in excess of the
underwriting discount or commission applicable to the Shares purchased by such
Underwriter hereunder, except as may be provided in any agreement among the
Underwriters relating to the offering of the Shares. No person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities 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 an Underwriter within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act and
each Underwriter’s Affiliates and selling agents shall have the same rights to
contribution as such Underwriter, and each director of the REIT Entities, each
officer of the REIT Entities who signed the Registration Statement, and each
person, if any, who controls the REIT Entities within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act
shall have the same rights to contribution as the REIT Entities. The
Underwriters’ respective obligations to contribute pursuant to this Section 7 are
several in proportion to the number of Initial Shares set forth opposite their
respective names in Schedule I hereto and
not joint.
8. Representations, Warranties
and Agreements to Survive. All representations, warranties and
agreements contained in this Agreement or in certificates of officers of the
Transaction Entities or any of their Subsidiaries submitted pursuant hereto,
shall remain operative and in full force and effect regardless of (a) any
investigation made by or on behalf of any Underwriter or its Affiliates or
selling agents, any person controlling any Underwriter, its officers or
directors or any person controlling the Company and (b) delivery of and
payment for the Shares.
-29-
9. Termination of
Agreement.
(a) Termination;
General. The Representatives may terminate this Agreement, by
notice to the Company, at any time at or prior to Closing Date (i) if there
has been, in the reasonable judgment of the Representatives, since the time of
execution of this Agreement or since the respective dates as of which
information is given in the General Disclosure Package or the Prospectus, any
material adverse change in or affecting any of the Properties or in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its 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 or the international financial markets, any
outbreak of hostilities or escalation thereof or other calamity or 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 Representatives,
impracticable or inadvisable to proceed with the public offering of the Shares,
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 NYSE Amex or the New York Stock Exchange or in the
Nasdaq Global Market has been suspended or materially limited, or minimum or
maximum prices for trading have been fixed, or maximum ranges for prices have
been required, by any of said exchanges or by such system or by order of the
Commission, FINRA or any other governmental authority, or (iv) a material
disruption has occurred in commercial banking or securities settlement or
clearance services in the United States or with respect to Clearstream or
Euroclear systems in Europe, or (v) 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 and
provided further that Sections 3, 6, 7, 8 and 16 shall survive such
termination and remain in full force and effect.
10. Default by One or More of
the Underwriters. If one or more of the Underwriters shall
fail on the Closing Date or on any Date of Delivery to purchase the Shares which
it or they are obligated to purchase under this Agreement (the “Defaulted
Shares”), the Representatives shall have the right, within 24 hours
thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Shares in such amounts as may be agreed upon and upon the terms
herein set forth; if, however, the Representatives shall not have completed such
arrangements within such 24-hour period, then:
(a) if
the number of Defaulted Shares does not exceed 10% of the number of Shares to be
purchased on such date, each of the non-defaulting Underwriters shall be
obligated, severally and not jointly, to purchase the full amount thereof in
proportion to the number of Initial Shares set forth in Schedule I hereto
opposite the name of such non-defaulting Underwriter bears to the total number
of Initial Shares opposite the names of all non-defaulting Underwriters,
or
-30-
(b) if
the number of Defaulted Shares exceeds 10% of the number of Shares to be
purchased on such date, this Agreement or, with respect to any Date of Delivery
which occurs after the Closing Date, the obligation of the Underwriters to
purchase and of the Company to sell the Option Shares to be purchased and sold
on such Date of Delivery, shall terminate without liability on the part of any
non-defaulting Underwriter.
No action
taken pursuant to this Section shall relieve any defaulting Underwriter from
liability in respect of its default.
In the
event of any such default which does not result in a termination of this
Agreement or, in the case of a Date of Delivery which is after the Closing Date,
which does not result in a termination of the obligation of the Underwriters to
purchase and the Company to sell the relevant Option Shares, as the case may be,
either (i) the Representatives or (ii) the Company shall have the
right to postpone Closing Date or the relevant Date of Delivery, as the case may
be, for a period not exceeding seven days in order to effect any required
changes in the Registration Statement, the General Disclosure Package or the
Prospectus or in any other documents or arrangements. As used herein,
the term “Underwriter”
includes any person substituted for a defaulting Underwriter under this Section 10.
11. Tax
Disclosure. Notwithstanding any other provision of this
Agreement, immediately upon commencement of discussions with respect to the
transactions contemplated hereby, the Transaction Entities (and each employee,
representative or other agent of the Transaction Entities) may disclose to any
and all persons, without limitation of any kind, the tax treatment and tax
structure of the transactions contemplated by this Agreement and all materials
of any kind (including opinions or other tax analyses) that are provided to the
Transaction Entities relating to such tax treatment and tax
structure. For purposes of the foregoing, the term “tax
treatment” is the purported or claimed federal income tax treatment of
the transactions contemplated hereby, and the term “tax
structure” includes any fact that may be relevant to understanding the
purported or claimed federal income tax treatment of the transactions
contemplated hereby.
-31-
12. Payment of
Expenses.
(a) Expenses. The
Company agrees to pay for or promptly reimburse the Representatives on behalf of
all Underwriters for all reasonable out-of-pocket expenses payable to third
parties incident to their performance under this Agreement, including
(i) the preparation, printing and filing under the Securities Act of the
Registration Statement (including financial statements and exhibits thereto) as
originally filed and of each amendment thereto, (ii) the preparation,
printing and delivery to the Underwriters of this Agreement, any agreement among
underwriters and such other documents as may be required in connection with the
offering, purchase, sale, issuance or delivery of the Shares, (iii) the
preparation, issuance and delivery of the certificates for the Shares to the
Underwriters, including any stock or other transfer taxes and any stamp or other
duties payable upon the sale, issuance or delivery of the Shares to the
Underwriters, (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 1,
including filing fees and the reasonable fees and disbursements of counsel for
the Underwriters, in connection therewith, (vi) the printing and delivery
to the Underwriters of copies of each preliminary prospectus, any Permitted Free
Writing Prospectus, the Prospectus and any amendments or supplements thereto or
prospectus wrapper prepared in connection therewith and any costs associated
with electronic delivery of any of the foregoing by the Underwriters to
investors, (vii) the fees and expenses of any transfer agent or registrar
for the Securities, (viii) the costs and expenses relating to investor
presentations on any “road show” undertaken in connection with the marketing of
the Shares, including without limitation, expenses associated with the
production of road show slides and graphics, fees and expenses of any
consultants engaged in connection with the road show presentations, travel and
lodging expenses of the representatives and officers of the Company and any such
consultants and the Underwriters, (ix) the filing fees incident to, and the
reasonable fees and disbursements of counsel to the Underwriters in connection
with, the review by FINRA of the terms of the sale of the Shares and
(x) the fees and expenses incurred in connection with the listing of the
Shares on the NYSE Amex and (xi) all costs and expenses of the
Underwriters, including the fees and disbursements of counsel for the
Underwriters, in connection with matters related to the Reserved Shares
(collectively, “Expenses”);
provided, however, that the
Representatives on behalf of all Underwriters shall receive prior written
approval of the Company in respect of any Expenses to be incurred in an amount
equal to or in excess of $5,000 individually (the “Individual
Threshold”) or $250,000 in the aggregate exclusive of air transportation
costs incurred pursuant to the road show conducted in connection with the
offering of Shares (the “Aggregate
Threshold”), such approvals not to be unreasonably withheld or delayed;
provided further, however, that once
the Company has approved exceeding the Aggregate Threshold, then the
Representatives on behalf of all Underwriters (A) shall be required to
receive prior written approval for any Expenses to be incurred in an amount
equal to or in excess of the Individual Threshold, and (B) shall notify the
Company promptly in respect of any Expenses incurred in an amount less than the
Individual Threshold. In any event, the Representatives on behalf of
all Underwriters shall not incur Expenses in excess of $300,000 in the aggregate
exclusive of air transportation costs incurred pursuant to the road show
conducted in connection with the offering of the Shares without the prior
written approval of the Company, such approvals not to be unreasonably withheld
or delayed. The Company acknowledges and agrees that the budget of up
to $125,000 for payment to the Underwriters’ single legal counsel for services
to the Underwriters in connection with the Transaction is hereby approved as an
Expense pursuant to this Section 12(a), such
Expense to be included in the calculation of the Aggregate
Threshold. The Representatives on behalf of all Underwriters shall
provide evidence of all Expenses in reasonable detail to the
Company.
(b) Termination of
Agreement. If this Agreement is terminated by the
Representatives in accordance with the provisions of Section 5 or
Section 9,
the Company shall reimburse the Underwriters for all of their reasonable
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriters.
-32-
13. Notices. All
notices, requests, communications and demands (each a “Notice”)
to, with or upon any of the respective parties shall be in writing and sent by
(i) personal delivery, (ii) reputable overnight courier, (iii) facsimile
transmission with telephonic confirmation (provided that such Notice also is
sent contemporaneously by another method provided for in this Section 13), or
(iv) registered or certified mail, postage prepaid, return receipt requested,
addressed as set forth below (or to such other address as may be hereafter
notified by the respective parties hereto in accordance with this Section 13):
Notices
to the Underwriters shall be directed to the Representatives at:
XXXX
Capital Partners LLC
00
Xxxxxxxxx Xxxxx
Xxxxxxx
Xxxxx, Xxxxxxxxxx 00000
|
|
Tel:
|
(000)
000-0000
|
|
|
Fax:
|
(000)
000-0000
|
Attention: Xxx
Xxxxx
and
Xxxxxxxx
& Xxxxxxxxx, Incorporated
000 Xxxx
Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxx,
Xxxxxxxx 00000
|
|
Tel:
|
(000)
000-0000
|
|
|
Fax:
|
(000)
000-0000
|
Attention: Xxxxxx
XxXxxxxxx
with a
copy to:
Xxxxxxxxx
Xxxxxxxxx
0000 Xxxx
Xxxx Xxxxxx
Xxxxxxxx,
Xxxxxxxx 00000
|
|
Tel:
|
(000)
000-0000
|
|
|
Fax:
|
(000)
000-0000
|
Attention: Xxxxxx
X. Xxxxxxx, Esq.
Attention: Xxxxxxx
X. Xxxxxxxxxx, Esq.
notices
to the Transaction Entities shall be directed to the Company at:
Preferred
Apartment Communities, Inc.
0000
Xxxxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx,
Xxxxxxx 00000
Tel:
(000) 000-0000
Fax:
(000) 000-0000
Attention: Xxxxxxx
X. Xxxxxxxxxxx, Esq.
-33-
with a
copy to:
Proskauer
Rose LLP
0000
Xxxxxxxx
Xxx Xxxx,
Xxx Xxxx 00000
Tel: (000-000-0000
Fax: (000)
000-0000
Attention: Xxxxx
X. Xxxx, Esq.
Attention: Xxxxx
X. Gerkis, Esq.
Any
Notice sent as aforesaid shall be deemed given and effective upon actual receipt
(or refusal of receipt).
14. No Advisory or Fiduciary
Relationship. Each of the Transaction Entities acknowledges
and agrees that
(a) the
purchase and sale of the Shares pursuant to this Agreement, including the
determination of the public offering price of the Shares and any related
discounts and commissions, is an arm’s-length commercial transaction between the
Transaction Entities, on the one hand, and the several Underwriters, on the
other hand,
(b) in
connection with the offering contemplated hereby and the process leading to such
transaction each Underwriter is and has been acting solely as a principal and is
not the agent or fiduciary of the Transaction Entities or their respective
stockholders, unitholders, creditors, employees or any other party,
(c) no
Underwriter has assumed or will assume an advisory or fiduciary responsibility
in favor of the Transaction Entities with respect to the offering contemplated
hereby or the process leading thereto (irrespective of whether such Underwriter
has advised or is currently advising the Transaction Entities on other matters)
and no Underwriter has any obligation to the Transaction Entities with respect
to the offering contemplated hereby except the obligations expressly set forth
in this Agreement,
(d) the
Underwriters and their respective Affiliates may be engaged in a broad range of
transactions that involve interests that differ from those of each of the
Transaction Entities, and
(e) the
Underwriters have not provided any legal, accounting, regulatory or tax advice
with respect to the offering contemplated hereby and the Transaction Entities
have consulted their own respective legal, accounting, regulatory and tax
advisors to the extent it deemed appropriate.
15. Parties. This
Agreement shall each inure to the benefit of and be binding upon the
Underwriters, the Transaction Entities and their respective
successors. No party hereto may assign this Agreement in whole or in
part without the consent of the other parties, which shall not be unreasonably
withheld. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person, firm or corporation, other
than the Underwriters, the Transaction Entities 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 Underwriters, the
Transaction Entities and their respective successors and permitted assignees,
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 Shares from any Underwriter shall be
deemed to be a successor by reason merely of such purchase.
-34-
16. Trial by
Jury. Each of the Transaction Entities (on its behalf and, to
the extent permitted by applicable law, on behalf of its stockholders or
unitholders, as applicable, and Affiliates) and each of the Underwriters hereby
irrevocably waives, to the fullest extent permitted by applicable law, any and
all right to trial by jury in any legal proceeding arising out of or relating to
this Agreement or the transactions contemplated hereby.
17. GOVERNING
LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
18. TIME. TIME
SHALL BE OF THE ESSENCE OF THIS AGREEMENT. EXCEPT AS OTHERWISE SET
FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
19. Partial
Unenforceability. The invalidity or unenforceability of any
Section, paragraph or provision of this Agreement shall not affect the validity
or enforceability of any other Section, paragraph or provision
hereof. If any Section, paragraph or provision of this Agreement is
for any reason determined to be invalid or unenforceable, there shall be deemed
to be made such minor changes (and only such minor changes) as are necessary to
make it valid and enforceable.
20. Counterparts. This
Agreement may be executed (including by facsimile transmission) with counterpart
signature pages or in any number of counterparts, each of which shall be deemed
to be an original, but all such counterparts shall together constitute one and
the same Agreement.
21. Effect of
Headings. The Section headings herein are for convenience only
and shall not affect the construction hereof.
-35-
If the foregoing correctly sets forth
the understanding among the Transaction Entities and the Underwriters, please so
indicate in the space provided below for the purpose, whereupon this Agreement
shall constitute a binding agreement among the Transaction Entities and the
Underwriters.
|
Very
truly yours,
|
|||||
|
PREFERRED
APARTMENT COMMUNITIES, INC.,
a Maryland corporation |
|||||
|
By:
|
|||||
|
Name:
|
Xxxx
X. Xxxxxxxx
|
||||
|
Title:
|
Chief
Executive Officer
|
||||
|
PREFERRED
APARTMENT COMMUNITIES OPERATING PARTNERSHIP, L.P., a Delaware limited
partnership
|
|||||
|
By:
|
PREFERRED
APARTMENT COMMUNITIES, INC.,
a Maryland corporation |
||||
|
Its:
|
General
Partner
|
||||
|
By:
|
|||||
|
Name:
|
Xxxx
X. Xxxxxxxx
|
||||
|
Title:
|
Chief
Executive Officer
|
||||
|
PREFERRED
APARTMENT ADVISOR, LLC,
a
Delaware limited liability company
|
|||||
|
By:
|
|||||
|
Name:
|
Xxxx
X. Xxxxxxxx
|
||||
|
Title:
|
Chief
Executive
Officer
|
||||
-36-
|
Accepted
and agreed to as
|
|||
|
of
the date first above written:
|
|||
|
XXXX
CAPITAL PARTNERS LLC
|
|||
|
By:
|
|||
|
Name:
|
|||
|
Title:
|
|||
|
XXXXXXXX
& XXXXXXXXX, INCORPORATED
|
|||
|
By:
|
|||
|
Name:
|
|||
|
Title:
|
|||
Each for
itself and as a Representative of the other Underwriters named on Schedule I
hereto.
-37-
Schedule
I
|
Number
of Initial
|
||||
|
Underwriter
|
Shares to be Purchased
|
|||
|
XXXX
Capital Partners LLC
|
[_____ | ] | ||
|
Xxxxxxxx
& Xxxxxxxxx, Incorporated
|
[_____ | ] | ||
| Legent Clearing LLC | [_____ | ] | ||
|
Boenning
& Scattergood, Inc.
|
[_____ | ] | ||
|
[INSERT
NAMES OF OTHER UNDERWRITER]
|
[_____ | ] | ||
|
Total
|
6,000,000 | |||
Schedule
II
Issuer Free Writing
Prospectuses
1.
2.
3.
Free Writing
Prospectuses
4.
5.
6.
Pricing and Other
Information
7.
8.
9.
Schedule
III
Signatories to Lock-Up
Agreement
1.
2.
3.
