Exhibit 1.1
CAPITAL AUTOMOTIVE REIT
20,000,000 Shares of Beneficial Interest
UNDERWRITING AGREEMENT
_______, 1998
FRIEDMAN, BILLINGS, XXXXXX & CO., INC.
as Representative of the several Underwriters
c/o Friedman, Billings, Xxxxxx & Co., Inc.
0000 00xx Xxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Dear Sirs:
Capital Automotive REIT, a Maryland real estate investment trust (the
"Company"), confirms its agreement with Friedman, Billings, Xxxxxx & Co., Inc.
and each of the other Underwriters listed on Schedule I hereto (collectively,
the "Underwriters"), for whom Friedman, Billings, Xxxxxx & Co., Inc. is acting
as representative (in such capacity, the "Representative"), with respect to (i)
the sale by the Company and the purchase by the Underwriters, acting severally
and not jointly, of the respective numbers of common shares of beneficial
interest of the Company, $.01 par value per share (the "Common Shares"), set
forth in Schedule I hereto and (ii) the grant by the Company to the
Underwriters, acting severally and not jointly, of the option described in
Section 1(b) hereof to purchase all or any part of 3,000,000 Common Shares to
cover over-allotments, if any. The 20,000,000 Common Shares to be purchased by
the Underwriters (the "Initial Shares") and all or any part of the 3,000,000
Common Shares subject to the option described in Section 1(b) hereof (the
"Option Shares") are hereinafter called, collectively, the "Shares".
The Company understands 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.
The Company has filed with the Securities and Exchange Commission (the
"Commission"), a registration statement on Form S-11 (No. 333-41183) and a
related preliminary prospectus subject to completion for the registration of the
Shares under the Securities Act of 1933, as amended (the "Securities Act"), and
the rules and regulations thereunder (the "Securities Act Regulations"). The
Company has prepared and filed such amendments thereto, if any, and such amended
preliminary prospectuses, if any, as may have been required to the date hereof,
and will file such additional amendments or supplements thereto and such amended
or supplemented prospectuses as may hereafter be required. The registration
statement has been declared effective under the Securities Act by the
Commission. The
registration statement as amended at the time it became effective (including all
information deemed to be a part of the registration statement at the time it
became effective pursuant to Rule 430A of the Securities Act Regulations) is
hereinafter called the "Registration Statement," except that, if the Company
files a post-effective amendment to such registration statement which becomes
effective prior to the Closing Time (as defined below), "Registration Statement"
shall refer to such registration statement as so amended. Any registration
statement filed pursuant to Rule 462(b) of the Securities Act Regulations is
hereinafter called the "Rule 462(b) Registration Statement," and after such
filing the term "Registration Statement" shall include the 462(b) Registration
Statement, as amended from time to time. Each prospectus included in the
registration statement, or amendments thereof or supplements thereto, before it
became effective under the Securities Act and any prospectus filed with the
Commission by the Company with the consent of the Underwriters pursuant to Rule
424(a) of the Securities Act Regulations is hereinafter called the "Preliminary
Prospectus." The term "Prospectus" means the final prospectus, as first filed
with the Commission pursuant to paragraph (1) or (4) of Rule 424(b) of the
Securities Act Regulations, and any amendments thereof or supplements thereto.
The Company also will issue and sell at the Closing Time (as hereinafter
defined) to the Representative for its own account warrants (the "Warrants") to
purchase at the Public Offering Price (as defined below) up to 1,277,794 Common
Shares (the "Warrant Shares"), which Warrant Shares will be registered under the
Securities Act pursuant to the Registration Statement and which issuance will be
consummated in accordance with the terms and conditions of the Warrant Agreement
in the form filed as an exhibit to the Registration Statement (the "Warrant
Agreement").
The Company and the Underwriters agree as follows:
1. Sale and Purchase:
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(a) Initial Shares. Upon the basis of the warranties and representations
and other terms and conditions herein set forth, the Company agrees to sell to
each Underwriter, severally and not jointly, and each Underwriter agrees,
severally and not jointly, to purchase from the Company, at the purchase price
per share of $_____, the number of Initial Shares set forth in Schedule I
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 8 hereof subject, in each case, to such adjustments among
the Underwriters as the Representative in its sole discretion shall make to
eliminate any sales or purchases of fractional shares.
(b) Option Shares. In addition, upon the basis of the warranties and
representations and other terms and conditions herein set forth, the Company
hereby grants an option to the Underwriters, severally and not jointly, to
purchase from the Company all or any part of the Option Shares, at the purchase
price per share set forth in paragraph (a) above, plus any additional number of
Option Shares which such Underwriter may become obligated to purchase pursuant
to the provisions of Section 8 hereof. 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 only for the purpose of covering over-allotments, which may be made in
connection with the offering and distribution of the Initial Shares, upon
written notice by the Representative to the Company no later than 12:00 noon,
New York City time, at least two and no more than five days before the
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date specified for closing in such notice 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
Representative, but shall not be later than three full business days (nor
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 Time, as
hereinafter defined. If the option is exercised as to all or any portion of the
Option Shares, 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 opposite
the name of such Underwriter bears to the total number of Initial Shares,
subject in each case to such adjustments as the Representative in its sole
discretion shall make to eliminate any sales or purchases of fractional shares.
(c) Terms of Public Offering. The Company is advised by the Underwriters
that the Shares are to be offered to the public initially at $ a share (the
"Public Offering Price") and to certain dealers selected by the Underwriters at
a price that represents a concession not in excess of $ per Share, and that any
Underwriter may allow, and such dealers may reallow, a concession, not in excess
of $ per Share, to any Underwriter or to certain other dealers. The Underwriters
may from time to time increase or decrease the Public Offering Price of the
Shares after the initial public offering to such extent as the Underwriters may
determine.
(d) Reserved Shares. At the Company's direction, the Underwriters will
reserve up to 2% of the Initial Shares for sale to certain persons associated
with the Company, including executive officers and Trustees of the Company and
members of their families, at the Public Offering Price net of underwriting
discounts and commissions.
(e) Warrants. Upon the basis of the warranties and representations and
other terms and conditions herein set forth, the Company also agrees to issue to
the Representative, in further consideration of the Representative's efforts in
connection with the sale and purchase of the Initial Shares and the Option
Shares, the Warrants to purchase up to 1,277,794 Warrant Shares at an exercise
price equal to the Public Offering Price.
2. Payment and Delivery:
--------------------
(a) Initial Shares and Warrants. Payment of the purchase price for the
Initial Shares shall be made to the Company by wire transfer of immediately
available funds or certified or official bank check payable in federal
(same-day) funds to an account which has been designated in writing by the
Company to the Representative at the offices of Xxxxxx, Xxxxxx & Xxxxxxxxx
located at 0000 X Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000-0000 (unless another
place shall be agreed upon by the Representative and the Company) against
delivery of the certificates for the Initial Shares to the Representative for
the respective accounts of the Underwriters and the delivery of the Warrants,
represented by one or more certificates as the Representative may specify, to
the Representative. Such payment and delivery shall be made at 9:30 a.m., New
York City time, on the third (fourth, if pricing occurs after 4:30 p.m., New
York City time) business day after the date hereof (unless another time, not
later than ten business days after such date, shall be agreed to by the
Representative and the Company). The time at which such payment and delivery are
actually made is hereinafter sometimes called the "Closing Time." Certificates
for
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the Initial Shares shall be delivered to the Representative in definitive form
registered in such names and in such denominations as the Representative shall
specify. For the purpose of expediting the checking of the certificates for the
Initial Shares by the Representative, the Company agrees to make such
certificates available to the Representative for such purpose at least one full
business day preceding the Closing Time.
(b) Option Shares. In addition, payment of the purchase price for the
Option Shares shall be made to the Company by wire transfer of immediately
available funds or certified or official bank check payable in federal
(same-day) funds to an account which has been designated in writing by the
Company to the Representative at the offices of Xxxxxx, Xxxxxx & Xxxxxxxxx
located at 0000 X Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000-0000 (unless another
place shall be agreed upon by the Representative and the Company), against
delivery of the certificates for the Option Shares to the Representative for the
respective accounts of the Underwriters. Such payment and delivery shall be made
at 9:30 a.m., New York City time, on each Date of Delivery. Certificates for the
Option Shares shall be delivered to the Representative in definitive form
registered in such names and in such denominations as the Representative shall
specify. For the purpose of expediting the checking of the certificates for the
Option Shares by the Representative, the Company agrees to make such
certificates available to the Representative for such purpose at least one full
business day preceding the relevant Date of Delivery.
3. Representations and Warranties of the Company and the Partnership:
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The Company and Capital Automotive L.P., a Delaware limited partnership
(the "Partnership"), represent and warrant to the Underwriters that:
(a) each of the Company and the Partnership has been duly incorporated or
formed, as the case may be, and is validly existing and in good standing under
the laws of its respective jurisdiction of incorporation or formation with all
requisite corporate power and authority to own, lease and operate its respective
properties and to conduct its respective business as now conducted and as
proposed to be conducted as described in the Registration Statement and
Prospectus;
(b) the Company and the Partnership are duly qualified or registered to
transact business in each jurisdiction in which they conduct their respective
businesses as now conducted and as proposed to be conducted as described in the
Registration Statement and the Prospectus and in which the failure, individually
or in the aggregate, to be so qualified or registered would have a material
adverse effect on the assets, operations, business prospects or condition
(financial or otherwise) of the Company and the Partnership taken as a whole,
and the Company and the Partnership are in good standing in each jurisdiction in
which they maintain an office or in which an Initial Property (as defined in the
Prospectus) is located or in which the nature or conduct of their respective
businesses as now conducted or proposed to be conducted as described in the
Registration Statement and the Prospectus requires such qualification, except
where the failure to be in good standing would not have a material adverse
effect on the assets, operations, business prospects or condition (financial or
otherwise) of the Company and the Partnership taken as a whole (a "Material
Adverse Effect");
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(c) the Company and the Partnership are in compliance in all respects with
all applicable laws, rules, regulations, orders, decrees and judgments, except
where non-compliance would not have a Material Adverse Effect;
(d) neither the Company nor the Partnership is in breach of, or in default
under (nor has any event occurred which with notice, lapse of time, or both
would constitute a breach of, or default under), its respective declaration of
trust, by-laws, certificate of limited partnership or partnership agreement, as
the case may be, or in the performance or observance of any obligation,
agreement, covenant or condition contained in any license, indenture, mortgage,
deed of trust, loan or credit agreement or other agreement or instrument to
which the Company or the Partnership is a party or by which any of them or their
respective properties is bound, except for such breaches or defaults which would
not have a Material Adverse Effect;
(e) the issuance, sale and delivery by the Company of the Shares will not
conflict with, or result in any breach of, or constitute a default under (nor
constitute any event which with notice, lapse of time, or both would constitute
a breach of, or default under), (i) any provision of the declaration of trust,
by-laws, certificate of limited partnership or partnership agreement, as the
case may be, of the Company or the Partnership, (ii) any provision of any
license, indenture, mortgage, deed of trust, loan or credit agreement or other
agreement or instrument to which the Company or the Partnership is a party or by
which either of them or their respective properties may be bound or affected, or
(iii) any federal, state, local or foreign law, regulation or rule or any
decree, judgment or order applicable to the Company or the Partnership, except
in the case of clause (ii) for such breaches or defaults which would not have a
Material Adverse Effect; or result in the creation or imposition of any lien,
charge, claim or encumbrance upon any property or asset of the Company or
Partnership.
(f) the execution, delivery and performance of this Agreement and the
other agreements listed in the Prospectus and listed on Schedule III attached
hereto (the "Other Transaction Documents"), and consummation of the transactions
contemplated hereby and thereby will not conflict with, or result in any breach
of, or constitute a default under (nor constitute any event which with notice,
lapse of time, or both would constitute a breach of, or default under), (i) any
provision of the declaration of trust, by-laws, certificate of limited
partnership or partnership agreement as the case may be, of the Company or the
Partnership, (ii) any provision of any license, indenture, mortgage, deed of
trust, loan or credit agreement or other agreement or instrument to which the
Company or the Partnership is a party or by which either of them or their
respective properties may be bound or affected, or (iii) any federal, state,
local or foreign law, regulation or rule or any decree, judgment or order
applicable to the Company or the Partnership, except in the case of clause (ii)
for such breaches or defaults which would not have a Material Adverse Effect; or
result in the creation or imposition of any lien, charge, claim or encumbrance
upon any property or asset of the Company or the Partnership, which would have a
Material Adverse Effect;
(g) the Company has full legal right, power and authority to enter into
and perform this Agreement and to consummate the transactions contemplated
herein to which it is a party; this Agreement has been duly authorized, executed
and delivered by the Company and is a legal, valid and binding agreement of the
Company enforceable in accordance with its terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
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creditors' rights generally, or by general principles of equity and except to
the extent that the indemnification provisions of Section 9 hereof may be
limited by federal or state securities laws and public policy considerations in
respect thereof;
(h) the Partnership has full legal right, power and authority to enter
into and perform this Agreement and to consummate the transactions contemplated
herein to which it is a party; this Agreement has been duly authorized, executed
and delivered by or on behalf of the Partnership and constitutes a valid and
binding agreement of the Partnership enforceable in accordance with its terms,
except as may be limited by bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting creditors' rights generally, or by general principles
of equity and except to the extent that the indemnification provisions of
Section 9 hereof may be limited by federal or state securities laws and public
policy considerations in respect thereof;
(i) the Limited Partnership Agreement of the Partnership, including any
amendment thereto (the "Partnership Agreement"), has been duly and validly
authorized, executed and delivered by the Company and constitutes a valid and
binding agreement of the Company, enforceable in accordance with its terms,
except as may be limited by bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting creditors' rights generally or by general principles
of equity;
(j) the issuance and sale of the Shares to the Underwriters hereunder have
been duly authorized by the Company; when issued and delivered against payment
therefor as provided in this Agreement, the Shares will be validly issued, fully
paid and non-assessable and the issuance of the Shares will not be subject to
any preemptive or similar rights; except as contemplated herein, no person or
entity holds a right to require or participate in the registration under the
Securities Act of the Shares pursuant to the Registration Statement; no person
or entity has a right of participation or first refusal with respect to the sale
of the Shares by the Company; except as set forth in the Prospectus, there are
no contracts, agreements or understandings between the Company and any person or
entity granting such person or entity the right to require the Company to file a
registration statement under the Securities Act with respect to any securities
of the Company; the form of certificates evidencing the Shares complies with all
applicable requirements of Maryland law and with all applicable requirements of
the declaration of trust and by-laws of the Company and the requirements of the
Nasdaq National Market;
(k) the issuance of the Warrants has been duly authorized by the Company;
when issued and delivered pursuant to the terms of the Warrant Agreement, the
Warrants will constitute legal, valid and binding obligations of the Company
enforceable in accordance with their terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally, or by general principles of equity; the Warrant
Shares have been duly reserved for issuance by the Company upon exercise of the
Warrants in accordance with the terms of the Warrant Agreement; and the Warrants
will conform in all material respects to the description thereof in the
Registration Statement and the Prospectus;
(l) the Warrant Agreement and the Other Transaction Documents have been
duly authorized and will be, upon execution and delivery by the Company, legal,
valid and binding agreements of the Company enforceable in accordance with their
terms, except as may be limited
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by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally, or by general principles of equity;
(m) no approval, authorization, consent or order of or filing with any
federal, state or local governmental or regulatory commission, board, body,
authority or agency is required in connection with the execution, delivery and
performance of this Agreement and the Other Transaction Documents, the
consummation of the transaction contemplated hereby and thereby, the sale and
delivery of the Shares, issuance of the Warrants or the Warrant Shares by the
Company as contemplated hereby or in the Warrant Agreement other than (i) such
as have been obtained, or will have been obtained at the Closing Time or the
relevant Date of Delivery, as the case may be, under the Securities Act or the
Securities Exchange Act of 1934, (ii) such approvals as have been obtained in
connection with the approval of the quotation of the Shares on the Nasdaq
National Market and (iii) any necessary qualification under the securities or
blue sky laws of the various jurisdictions in which the Shares are being offered
by the Underwriters;
(n) each of the Company and the Partnership has all necessary licenses,
authorizations, consents and approvals and has made all necessary filings
required under any applicable federal, state or local law, regulation or rule,
and has obtained all necessary authorizations, consents and approvals from other
persons required in order to conduct their respective businesses as described in
the Registration Statement and Prospectus, except to the extent that any failure
to have any such licenses, authorizations, consents or approvals, to make any
such filings or to obtain any such authorizations, consents or approvals would
not have, individually or in the aggregate, a Material Adverse Effect; neither
the Company nor the Partnership is in violation of, in default under, or has
received any notice regarding a possible violation, default or revocation of any
such license, authorization, consent or approval or any federal, state, local or
foreign law, regulation or rule or any decree, order or judgment applicable to
the Company or the Partnership, which would have a Material Adverse Effect; and
no such license, authorization, consent or approval contains a materially
burdensome restriction that is not adequately disclosed in the Registration
Statement and the Prospectus;
(o) each of the Registration Statement and any Rule 462(b) Registration
Statement has become effective under the Securities Act and no stop order
suspending the effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement has been issued under the Securities Act and no
proceedings for that purpose have been instituted or are pending or, to the
knowledge of the Company, are threatened by the Commission, and any request on
the part of the Commission for additional information has been complied with;
(p) the Company and the transactions contemplated by this Agreement meet
the requirements and conditions for using a registration statement on Form S-11
under the Securities Act, set forth in the General Instructions to Form S-11;
the Preliminary Prospectus and the Registration Statement comply and the
Prospectus and any further amendments or supplements thereto will comply, when
they have become effective or are filed with the Commission, as the case may be,
in all material respects with the requirements of the Securities Act and the
Securities Act Regulations; the Registration Statement did not, and any
amendment thereto will not, in each case as of the applicable effective date,
contain 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; and the Preliminary Prospectus does not, and the Prospectus
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or any amendment or supplement thereto will not, as of the applicable filing
date and at the Closing Time and on each Date of Delivery (if any), contain 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, in the light of
the circumstances under which they were made, not misleading; provided, however,
that the Company makes no warranty or representation with respect to any
statement contained in the Registration Statement or the Prospectus made in
reliance upon and in conformity with the information concerning the Underwriters
and furnished in writing by or on behalf of the Underwriters through the
Representative to the Company expressly for use in the Registration Statement or
the Prospectus (that information being limited to that described in the last
sentence of the first paragraph of Section 9(b) hereof);
(q) the Preliminary Prospectus was and the Prospectus delivered to the
Underwriters for use in connection with this offering will be identical to the
versions of the Preliminary Prospectus and Prospectus created to be transmitted
to the Commission for filing via the Electronic Data Gathering Analysis and
Retrieval System ("XXXXX"), except to the extent permitted by Regulation S-T;
(r) all legal or governmental proceedings, contracts or documents which
are material and of a character required to be filed as exhibits to the
Registration Statement or to be summarized or described in the Prospectus have
been so filed, summarized or described as required;
(s) there are no actions, suits, proceedings, inquiries or investigations
pending or, to the Company's knowledge, threatened against the Company or the
Partnership or any of their respective officers and trustees or to which the
properties, assets or rights of any such entity is subject, at law or in equity,
before or by any federal, state, local or foreign governmental or regulatory
commission, board, body, authority, arbital panel or agency which could
reasonably be expected to result in a judgment, decree, award or order having a
material adverse effect on the assets, operations, business, prospects or
condition (financial or otherwise) of the Company and the Partnership taken as a
whole, or which could adversely affect the consummation of the transactions
contemplated by this Agreement in any material respect;
(t) the financial statements, including the notes thereto, included in the
Registration Statement and the Prospectus present fairly the financial position
of the Company as of the dates indicated and the results of operations and
changes in financial position and cash flows of the Company for the periods
specified; such financial statements have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis during
the periods involved (except as indicated in the notes thereto); the financial
statement schedules included in the Registration Statement and the Prospectus
fairly present the information required to be shown therein; no other financial
statements or schedules are required by Form S-11 or otherwise to be included in
the Registration Statement or Prospectus; the unaudited pro forma financial
information, including the notes thereto, included in the Prospectus or any
Preliminary Prospectus complies as to form in all material respects to the
applicable accounting requirements of the Securities Act and the Securities Act
Regulations, and management of the Company believes that the assumptions
underlying the pro forma adjustments are reasonable; such pro forma adjustments
have been properly applied to the historical amounts in the compilation of the
information and such information fairly presents with respect to the Company and
the Partnership on a consolidated basis, the financial position, results of
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operations and other information purported to be shown therein at the respective
dates and for the respective periods specified;
(u) Xxxxxx Xxxxxxxx LLP, whose reports on the audited financial statements
of the Company and the Partnership are included as part of the Registration
Statement and Prospectus, are and were during the periods covered by their
reports independent public accountants within the meaning of the Securities Act
and the Securities Act Regulations;
(v) subsequent to the respective dates as of which information is given in
the Registration Statement and the Prospectus, and except as may be otherwise
stated in the Registration Statement or Prospectus, there has not been (i) any
material adverse change in the assets, operations, business, prospects or
condition (financial or otherwise), present or prospective, of the Company and
the Partnership taken as a whole, whether or not arising in the ordinary course
of business, (ii) any transaction, which is material to the Company and the
Partnership taken as a whole, planned or entered into by the Company or the
Partnership, (iii) any obligation, contingent or otherwise, directly or
indirectly incurred by the Company or the Partnership, which is material to the
Company and the Partnership taken as a whole or (iv) any dividend or
distribution of any kind declared, paid or made with respect to the capital
stock of the Company or with respect to the partnership interests of the
Partnership;
(w) other than as set forth in the Registration Statement, there are no
persons with registration or other similar rights to have any equity securities
registered pursuant to the Registration Statement or otherwise registered by the
Company under the Securities Act;
(x) the authorized shares of beneficial interest of the Company conform in
all material respects to the description thereof contained in the Prospectus;
the Company has an authorized, issued and outstanding capitalization as set
forth in the Prospectus under the caption "Capitalization"; immediately after
the Closing Time, upon payment therefor, 21,792,115 Common Shares will be issued
and outstanding (excluding the Underwriters' over-allotment option described in
Section 1(b) hereof) and no shares of beneficial interest of any other class of
beneficial interest will be issued and outstanding. All of the issued and
outstanding shares of beneficial interest of the Company have been duly
authorized and are validly issued, fully paid and non-assessable, and have been
offered, sold and issued by the Company in compliance with all applicable laws
(including, without limitation, federal and state securities laws); none of the
issued shares of beneficial interest of the Company have been issued in
violation of any preemptive or similar rights granted by the Company; except as
disclosed in the Prospectus, there is no outstanding option, warrant or other
right calling for the issuance of, and no commitment, plan or arrangement to
issue, any shares of beneficial interest of the Company or any security
convertible into or exchangeable for shares of beneficial interest of the
Company; the private placement of Common Shares by the Company to FBR Asset
Investment Corporation (the "FBR Offering") is not required to be registered
under the Securities Act or any state securities law;
(y) when the Warrant Shares have been issued and duly delivered against
payment therefor as contemplated by the Warrant Agreement, the Warrant Shares
will be validly issued, fully paid and nonassessable, free and clear of any
pledge, lien, encumbrance, security interest, or other claim; the issuance and
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sale of the Warrants and the Warrant Shares by the Company is not subject to
preemptive or other similar rights arising by operation of law, under the
declaration of trust or by-laws of the Company, under any agreement to which the
Company or the Partnership is a party or by which they are bound;
(z) immediately after the Closing Time, all of the issued and outstanding
units of partnership interest in the Partnership ("Common Units") will be
validly issued, fully paid and non-assessable; none of the Common Units has been
or will be issued or is owned or held in violation of any preemptive right; the
Common Units have been or will be offered, sold and issued by the Partnership in
compliance with all applicable laws (including, without limitation, federal and
state securities laws);
(aa) each of the Company, the Partnership, and each of their respective
officers, trustees and controlling persons has not taken, and will not take,
directly or indirectly, any action which is designed to or which has constituted
or which might 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;
(bb) neither the Company nor any of its affiliates (i) is required to
register as a "broker" or "dealer" in accordance with the provisions of the
Securities Exchange Act of 1934 or the rules and regulations thereunder, or (ii)
directly, or indirectly through one or more intermediaries, controls or has any
other association with (within the meaning of Article 1 of the By-laws of the
National Association of Securities Dealers, Inc. (the "NASD")) any member firm
of the NASD;
(cc) the Company has not relied upon the Representative or legal counsel
for the Representative for any legal, tax or accounting advice in connection
with the offering and sale of the Shares or the Warrant Shares;
(dd) any certificate signed by any officer of the Company or the
Partnership delivered to the Representative or to counsel for the Underwriters
pursuant to or in connection with this Agreement shall be deemed a
representation and warranty by the Company to each Underwriter as to the matters
covered thereby;
(ee) to the knowledge of the Company and the Partnership, there are no
statutes or regulations applicable to the Company or the Partnership or
certificates, permits or other authorizations from governmental regulatory
officials or bodies required to be obtained or maintained by the Company or the
Partnership of a character required to be disclosed in the Registration
Statement or the Prospectus which have not been so disclosed and properly
described therein; all agreements between the Company or the Partnership and
third parties expressly referenced in the Prospectus are legal, valid and
binding obligations of the Company or the Partnership, enforceable in accordance
with their respective terms, except to the extent enforceability may be limited
by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally or by general principles of equity and except to the
extent that any indemnification provisions in this Agreement may be limited by
federal or state securities laws and public policy considerations in respect
thereof;
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(ff) no relationship, direct or indirect, exists between or among the
Company or the Partnership on the one hand, and the trustees, officers,
shareholders, customers or suppliers of the Company or the Partnership on the
other hand, which is required by the Securities Act to be described in the
Registration Statement and the Prospectus which is not so described;
(gg) each of the Company and the Partnership owns or possesses adequate
license or other rights to use all patents, trademarks, service marks, trade
names, copyrights, software and design licenses, trade secrets, manufacturing
processes, other intangible property rights and know-how, if any (collectively
"Intangibles"), necessary to entitle the Company and the Partnership to conduct
its business as described in the Prospectus, and neither the Company, nor the
Partnership, has received notice of infringement of or conflict with (and knows
of no such infringement of or conflict with) asserted rights of others with
respect to any Intangibles which could materially and adversely affect the
assets, operations, business, prospects or condition (financial or otherwise) of
the Company or the Partnership;
(hh) each of the Company and the Partnership has filed on a timely basis
all necessary federal, state, local and foreign income and franchise tax
returns, if any such returns were required to be filed, through the date hereof
and have paid all taxes shown as due thereon; and no tax deficiency has been
asserted against the Company or the Partnership, nor does the Company or the
Partnership know of any tax deficiency which is likely to be asserted against
either entity which, if determined adversely to any such entity, could
materially adversely affect the assets, operations, business, prospects or
condition (financial or otherwise) of either entity, respectively; all tax
liabilities, if any, are adequately provided for on the respective books of the
entities;
(ii) each of the Company and the Partnership maintains insurance (issued
by insurers of recognized financial responsibility) of the types and in the
amounts generally deemed adequate, if any, for their respective businesses and
consistent with insurance coverage maintained by similar companies in similar
businesses, including, but not limited to, insurance covering real and personal
property owned or leased by the Company and the Partnership against theft,
damage, destruction, acts of vandalism and all other risks customarily insured
against, all of which insurance is in full force and effect;
(jj) the Company or the Partnership, as the case may be, will have good
and marketable title in fee simple to the Initial Properties to be acquired by
it, if any, and good title to all personal property owned by them, in each case
free and clear of all liens, security interests, pledges, charges, encumbrances,
mortgages and defects, except such as are disclosed in the Prospectus, the
Exhibits to the Registration Statement or the financial statements thereto or
such as do not materially and adversely affect the value of such property and do
not interfere with the use made or proposed to be made of such property by the
Company or the Partnership; the Initial Properties to be acquired by it held
under lease by the Company or the Partnership are held under valid, existing and
enforceable leases, with such exceptions, liens, security interests, pledges,
charges, encumbrances, mortgages and defects, as are disclosed in the
Prospectus, the Exhibits to the Registration Statement or the financial
statements thereto or will not result in a Material Adverse Effect and do not
interfere with the use made or proposed to be made of such property and
buildings by the Company or the Partnership; the Company or the Partnership has
obtained an owner's title insurance policy, from a title insurance company
licensed to issue such policy, on the Initial Properties to be acquired by it,
that insures the Company's or the Partnership's fee or leasehold interest in
such property (other than the leasehold interest of the Company with
11
respect to its principal executive offices as described in the Registration
Statement), with coverage in an amount at least equal to the fair market value
of such fee or leasehold interest in such real property, or a lender's title
insurance policy insuring the lien of its mortgage securing such real property
with coverage equal to the maximum aggregate principal amount of any
indebtedness held by the Company or the Partnership and secured by the Initial
Properties to be acquired by it;
(kk) except as otherwise disclosed in the Prospectus or in the
environmental reports regarding any Initial Property (copies of which have been
provided to the Representative (collectively, the "Environmental Reports"),
neither the Company nor the Partnership nor, to their knowledge, any former
owner of any Initial Property has authorized or conducted or has knowledge of
the generation, transportation, storage, presence, use, treatment, disposal,
release, or other handling of any hazardous substance, hazardous waste,
hazardous material, hazardous constituent, toxic substance, pollutant,
contaminant, asbestos, radon, polychlorinated biphenyls ("PCBs"), petroleum
product or waste (including crude oil or any fraction thereof), natural gas,
liquefied gas, synthetic gas or other material defined, regulated, controlled or
potentially subject to any remediation requirement under any environmental law
(collectively, "Hazardous Materials"), on, in, under or affecting any Initial
Property, except in material compliance with applicable laws; except as
disclosed in the Prospectus, or as disclosed in the Environmental Reports, to
the knowledge of the Company and the Partnership, the Initial Properties, and
the Company's, the Partnership's and the Initial Sellers' operations with
respect to the Initial Properties, are and were in compliance with all federal,
state and local laws, ordinances, rules, regulations and other governmental
requirements relating to pollution, control of chemicals, management of waste,
discharges of materials into the environment, health, safety, natural resources,
and the environment (collectively, "Environmental Laws"), and the Company and
the Partnership are in compliance with, all licenses, permits, registrations and
government authorizations necessary to operate under all applicable
Environmental Laws in all material respects; except as otherwise disclosed in
the Prospectus, or as disclosed in the Environmental Reports, neither the
Company nor, to the knowledge of the Company, any former owner of any Initial
Property has received any written or oral notice from any governmental entity or
any other person and there is no pending or, to the knowledge of the Company and
the Partnership threatened claim, litigation or any administrative agency
proceeding that: alleges a violation of any Environmental Laws by the Company or
the Partnership; or that the Company or the Partnership is a liable party or a
potentially responsible party under the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. (S) 9601, et seq., or any state
superfund law; has resulted in or could result in the attachment of an
environmental lien on any of the Initial Properties; or alleges that the Company
or the Partnership is liable for any contamination of the environment,
contamination of the Real Property, damage to natural resources, property
damage, or personal injury based on their activities or the activities of their
predecessors or third parties (whether at the Initial Properties or elsewhere)
involving Hazardous Materials, whether arising under the Environmental Laws,
common law principles, or other legal standards;
(ll) there are no costs or liabilities associated with Environmental Laws
(including, without limitation, any capital or operating expenditures required
for clean-up, closure of properties or compliance with Environmental Laws or any
permit, license or approval, any related constraints on operating activities
12
and any potential liabilities to third parties) which would, singly or in the
aggregate, have a Material Adverse Effect;
(mm) none of the entities which prepared Phase I environmental assessment
reports with respect to the Initial Properties was employed for such purpose by
the Company on a contingent basis or has any substantial interest in the Company
or the Partnership, and none of their directors, officers or employees is
connected with the Company or the Partnership as a promoter, selling agent,
voting trustee, officer or employee;
(nn) except as otherwise disclosed in the Prospectus, there are no
material outstanding loans or advances or material guarantees of indebtedness by
the Company or the Partnership to or for the benefit of any of the officers or
trustees of the Company or the Partnership or any of the members of the families
of any of them;
(oo) neither the Company nor the Partnership nor, to the Company's
knowledge, any employee or agent of the Company or the Partnership, has made any
payment of funds of the Company or the Partnership or received or retained any
funds in violation of any law, rule or regulation or of a character required to
be disclosed in the Prospectus;
(pp) the Company is organized in conformity with the requirements for
qualification as a real estate investment trust under the Internal Revenue Code
of 1986, as amended (the "Code"), and the Company's proposed method of operation
will enable it to meet the requirements for taxation as a real estate investment
trust under the Code; the Partnership will be treated as a partnership for
federal income tax purposes and not as a corporation or association taxable as a
corporation;
(qq) the Shares have been approved for listing, upon official notice
of issuance, on the Nasdaq National Market;
(rr) in connection with this offering, the Company has not offered and
will not offer its Common Shares or any other securities convertible into or
exchangeable or exercisable for Common Shares in a manner in violation of the
Securities Act or the Securities Act Regulations; the Company has not
distributed and will not distribute any Prospectus or other offering material in
connection with the offer and sale of the Shares, except as contemplated herein;
(ss) the Company has complied and will comply with all the provisions of
Florida Statutes, Section 517.075 (Chapter 92-198, Laws of Florida); neither the
Company nor the Partnership nor their respective affiliates does business with
the government of Cuba or with any person or affiliate located in Cuba;
(tt) neither the Company nor the Partnership is or, solely as a result of
transactions contemplated hereby and the application of the proceeds from the
sale of the Shares, will become an "investment company" or a company
"controlled" by an "investment company" within the meaning of the Investment
Company Act of 1940, as amended (the "1940 Act"); and
(uu) the Company has not incurred any liability for any finder's fees or
similar payments in connection with the transactions herein contemplated, except
as contemplated hereby.
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4. Certain Covenants of the Company and the Partnership:
----------------------------------------------------
The Company and the Partnership hereby covenant with each Underwriter:
(a) to furnish such information as may be required and otherwise to
cooperate in qualifying the Shares for offering and sale under the securities or
blue sky laws of such states as the Representative may designate and to maintain
such qualifications in effect as long as required for the distribution of the
Shares, provided that the Company shall not be required to qualify as a foreign
corporation or to consent to the service of process under the laws of any such
state (except service of process with respect to the offering and sale of the
Shares); or to take any action which would subject it to taxation in such state
solely on account of registration of the Shares.
(b) if, at the time this Agreement is executed and delivered, it is
necessary for a post-effective amendment to the Registration Statement to be
declared effective before the offering of the Shares may commence, the Company
will endeavor to cause such post-effective amendment to become effective as soon
as possible;
(c) to prepare the Prospectus in a form approved by the Underwriters in
compliance with Rule 430A and file such Prospectus with the Commission pursuant
to Rule 424(b) within the time period prescribed by law and to furnish promptly
to the Underwriters as many copies of the Prospectus (or of the Prospectus as
amended or supplemented if the Company shall have made any amendments or
supplements thereto after the effective date of the Registration Statement) as
the Underwriters may reasonably request for the purposes contemplated by the
Securities Act Regulations, which Prospectus and any amendments or supplements
thereto furnished to the Underwriters will be identical to the version created
to be transmitted to the Commission for filing via XXXXX, except to the extent
permitted by Regulation S-T;
(d) to advise the Representative promptly, confirming such advice in
writing, when the Registration Statement has become effective and when any
post-effective amendment thereto becomes effective under the Securities Act
Regulations and will advise the Representative promptly and, if requested by the
Representative, will confirm such advice in writing, when such post effective
amendment has become effective;
(e) to advise the Representative immediately, confirming such advice in
writing, of (i) the receipt of any comments from, or any request by, the
Commission for amendments or supplements to the Registration Statement or
Prospectus or for additional information with respect thereto, or (ii) 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 the Prospectus, or of the suspension of the
qualification of the Shares for offering or sale in any jurisdiction, or of the
initiation or, to the knowledge of the Company, threatening of any proceedings
for any of such purposes and, if the Commission or any other government agency
or authority should issue any such order, to make every reasonable effort to
obtain the lifting or removal of such order as soon as possible; to advise the
Representative promptly of any proposal to amend or supplement the Registration
Statement or
14
Prospectus and to file no such amendment or supplement to which the
Representative shall reasonably object in writing;
(f) before amending or supplementing the Registration Statement or the
Prospectus, or during any period of time in which a Prospectus relating to the
Shares is required to be delivered under the Securities Act Regulations, to
furnish to the Representative a copy of each such proposed amendment or
supplement before filing any such amendment or supplement with the Commission;
(g) to furnish to the Underwriters for a period of five years from the
date of this Agreement (i) as soon as available, copies of all annual, quarterly
and current reports or other communications supplied to holders of Common
Shares, (ii) as soon as practicable after the filing thereof, copies of all
reports filed by the Company with the Commission, the NASD or any securities
exchange and (iii) such other publicly available information as the Underwriters
may reasonably request regarding the Company and the Partnership;
(h) to advise the Underwriters promptly during any period of time in which
a Prospectus relating to the Shares is required to be delivered under the
Securities Act Regulations (i) of any material change in the Company's assets,
operations, business, prospects or condition (financial or otherwise) or (ii) of
the happening of any event, which change or event would require the making of
any change in the Prospectus then being used so that the Prospectus would 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, in
the light of the circumstances under which they were made, not misleading, and,
during such time, to prepare and furnish, at the Company's expense, to the
Underwriters promptly such amendments or supplements to the Prospectus as may be
necessary to reflect any such change;
(i) to furnish promptly to the Representative a signed copy of the
Registration Statement, as initially filed with the Commission, and of all
amendments or supplements thereto (including all exhibits filed therewith) and
such number of conformed copies of the foregoing as the Underwriters may
reasonably request;
(j) to furnish to the Underwriters, not less than two business days before
filing with the Commission subsequent to the effective date of the Prospectus
and during the period referred to in paragraph (h) above, a copy of any document
proposed to be filed with the Commission pursuant to Section 13, 14, or 15(d) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act");
(k) to apply the net proceeds of the sale of the Shares substantially in
accordance with its statements under the caption "Use of Proceeds" in the
Prospectus;
(l) to make generally available to its security holders as soon as
practicable, but in any event not later than the end of the fiscal quarter first
occurring after the first anniversary of the effective date of the Registration
Statement, an earnings statement complying with the provisions of Section 11(a)
of the Securities Act (in form, at the option of the Company, complying with the
provisions of Rule 158 of the Securities Act Regulations) covering a period of
12 months after the effective date of the Registration Statement;
15
(m) to use its best efforts to effect and maintain the quotation of the
Shares on the Nasdaq National Market and to file with the Nasdaq National Market
all documents and notices required by the Nasdaq National Market of companies
that have securities that are included on the Nasdaq National Market;
(n) to refrain during a period of [___] days from the date of the
Prospectus, without the prior written consent of the Representative, from (i)
offering, pledging, selling, contracting to sell, selling any option or contract
to purchase, purchasing any option or contract to sell, granting any option for
the sale of, or otherwise disposing of or transferring, directly or indirectly,
any Common Shares or any securities convertible into or exercisable or
exchangeable for Common Shares, or filing any registration statement under the
Securities Act with respect to any of the foregoing or (ii) entering 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 shall not apply to the Shares or
Units or options or warrants therefor contemplated to be granted, sold or issued
as described in the Prospectus or pursuant to a dividend reinvestment plan
adopted hereafter;
(o) to execute and deliver to the representative the Warrant Agreement and
to comply with the terms of the Warrant Agreement;
(p) the Company shall not, and shall use its best efforts to cause its
officers, trustees and affiliates not to, (i) take, directly or indirectly prior
to termination of the underwriting syndicate contemplated by this Agreement, any
action designed to stabilize or manipulate the price of any security of the
Company, or which would cause or result in, the stabilization or manipulation of
the price of any security of the Company, to facilitate the sale or resale of
any of the Shares, (ii) sell, bid for, purchase or pay anyone any compensation
for soliciting purchases of the Shares other than ordinary brokers transactions
for such person's own account, or (iii) pay or agree to pay to any person any
compensation for soliciting any order to purchase any other securities of the
Company;
(q) the Company will maintain a transfer agent and, if necessary under the
jurisdiction of incorporation of the Company, a registrar (which may be the same
entity as the transfer agent) for its Common Shares;
(r) the Company will use its best efforts (i) to meet the requirements to
qualify as a real estate investment trust under the Code and (ii) to cause the
Partnership to be treated as a partnership for federal income tax purposes;
(s) the Company will comply with all of the provisions of any undertakings
in the Registration Statement;
(t) the Company and the Partnership will use their best efforts to conduct
their affairs in such a manner so as to ensure that neither the Company nor the
Partnership will be an "investment company" or an entity "controlled" by an
investment company within the meaning of the 1940 Act; and
16
(u) to maintain a system of internal accounting controls sufficient to
provide reasonable assurance that (i) transactions are executed in accordance
with management's general or specific authorizations; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain asset
accountability; (iii) access to assets is permitted only in accordance with
management's general or specific authorization; and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
5. Payment of Expenses; Right of First Refusal:
-------------------------------------------
(a) The Company agrees to pay all costs and expenses incident to the
performance of the Company's obligations under this Agreement and the Warrant
Agreement, whether or not the transactions contemplated hereunder or thereunder
are consummated or this Agreement and the Warrant Agreement are terminated,
including, but not limited to, all fees and expenses of filing with the
Commission and the NASD; all Blue Sky fees and expenses, including filing fees
and disbursements of the Representative's Blue Sky counsel; reasonable fees and
expenses of Representative's counsel, fees and disbursements of counsel and
accountants for the Company, and printing costs, including costs of printing the
prospectus, and any amendments thereto; all underwriting documents, Blue Sky
Memoranda, a reasonable quantity of prospectuses requested by the
Representative, and the Company's road show costs and expenses.
(b) The Company agrees to reimburse the Representative upon request for
its reasonable out-of-pocket expenses incurred in connection with its
obligations under this Agreement whether or not the Offering is consummated,
including the reasonable fees and disbursements of the Representative's legal
counsel, Blue Sky counsel (which shall undertake all Blue Sky matters), and road
show costs and expenses.
(c) If this Agreement shall be terminated by the Underwriters (other than
as a result of a default or refusal by the Underwriters, or any of them, to
fulfill the terms of this Agreement), or any of them, because of any failure or
refusal on the part of the Company to comply with the terms or to fulfill any of
the conditions of this Agreement, or if for any reason the Company shall be
unable to perform its obligations under this Agreement (other than as a result
of a default or refusal by the Underwriters to fulfill the terms of this
Agreement), the Company will reimburse the Underwriters or such Underwriters as
have so terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the reasonable fees and disbursements of their
counsel) reasonably incurred by such Underwriters in connection with this
Agreement or the transactions contemplated herein.
6. Conditions of the Underwriters' Obligations:
The obligations of the Underwriters hereunder are subject to (i) the
accuracy of the representations and warranties on the part of the Company in all
material respects on the date hereof and at the Closing Time and on each Date of
Delivery, (ii) the performance by the Company of its obligations hereunder in
all material respects, and (iii) the following further conditions:
17
(a) If, at the time this Agreement is executed and delivered, it is
necessary for a post-effective amendment to the Registration Statement to be
declared effective before the offering of the Shares may commence, such
post-effective amendment shall have become effective not later than 5:30 p.m.,
New York City time, on the date hereof, or at such later date and time as shall
be consented to in writing by the Representative.
(b) The Company shall furnish to the Underwriters at the Closing Time and
on each Date of Delivery an opinion of Xxxxxx, Xxxxxx & Xxxxxxxxx, counsel for
the Company, addressed to the Underwriters and dated the Closing Time and each
Date of Delivery and in form satisfactory to Hunton & Xxxxxxxx, counsel for the
Underwriters, stating that:
(i) the Company meets the requirements for the use of Form S-11
under the Securities Act; the authorized shares of beneficial interest of
the Company conform as to legal matters to the description thereof
contained in the Prospectus in all material respects; the Company has an
authorized capitalization as set forth in the Prospectus under the caption
"Capitalization"; the outstanding shares of beneficial interest of the
Company have been duly and validly authorized and issued and are fully
paid and non-assessable; except as disclosed in the Prospectus, there are
no authorized and validly issued (i) securities or obligations of the
Company or the Partnership convertible into or exchangeable for any shares
of beneficial interest of the Company or any interests in the Partnership
or (ii) warrants, rights or options to subscribe for or purchase from the
Company or the Partnership any such shares of beneficial interest, capital
stock, interests or any such convertible or exchangeable securities or
obligations; except as set forth in the Prospectus or contemplated by this
Agreement, there are no outstanding obligations of the Company or the
Partnership to issue any shares of beneficial interest, capital stock or
interests, any such convertible or exchangeable securities or obligation,
or any such warrants, rights or options;
(ii) the Company has been duly incorporated and is validly existing
and in good standing under the laws of its jurisdiction of incorporation
with the requisite power and authority to own its properties and to
conduct its business as described in the Registration Statement and
Prospectus and to execute and deliver this Agreement, the Warrant
Agreement and the Other Transaction Documents and to consummate the
transactions described in each such agreement;
(iii) the Company is duly qualified in or registered by and is in
good standing in each jurisdiction in which the Initial Properties are
located and in which the failure, individually or in the aggregate, to be
so qualified would have a Material Adverse Effect. Except as disclosed in
the Prospectus, the Partnership is not prohibited or restricted by its
certificate of limited partnership or partnership agreement, or, to the
knowledge of such counsel, or by the Other Transaction Documents, directly
or indirectly, from (a) paying dividends to the Company, (b) making any
other distribution with respect to the Partnership's interest, (c) paying
the Company, any loans or advances, or (d) transferring any of the
Partnership's property or assets to the Company;
(iv) the Partnership has been duly formed and is validly existing
as a limited partnership under the laws of the jurisdiction of its
organization, with all requisite partnership power and authority to own,
18
lease and operate its properties and to conduct its business as now
conducted as described in the Registration Statement and the Prospectus.
The Partnership has been duly qualified or registered to do business as a
foreign partnership in those jurisdictions in which the Initial Properties
are located and in which the failure, individually or in the aggregate, to
be so qualified or registered would have a Material Adverse Effect;
(v) to such counsel's knowledge, except as disclosed on the
Registration Statement and the Prospectus, neither the Company nor the
Partnership is in material breach of, or in material default under (nor
has any event occurred which with notice, lapse of time, or both would
constitute a material breach of, or material default under) its respective
declaration of trust, by-laws, certificate of limited partnership or
partnership agreement, as the case may be, or in the performance or
observation of any license, indenture, mortgage, deed of trust, loan or
credit agreement or any other agreement or instrument to which the Company
or the Partnership is a party or by which either of them or their
respective properties may be bound or affected, except such breaches or
defaults which would not have a Material Adverse Effect;
(vi) the issuance, sale and delivery by the Company of the Shares
do not and will not conflict with, or result in any breach of, or
constitute a default under (nor constitute any event which with notice,
lapse of time, or both would constitute a breach of or default under), (i)
any provisions of the declaration of trust, by-laws, certificate of
limited partnership or partnership agreement, as the case may be, of the
Company or the Partnership, (ii) to such counsel's knowledge, any
provision of any license, indenture, mortgage, deed of trust, loan or
credit agreement or other agreement or instrument to which the Company or
the Partnership is a party or by which any of them or their respective
properties may be bound or affected, or (iii) to such counsel's knowledge,
any law or regulation or any decree, judgment or order applicable to the
Company or the Partnership, except in the case of clauses (ii) and (iii)
for such conflicts, breaches or defaults, laws, regulations, decrees,
judgments or orders, which individually or in the aggregate would not have
a Material Adverse Effect; or result in the creation or imposition of any
lien, encumbrance, charge or claim upon any property or assets of the
Company or the Partnership;
(vii) the execution, delivery and performance of this Agreement, the
Warrant Agreement and the Other Transaction Documents by the Company and
the consummation by the Company of the transactions contemplated under
this Agreement, the Warrant Agreement or the Other Transaction Documents,
as the case may be, do not and will not conflict with, or result in any
breach of, or constitute a default under (nor constitute any event which
with notice, lapse of time, or both would constitute a breach of or
default under), (i) any provisions of the declaration of trust, by-laws,
certificate of limited partnership or partnership agreement, as the case
may be, of the Company or the Partnership, (ii) to such counsel's
knowledge, any license, indenture, mortgage, deed of trust, loan or credit
agreement or other agreement or instrument to which the Company or the
Partnership is a party or by which any of them or their respective
properties may be bound or affected, or (iii) to such counsel's knowledge,
any law or regulation or any decree, judgment or order applicable to the
Company or the Partnership, except in the
19
case of clauses (ii) and (iii) for such conflicts, breaches or defaults,
laws, regulations, decrees, judgments or orders, which individually or in
the aggregate would not have a Material Adverse Effect; or, to such
counsel's knowledge, with the exception of the Other Transaction
Documents, result in the creation or imposition of any lien, encumbrance,
charge or claim upon any property or assets of the Company or the
Partnership which would have a Material Adverse Effect;
(viii) the Company has full trust power and authority to enter into
and perform this Agreement and to consummate the transactions contemplated
herein; this Agreement has been duly authorized, executed and delivered by
the Company and is a legal, valid and binding agreement of the Company
enforceable in accordance with its terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally, and by general principles of
equity, and except that enforceability of the indemnification and
contribution provisions set forth in Section 9 hereof may be limited by
the federal or state securities laws of the United States or public policy
underlying such laws;
(ix) the Partnership has full partnership power and authority to
enter into and perform this Agreement and to consummate the transactions
contemplated herein. This Agreement has been duly authorized, executed and
delivered by or on behalf of the Partnership and constitutes a valid and
binding agreement of the Partnership enforceable in accordance with its
terms, except as may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally, and by
general principles of equity, and except that enforceability of the
indemnification and contribution provisions set forth in Section 9 hereof
may be limited by federal or state securities laws of the United States or
public policy underlying such laws;
(x) the Other Transaction Documents to which the Company or the
Partnership is a party have been duly authorized, executed, and delivered
by the Company or the Partnership, and are legal, valid and binding
agreements of the Company or the Partnership enforceable against it in
accordance with their terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally, and by general principles of equity; when
issued and delivered pursuant to the terms of the Warrant Agreement, the
Warrants will constitute legal, valid and binding obligations of the
Company enforceable in accordance with their terms, except as may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting creditors' rights generally, and by general principles of
equity; the Warrant Shares have been duly reserved for issuance upon
exercise of the Warrants in accordance with the terms of the Warrant
Agreement; and the Warrants will conform to the description thereof in the
Registration Statement and the Prospectus;
(xi) no approval, authorization, consent or order of or filing
with any federal or state governmental or regulatory commission, board,
body, authority or agency is required in connection with the execution,
delivery and performance of this Agreement and the Other Transaction
Documents or the consummation of the transaction contemplated hereby and
thereby by the Company and the Partnership, the sale and delivery of the
Shares by the Company as contemplated hereby other than such as have
20
been obtained or made under the Securities Act and except that such
counsel need express no opinion as to any necessary qualification under
the state securities or blue sky laws of the various jurisdictions in
which the Shares are being offered by the Underwriters or any approval of
the underwriting terms and arrangements by the National Association of
Securities Dealers, Inc.;
(xii) the Shares, the Warrants, and the Warrant Shares have been
duly authorized and, when the Shares and the Warrant Shares have been
issued and duly delivered against payment therefor as contemplated by this
Agreement or the Warrant Agreement, as the case may be, the Shares and the
Warrant Shares will be validly issued, fully paid and nonassessable, and,
except for any action that may have been taken by the holder thereof, free
and clear of any pledge, lien, encumbrance, security interest, or other
claim;
(xiii) immediately after the Closing Time, all of the issued and
outstanding units of partnership interest in the Partnership (the "Common
Units") will be validly issued, fully paid and non-assessable. The
issuance of the outstanding Common Units by the Partnership was exempt
from the registration requirements of the Securities Act and applicable
state securities laws;
(xiv) the issuance and sale of the Shares, the Warrants, and the
Warrant Shares and the Common Units by the Company is not subject to
preemptive or other similar rights arising by operation of law, under the
declaration of trust or by-laws of the Company or the certificate of
limited partnership or Partnership Agreement of the Partnership, under any
agreement known to such counsel to which the Company or the Partnership is
a party or, to such counsel's knowledge, otherwise;
(xv) to counsel's knowledge, there are no persons with
registration or other similar rights to have any securities registered
pursuant to the Registration Statement or otherwise registered by the
Company under the Securities Act, except as disclosed in the Prospectus;
(xvi) the form of certificate used to evidence the Common Shares
complies with Maryland law, with any applicable requirements of the
declaration of trust and by-laws of the Company and the requirements of
the Nasdaq National Market;
(xvii) the Registration Statement has become effective under the
Securities Act and, to such counsel's knowledge, no stop order suspending
the effectiveness of the Registration Statement has been issued and, to
such counsel's knowledge, no proceedings with respect thereto have been
commenced or threatened;
(xviii) as of the effective date of the Registration Statement, the
Registration Statement and the Prospectus (except as to the financial
statements and other financial and pro forma or statistical data contained
therein, as to which such counsel need express no opinion) complied as to
form in all material respects with the requirements of the Securities Act
and the Securities Act Regulations;
21
(xix) the statements under the captions "Risk Factors," "Tax
Status of the Company," "Description of Shares of Beneficial Interest,"
"Common Shares Eligible for Future Sale," and "Federal Income Tax
Consequences" in the Registration Statement and the Prospectus, insofar as
such statements constitute a summary of the legal matters referred to
therein, constitute accurate summaries thereof in all material respects;
(xx) the Shares have been approved for quotation on the Nasdaq
National Market;
(xxi) to such counsel's knowledge, there are no actions, suits or
proceedings, inquiries, or investigations pending or threatened against
the Company or the Partnership or any of their respective officers and
trustees or to which the properties of any such entity are subject, at law
or in equity, before or by any federal, state, local or foreign
governmental or regulatory commission, board, body, authority, arbital
panel or agency that are required to be described in the Prospectus but
are not so described;
(xxii) to such counsel's knowledge, there are no contracts or
documents of a character that are required to be filed as exhibits to the
Registration Statement or to be described or summarized in the Prospectus
which have not been so filed, summarized or described;
(xxiii) the Company is organized in conformity with the
requirements for qualification as a real estate investment trust pursuant
to Sections 856 through 860 of the Code, and the Company's proposed method
of operation will enable it to meet the requirements for qualification and
taxation as a real estate investment trust under the Code. The Partnership
will be treated as a partnership for federal income tax purposes and not
as a corporation or an association taxable as a corporation;
(xxiv) neither the Company nor the Partnership is or, solely as a
result of transactions contemplated hereby and the application of the
proceeds from the sale of the Shares as described in the Registration
Statement and the Prospectus under the caption "Use of Proceeds," will
become an "investment company" or a company "controlled" by an "investment
company" within the meaning of the Investment Company Act of 1940, as
amended (the "1940 Act"); and
(xxv) the issuance of Common Shares in the FBR Offering was exempt
from the registration requirements of the Securities Act and applicable
state securities laws.
In addition, such counsel shall state that they have participated in
conferences with officers and other representatives of the Company, independent
public accountants of the Company and Underwriters at which the contents of the
Registration Statement and Prospectus were discussed and, although such counsel
is not passing upon and does not assume responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement or Prospectus (except as and to the extent stated in subparagraphs
(viii) and (xix) above), have not independently, checked, investigated or
verified such statements and has relied as to materiality upon discussions with,
and representations and opinions of officers and other representatives of the
Company nothing has caused them to believe that the
22
Registration Statement, as of the date it became effective, and the Preliminary
Prospectus or the Prospectus, as of their respective dates and as of the date of
such counsel's opinion, contained or contains any untrue statement of a material
fact or omitted or omits to state a material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading (it being understood that, in each
case, such counsel need express no view with respect to the financial statements
and other financial and pro forma or statistical data included in the
Registration Statement, Preliminary Prospectus or Prospectus).
(c) All Initial Properties shall be acquired pursuant to purchase
agreements that contain representations and warranties, rights and other terms
reasonably acceptable to the Representative.
(d) The Representative shall have received from Xxxxxx Xxxxxxxx LLP,
letters dated, respectively, as of the date of this Agreement, the Closing Time
and each Date of Delivery, as the case may be, addressed to the Representative
as representative of the Underwriters and in form and substance satisfactory to
the Representative.
(e) The Underwriters shall have received at the Closing Time and on each
Date of Delivery the favorable opinion of Hunton & Xxxxxxxx, dated the Closing
Time or such Date of Delivery, addressed to the Representative and in form and
substance satisfactory to the Representative.
(f) No amendment or supplement to the Registration Statement or Prospectus
shall have been filed to which the Underwriters shall have objected in writing.
(g) Prior to the Closing Time and each Date of Delivery (i) no stop order
suspending the effectiveness of the Registration Statement or any order
preventing or suspending the use of any Preliminary Prospectus or Prospectus has
been issued by the Commission, and no 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, has occurred; and (ii)
the Registration Statement and the Prospectus, as amended or supplemented, shall
not contain an untrue statement of material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading.
(h) Between the time of execution of this Agreement and the Closing Time
or the relevant Date of Delivery (i) no material and unfavorable change in the
assets, results of operations, business, or condition (financial or otherwise)
of the Company and the Partnership taken as a whole shall occur or become known
(whether or not arising in the ordinary course of business) [or that makes it,
in the judgment of the Representative, impracticable to market the Shares on the
terms and in the manner contemplated in the Prospectus], or (ii) no transaction
which is material and unfavorable to the Company shall have been entered into by
the Company or the Partnership.
(i) At the Closing Time, the Warrant Agreement and the Other Transaction
Documents shall have been entered into and delivered by all required parties.
23
(j) At the Closing Time, the Shares shall have been approved for quotation
on the Nasdaq National Market.
(k) The NASD shall not have raised any objection with respect to the
fairness and reasonableness of the underwriting terms and arrangements.
(l) The Representative shall have received a two year lock-up letter from
each officer and a one-year lock-up letter from each trustee of the Company, in
form and substance reasonably satisfactory to the Representative.
(m) The Company will, at the Closing Time and on each Date of Delivery,
deliver to the Underwriters a certificate of two principal executive officers to
the effect that, to each of such officer's knowledge, the representations and
warranties of the Company set forth in this Agreement and the conditions set
forth in paragraphs (g), (h), (i), (j) and (p) of this Section 6 have been met
and are true and correct as of such date.
(n) The Company shall have furnished to the Underwriters such other
documents and certificates as to the accuracy and completeness of any statement
in the Registration Statement and the Prospectus, the representations,
warranties and statement of the Company contained herein and in the Warrant
Agreement, and the performance by the Company of its covenants contained herein
and therein, and the fulfillment of any conditions contained herein or therein,
as of the Closing Time or any Date of Delivery as the Underwriters may
reasonably request.
(o) All filings with the Commission required by Rule 424 under the
Securities Act shall have been made within the applicable time period prescribed
for such filing by such Rule.
(p) The Company shall perform such of its obligations under this Agreement
and the Warrant Agreement as are to be performed by the terms hereof and thereof
at or before the Closing Time or the relevant Date of Delivery.
The several obligations of the Underwriters to purchase Option Shares
hereunder are subject to the delivery to the Representative on the Date if
Delivery of such documents as the Underwriter may reasonably request with
respect to the good standing of the Company, the due authorization and issuance
of the Option Shares and other matters related to the issuance of the Option
Shares.
7. Termination:
-----------
The obligations of the several Underwriters hereunder shall be subject to
termination in the absolute discretion of the Representative, at any time prior
to the Closing Time or any Date of Delivery, (i) if any of the conditions
specified in Section 6 shall not have been fulfilled when and as required by
this Agreement to be fulfilled, or (ii) if there has been since the respective
dates as of which information is given in the Registration Statement, any
material adverse change, or any development involving a prospective material
adverse change, in or affecting the assets, operations, business, prospects or
condition (financial or otherwise) of the Company, whether or not arising in the
ordinary course of business, or (iii) if there has occurred outbreak or
escalation of hostilities or other national or international calamity or crisis
or change in economic, political or other conditions the effect of which on the
financial markets of the United
24
States is such as to make it, in the judgment of the Representative,
impracticable to market or deliver the Shares or enforce contracts for the sale
of the Shares, or (iv) if trading in any securities of the Company has been
suspended by the Commission or by Nasdaq or if trading generally on the New York
Stock Exchange or in the Nasdaq over-the-counter market has been suspended
(including automatic halt in trading pursuant to market-decline triggers other
than those in which solely program trading is temporarily halted), or
limitations on prices for trading (other than limitations on hours or numbers of
days of trading) have been fixed, or maximum ranges for prices for securities
have been required, by such exchange or the NASD or Nasdaq or by order of the
Commission or any other governmental authority, or (v) if there has been any
downgrading in the rating of any of the Company's debt securities or preferred
stock by any "nationally recognized statistical rating organization" (as defined
for purposes of Rule 436(g) under the Securities Act), or (vi) any federal or
state statute, regulation, rule or order of any court or other governmental
authority has been enacted, published, decreed or otherwise promulgated which in
the reasonable opinion of the Representative has a material adverse affect or
will have a material adverse affect on the assets, operations, business,
prospects or condition (financial or otherwise) of the Company, or (viii) any
action has been taken by any federal, state or local government or agency in
respect of its monetary or fiscal affairs which in the reasonable opinion of the
Representative has a material adverse effect on the securities markets in the
United States.
If the Representative elects to terminate this Agreement as provided in
this Section 7, the Company and the Underwriters shall be notified promptly by
telephone, promptly confirmed by letter or telegram.
If the sale to the Underwriters of the Shares, as contemplated by this
Agreement, is not carried out by the Underwriters for any reason permitted under
this Agreement or if such sale is not carried out because the Company shall be
unable to comply in all material respects with any of the terms of this
Agreement, the Company shall not be under any obligation or liability under this
Agreement (except to the extent provided in Sections 5 and 9 hereof) and the
Underwriters shall be under no obligation or liability to the Company under this
Agreement (except to the extent provided in Section 9 hereof) or to one another
hereunder.
8. Increase in Underwriters' Commitments:
-------------------------------------
If any Underwriter shall default at the Closing Time or on a Date of
Delivery in its obligation to take up and pay for the Shares to be purchased by
it under this Agreement on such date, the Representative shall have the right,
within 36 hours after such default, 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 Shares which such Underwriter shall have agreed but failed
to take up and pay for (the "Defaulted Shares"). Absent the completion of such
arrangements within such 36 hour period, (i) if the total number of Defaulted
Shares does not exceed 10% of the total number of Shares to be purchased on such
date, each non-defaulting Underwriter shall take up and pay for (in addition to
the number of Shares which it is otherwise obligated to purchase on such date
pursuant to this Agreement) the portion of the total number of Shares agreed to
be purchased by the defaulting Underwriter on such date in the proportion that
its underwriting obligations hereunder bears to the underwriting obligations of
all non-defaulting Underwriters; and (ii) if the total number of Defaulted
Shares exceeds 10% of such total, the
25
Representative may terminate this Agreement by notice to the Company, without
liability to any non-defaulting Underwriter.
Without relieving any defaulting Underwriter from its obligations
hereunder, the Company agrees with the non-defaulting Underwriters that it will
not sell any Shares hereunder on such date unless all of the Shares to be
purchased on such date are purchased on such date by the Underwriters (or by
substituted Underwriters selected by the Representative with the approval of the
Company or selected by the Company with the approval of the Representative).
If a new Underwriter or Underwriters are substituted for a defaulting
Underwriter in accordance with the foregoing provision, the Company or the
non-defaulting Underwriters shall have the right to postpone the Closing Time or
the relevant Date of Delivery for a period not exceeding five business days in
order that any necessary changes in the Registration Statement and Prospectus
and other documents may be effected.
The term Underwriter as used in this Agreement shall refer to and include
any Underwriter substituted under this Section 8 with the like effect as if such
substituted Underwriter had originally been named in this Agreement.
9. Indemnity and Contribution by the Company, the Partnership and the
------------------------------------------------------------------
Underwriters:
------------
(a) The Company and the Partnership, jointly and severally agree to
indemnify, defend and hold harmless each Underwriter and any person who controls
any Underwriter within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, from and against any loss, expense, liability,
damage or claim (including the reasonable cost of investigation) which, jointly
or severally, any such Underwriter or controlling person may incur under the
Securities Act, the Exchange Act or otherwise, insofar as such loss, expense,
liability, damage or claim arises out of or is based upon [(i) any breach of any
representation, warranty or covenant of the Company or the Partnership contained
herein or] (ii) any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement (or in the Registration Statement
as amended by any post-effective amendment thereof by the Company) or in a
Prospectus (the term Prospectus for the purpose of this Section 9 being deemed
to include any Preliminary Prospectus, the Prospectus and the Prospectus as
amended or supplemented by the Company), or arises out of (iii) any omission or
alleged omission to state a material fact required to be stated in either such
Registration Statement or Prospectus or necessary to make the statements made
therein, in the light of the circumstances under which they were made, not
misleading, except insofar as any such loss, expense, liability, damage or claim
arises out of or is based upon any untrue statement or alleged untrue statement
or omission or alleged omission of a material fact contained in and in
conformity with information furnished in writing by the Underwriters through the
Representative to the Company or the Partnership expressly for use in such
Registration Statement or such Prospectus; provided, however, that the indemnity
agreement contained in this subsection (a) with respect to the Preliminary
Prospectus or the Prospectus shall not inure to the benefit of an Underwriter
(or to the benefit of any person controlling such Underwriter) with respect to
any person asserting any such loss, expense, liability, damage or claim which is
the subject thereof if the Prospectus or any supplement thereto prepared with
the consent of the Representative and furnished to the Underwriters prior to
26
the Closing Time corrected any such alleged untrue statement or omission and if
such Underwriter failed to send or give a copy of the Prospectus or supplement
thereto to such person at or prior to the written confirmation of the sale of
Shares to such person, unless such failure resulted from noncompliance by the
Company or the Partnership with Section 4(c) of this Agreement.
If any action is brought against an Underwriter or controlling person in
respect of which indemnity may be sought against the Company or the Partnership
pursuant to the preceding paragraph, such Underwriter shall promptly notify the
Company and the Partnership in writing of the institution of such action and the
Company and the Partnership shall assume the defense of such action, including
the employment of counsel and payment of expenses; provided, however, that any
failure or delay to so notify the Company or the Partnership will not relieve
the Company or the Partnership of any obligation hereunder, except to the extent
that its ability to defend is actually impaired by such failure or delay. Such
Underwriter or controlling person shall have the right to employ its or their
own counsel in any such case, but the fees and expenses of such counsel shall be
at the expense of such Underwriter or such controlling person unless the
employment of such counsel shall have been authorized in writing by the Company
and the Partnership in connection with the defense of such action or the Company
and the Partnership shall not have employed counsel to have charge of the
defense of such action within a reasonable time or such indemnified party or
parties shall have reasonably concluded (based on the advice of counsel) that
there may be defenses available to it or them which are different from or
additional to those available to the Company or the Partnership and which
counsel to the Underwriter believes may present a conflict for counsel
representing the Company or the Partnership and the Underwriter (in which case
the Company and the Partnership shall not have the right to direct the defense
of such action on behalf of the indemnified party or parties), in any of which
events such fees and expenses shall be borne by the Company and the Partnership
and paid as incurred (it being understood, however, that the Company and the
Partnership shall not be liable for the expenses of more than one separate firm
of attorneys for the Underwriters or controlling persons in any one action or
series of related actions in the same jurisdiction representing the indemnified
parties who are parties to such action). Anything in this paragraph to the
contrary notwithstanding, neither the Company nor the Partnership shall be
liable for any settlement of any such claim or action effected without its
written consent.
(b) Each Underwriter agrees, severally and not jointly, to indemnify,
defend and hold harmless the Partnership, the Company, their trustees and
officers that signed the Registration Statement and any person who controls the
Partnership or the Company within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act from and against any loss, expense,
liability, damage or claim (including the reasonable cost of investigation)
which, jointly or severally, the Company, the Partnership or any such person may
incur under the Securities Act, the Exchange Act or otherwise, insofar as such
loss, expense, liability, damage or claim arises out of or is based upon any
untrue statement or alleged untrue statement of a material fact contained in and
in conformity with information furnished in writing by such Underwriter through
the Representative to the Company or the Partnership expressly for use in the
Registration Statement (or in the Registration Statement as amended by any
post-effective amendment thereof by the Company) or in a Prospectus, or arises
out of or is based upon any omission or alleged omission to state a material
fact in connection with such information required to be stated either in the
Registration Statement or Prospectus or necessary to make such
27
information, in the light of the circumstances under which made, not misleading.
The statements set forth in the last paragraph on the cover page and under the
caption "Underwriting," and the information regarding "Stabilizing" and "Passive
Market Making" in the Preliminary Prospectus and the Prospectus (to the extent
such statements relate to the Underwriters) constitute the only information
furnished by or on behalf of any Underwriter through the Representative to the
Company for purposes of Section 3(p) and this Section 9.
If any action is brought against the Company, the Partnership or any such
person in respect of which indemnity may be sought against any Underwriter
pursuant to the foregoing paragraph, the Company, the Partnership or such person
shall promptly notify the Representative in writing of the institution of such
action and the Representative, on behalf of the Underwriters, shall assume the
defense of such action, including the employment of counsel and payment of
expenses, provided, however, that any failure or delay to so notify the
Representative will not relieve any such Underwriter of any obligation
hereunder, except to the extent that its ability to defend is actually impaired
by such failure or delay. The Company, the Partnership or such person shall have
the right to employ its own counsel in any such case, but the fees and expenses
of such counsel shall be at the expense of the Company, the Partnership or such
person unless the employment of such counsel shall have been authorized in
writing by the Representative in connection with the defense of such action or
the Representative shall not have employed counsel to have charge of the defense
of such action within a reasonable time or such indemnified party or parties
shall have reasonably concluded (based on the advice of counsel) that there may
be defenses available to it or them which are different from or additional to
those available to the Underwriters (in which case the Representative shall not
have the right to direct the defense of such action on behalf of the indemnified
party or parties), in any of which events such fees and expenses shall be borne
by such Underwriter and paid as incurred (it being understood, however, that the
Underwriters shall not be liable for the expenses of more than one separate firm
of attorneys in any one action or series of related actions in the same
jurisdiction representing the indemnified parties who are parties to such
action). Anything in this paragraph to the contrary notwithstanding, no
Underwriter shall be liable for any settlement of any such claim or action
effected without the written consent of the Representative.
(c) If the indemnification provided for in this Section 9 is unavailable
to an indemnified party under subsections (a) and (b) of this Section 9 in
respect of any losses, expenses, liabilities, damages or claims referred to
therein, then each applicable indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, expenses, liabilities, damages or
claims (i) in such proportion as is appropriate to reflect the relative benefits
received by the Company and the Partnership on the one hand and the Underwriters
on the other hand from the offering of the Shares or (ii) if (but only if) the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company and
the Partnership on the one hand and of the Underwriters on the other in
connection with the statements or omissions which resulted in such losses,
expenses, liabilities, damages or claims, as well as any other relevant
equitable considerations. The relative benefits received by the Company and the
Partnership on the one hand and the Underwriters on the other shall be deemed to
be in the same proportion as the total proceeds from the offering (net of
underwriting discounts and commissions but before deducting expenses) received
by the Company and the
28
Partnership bear to the underwriting discounts and commissions received by the
Underwriters. The relative fault of the Company and the Partnership on the one
hand and of the Underwriters on the other shall be determined by reference to,
among other things, whether the untrue statement or alleged untrue statement of
a material fact or omission or alleged omission relates to information supplied
by the Company or the Partnership or by the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The amount paid or payable by a party as a
result of the losses, claims, damages and liabilities referred to above shall be
deemed to include any legal or other fees or expenses reasonably incurred by
such party in connection with investigating or defending any claim or action.
(d) The Company and the Partnership, on the one hand, and the
Underwriters, on the other, agree that it would not be just and equitable if
contribution pursuant to this Section 9 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 in subsection (c)(i) and, if applicable (ii), above.
Notwithstanding the provisions of this Section 9, no Underwriter shall be
required to contribute any amount in excess of the underwriting discounts and
commissions applicable to the Shares purchased by such Underwriter. 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. The Underwriters' obligations
to contribute pursuant to this Section 9 are several in proportion to their
respective underwriting commitments and not joint.
10. Survival:
--------
The indemnity and contribution agreements contained in Section 9 and the
covenants, warranties and representations of the Company and the Partnership
contained in Sections 3, 4 and 5 of this Agreement shall remain in full force
and effect regardless of any investigation made by or on behalf of any
Underwriter, or any person who controls any Underwriter within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act, or by or on
behalf of the Company and the Partnership, their trustees and officers or any
person who controls the Company or the Partnership within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act, and shall survive
any termination of this Agreement or the sale and delivery of the Shares. The
Company, the Partnership and each Underwriter agree promptly to notify the
others of the commencement of any litigation or proceeding against it and, in
the case of the Company, against any of the Company's officers and trustees, in
connection with the sale and delivery of the Shares, or in connection with the
Registration Statement or Prospectus, it being understood that notice by the
Company or the Partnership to the Representative in accordance with Section 11
shall constitute prompt and adequate notice to the Underwriters.
11. Notices:
-------
Except as otherwise herein provided, all statements, requests, notices and
agreements shall be in writing or by telegram and, if to the Underwriters, shall
be sufficient in all respects if delivered to Friedman, Billings, Xxxxxx & Co.,
Inc., 0000 00xx Xxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxx 00000, Attention: Syndicate
Department; if to the Company, shall be sufficient in all respects if
29
delivered to the Company at the offices of the Company at 0000 Xxxxx Xxxx
Xxxxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxxx 00000, attention: Xxxxxx X. Xxxxxx, Chief
Executive Officer and President; and, if to the Partnership, shall be sufficient
in all respects if delivered to the offices of the Partnership at 0000 Xxxxx
Xxxx Xxxxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxxx 00000, attention: Xxxxxx X. Xxxxxx,
Chief Executive Officer and President.
12. Governing Law; Consent to Jurisdiction; Headings:
------------------------------------------------
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE COMMONWEALTH OF VIRGINIA, WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES.
13. Parties in Interest:
-------------------
The Agreement herein set forth has been and is made solely for the benefit
of the Underwriters, the Company, the Partnership and the controlling persons,
trustees and officers referred to in Sections 9 and 10 hereof, and their
respective successors, assigns, executors and administrators. No other person,
partnership, association or corporation (including a purchaser, as such
purchaser, from any of the Underwriters) shall acquire or have any right under
or by virtue of this Agreement.
14. Counterparts:
------------
This Agreement may be signed by the parties in counterparts which together
shall constitute one and the same agreement among the parties.
30
If the foregoing correctly sets forth the understanding among the Company,
the Partnership and the Underwriters, please so indicate in the space provided
below for the purpose, whereupon this Agreement shall constitute a binding
agreement among the Company, the Partnership and the Underwriters.
Very truly yours,
CAPITAL AUTOMOTIVE REIT
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
CAPITAL AUTOMOTIVE L.P.
By: Capital Automotive REIT
Its: General Partner
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
31
Accepted and agreed to as
of the date first above written:
FRIEDMAN, BILLINGS, XXXXXX &
CO., INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
For themselves and as Representative
of the other Underwriters named on
Schedule I hereto.
32
Schedule I
Number of
Underwriter Initial
Shares to be
Purchased
Friedman, Billings, Xxxxxx & Co., Inc. [____________]
[_______________________________] [____________]
===============
Total $20,000,000
Schedule II
Subsidiaries of the Company
Capital Automotive L.P.
Schedule III
Other Transaction Documents
Agreement of Limited Partnership of Capital Automotive L.P.
Indemnification Agreement
1998 Equity Incentive Plan
Employment Agreement by and between the Company and Xxxxxx X. Xxxxxx, as amended
Employment Agreement by and between the Company and Xxxxx X. Xxxxx, as amended
Employment Agreement by and between the Company and Xxxxxx X. Xxxxxxxx, as
amended Employment Agreement by and between the Company and Xxxxx X. Xxx, as
amended
Option Agreement
NationsBank, N.A. Line of Credit Agreement
FBR Asset Investment Purchase Agreement, as amended
FBR Registration Rights Agreement
Pohanka Contribution Agreement dated as of November 21, 1997, as amended
Xxxxxxxxx Contribution Agreement dated as of November 21, 1997, as amended
Xxxxxx Contribution Agreement dated as of November 24, 1997, as amended
Xxxxxxx Contribution Agreement dated as of November 24, 1997, as amended
Cross-Continent Auto Retailers, Inc. Purchase Agreement dated as of December 31,
1997, as amended
Pohanka Lease Agreement
Xxxxxxxxx Lease Agreement
Xxxxxx Lease Agreement
Xxxxxxx Lease Agreement
Cross-Continent Lease Agreement
Underwriters Warrant Agreement
Dealers Warrant Agreement
Pohanka Guaranty Agreement
Xxxxxxxxx Guaranty Agreement
Friedman, Billings, Xxxxxx Group, Inc. Loan Agreement, as
amended
Friedman, Billings, Xxxxxx Group, Inc. Security Agreement
Cross-Continent Guaranty Agreement
Good News Purchase Agreement dated as of
January 10, 1998, as amended
Good News Lease Agreement
Good News Guaranty Agreement
Xxxxx Purchase Agreement dated as of January 12, 1998
Xxxxx Lease Agreement
Xxxxx Guaranty Agreement
Schedule IV
Directors, Officers and Employees of the Company
For Whom Shares Have Been Reserved
