AGREE REALTY CORPORATION 1,300,000 Shares of Common Stock (Par Value $0.0001 Per Share) UNDERWRITING AGREEMENT
Exhibit
1.1
AGREE
REALTY CORPORATION
1,300,000
Shares of Common Stock
(Par
Value $0.0001 Per Share)
April 13,
2010
XXXXXXX
XXXXX & ASSOCIATES, INC.
000
Xxxxxxxx Xxxxxxx
Xx.
Xxxxxxxxxx, XX 00000
Ladies
and Gentlemen:
Agree
Realty Corporation, a Maryland corporation (the “Company”) and the sole general
partner of Agree Limited Partnership, a Delaware limited partnership (the “Operating Partnership”),
proposes to issue and sell to you, as the sole Underwriter (the “Underwriter”), 1,300,000
shares (the “Firm
Shares”) of its common stock, par value $0.0001 per share (the “Common Stock”). The
Company also proposes to grant to the Underwriter an option to purchase up to an
additional 195,000 shares of Common Stock solely to cover over-allotments (the
“Option Shares”; the
Option Shares, together with the Firm Shares, hereinafter called the “Shares”).
The Company and the Operating
Partnership wish to confirm as follows their agreement with you in connection
with the purchase of the Shares by the Underwriter.
1.
Registration Statement and
Prospectus. The Company has prepared and filed on August 24, 2009
with the Securities and Exchange Commission (the “Commission”) in accordance
with the provisions of the Securities Act of 1933, as amended, and the rules and
regulations of the Commission thereunder (collectively, the “Act”), a shelf registration
statement on Form S-3 (file number 333-161520) under the Act, as amended on
November 13, 2009 (“Registration Statement
333-161520”), which registration statement included a prospectus dated
November 13, 2009 (the “Basic
Prospectus”), relating to the issuance of up to $125,000,000 shares of
Common Stock, shares of Preferred Stock, Depositary Shares, Warrants and
Preferred Stock Purchase Rights in unallocated amounts. As of the date
hereof, no securities have been sold off of Registration Statement
333-161520. The Company has filed with, or transmitted for filing to, or
shall promptly hereafter file with or transmit for filing to, the Commission a
supplement to the prospectus included in such registration statement (the “Prospectus Supplement”)
specifically relating to the Shares and the plan of distribution thereof
pursuant to Rule 424. Registration Statement 333-161520, including any
amendments thereto filed prior to the Execution Time (as defined below), was
declared effective on November 16, 2009. Except where the context
otherwise requires, Registration Statement 333-161520, on each date and time
that such registration statement and any post-effective amendment or amendments
thereto became or becomes effective (each, an “Effective Date”), including
all documents filed as part thereof and including any information contained in a
Prospectus (as defined below) subsequently filed with the Commission pursuant to
Rule 424(b) and deemed part of such registration statement, collectively, are
herein called the “Registration
Statement,” and the Basic Prospectus, as supplemented by the final
Prospectus Supplement, in the form first used by the Company in connection with
confirmation of sales of the Shares, is herein called the “Prospectus”; and the term
“Preliminary Prospectus”
means any preliminary form of the Prospectus Supplement. The Basic
Prospectus together with the Preliminary Prospectus, as amended or supplemented,
immediately prior to the date and time that this Agreement is executed and
delivered by the parties hereto (the “Execution Time”) is hereafter
called the “Pricing
Prospectus,” and any “issuer free writing prospectus” (as defined in Rule
433) relating to the Shares is hereafter called an “Issuer Free Writing
Prospectus.” The Pricing Prospectus, as supplemented by the Issuer
Free Writing Prospectuses, if any, listed in Schedule II hereto or
that the parties hereto shall hereafter expressly agree in writing to treat as
part of the Disclosure Package (as defined below), if any, and a schedule
indicating the number of Shares being sold and the price at which the Shares
will be sold to the public, attached hereto as Exhibit A taken
together, are hereafter collectively called the “Disclosure Package.” Any
reference in this Agreement to the Registration Statement, the Disclosure
Package, the Prospectus or any amendment or supplement thereto shall be deemed
to refer to and include the documents incorporated by reference therein pursuant
to Item 12 of Form S-3 under the Act (the “Incorporated Documents”), as
of each Effective Date or the Execution Time or the date of the Prospectus, as
the case may be (it being understood that the several specific references in
this Agreement to documents incorporated by reference in the Registration
Statement, the Disclosure Package or the Prospectus are for clarifying purposes
only and are not meant to limit the inclusiveness of any other definition
herein). For purposes of this Agreement, all references to the
Registration Statement, the Disclosure Package or the Prospectus or any
amendment or supplement thereto shall be deemed to include the copy filed with
the Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval
system (“XXXXX”).
All
references in this Agreement to financial statements and schedules and other
information which is “contained,” “included,” “stated” or “described” in the
Registration Statement, the Disclosure Package or the Prospectus (and all other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is or is deemed
to be incorporated by reference in the Registration Statement, the Disclosure
Package or the Prospectus, as the case may be; and all references in this
Agreement to amendments or supplements to the Registration Statement, the
Disclosure Package or the Prospectus shall be deemed to include the filing after
the Execution Time of any document under the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated thereunder
(the “Exchange Act”),
which is or is deemed to be incorporated by reference in the Registration
Statement, the Disclosure Package or the Prospectus, as the case may
be.
2.
Agreement to Sell and
Purchase.
(a)
The Company hereby agrees, subject to all the
terms and conditions set forth herein, to issue and sell to the Underwriter and,
upon the basis of the representations, warranties and agreements of the Company
and the Operating Partnership herein contained and subject to all the terms and
conditions set forth herein, the Underwriter agrees to purchase from the
Company, at a purchase price of $20.90 per Share, the Firm Shares set forth
opposite its name on Schedule I to
this Agreement.
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(b)
Subject to the terms and conditions and in
reliance upon the representations and warranties herein set forth, the Company
hereby grants an option to the Underwriter to purchase up to the number of
Option Shares set forth in Schedule I hereto at
the same purchase price set forth in Section 2(a), less an amount per share
equal to any dividends or distributions declared by the Company and payable on
the Firm Shares but not payable on the Option Shares. Said option may be
exercised only to cover over-allotments in the sale of the Firm Shares by the
Underwriter. Said option may be exercised in whole or in part at any time
on or before the 30th day after the date of the Prospectus upon written,
electronic or telegraphic notice by the Underwriter to the Company setting forth
the number of Option Shares as to which the Underwriter is exercising the option
and the settlement date (each, an “Option Closing Date”).
Each purchase date must be at least one (1) Business Day after the written
notice is given and may not be earlier than the Closing Date for the Firm Shares
nor later than ten (10) Business Days after the date of such
notice.
3.
Offering by
Underwriter. It is understood that the Underwriter proposes to
offer the Shares for sale to the public as soon after this Agreement has become
effective as in their judgment is advisable and initially to offer the Shares
upon the terms set forth in the Prospectus.
The
Underwriter represents and agrees that, unless it has or shall have obtained, as
the case may be, the prior written consent of the Company, it has not made and
will not make any offer relating to the Shares that would constitute an Issuer
Free Writing Prospectus or that would otherwise constitute a “free writing
prospectus” (as defined in Rule 405, a “Free Writing Prospectus”)
required to be filed by the Company with the Commission or retained by the
Company under Rule 433, other than the free writing prospectus, if any,
containing the information contained in the final term sheet prepared and filed
pursuant to Section 5(t) hereto; provided that the
prior written consent of the parties hereto shall be deemed to have been given
in respect of any Free Writing Prospectuses listed in Schedule II hereto
and any electronic road show.
4.
Delivery of the Shares and
Payment Therefor. Delivery of and payment for the Shares shall be
made at 10:00 a.m., New York City time, on April 16, 2010, or at such time on
such later date not more than three (3) Business Days after the foregoing date
as the Underwriter shall designate, which date and time may be postponed by
mutual written agreement of the Underwriter and the Company (such date and time
of delivery and payment for the Shares being herein called the “Closing Date”) or on the
applicable Option Closing Date (or at such other time on the same or on such
other date, in any event not later than the third Business Day thereafter, as
the Underwriter and the Company may agree in writing). Delivery of the
Shares shall be made against payment by the Underwriter of the purchase price
thereof, to or upon the order of the Company by wire transfer payable in
immediately available funds to an account specified by the Company. The
Shares will be delivered to the Underwriter through the facilities of The
Depository Trust Company (“DTC”), and the Company will
make electronic transfer of the Shares in such names and denominations as the
Underwriter requests.
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5.
Agreements of the
Company. The Company agrees with the Underwriter as
follows:
(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, the Company will use its best efforts to cause such post-effective
amendment to become effective as soon as possible and will advise the
Underwriter promptly and, if requested by the Underwriter, will confirm such
advice in writing, immediately after such post-effective amendment has become
effective.
(b)
If, at any time prior to the filing of the
Prospectus pursuant to Rule 424(b), any event occurs as a result of which the
Disclosure Package would (x) include any untrue statement of a material fact or
omit to state any material fact necessary to make the statements therein in the
light of the circumstances under which they were made or the circumstances then
prevailing not misleading or (y) conflict with the information contained in the
Registration Statement, the Company will (i) notify promptly the Underwriter so
that any use of the Disclosure Package may cease until it is amended or
supplemented; (ii) amend or supplement the Disclosure Package to correct such
statement, omission or conflicting information; and (iii) supply any amendment
or supplement to the Underwriter in such quantities as may be reasonably
requested.
(c)
The Company will advise the Underwriter
promptly and, if requested by the Underwriter, will confirm such advice in
writing: (i) of any review, issuance of comments or request by the
Commission or its staff on or for an amendment of or a supplement to the
Registration Statement, any Preliminary Prospectus or the Prospectus or for
additional information regarding the Company, its affiliates or its filings with
the Commission, whether or not such filings are incorporated by reference into
the Registration Statement, any Preliminary Prospectus or the Prospectus; (ii)
of the issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement or of the suspension of qualification of the
Shares for offering or sale in any jurisdiction or the initiation of any
proceeding for such purpose or any examination pursuant to Section 8(e) of the
Act relating to the Registration Statement or Section 8A of the Act in
connection with the offering of the Shares; (iii) of the receipt by the Company
of any notification with respect to the suspension of the qualification of the
Shares for sale in any jurisdiction or the institution or threatening of any
proceeding for such purpose; and (iv) within the period of time referred to in
the first sentence in subsection (f) below, of any change in the Company’s
condition (financial or other), business, prospects, properties, net worth or
results of operations, or of the happening of any event, which results in any
statement of a material fact made in the Registration Statement or the
Prospectus (as then amended or supplemented) being untrue or which requires the
making of any additions to or changes in the Registration Statement or the
Prospectus (as then amended or supplemented) in order to state a material fact
required by the Act to be stated therein or necessary in order to make the
statements therein not misleading, or of the necessity to amend or supplement
the Prospectus (as then amended or supplemented) to comply with the Act or any
other law. If at any time the Commission shall issue any stop order
suspending the effectiveness of the Registration Statement, the Company will
make every reasonable effort to obtain the withdrawal of such order at the
earliest possible time.
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(d)
On request, the Company will furnish to the
Underwriter and counsel to the Underwriter, without charge: (i) one
(1) signed copy of the Registration Statement as originally filed with the
Commission and of each amendment thereto, including financial statements and all
exhibits to the Registration Statement; (ii) such number of conformed
copies of the Registration Statement as originally filed and of each amendment
thereto, but without exhibits, as the Underwriter may request; (iii) such
number of copies of the Incorporated Documents, without exhibits, as the
Underwriter may request; and (iv) one (1) copy of the exhibits to the
Incorporated Documents.
(e)
The Company will not file any amendment to the
Registration Statement or make any amendment or supplement to the Prospectus or,
prior to the end of the period of time referred to in the first sentence in
subsection (f) below, file any document which upon filing becomes an
Incorporated Document, of which the Underwriter shall not previously have been
advised or to which, after the Underwriter shall have received a copy of the
document proposed to be filed, the Underwriter shall reasonably object; and no
such further document, when it is filed, will contain an untrue statement of a
material fact or will omit to state a material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The Company will
give the Underwriter notice of its intention to make any other filing pursuant
to the Exchange Act from the Execution Time to the Closing Time and will furnish
the Underwriter with copies of any such documents a reasonable amount of time
prior to such proposed filing.
(f)
After the execution and delivery of this
Agreement and thereafter from time to time for such period as in the opinion of
counsel for the Underwriter a prospectus is required by the Act to be delivered
(or in lieu thereof, the notice referred to in Rule 173(a) under the Act) in
connection with sales by the Underwriter or any dealer (including circumstances
where such requirement may be satisfied pursuant to Rule 172), the Company will
file promptly all reports and any definitive proxy or information statements
required to be filed by the Company with the Commission pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act and the Company will expeditiously
deliver to the Underwriter and each dealer, without charge, as many copies of
the Prospectus (and of any amendment or supplement thereto), any Preliminary
Prospectus and any Issuer Free Writing Prospectus as the Underwriter may
request. The Company consents to the use of the Prospectus (and of any
amendment or supplement thereto) in accordance with the provisions of the Act
and with the securities or blue sky laws of the jurisdictions in which the
Shares are offered by the Underwriter and by all dealers to whom Shares may be
sold, both in connection with the offering and sale of the Shares and for such
period of time thereafter as the Prospectus is required by the Act to be
delivered (or in lieu thereof, the notice referred to in Rule 173(a) under the
Act) in connection with sales by the Underwriter or any dealers. If during
such period of time: (i) any event shall occur as a result of which,
in the judgment of the Company, or in the opinion of counsel for the
Underwriter, the Prospectus as supplemented would include an untrue statement of
a material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances when the Prospectus is
delivered to a purchaser, not misleading; or (ii) if it is necessary to
supplement the Prospectus or amend the Registration Statement (or to file under
the Exchange Act any document which, upon filing, becomes an Incorporated
Document) in order to comply with the Act, the Exchange Act or any other law,
the Company will promptly notify the Underwriter of such event and forthwith
prepare and, subject to the provisions of paragraph (e) above, file with the
Commission an appropriate supplement or amendment thereto (or to such document),
and will expeditiously furnish to the Underwriter and dealers a reasonable
number of copies thereof. In the event that the Company and the
Underwriter agree that the Prospectus should be amended or supplemented, the
Company, if requested by the Underwriter, will promptly issue a press release
announcing or disclosing the matters to be covered by the proposed amendment or
supplement.
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(g)
The Company will: (i) cooperate
with the Underwriter and its counsel in connection with the registration or
qualification of the Shares for offering and sale by the Underwriter and by
dealers under the securities or blue sky laws of such jurisdictions as the
Underwriter may designate; (ii) maintain such qualifications in effect so
long as required for the distribution of the Shares; and (iii) file such
consents to service of process or other documents necessary or appropriate in
order to effect such registration or qualification; provided that in no
event shall the Company be obligated to qualify to do business in any
jurisdiction where it is not now so qualified or to take any action which would
subject it to service of process in suits, other than those arising out of the
offering or sale of the Shares, in any jurisdiction where it is not now so
subject.
(h)
The Company agrees that, unless it has or
shall have obtained the prior written consent of the Underwriter, it has not
made and will not make any offer relating to the Shares that would constitute an
Issuer Free Writing Prospectus or that would otherwise constitute a Free Writing
Prospectus required to be filed by the Company with the Commission or retained
by the Company under Rule 433, other than the Free Writing Prospectus containing
the information contained in the final term sheet prepared and filed pursuant to
Section 5(t) hereto; provided that the
prior written consent of the parties hereto shall be deemed to have been given
in respect of the Free Writing Prospectuses listed in Schedule II
hereto and any electronic road show. Any such free writing prospectus
consented to by the Underwriter or the Company is hereinafter referred to as a
“Permitted Free Writing
Prospectus.” The Company agrees that (x) it has treated and will
treat, as the case may be, each Permitted Free Writing Prospectus as an Issuer
Free Writing Prospectus and (y) it has complied and will comply, as the case may
be, with the requirements of Rules 164 and 433 applicable to any Permitted Free
Writing Prospectus, including in respect of timely filing with the Commission,
legending and record keeping.
(i)
The Company will make generally available to
its security holders and to the Underwriter a consolidated earnings statement,
which need not be audited, covering a 12-month period commencing after the
effective date of this Agreement and ending not later than 15 months thereafter,
as soon as practicable after the end of such period, which consolidated earnings
statement shall satisfy the provisions of Section 11(a) of the Act and Rule
158 under the Act.
(j)
During the period commencing on the date
hereof and ending on the date occurring three (3) years hereafter, the Company
will furnish to the Underwriter: (i) as soon as available, if
requested, a copy of each report of the Company mailed to stockholders or filed
with the Commission that is not publicly available on XXXXX or the Company’s
website; and (ii) from time to time such other information concerning the
Company as the Underwriter may reasonably request.
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(k)
If this Agreement shall terminate or shall be
terminated after execution pursuant to any provisions hereof, or if this
Agreement shall be terminated by the Underwriter because of any inability,
failure or refusal on the part of the Company to comply with the terms or
fulfill any of the conditions of this Agreement, the Company shall reimburse the
Underwriter for reasonable out-of-pocket expenses (including the reasonable fees
and expenses of counsel for the Underwriter) incurred by the Underwriter in
connection herewith.
(l)
The Company will apply the net proceeds from
the sale of the Shares substantially in accordance with the description set
forth in the Prospectus.
(m) If
Rule 430A, 430B or 430C of the Act is employed, the Company will timely file the
Prospectus pursuant to Rule 424(b) under the Act and will advise the Underwriter
of the time and manner of such filing.
(n)
The Company has not taken, nor will it take,
directly or indirectly, any action designed to, or that might reasonably be
expected to cause or result in, under the Exchange Act or otherwise,
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares.
(o)
The Company will comply and will use
commercially reasonable efforts, consistent with its leases, to cause its
tenants to comply in all material respects with all applicable Environmental
Laws (as hereinafter defined).
(p)
The Company will use its best efforts to
continue to qualify as a real estate investment trust (a “REIT”) under the Internal
Revenue Code of 1986, as amended (the “Code”), so long as its Board
of Directors deems it in the best interest of the Company’s stockholders to
remain so qualified.
(q)
The Company will use all reasonable best
efforts to do or perform all things required to be done or performed by the
Company prior to the Closing Date to satisfy all conditions precedent to the
delivery of the Shares pursuant to this Agreement.
(r)
The Company will not, without the prior
written consent of the Underwriter, offer, sell, contract to sell, pledge or
otherwise dispose of or enter into any transaction that is designed to, or might
reasonably be expected to, result in the disposition (whether by actual
disposition or effective economic disposition due to cash settlement or
otherwise) by the Company or any affiliate of the Company or the Operating
Partnership, directly or indirectly, including the filing (or participation in
the filing) of a registration statement with the Commission in respect of, or
establish or increase a put equivalent position or liquidate or decrease a call
equivalent position (within the meaning of Section 16 of the Exchange
Act), any shares of
Common Stock (excluding the Shares) or any securities convertible into or
exercisable or exchangeable for, shares of Common Stock; or publicly announce an
intention to effect any such transaction, until ninety (90) days from the date
of the Prospectus; provided, however, that the
Company may issue and sell Common Stock, or any securities convertible into or
exchangeable for shares of Common Stock, (i) pursuant to the conversion or
exchange of convertible or exchangeable securities or the exercise of warrants
or options, in each case outstanding at the Execution Time, (ii) grant employees
stock options and restricted shares pursuant to the terms of any equity
incentive plan in effect at the Execution Time, (iii) in connection with the
acquisition of properties or in connection with joint ventures or similar
arrangements, so long as the recipients agree in writing not to sell or transfer
the Common Stock or such securities for a period of ninety (90) days from the
date of the Prospectus without the prior written consent of the Underwriter and
(iv) pursuant to the dividend reinvestment and stock purchase plan of the
Company in effect at the Execution Time.
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(s)
The Company will comply with all applicable
securities and other applicable laws, rules and regulations, including, without
limitation, the Xxxxxxxx-Xxxxx Act of 2002 (the “Xxxxxxxx-Xxxxx Act”), and will
use its best efforts to cause the Company’s directors and officers, in their
capacities as such, to comply with such laws, rules and regulations, including,
without limitation, the provisions of the Xxxxxxxx-Xxxxx Act.
(t)
Unless requested otherwise by the Underwriter,
the Company will prepare a final term sheet, containing solely a description of
final terms of the Shares and the offering thereof, in the form and substance
approved by the Underwriter and attached as Schedule II hereto
and will file such final term sheet with the Commission as soon as practical
after the Execution Time. The Company will file any other Issuer Free
Writing Prospectus to the extent required by Rule 433 under the Securities Act
within the time period required by such rule. The Company will retain,
pursuant to reasonable procedures developed in good faith, copies of each Issuer
Free Writing Prospectus that is not filed with the Commission in accordance with
Rule 433(g) under the Securities Act.
(u)
The Company will use best efforts to complete
all required filings with the New York Stock Exchange and other necessary
actions in order to cause the Shares to be listed and admitted and authorized
for trading on the New York Stock Exchange, subject solely to notice of
issuance.
6.
Representations and
Warranties of the Company and Operating Partnership. The Company
and Operating Partnership, jointly and severally, represent, warrant and
covenant to the Underwriter as follows:
(a)
The Basic Prospectus and each Preliminary
Prospectus, if any, included as part of the registration statement as originally
filed or as part of any amendment or supplement thereto, or filed pursuant to
Rule 424 under the Act, complied when so filed in all material respects with the
provisions of the Act.
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(b)
The Company and the transactions contemplated
by this Agreement meet all of the requirements for using Form S-3 under the Act
pursuant to the standards for such form in effect currently and immediately
prior to October 21, 1992. The Registration Statement, including any
amendments thereto filed prior to the Execution Time, was declared effective on
November 16, 2009. No stop order suspending the effectiveness of the
Registration Statement is in effect, and no proceedings or examination under
Section 8(d) or 8(e) of the Act are pending before or, to the Company’s
knowledge, threatened by the Commission. The Company is not the subject of
a pending proceeding under Section 8A of the Act in connection with the offering
of the Shares. The Registration Statement meets the requirements set forth
in Rule 415(a)(1)(x) under the Act and complies in all other material respects
with such Rule. The Registration Statement, in the form in which it was
declared effective, and also in such form as it may be when any post-effective
amendment thereto shall become effective, and the Preliminary Prospectus and the
Prospectus and any supplement or amendment thereto, each when filed with the
Commission under Rule 424(b) under the Act, complied or will comply in all
material respects with the provisions of the Act and the Exchange Act. The
Company has not received from the Commission any notice objecting to the use of
the shelf registration statement form. On each Effective Date and at the
Execution Time, the Registration Statement did not contain an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements made therein not misleading.
On the date of any filing pursuant to Rule 424(b) and on the Closing Date
and each Option Closing Date, the Prospectus (together with any supplement
thereto) will not, include any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading. The
representation and warranty contained in this Section 6(b) does not apply
to statements in or omissions from the Registration Statement, the Disclosure
Package or the Prospectus made in reliance upon and in conformity with
information relating to the Underwriter furnished to the Company in writing by
or on behalf of the Underwriter expressly for use therein.
(c)
(i) The Disclosure Package, and (ii) each
electronic road show, if any, when taken together as a whole with the Disclosure
Package, did not at the Execution Time, and will not on the Closing Date and
each Option Closing Date, contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. The preceding sentence does not apply to statements in or
omissions from the Disclosure Package made in reliance upon and in conformity
with information relating to the Underwriter furnished to the Company in writing
by or on behalf of the Underwriter expressly for use therein.
(d)
(i) At the earliest time after the filing of
the Registration Statement that the Company or another offering participant made
a bona fide offer
(within the meaning of Rule 164(h)(2)) of the Shares and (ii) as of the
Execution Time (with such date being used as the determination date for purposes
of this clause (ii)), the Company was not and is not an Ineligible Issuer (as
defined in Rule 405), without taking account of any determination by the
Commission pursuant to Rule 405 that it is not necessary that the Company be
considered an Ineligible Issuer.
(e)
Each Issuer Free Writing Prospectus and the
final term sheet prepared and filed pursuant to Section 5(t) hereof does not
include any information that conflicts with the information contained in the
Registration Statement, including any Incorporated Document and any prospectus
supplement deemed to be a part thereof that has not been superseded or
modified. The foregoing sentence does not apply to statements in or
omissions from any Issuer Free Writing Prospectus based upon and in conformity
with written information furnished to the Company by the Underwriter
specifically for use therein, it being understood and agreed that the only such
information furnished by or on behalf of the Underwriter consists of the
information described as such in Section 12 hereof.
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(f)
The Incorporated Documents heretofore filed,
when they were filed (or, if any amendment with respect to any such document was
filed, when such amendment was filed), conformed in all material respects with
the requirements of the Exchange Act and the rules and regulations of the
Commission thereunder. No such document when it was filed (or, if an
amendment with respect to any such document was filed, when such amendment was
filed), contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make the
statements made therein, in light of the circumstances under which they were
made, not misleading.
(g)
The Shares have been duly and validly
authorized and conform in all material respects to the description thereof
contained in the Registration Statement, the Disclosure Package and the
Prospectus and, when issued and delivered pursuant to this Agreement, will be
fully paid and non-assessable free and clear of any pledge, lien, encumbrance,
security interest or other claim, and the issuance and sale of the Shares by the
Company is not subject to preemptive or other similar rights arising by
operation of law, under the articles of incorporation, by-laws or other
organizational documents of the Company or under any agreement to which the
Company or any one of its subsidiaries is a party; no person has a right of
participation or first refusal with respect to the sale of the Shares by the
Company. The form of certificate for the Shares will be in valid and
sufficient form in compliance with Maryland law and the New York Stock Exchange
requirements.
(h)
Immediately following the Closing Date,
9,559,264 shares of Common Stock of the Company will be issued and outstanding
(excluding any Option Shares); all of the outstanding shares of Common Stock of
the Company have been duly and validly authorized and issued and are fully paid
and nonassessable and are free of any preemptive or similar rights. Except
as disclosed in the Registration Statement, the Disclosure Package and the
Prospectus (or any amendment or supplement thereto), there are no outstanding
(i) securities or obligations of the Company or any of its subsidiaries
convertible into or exchangeable for any equity interests of the Company or any
such subsidiary, (ii) warrants, rights or options to subscribe for or purchase
from the Company or any such subsidiary any such equity interests or any such
convertible or exchangeable securities or obligations or (iii) obligations of
the Company or any such subsidiary to issue any equity interests, any such
convertible or exchangeable securities or obligation, or any such warrants,
rights or options. Except as disclosed in the Registration Statement, the
Disclosure Package and the Prospectus (or any amendment or supplement thereto),
there are no persons with registration or other similar rights to have any
equity or debt securities, including securities which are convertible into or
exchangeable for equity securities, registered pursuant to the Registration
Statement or otherwise registered by the Company under the Act (other than those
that have been waived).
(i)
Each of the Company, the Operating Partnership
and each of their subsidiaries is a corporation, limited liability company,
limited partnership or trust, as applicable, duly organized, validly existing
and in good standing under the laws of the state of its formation, as set forth
on Schedule III
hereto, with full corporate, limited liability company, partnership or trust
power, as applicable, and authority to own, lease and operate its properties and
to conduct its business as described in the Registration Statement, the
Disclosure Package and the Prospectus, and each is duly registered and qualified
to conduct its business, and is in good standing, in each jurisdiction or place
where the nature of its properties or the conduct of its business requires such
registration or qualification, except where the failure so to register or
qualify does not have a material adverse effect on the condition (financial or
other), prospects, earnings, business, properties, net worth or results of
operations of the Company and its subsidiaries taken as a whole, whether or not
arising from transactions in the ordinary course of business (a “Material Adverse
Effect”).
10
(j)
None of the Company, the Operating Partnership
or any of its subsidiaries does any business in Cuba.
(k)
Other than as set forth on Schedule III
hereto, the Company has no subsidiary or subsidiaries and does not control,
directly or indirectly, any corporation, partnership, joint venture, association
or other business association. The issued shares of capital stock of each
of the Company’s subsidiaries (including the Operating Partnership) have been
duly authorized and validly issued, are fully paid and non-assessable and are
owned legally and beneficially by the Company free and clear of any security
interests, liens, encumbrances, equities or claims, except as disclosed in the
Registration Statement, the Prospectus and the Disclosure Package.
(l)
There are no legal or governmental actions,
suits or proceedings pending or, to the knowledge of the Company, threatened,
against the Company, the Operating Partnership or any of their subsidiaries, or
to which the Company, the Operating Partnership or any properties of the
Company, the Operating Partnership or any of their subsidiaries is subject, that
(A) are required to be described in the Registration Statement or the
Prospectus but are not described as required; (B) could reasonably be
expected to have a material adverse effect on the performance of this Agreement
or the consummation of any of the transactions contemplated hereby; or
(C) could reasonably be expected to have a Material Adverse Effect, except
as set forth in or contemplated in the Disclosure Package and the Prospectus
(exclusive of any supplement thereto). There are no statutes, regulations,
off-balance sheet transactions, contingencies or agreements, contracts,
indentures, leases or other instruments or documents of a character that are
required to be described in the Registration Statement or the Prospectus or to
be filed or incorporated by reference as an exhibit to the Registration
Statement or any Incorporated Document that are not described, filed or
incorporated as required by the Act or the Exchange Act (and the Pricing
Prospectus contains in all material respects the same description of the
foregoing matters contained in the Prospectus). The statements in the
Registration Statement, Prospectus and the Disclosure Package under the heading
“Federal Income Tax Considerations” and the statements in the Prospectus and
Disclosure Package under the heading “Additional Federal Income Tax
Considerations” fairly summarize the matters therein described.
(m)
None of the Company, the Operating Partnership
or any of their subsidiaries is: (A) in violation of (i) its
respective articles of incorporation, partnership agreement, operating agreement
or by-laws (or analogous governing instruments), (ii) any law, ordinance,
administrative or governmental rule or regulation applicable to the Company, the
Operating Partnership or any of their subsidiaries, which violation would have a
Material Adverse Effect, or (iii) any decree of any court or governmental
agency or body having jurisdiction over the Company or its subsidiaries, which
violation would have a Material Adverse Effect; or (B) in default in any
material respect in the performance of any obligation, agreement, condition or
covenant (financial or otherwise) contained in any bond, debenture, note or any
other evidence of indebtedness or in any material agreement, indenture, lease or
other instrument to which the Company, the Operating Partnership or any of their
subsidiaries is a party or by which the Company, the Operating Partnership or
any of their subsidiaries or any of their respective properties may be bound,
and, to the Company’s knowledge, no such default is expected. All
agreements, contracts or other arrangements that are material to the Company and
the Operating Partnership are set forth on Schedule IV of this
Agreement (the “Material
Agreements”).
11
(n)
(A) As of the date of this Agreement, the
Company owns either directly or indirectly through its subsidiaries, 72
properties (the “Properties”). To the
Company’s knowledge, none of the Company, the Operating Partnership or any of
their subsidiaries is in violation of any municipal, state or federal law, rule
or regulation concerning any of their Properties, which violation would have a
Material Adverse Effect; (B) to the Company’s knowledge, each of the
Properties complies with all applicable zoning laws, ordinances and regulations
in all material respects and, if and to the extent there is a failure to comply,
such failure does not materially impair the value of any of such Properties and
will not result in a forfeiture or reversion of title thereof; (C) none of
the Company, the Operating Partnership or any of their subsidiaries has received
from any governmental authority any written notice of any condemnation of, or
zoning change affecting any of, the Properties, and the Company does not know of
any such condemnation or zoning change which is threatened and which if
consummated would have a Material Adverse Effect; (D) the leases under
which the Company or any of its subsidiaries leases the Properties as lessor
(the “Leases”) are in
full force and effect and have been entered into in the ordinary course of
business of such entity, except as would not have a Material Adverse Effect;
(E) the Company and each of its subsidiaries has complied with its
respective obligations under the Leases in all material respects and the Company
does not know of any default by any other party to the Leases which, alone or
together with other such defaults, would have a Material Adverse Effect; and
(F) all liens, charges, encumbrances, claims or restrictions on or
affecting the assets (including the Properties) of the Company and its
subsidiaries that are required to be disclosed in the Prospectus are disclosed
therein.
(o)
Neither the issuance and sale of the Shares,
the execution, delivery or performance of this Agreement by the Company or the
Operating Partnership, nor the consummation by the Company or the Operating
Partnership of the transactions contemplated hereby (including the application
of the proceeds from the sale of the Shares as described in the Disclosure
Package and the Prospectus): (A) requires any consent, approval,
authorization or other order of, or registration or filing with, any court,
regulatory body, administrative agency or other governmental body, agency or
official (except such as may be required for the registration of the Shares
under the Act, the listing of the Shares on the New York Stock Exchange and
compliance with the securities or blue sky laws of various jurisdictions), or
conflicts or will conflict with or constitutes or will constitute a breach or
violation of, or a default under, the articles of incorporation or by-laws (or
analogous governing documents) of the Company, the Operating Partnership or any
of their subsidiaries; or (B) except as would not have Material Adverse
Effect, conflicts or will conflict with or constitutes or will constitute a
breach of, or a default under, any agreement, indenture, lease or other
instrument to which the Company, the Operating Partnership or any of their
subsidiaries is a party or by which the Company or the Operating Partnership or
any properties of the Company or the Operating Partnership or any of their
subsidiaries may be bound, or violates or will violate any statute, law,
regulation or filing or judgment, injunction, order or decree applicable to the
Company, the Operating Partnership or any of their subsidiaries or any
properties of the Company, the Operating Partnership or any of their
subsidiaries, or will result in the creation or imposition of any lien, charge
or encumbrance upon any property or assets of the Company, the Operating
Partnership or any of their subsidiaries pursuant to the terms of any agreement
or instrument to which the Company, the Operating Partnership or any of their
subsidiaries is a party or by which the Company, the Operating Partnership or
any of their subsidiaries may be bound, or to which any property or assets of
the Company, the Operating Partnership or any of their subsidiaries is
subject.
12
(p)
To the Company’s knowledge, Xxxxx Xxxxx
Xxxxxxx Xxxxxx, LLP, who has certified or shall certify the financial statements
and schedules included or incorporated by reference in the Registration
Statement, the Pricing Prospectus and the Prospectus (or any amendment or
supplement thereto), is and was, as of the date of this Agreement and during the
periods covered by the financial statements on which it reported, an independent
registered public accounting firm with respect to the Company as required by the
Act and the Exchange Act and the applicable published rules and regulations
thereunder and by the Public Company Accounting Oversight Board.
(q)
The historical financial statements, together
with related schedules and notes, included or incorporated by reference in the
Registration Statement, the Pricing Prospectus and the Prospectus (and any
amendment or supplement thereto), present fairly in all material respects the
financial position, results of operations and changes in financial position of
the Company and its subsidiaries on the basis stated in the Registration
Statement and the Incorporated Documents at the respective dates or for the
respective periods to which they apply. Such statements and related
schedules and notes have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods involved,
except as disclosed therein. The other historical financial and
statistical information and data included or incorporated by reference in the
Registration Statement, the Pricing Prospectus and the Prospectus (and any
amendment or supplement thereto) are accurately presented and prepared on a
basis consistent with such financial statements and the books and records of the
Company and its subsidiaries. The pro forma financial statements and other
pro forma financial information included, or incorporated by reference in, the
Registration Statement, the Pricing Prospectus and the Prospectus include
assumptions that provide a reasonable basis for presenting the significant
effects directly attributable to the transactions and events described therein,
the related pro forma adjustments give appropriate effect to those assumptions,
and the pro forma adjustments reflect the proper application of those
adjustments to the historical financial statement amounts in the pro forma
financial statements included in the Prospectus, the Pricing Prospectus and the
Registration Statement. The pro forma financial statements included in the
Prospectus, the Pricing Prospectus and the Registration Statement comply as to
form in all material respects with the applicable accounting requirements of
Regulation S-X under the Act. The Company has filed with the Commission
all financial statements, together with related schedules and notes, required to
be filed pursuant to Regulation S-X under the Act.
13
(r)
The Company has the corporate power to issue,
sell and deliver the Shares as provided herein; the execution and delivery of,
and the performance by the Company of its obligations under, this Agreement have
been duly and validly authorized by the Company, and this Agreement has been
duly executed and delivered by the Company and constitutes the valid and legally
binding agreement of the Company, enforceable against the Company in accordance
with its terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors’ rights
generally and by general principles of equity and to the extent that rights to
indemnity and contribution hereunder may be limited by federal or state
securities laws; the execution and delivery of, and the performance by the
Operating Partnership of its obligations under, this Agreement have been duly
and validly authorized by the Operating Partnership, and this Agreement has been
duly executed and delivered by the Operating Partnership and constitutes the
valid and legally binding agreement of the Operating Partnership, enforceable
against the Operating Partnership in accordance with its terms, except as may be
limited by bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting creditors’ rights generally and by general principles of equity
and to the extent that rights to indemnity and contribution hereunder may be
limited by federal or state securities laws.
(s)
Except as disclosed in the Registration
Statement, the Disclosure Package and the Prospectus (or any amendment or
supplement thereto), subsequent to the respective dates as of which such
information is given in the Registration Statement, the Disclosure Package and
the Prospectus (or any amendment or supplement thereto), none of the Company,
the Operating Partnership or any of their subsidiaries has incurred any
liability or obligation (financial or other), direct or contingent, or entered
into any transaction (including any off-balance sheet activities or
transactions), not in the ordinary course of business, that is material to the
Company and its subsidiaries, as a whole, and there has not been any material
change in the capital stock, or partnership interests, as the case may be, or
material increase in the short-term debt or long-term debt (including any
off-balance sheet activities or transactions), of any of the Company, the
Operating Partnership or their subsidiaries, or any material adverse change, or
any development involving or which may reasonably be expected to involve, a
prospective material adverse change, in the condition (financial or other),
business, prospects, net worth or results of operations of any of the Company,
the Operating Partnership or their subsidiaries.
(t)
The Company, the Operating Partnership and
each of their subsidiaries has good and marketable title to all property (real
and personal) described in the Disclosure Package and the Prospectus as being
owned by each of them (including the Properties), free and clear of all liens,
claims, security interests or other encumbrances that would materially and
adversely affect the value thereof or materially interfere with the use made or
presently contemplated to be made thereof by them as described in the
Prospectus, except such as are described in the Registration Statement, the
Disclosure Package and the Prospectus, or in any document filed as an exhibit to
the Registration Statement, and each property described in the Disclosure
Package and the Prospectus as being held under lease by the Company or any of
its subsidiaries is held by it under a valid, subsisting and enforceable
lease.
(u)
The “significant subsidiaries” of the Company
as defined in Section 1-02(w) of Regulation S-X are set forth in Schedule III
hereto (the “Significant
Subsidiaries”).
(v)
The Company has not distributed and, prior to
the later to occur of (x) the Closing Date and (y) completion of the
distribution of the Shares, will not distribute, any offering material in
connection with the offering and sale of the Shares other than the Registration
Statement, the Disclosure Package or the Prospectus. The Company has not,
directly or indirectly: (i) taken any action designed to cause or to
result in, or that has constituted or which might reasonably be expected to
constitute, the stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of the Shares; or (ii) since
the filing of the Registration Statement (A) sold, bid for, purchased, or
paid anyone any compensation for soliciting purchases of, the Shares or
(B) paid or agreed to pay to any person any compensation for soliciting
another to purchase any other securities of the Company.
14
(w)
The Company, the Operating Partnership and
each of their subsidiaries possess all certificates, permits, licenses,
franchises and authorizations of governmental or regulatory authorities (the
“permits”) as are
necessary to own their respective properties and to conduct their respective
businesses in the manner described in the Disclosure Package and the Prospectus,
where such failure to possess could have a Material Adverse Effect, subject to
such qualifications as may be set forth in the Disclosure Package and the
Prospectus. The Company, the Operating Partnership and each of their
subsidiaries has fulfilled and performed all of their respective material
obligations with respect to such permits, and no event has occurred which
allows, or after notice or lapse of time would allow, revocation or termination
thereof or which would result in any other material impairment of the rights of
the holder of any such permit, subject in each case to such qualification as may
be set forth in the Disclosure Package and the Prospectus.
(x)
The Company, the Operating Partnership and
each of their subsidiaries have established and maintain disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) that are
designed to ensure that information required to be disclosed by the Company in
the reports that it files or submits under the Exchange Act is recorded,
processed, summarized and reported, within the time periods specified in the
Commission’s rules and forms and is accumulated and communicated to the
Company’s management, including its chief executive officer and chief financial
officer, or persons performing similar functions, as appropriate to allow timely
decisions regarding required disclosure; and the Company, the Operating
Partnership and each of their subsidiaries maintain a system of internal control
over financial reporting sufficient to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted
accounting principles and which includes policies and procedures that (i)
pertain to the maintenance of records that in reasonable detail accurately and
fairly reflect the transactions and dispositions of the assets of the Company,
the Operating Partnership and each of their subsidiaries, (ii) provide
reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted
accounting principles and that receipts and expenditures of the Company, the
Operating Partnership and each of their subsidiaries are being made only in
accordance with the authorization of management, and (iii) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisitions,
use or dispositions of assets that could have a material effect on the financial
statements. The Company’s disclosure controls and procedures have been
evaluated for effectiveness as of the end of the period covered by the Company’s
most recently filed periodic report on Form 10-Q or 10-K, as the case may be,
which precedes the date of the Prospectus and were effective in all material
respects to perform the functions for which they were established. Based
on the most recent evaluation of its internal control over financial reporting,
the Company was not aware of (i) any material weaknesses in the design or
operation of internal control over financial reporting, except as disclosed in
the Disclosure Package and the Prospectus, or (ii) any fraud, whether or not
material, that involves management or other employees who have a significant
role in the Company’s internal control over financial reporting. There has
been no change in the Company’s internal control over financial reporting that
has occurred during its most recently completed fiscal quarter that has
materially affected, or is reasonably likely to materially affect, the Company’s
internal control over financial reporting, except as disclosed in the Disclosure
Package and the Prospectus.
15
(y) There
is and has been no failure on the part of the Company and any of the Company’s
directors or officers, in their capacities as such, to comply with any provision
of the Xxxxxxxx-Xxxxx Act and the rules and regulations promulgated in
connection therewith, including, without limitation, Section 402 related to
loans to insiders and Sections 302 and 906 related to
certifications.
(z)
To the Company’s knowledge, none of the
Company, the Operating Partnership or any of their subsidiaries nor any employee
or agent of the Company, the Operating Partnership or any of their subsidiaries
has made any payment of funds of the Company or its subsidiaries or received or
retained any funds in violation of any law, rule or regulation, which payment,
receipt or retention of funds is of a character required to be disclosed in the
Disclosure Package or the Prospectus.
(aa) None
of the Company, the Operating Partnership or any of their subsidiaries nor, to
the knowledge of the Company, any director, officer, agent, employee or
affiliate of the Company, the Operating Partnership or any of their subsidiaries
is aware of or has taken any action, directly or indirectly, that would result
in a violation by such persons of the Foreign Corrupt Practices Act of 1977, as
amended, and the rules and regulations thereunder (the “FCPA”), including, without
limitation, making use of the mails or any means or instrumentality of
interstate commerce corruptly in furtherance of an offer, payment, promise to
pay or authorization of the payment of any money, or other property, gift,
promise to give, or authorization of the giving of anything of value to any
“foreign official” (as such term is defined in the FCPA) or any foreign
political party or official thereof or any candidate for foreign political
office, in contravention of the FCPA; and the Company, the Operating
Partnership, their subsidiaries and, to the knowledge of the Company, their
affiliates have conducted their businesses in compliance with the FCPA and have
instituted and maintain policies and procedures designed to ensure, and which
are reasonably expected to continue to ensure, continued compliance
therewith.
(bb) The
operations of the Company, the Operating Partnership and their subsidiaries are
and have been conducted at all times in compliance with applicable financial
recordkeeping and reporting requirements and the money laundering statutes and
the rules and regulations thereunder and any related or similar rules,
regulations or guidelines, issued, administered or enforced by any governmental
agency (collectively, the “Money Laundering Laws”) and no
action, suit or proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving the Company, the Operating
Partnership or any of their subsidiaries with respect to the Money Laundering
Laws is pending or, to the knowledge of the Company, threatened.
(cc) None
of the Company, the Operating Partnership or any of their subsidiaries nor, to
the knowledge of the Company, any director, officer, agent, employee or
affiliate of the Company, the Operating Partnership or any of their subsidiaries
is currently subject to any sanctions administered by the Office of Foreign
Assets Control of the U.S. Treasury Department (“OFAC”); and the Company will
not directly or indirectly use the proceeds of the offering, or lend, contribute
or otherwise make available such proceeds to any subsidiary, joint venture
partner or other person or entity, for the purpose of financing the activities
of any person currently subject to any U.S. sanctions administered by
OFAC.
16
(dd) No
labor problem or dispute with the employees of the Company and/or any of its
subsidiaries or, to the Company’s knowledge, any of the Company’s or its
subsidiaries’ principal suppliers, contractors or customers, exists, is
threatened or imminent that could result in a Material Adverse Effect. To
the Company’s knowledge, no labor problem or dispute with the Company’s or its
subsidiaries’ tenants exists, is threatened or imminent that could result in a
Material Adverse Effect.
(ee) Each
of the Company, the Operating Partnership and their subsidiaries has filed all
foreign, federal, state and local tax returns that are required to be filed,
which returns are complete and correct, or has requested extensions thereof
(except in any case in which the failure so to file would not have a Material
Adverse Effect and except as set forth in the Disclosure Package and the
Prospectus) and has paid all material taxes required to be paid by it and any
material other assessment, fine or penalty levied against it, to the extent that
any of the foregoing is due and payable, except for any such assessment, fine or
penalty that is currently being contested in good faith. The Company has
made appropriate provisions in the Company’s financial statements that are
incorporated by reference into the Registration Statement (or otherwise
described in the Disclosure Package and the Prospectus) in respect of all
federal, state, local and foreign income and franchise taxes for all current or
prior periods as to which the tax liability of the Company, the Operating
Partnership and their subsidiaries has not been finally determined, except to
the extent of any inadequacy that would not reasonably be expected to result in
a Material Adverse Effect.
(ff)
No holder of any security of the Company or
the Operating Partnership has any right to require registration of the Shares or
any other security of the Company or the Operating Partnership because of the
filing of the Registration Statement or consummation of the transactions
contemplated by this Agreement, which right has not been waived in connection
with the transactions contemplated by this Agreement. The holders of outstanding
shares of capital stock of the Company and the Operating Partnership are not
entitled to preemptive or other rights to subscribe for the Shares.
(gg) The
Company, the Operating Partnership and their subsidiaries own or possess all
patents, trademarks, trademark registrations, service marks, service xxxx
registrations, trade names, copyrights, licenses, inventions, trade secrets and
rights described in the Disclosure Package and the Prospectus as being owned by
them or necessary for the conduct of their respective businesses. The
Company is not aware of any claim to the contrary or any challenge by any other
person to the rights of the Company, the Operating Partnership and their
subsidiaries with respect to the foregoing that would have a Material Adverse
Effect.
(hh) The
Company is not now, and after sale of the Shares to be sold by the Company
hereunder and the application of the net proceeds from such sale as described in
the Pricing Prospectus and the Prospectus under the caption “Use of Proceeds,”
will not be, an “investment company” within the meaning of the Investment
Company Act of 1940, as amended.
17
(ii)
(i) To
the Company’s knowledge, the Company, the Operating Partnership, their
subsidiaries, the Properties and the operations conducted thereon comply and
heretofore have complied with all applicable Environmental Laws, and no
expenditures are required to maintain or achieve such compliance, except as
disclosed in environmental site assessment reports obtained by the Company on or
before the date hereof in connection with the purchase of any of the Properties
or in a written summary maintained by the Company of the status of ongoing
environmental projects at Properties, each of which have been directly
provided to the Underwriter or its counsel (collectively, the “Environmental Reports”) and
except for those circumstances that have not had and will not have, singly or in
the aggregate, a Material Adverse Effect, or as disclosed in the Disclosure
Package and the Prospectus.
(ii)
None of the Company, the Operating Partnership
or any of their subsidiaries has at any time and, to the Company’s knowledge, no
other party has at any time, handled, buried, stored, retained, refined,
transported, processed, manufactured, generated, produced, spilled, allowed to
seep, leak, escape or xxxxx, or be pumped, poured, emitted, emptied, discharged,
injected, dumped, transferred or otherwise disposed of or dealt with, Hazardous
Materials (as defined below) on, to, under or from the Properties, except as
disclosed in Environmental Reports, or the Disclosure Package and the Prospectus
and except for those circumstances that have not had and will not have a
Material Adverse Effect. None of the Company, the Operating Partnership or
any of their subsidiaries intends to use the Properties or any subsequently
acquired properties for the purpose of handling, burying, storing, retaining,
refining, transporting, processing, manufacturing, generating, producing,
spilling, seeping, leaking, escaping, leaching, pumping, pouring, emitting,
emptying, discharging, injecting, dumping, transferring or otherwise disposing
of or dealing with Hazardous Materials; provided, however, the tenants
of the Company and the Operating Partnership may use Properties for their
intended purpose, which may involve the handling, storing and transporting of
Hazardous Materials.
(iii)
To the Company’s knowledge, no seepage, leak,
escape, xxxxx, discharge, injection, release, emission, spill, pumping, pouring,
emptying or dumping of Hazardous Materials into any surface water, groundwater,
soil, air or other media on or adjacent to the Properties has occurred, is
occurring or is reasonably expected to occur, except as is disclosed in the
Environmental Reports or the Disclosure Package and the Prospectus, and except
for those circumstances that will not have a Material Adverse
Effect.
(iv)
None of the Company, the Operating Partnership
or any of their subsidiaries has received written notice from any Governmental
Authority or other person of, or has knowledge of, any occurrence or
circumstance which, with notice, passage of time, or failure to act, would give
rise to any claim against the Company, the Operating Partnership or any of their
subsidiaries under or pursuant to any Environmental Law or under common law
pertaining to Hazardous Materials on or originating from the existing Properties
or any act or omission of any party with respect to the existing Properties,
except as disclosed in the Environmental Reports, or the Disclosure Package and
the Prospectus and except for those circumstances that will not have a Material
Adverse Effect.
18
(v)
To the Company’s knowledge, none of the
Properties is included or proposed for inclusion on any federal, state, or local
lists of sites which require or might require environmental cleanup, including,
but not limited to, the National Priorities List or CERCLIS List issued pursuant
to CERCLA (as defined below) by the United States Environmental Protection
Agency or any analogous state list, except as is disclosed in the Environmental
Reports or the Disclosure Package and the Prospectus and except for those
circumstances that will not have a Material Adverse Effect.
(vi)
In the ordinary course of its business, the
Company periodically reviews the effect of Environmental Laws on the business,
operations and properties of the Company and its subsidiaries, in the course of
which it identifies and evaluates associated costs and liabilities (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 and any
potential liabilities to third parties). On the basis of such review, the
Company has reasonably concluded that such associated costs and liabilities
would not, singly or in the aggregate, have a Material Adverse Effect, whether
or not arising from transactions in the ordinary course of business, except as
set forth in or contemplated in the Disclosure Package and the
Prospectus.
As used
herein, “Hazardous
Material” shall include, without limitation, any flammable explosives,
radioactive materials, hazardous materials, hazardous wastes, hazardous or toxic
substances, or related materials, asbestos, polychlorinated biphenyls (“PCBs”), petroleum products and
by-products and substances defined or listed as “hazardous substances,” “toxic
substances,” “hazardous waste,” or “hazardous materials” in any Federal, state
or local Environmental Law.
As used
herein, “Environmental
Law” shall mean all laws, common law duties, regulations or ordinances
(including any orders or agreements) of any Federal, state or local governmental
authority having or claiming jurisdiction over any of the Properties (a “Governmental Authority”) that
are designed or intended to protect the public health and the environment or to
regulate the handling of Hazardous Materials, including, without limitation, the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
as amended (42 U.S.C. Section 9601 et seq.) (“CERCLA”), the Hazardous
Material Transportation Act, as amended (49 U.S.C. Section 1801 et seq.),
the Resource Conservation and Recovery Act, as amended (42 U.S.C.
Section 6901 et seq.), the Federal Water Pollution Control Act, as amended
(33 U.S.C. Section 1251 et seq.), and the Clean Air Act, as amended (42
U.S.C. Section 7401 et seq.), and any and all analogous state or local
laws.
19
(jj)
Commencing with its taxable year ended
December 31, 1994, the Company has been organized and operated in conformity
with the requirements for qualification and taxation as a real estate investment
trust (“REIT”) under the
Internal Revenue Code of 1986, as amended, and the regulations and published
interpretations thereunder (collectively, the “Code”), and the Company’s
current and proposed method of operations as described in the Registration
Statement, the Disclosure Package and the Prospectus will enable it to continue
to meet the requirements for qualification and taxation as a REIT under the Code
for its taxable year ending December 31, 2010 and thereafter. No
transaction or other event has occurred that would reasonably be expected to
cause the Company to not be able to qualify as a REIT for its taxable year
ending December 31, 2010 or future taxable years.
(kk) The
Company, the Operating Partnership and each of their subsidiaries is insured by
insurers of recognized financial responsibility against such losses and risks
and in such amounts as are prudent and customary in the businesses in which they
are engaged and the value of their properties. All policies of insurance
and fidelity or surety bonds insuring the Company, the Operating Partnership or
any of their subsidiaries or their respective businesses, assets, employees,
officers and directors are in full force and effect. The Company, the
Operating Partnership and each of their subsidiaries are in compliance with the
terms of such policies and instruments in all material respects and there are no
claims by the Company, the Operating Partnership or any of their subsidiaries
under any such policy or instrument as to which any insurance company is denying
liability or defending under a reservation of rights clause, except as would not
have a Material Adverse Effect. None of the Company, the Operating
Partnership or any of their subsidiaries has been refused any insurance coverage
sought or applied for, and the Company does not have any reason to believe that
the Company, the Operating Partnership and each of their subsidiaries will not
be able to renew its respective existing insurance coverage as and when such
coverage expires or to obtain similar coverage from similar insurers as may be
necessary to continue their respective businesses at a cost that would not have
a Material Adverse Effect.
(ll)
The Company, the Operating Partnership and
their subsidiaries have title insurance on each of the Properties owned in fee
simple in amounts at least equal to the cost of acquisition of such property;
with respect to an uninsured loss on any of the Properties, the title insurance
shortfall would not have a Material Adverse Effect.
(mm)
No subsidiary of the Company is currently prohibited, directly or indirectly,
from paying any dividends to the Company, from making any other distribution on
such subsidiary’s capital stock, from repaying to the Company any loans or
advances to such subsidiary from the Company or from transferring any of such
subsidiary’s assets or property to the Company or any other subsidiary of the
Company, except as described in the Disclosure Package and the
Prospectus.
(nn) There
are no transfer taxes or other similar fees or charges under Federal law or the
laws of any state, or any political subdivision thereof, required to be paid in
connection with the execution and delivery of this Agreement or the issuance by
the Company or sale by the Company of the Shares.
20
(oo) Each
of the Company and its subsidiaries has fulfilled its obligations, if any, under
the minimum funding standards of Xxxxxxx 000 xx xxx Xxxxxx Xxxxxx Employee
Retirement Income Security Act of 1974 (“ERISA”) and the regulations
and published interpretations thereunder with respect to each “plan” (as defined
in Section 3(3) of ERISA and such regulations and published
interpretations) in which employees of the Company and its subsidiaries are
eligible to participate. Each such plan is in compliance in all material
respects with the presently applicable provisions of ERISA and such regulations
and published interpretations. Neither the Company nor any of its
subsidiaries has incurred any unpaid liability to the Pension Benefit Guaranty
Corporation (other than for the payment of premiums in the ordinary course) or
to any such plan under Title IV of ERISA.
(pp) To
the knowledge of the Company, no stock options awards granted by the Company
have been retroactively granted, or the exercise or purchase price of any stock
option award determined retroactively.
(qq) The
Company’s authorized capitalization is as set forth in the Registration
Statement, the Disclosure Package and the Prospectus; the capital stock of the
Company conforms in all material respects to the description thereof contained
in the Registration Statement, the Disclosure Package and the Prospectus; the
outstanding shares of Common Stock of the Company have been duly and validly
authorized and issued in compliance with all Federal and state securities laws,
and are fully paid and non-assessable.
(rr)
Application has been made to list the Shares
on the New York Stock Exchange.
7.
Indemnification and
Contribution.
(a)
The Company and the Operating Partnership,
jointly and severally, agree to indemnify and hold harmless the Underwriter, the
directors, officers, employees, affiliates and agents of the Underwriter and
each person who controls the Underwriter, within the meaning of either the Act
or the Exchange Act, against any and all losses, claims, damages or liabilities,
joint or several, to which they or any of them may become subject under the Act,
the Exchange Act or other Federal or state statutory law or regulation, at
common law or otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) (i) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement for the registration of the Shares as originally filed or
in any amendment thereof, or in the Basic Prospectus, any Preliminary
Prospectus, the Prospectus or the Disclosure Package; or (ii) arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading. The Company and Operating Partnership, jointly and
severally, agree to reimburse each such indemnified party, as incurred, for any
legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the
Company and the Operating Partnership will not be liable in any such case
arising in connection with this Section 7 to the extent that any such loss,
claim, damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written information furnished to
the Company or the Operating Partnership by or on behalf of the Underwriter
specifically for inclusion therein. This indemnity agreement will be in
addition to any liability, which the Company and the Operating Partnership may
otherwise have.
21
(b)
The Underwriter agrees to indemnify and hold
harmless the Company and each of its directors, the Operating Partnership and
each of the Company’s officers who signs the Registration Statement, and each
person who controls the Company or the Operating Partnership within the meaning
of either the Act or the Exchange Act, to the same extent as the foregoing
indemnity from the Company and the Operating Partnership to the Underwriter, but
only with reference to written information relating to the Underwriter furnished
to the Company or the Operating Partnership by or on behalf of the Underwriter
in writing specifically for inclusion in the documents referred to in the
foregoing indemnity. This indemnity agreement will be in addition to any
liability, which the Underwriter may otherwise have. The Company
acknowledges that the only information furnished in writing by or on behalf of
the Underwriter for inclusion in any Preliminary Prospectus, the Prospectus or
any Issuer Free Writing Prospectus is as set forth in Section 12
hereof.
(c)
Promptly after receipt by an indemnified party
under this Section 7 of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made against the
indemnifying party under this Section 7, notify the indemnifying party in
writing of the commencement thereof; but the failure so to notify the
indemnifying party: (i) will not relieve it from liability under
paragraph (a) or (b) above unless and to the extent it did not otherwise learn
of such action and such failure results in the forfeiture by the indemnifying
party of substantial rights and defenses; and (ii) will not, in any event,
relieve the indemnifying party from any obligations to any indemnified party
other than the indemnification obligation provided in paragraph (a) or (b)
above. The indemnifying party shall be entitled to appoint counsel of the
indemnifying party’s choice at the indemnifying party’s expense to represent the
indemnified party in any action for which indemnification is sought (in which
case the indemnifying party shall not thereafter be responsible for the fees and
expenses of any separate counsel retained by the indemnified party or parties
except as set forth below); provided, however, that such
counsel shall be reasonably satisfactory to the indemnified party.
Notwithstanding the indemnifying party’s election to appoint counsel to
represent the indemnified party in an action, the indemnified party shall have
the right to employ separate counsel (including local counsel), and the
indemnifying party shall bear the reasonable fees, costs and expenses of such
separate counsel if: (i) the use of counsel chosen by the
indemnifying party to represent the indemnified party would present such counsel
with a conflict of interest; (ii) the actual or potential defendants in, or
targets of, any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party; (iii) the indemnifying party shall not have employed
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of the institution of
such action; or (iv) the indemnifying party shall in writing authorize the
indemnified party to employ separate counsel at the expense of the indemnifying
party. In no event will the indemnifying parties be liable for the fees,
costs or expenses of more than one counsel (in addition to any local counsel)
separate from their own counsel for all indemnified parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances.
An indemnifying party will not, without the prior written consent of the
indemnified parties, settle or compromise, or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action), unless such settlement, compromise or consent
(x) includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding and (y) does not
include a statement as to, or an admission of, fault, culpability or a failure
to act by or on behalf of any indemnified party.
22
(d)
In the event that the indemnity provided in
paragraph (a) or (b) of this Section 7 is unavailable to, or insufficient
to hold harmless, an indemnified party for any reason, the Company and the
Operating Partnership, on the one hand, and the Underwriter, on the other, agree
to contribute to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in connection with
investigating or defending the same) (collectively “Losses”) to which the Company,
the Operating Partnership and the Underwriter may be subject in such proportion
as is appropriate to reflect the relative benefits received by the Company, on
the one hand, and by the Underwriter, on the other, from the offering of the
Shares; provided, however, that in no
case shall the Underwriter be responsible for any amount in excess of the
underwriting discount or commission applicable to the Shares purchased by the
Underwriter hereunder. If the allocation provided by the immediately
preceding sentence is unavailable for any reason, the Company and the
Underwriter shall contribute in such proportion as is appropriate to reflect not
only such relative benefits but also the relative fault of the Company, on the
one hand, and of the Underwriter, on the other, in connection with the
statements or omissions which resulted in such Losses as well as any other
relevant equitable considerations. Benefits received by the Company shall
be deemed to be equal to the total net proceeds from the offering (before
deducting expenses) received by it, and benefits received by the Underwriter
shall be deemed to be equal to the total underwriting discounts and commissions,
in each case as set forth on the cover page of the Prospectus. Relative
fault shall be determined by reference to, among other things:
(i) whether any untrue or any alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information provided by the Company or the Operating Partnership, on the one
hand, or the Underwriter, on the other; (ii) the intent of the parties and
their relative knowledge; (iii) access to information; and (iv) the
opportunity to correct or prevent such untrue statement or omission. The
Company, the Operating Partnership and the Underwriter agree that it would not
be just and equitable if contribution were determined by pro rata allocation or
any other method of allocation which does not take account of the equitable
considerations referred to above. Notwithstanding the provisions of this
paragraph (d), no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. For
purposes of this Section 7, each person who controls the Underwriter within
the meaning of either the Act or the Exchange Act and each director, officer,
employee and agent of the Underwriter shall have the same rights to contribution
as the Underwriter, and each person who controls the Company within the meaning
of either the Act or the Exchange Act, each officer of the Company who shall
have signed the Registration Statement and each director of the Company shall
have the same rights to contribution as the Company, subject in each case to the
applicable terms and conditions of this paragraph (d).
8.
Conditions of Underwriter’s
Obligations. The obligations of the Underwriter to purchase the
Shares hereunder are subject to the following conditions:
23
(a)
(i) The Prospectus, and any supplement
thereto, have been filed in the manner and within the time period required by
Rule 424(b) (without reference to Rule 424(b)(8)); the final term sheet
contemplated by Section 5(b) hereto and any other material required to be filed
by the Company pursuant to Rule 433(d) shall have been filed with the Commission
within the applicable time periods prescribed for such filings by Rule 433 and
(ii) any request of the Commission for additional information (to be
included in the Registration Statement or the Prospectus or otherwise) shall
have been complied with to the reasonable satisfaction of the
Underwriter.
(b)
Subsequent to the Execution Time, or, if
earlier, the dates as of which information is given in the Registration
Statement (exclusive of any amendment thereto), the Disclosure Package and the
Prospectus (exclusive of any amendment thereof), there shall not have
occurred: (i) any change, or any development involving a prospective
change, in or affecting the condition (financial or otherwise), earnings,
business, properties, net worth, or results of operations of the Company and its
subsidiaries, whether or not arising from transactions in the ordinary course of
business, except as set forth in the Disclosure Package and the Prospectus
(exclusive of any amendments or supplements thereto subsequent to the date of
this Agreement), the effect of which, in the sole judgment of the Underwriter is
so material and adverse as to make it impractical or inadvisable to proceed with
the offering or delivery of the Shares as contemplated by the Registration
Statement (exclusive of any amendments thereto), the Disclosure Package and the
Prospectus (exclusive of any supplement thereto); or (ii) any event or
development relating to or involving the Company and its subsidiaries or any
officer or director of the Company and its subsidiaries which makes any
statement made in the Disclosure Package or the Prospectus untrue or which, in
the opinion of the Company and its counsel or the Underwriter and its counsel,
requires the making of any addition to or change in the Disclosure Package in
order to state a material fact required by the Act or any other law to be stated
therein, or necessary in order to make the statements therein not misleading, if
amending or supplementing the Disclosure Package to reflect such event or
development would, in the opinion of the Underwriter, adversely affect the
market for the Shares.
(c)
The Underwriter shall have received on the
Closing Date and, if applicable, each Option Closing Date an opinion and tax
opinion of DLA Piper LLP (US), counsel for the Company, dated as of such date
and addressed to the Underwriter, to the effect set forth on Exhibit C and Exhibit D,
respectively.
(d)
The Underwriter shall have received on the
Closing Date and, if applicable, each Option Closing Date an opinion of Hunton
& Xxxxxxxx LLP, counsel for the Underwriter, dated as of such date and
addressed to the Underwriter with respect to such matters as the Underwriter may
request.
(e)
The Underwriter shall have received letters
addressed to the Underwriter and dated as of the date hereof, the Closing Date
and, if applicable, each Option Closing Date from Xxxxx Xxxxx Xxxxxxx Xxxxxx,
LLP, an independent registered public accounting firm, substantially in the form
heretofore approved by the Underwriter; provided that the
letter delivered on the Closing Date or any applicable Option Closing Date shall
use a “cut-off” date no more than three (3) Business Days prior to the Closing
Date or such Option Closing Date, as the case may be.
24
(f)
(i) No stop order suspending the effectiveness
of the Registration Statement shall have been issued and no proceedings for that
purpose shall have been taken or, to the knowledge of the Company, shall be
contemplated by the Commission at or prior to the Closing Date or any Option
Closing Date; (ii) there shall not have been any change in the capital
stock of the Company nor any material increase in the short-term or long-term
debt (including any off-balance sheet activities or transactions) of the Company
and its subsidiaries (other than in the ordinary course of business) from that
set forth or contemplated in the Registration Statement, the Disclosure Package
or the Prospectus (or any amendment or supplement thereto); (iii) there
shall not have been, since the respective dates as of which information is given
in the Registration Statement, the Disclosure Package and the Prospectus (or any
amendment or supplement thereto), except as may otherwise be stated in the
Registration Statement, the Disclosure Package and Prospectus (or any amendment
or supplement thereto), any material adverse change in the condition (financial
or other), business, prospects, properties, net worth or results of operations
of the Company or its subsidiaries; (iv) the Company and its subsidiaries
shall not have any liabilities or obligations (financial or other), direct or
contingent (whether or not in the ordinary course of business), that are
material to the Company or its subsidiaries, other than those reflected in the
Registration Statement or the Disclosure Package and the Prospectus (or any
amendment or supplement thereto); and (v) all the representations and
warranties of the Company and the Operating Partnership contained in this
Agreement shall be true and correct at and as of the Execution Time and on and
as of the Closing Date and each Option Closing Date as if made at and as of such
time or on and as of such date, and the Underwriter shall have received a
certificate, dated the Closing Date and each Option Closing Date and signed by
either the chief executive officer or chief operating officer and the chief
financial officer of the Company (or such other officers as are acceptable to
the Underwriter), to the effect set forth in this Section 8(f) and in
Section 8(g) hereof.
(g)
The Company shall not have failed at or prior
to the Closing Date and each Option Closing Date to have performed or complied
with any of its agreements herein contained and required to be performed or
complied with by it hereunder, at or prior to the Closing Date and each Option
Closing Date.
(h)
Subsequent to the Execution Time, there shall
not have been any decrease in the rating of any of the Company’s debt securities
by any “nationally recognized statistical rating organization” (as defined for
purposes of Rule 436(g) under the Act) or any notice given of any intended or
potential decrease in any such rating or of a possible change in any such rating
that does not indicate the direction of the possible change.
(i)
The Company shall have completed all required
filings with the New York Stock Exchange and other necessary actions in order to
cause the Shares to be listed and admitted and authorized for trading on the New
York Stock Exchange, subject only to notice of issuance.
(j)
On or about the date of this Agreement, but in
no event later than the Closing Date, the Underwriter shall have received
“lock-up” agreements relating to sales and certain other dispositions of
shares of Common Stock or certain other securities, each substantially in
the form of Exhibit
B attached hereto, from the persons set forth on Schedule V attached
hereto, and all of such “lock-up” agreements shall be in full force and effect
on the Closing Date and, if applicable, each Option Closing Date.
25
(k)
The Company shall have furnished or caused to
be furnished to the Underwriter such further certificates and documents as the
Underwriter shall have reasonably requested.
Any
certificate or document signed by any officer of the Company or the general
partner of the Operating Partnership and delivered to the Underwriter, or to
counsel for the Underwriter, shall be deemed a representation and warranty by
the Company or the Operating Partnership, as the case may be, to the Underwriter
as to the statements made therein.
If any of
the conditions specified in this Section 8 shall not have been fulfilled in
all material respects when and as provided in this Agreement, or if any of the
opinions and certificates mentioned above or elsewhere in this Agreement shall
not be in all material respects reasonably satisfactory in form and substance to
the Underwriter and its counsel, this Agreement and all obligations of the
Underwriter hereunder may be canceled by the Underwriter at, or at any time
prior to, the Closing Date or any Option Closing Date, with respect to any
Option Shares remaining to be purchased. Notice of such cancellation shall
be given to the Company in writing or by telephone or facsimile confirmed in
writing.
With
respect to the Closing Date and each Option Closing Date, the documents required
to be delivered by this Section 8 shall be delivered at the offices of
Hunton & Xxxxxxxx LLP, Attn: Xxxxxx X. Xxxxxx, Esq., counsel for the
Underwriter, at 000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxxx, Xxxxx Xxxxxxxx on
or prior to such date.
9.
Expenses. The
Company agrees to pay the following costs and expenses and all other costs and
expenses incident to the performance by the Company of its obligations
hereunder: (i) the preparation, printing or reproduction, and filing
with the Commission of the registration statement (including financial
statements and exhibits thereto), each Preliminary Prospectus, if any, the
Prospectus, each Issuer Free Writing Prospectus and each amendment or supplement
to any of them; (ii) the printing (or reproduction) and delivery (including
postage, air freight charges and charges for counting and packaging) of such
copies of the registration statement, each Preliminary Prospectus, the
Prospectus, each Issuer Free Writing Prospectus, the Incorporated Documents, and
all amendments or supplements to any of them, as may be reasonably requested for
use in connection with the offering and sale of the Shares; (iii) the
preparation, printing, authentication, issuance and delivery of certificates for
the Shares, including any stamp or other taxes in connection with the original
issuance and sale of the Shares; (iv) the printing (or reproduction) and
delivery of this Agreement, the preliminary and supplemental blue sky memoranda
and all other agreements or documents printed (or reproduced) and delivered in
connection with the offering of the Shares; (v) the registration or
qualification of the Shares for offer and sale under the securities or blue sky
laws of the several states as provided in Section 5(g) hereof (including
the reasonable fees, expenses and disbursements of counsel for the Underwriter
relating to the preparation, printing or reproduction, and delivery of the
preliminary and supplemental blue sky memoranda and such registration and
qualification); (vi) the filing fees and the fees and expenses of counsel
for the Underwriter in connection with any filings required to be made with the
Financial Industry Regulatory Authority, Inc.; (vii) the transportation and
other expenses incurred by or on behalf of Company representatives in
connection with presentations to prospective purchasers of the Shares; and
(viii) the fees and expenses of the Company’s accountants and counsel
(including local and special counsel) for the Company).
26
10.
Termination of
Agreement. This Agreement shall be subject to termination in the
absolute discretion of the Underwriter, without liability on the part of the
Underwriter to the Company, by notice to the Company, if, prior to the Closing
Date: (i) there shall have occurred any change, or any development
involving a prospective change, in or affecting the condition (financial or
otherwise), earnings, business, properties, net worth, or results of operations
of the Company and its subsidiaries, whether or not arising from transactions in
the ordinary course of business, except as specifically addressed in the
Disclosure Package or the Prospectus (exclusive of any amendments or supplements
thereto subsequent to the date of this Agreement), the effect of which, in the
sole judgment of the Underwriter, is so material and adverse as to make it
impractical or inadvisable to proceed with the offering or delivery of the
Shares as contemplated by the Registration Statement (exclusive of any
amendments thereto) and the Prospectus (exclusive of any supplement thereto);
(ii) there shall have occurred any downgrading in the rating of any debt
securities or preferred stock of the Company by any “nationally recognized
statistical rating organization” (as defined for purposes of Rule 436(g) under
the Act), or any public announcement that any such organization has under
surveillance or review its rating of any debt securities or preferred stock of
the Company (other than an announcement with positive implications of a possible
upgrading, and no implication of a possible downgrading, of such rating);
(iii) trading in the Company’s common stock or outstanding preferred stock
shall have been suspended by the Commission or the New York Stock Exchange or
trading in securities generally on the New York Stock Exchange or the Nasdaq
Stock Market shall have been suspended or materially limited; (iv) a
general moratorium on commercial banking activities in New York or Florida shall
have been declared by either federal or state authorities; (v) the Company
or any of its subsidiaries shall have sustained a substantial loss by fire,
flood, accident or other calamity which renders it impracticable, in the
reasonable judgment of the Underwriter, to consummate the sale of the Shares and
the delivery of the Shares by the Underwriter at the initial public offering
price; or (vi) there shall have occurred any outbreak or escalation of
hostilities or other international or domestic calamity, crisis or change in
political, financial or economic conditions, the effect of which on the
financial markets of the United States is such as to make it, in the sole
judgment of the Underwriter, impracticable or inadvisable to commence or
continue the offering as contemplated by the Registration Statement (exclusive
of any amendments thereto) and the Prospectus (exclusive of any supplement
thereto). Notice of such termination may be given to the Company by
telegram, telecopy or telephone and shall be subsequently confirmed by
letter.
11.
Information Furnished by the
Underwriter. The statements in the third, twelfth, thirteenth,
fourteenth and fifteenth paragraphs under the heading “Underwriting” in any
Preliminary Prospectus and in the Prospectus Supplement, constitute the only
information furnished by or on behalf of the Underwriter as such information is
referred to in the last sentence of Section 6(b) and Section 7(b)
hereof.
27
12.
Representations and
Indemnities to Survive. The respective agreements, representations,
warranties, indemnities and other statements of the Company, the Operating
Partnership or any of their officers and of the Underwriter set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation made by or on behalf of the Underwriter or the Company, the
Operating Partnership or any of the officers, directors, employees, agents or
controlling persons referred to in Section 7 hereof, and will survive
delivery of and payment for the Shares. The provisions of
Sections 5(k), 7 and 9 hereof shall survive the termination or cancellation
of this Agreement.
13.
Absence of Fiduciary
Relationship. Each of the Company and Operating Partnership
acknowledges and agrees that:
(a)
the Underwriter has been retained solely to
act as underwriter in connection with the sale of the Shares and that no
fiduciary, advisory or agency relationship between the Company and the Operating
Partnership and the Underwriter has been created in respect of any of the
transactions contemplated by this Agreement or the process leading thereto,
irrespective of whether the Underwriter has advised or is advising the Company
and the Operating Partnership on other matters;
(b)
the price of the Shares set forth in this
Agreement was established by the Company following discussions and arms-length
negotiations with the Underwriter, and the Company is capable of evaluating and
understanding and understands and accepts the terms, risks and conditions of the
transactions contemplated by this Agreement;
(c)
it has been advised that the Underwriter and
its affiliates are engaged in a broad range of transactions which may involve
interests that differ from those of the Company and the Operating Partnership
and that the Underwriter has no obligation to disclose such interests and
transactions to the Company and the Operating Partnership by virtue of any
fiduciary, advisory or agency relationship; and
(d)
it waives, to the fullest extent permitted by
law, any claims they may have against the Underwriter for breach of fiduciary
duty or alleged breach of fiduciary duty.
14.
Notices. All
communications hereunder will be in writing and effective only on receipt, and,
if sent to the Underwriter, will be mailed, delivered or telefaxed to Xxxxxxx
Xxxxx & Associates, Inc., 000 Xxxxxxxx Xxxxxxx, Xx. Xxxxxxxxxx, XX
00000 (facsimile 727-567-8058), Attention: Xxxx Xxxxxxx; or, if sent to
the Company, will be mailed, delivered or telefaxed to the office of the Company
at 00000 Xxxxxxxxxxxx Xxxxxxx, Xxxxxxxxxx Xxxxx, XX 00000 (facsimile
248-737-9110), Attention: Xxxxxxx Xxxx.
15.
Successors.
This Agreement has been made solely for the benefit of the Underwriter, the
Company, the Operating Partnership, their directors and officers, and the other
controlling persons referred to in Section 7 hereof and their respective
successors and assigns, to the extent provided herein. This Agreement will
inure to the benefit of and be binding upon the parties hereto and their
respective successors and the officers and directors and controlling persons
referred to in Section 7 hereof, and no other person shall acquire or have
any right under or by virtue of this Agreement. Neither the term
“successor” nor the term “successors and assigns” as used in this Agreement
shall include a purchaser from the Underwriter of any of the Shares in his
status as such purchaser.
28
16.
Integration. This
Agreement supersedes all prior agreements and understandings (whether written or
oral) between the Company, the Operating Partnership and the Underwriter, or any
of them, with respect to the subject matter hereof.
17.
Applicable Law.
This Agreement will be governed by and construed in accordance with the laws of
the State of New York applicable to contracts made and to be performed within
the State of New York.
18.
Waiver of Jury
Trial. The Company, the Operating Partnership and the Underwriter
hereby irrevocably waive, to the fullest extent permitted by applicable law, any
and all right to trial by jury in any legal proceeding arising out of or
relating to this Agreement or the transactions contemplated hereby.
19.
Counterparts.
This Agreement may be signed in one or more counterparts, each of which shall
constitute an original, and all of which together shall constitute one and the
same agreement.
20.
Headings. The
section headings used herein are for convenience only and shall not affect the
construction hereof.
21.
Definitions.
The terms that follow, when used in this Agreement, shall have the meanings
indicated:
“Business Day” shall mean any
day other than a Saturday, a Sunday or a legal holiday or a day on which banking
institutions or trust companies are authorized or obligated by law to close in
New York City.
“Free Writing Prospectus” shall
mean a free writing prospectus, as defined in Rule 405.
“Rule 158,” “Rule 163,” “Rule 164,” “Rule 172,” “Rule 405,” “Rule 415,” “Rule 424” and “Rule 433” refer to such rules
under the Act.
[Signature
page follows]
29
If the
foregoing is in accordance with your understanding of our agreement, please sign
and return to us the enclosed duplicate hereof, whereupon this letter and your
acceptance shall represent a binding agreement among the Company, the Operating
Partnership and the Underwriter.
Very
truly yours,
|
|||
AGREE
REALTY CORPORATION
|
|||
By:
|
/s/ Xxxxxxx X. Xxxx
|
||
Name:
|
Xxxxxxx
X. Xxxx
|
||
Title:
|
Vice
President, Finance
|
||
AGREE
LIMITED PARTNERSHIP
|
|||
By:
AGREE REALTY CORPORATION
|
|||
By:
|
/s/ Xxxxxxx X. Xxxx
|
||
Name:
|
Xxxxxxx
X. Xxxx
|
||
Title:
|
Vice
President, Finance
|
Accepted
and agreed to as of
|
|
the
date first above written:
|
|
XXXXXXX
XXXXX & ASSOCIATES, INC.
|
|
By:
|
/s/ Xxxx Xxxxxx
|
Title:
|
Xxxx
Xxxxxx
|
Managing
Director
|
[Signature
Page to Underwriting Agreement for Shares of Common Stock]
SCHEDULE
I
AGREE
REALTY CORPORATION
Underwriter
|
Number of Firm
Shares to be
Purchased
|
Number of Option
Shares to be
Purchased
|
||||||
Xxxxxxx
Xxxxx & Associates, Inc.
|
1,300,000 | 195,000 | ||||||
Total
|
1,300,000 | 195,000 |