FRANKLIN STREET PROPERTIES CORP. (a Maryland corporation) 15,000,000 Shares of Common Stock UNDERWRITING AGREEMENT

Exhibit 1.1

 

Execution Copy

 

 

 

FRANKLIN STREET PROPERTIES CORP.

 

(a Maryland corporation)

 

15,000,000 Shares of Common Stock

 

UNDERWRITING AGREEMENT

 

Dated: May 9, 0000

 

 

 


 

XXXXXXXX XXXXXX PROPERTIES CORP.

 

(a Maryland corporation)

 

15,000,000 Shares of Common Stock

(par value $0.0001 per share)

 

UNDERWRITING AGREEMENT

 

May 9, 2013

 

Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated

Xxxxxx X. Xxxxx & Co. Incorporated

BMO Capital Markets Corp.

as Representatives of the several Underwriters

 

c/o                               Merrill Lynch, Pierce, Xxxxxx & Xxxxx
                                                                                                                   Incorporated

Xxx Xxxxxx Xxxx
Xxx Xxxx, Xxx Xxxx  00000

 

c/o                               Xxxxxx X. Xxxxx & Co. Incorporated
000 Xxxx Xxxxxxxxx Xxxxxx

Xxxxxxxxx, Xxxxxxxxx 00000

 

c/o                               BMO Capital Markets Corp.
0 Xxxxx Xxxxxx

Xxx Xxxx, XX 00000

 

Ladies and Gentlemen:

 

Franklin Street Properties Corp., a Maryland corporation (the “Company”), confirms its agreement with Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated (“Xxxxxxx Xxxxx”) and each of the other Underwriters named in Schedule A hereto (collectively, the “Underwriters,” which term shall also include any underwriter substituted as hereinafter provided in Section 10 hereof), for whom Xxxxxxx Xxxxx, Xxxxxx X. Xxxxx & Co. Incorporated and BMO Capital Markets Corp. are acting as representatives (in such capacity, the “Representatives”), with respect to (i) the sale by the Company and the purchase by the Underwriters, acting severally and not jointly, of the respective numbers of shares of Common Stock, par value $0.0001 per share, of the Company (“Common Stock”) set forth in Schedules A and B hereto and (ii) the grant by the Company to the Underwriters, acting severally and not jointly, of the option described in Section 2(b) hereof to purchase all or any part of 2,250,000 additional shares of Common Stock.  The aforesaid 15,000,000 shares of Common Stock (the “Initial Securities”) to be purchased by the Underwriters and all or any part of the 2,250,000 shares of Common Stock subject to

 


 

the option described in Section 2(b) hereof (the “Option Securities”) are herein called, collectively, the “Securities.”

 

The Company understands that the Underwriters propose to make a public offering of the Securities as soon as the Representatives deem advisable after this Agreement has been executed and delivered.

 

The Company has prepared and filed with the Securities and Exchange Commission (the “Commission”) an automatic shelf registration statement on Form S-3 (File No. 333-181009) covering the public offering and sale of certain securities, including the Securities, under the Securities Act of 1933, as amended (the “1933 Act”), and the rules and regulations promulgated thereunder (the “1933 Act Regulations”), which automatic shelf registration statement became effective upon filing under Rule 462(e) under the 1933 Act Regulations (“Rule 462(e)”). Such registration statement, as of any time, means such registration statement as amended by any post-effective amendments thereto to such time, including the exhibits and any schedules thereto at such time, the documents incorporated or deemed to be incorporated by reference therein at such time pursuant to Item 12 of Form S-3 under the 1933 Act and the documents otherwise deemed to be a part thereof as of such time pursuant to Rule 430B under the 1933 Act Regulations (“Rule 430B”), and is referred to herein as the “Registration Statement;” provided, however, that the “Registration Statement” without reference to a time means such registration statement as amended by any post-effective amendments thereto as of the time of the first contract of sale for the Securities, which time shall be considered the “new effective date” of such registration statement with respect to the Securities within the meaning of paragraph (f)(2) of Rule 430B, including the exhibits and schedules thereto as of such time, the documents incorporated or deemed incorporated by reference therein at such time pursuant to Item 12 of Form S-3 under the 1933 Act and the documents otherwise deemed to be a part thereof as of such time pursuant to the Rule 430B.  Each preliminary prospectus used in connection with the offering of the Securities, including the documents incorporated or deemed to be incorporated by reference therein pursuant to Item 12 of Form S-3 under the 1933 Act, are collectively referred to herein as a “preliminary prospectus.”  Promptly after execution and delivery of this Agreement, the Company will prepare and file a final prospectus relating to the Securities in accordance with the provisions of Rule 424(b) under the 1933 Act Regulations (“Rule 424(b)”).  The final prospectus, in the form first furnished or made available to the Underwriters for use in connection with the offering of the Securities, including the documents incorporated or deemed to be incorporated by reference therein pursuant to Item 12 of Form S-3 under the 1933 Act, are collectively referred to herein as the “Prospectus.”  For purposes of this Agreement, all references to the Registration Statement, any preliminary prospectus, the Prospectus or any amendment or supplement to any of the foregoing shall be deemed to include the copy filed with the Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval system (or any successor system) (“XXXXX”).

 

On April 3, 2013, FSP 0000 Xxxxxxxx LLC, a wholly-owned subsidiary of the Company, entered into an agreement to purchase a multi-tenant office building located in Denver, Colorado, from Pearlmark Broadreach 1999, L.L.C., and, on March 8, 2013, FSP 000 Xxxxxxxxx Xxxxxx LLC, a wholly-owned subsidiary of the Company, entered into an agreement to purchase a multi-tenant office building  located in Atlanta, Georgia, from Jamestown 999 Peachtree, L.P.  These agreements are collectively referred herein as the “Acquisition Agreements” and the properties to be acquired by the Company pursuant to such agreements are collectively referred to herein as the “Acquisition Properties”.

 

As used in this Agreement:

 

“Applicable Time” means 5:00 P.M., New York City time, on May 9, 2013 or such other time as agreed by the Company and Xxxxxxx Xxxxx.

 

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“General Disclosure Package” means any Issuer General Use Free Writing Prospectuses issued at or prior to the Applicable Time, the most recent preliminary prospectus (including any documents incorporated therein by reference) that is distributed to investors prior to the Applicable Time and the information included on Schedule C hereto, all considered together.

 

“Issuer Free Writing Prospectus” means any “issuer free writing prospectus,” as defined in Rule 433 of the 1933 Act Regulations (“Rule 433”), including without limitation any “free writing prospectus” (as defined in Rule 405 of the 1933 Act Regulations (“Rule 405”)) relating to the Securities that is (i) required to be filed with the Commission by the Company, (ii) a “road show that is a written communication” within the meaning of Rule 433(d)(8)(i), whether or not required to be filed with the Commission, or (iii) exempt from filing with the Commission pursuant to Rule 433(d)(5)(i) because it contains a description of the Securities or of the offering that does not reflect the final terms, in each case in the form filed or required to be filed with the Commission or, if not required to be filed, in the form retained in the Company’s records pursuant to Rule 433(g).

 

“Issuer General Use Free Writing Prospectus” means any Issuer Free Writing Prospectus that is intended for general distribution to prospective investors (other than a “bona fide electronic road show,” as defined in Rule 433), as evidenced by its being specified in Schedule D hereto.

 

“Issuer Limited Use Free Writing Prospectus” means any Issuer Free Writing Prospectus that is not an Issuer General Use Free Writing Prospectus.

 

All references in this Agreement to financial statements and schedules and other information which is “contained,” “included” or “stated” (or other references of like import) in the Registration Statement, any preliminary prospectus or the Prospectus shall be deemed to include all such financial statements and schedules and other information incorporated or deemed incorporated by reference in the Registration Statement, any preliminary prospectus or the Prospectus, as the case may be, prior to the execution and delivery of this Agreement; and all references in this Agreement to amendments or supplements to the Registration Statement, any preliminary prospectus or the Prospectus shall be deemed to include the filing of any document under the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (collectively, the “1934 Act”), incorporated or deemed to be incorporated by reference in the Registration Statement, such preliminary prospectus or the Prospectus, as the case may be, at or after the execution and delivery of this Agreement.

 

SECTION 1.                            Representations and Warranties.

 

(a)                                 Representations and Warranties by the Company.  The Company represents and warrants to each Underwriter as of the date hereof, the Applicable Time, the Closing Time (as defined below) and any Date of Delivery (as defined below), and agrees with each Underwriter, as follows:

 

(i)                                     Registration Statement and Prospectuses.  The Company meets the requirements for use of Form S-3 under the 1933 Act.  The Registration Statement is an “automatic shelf registration statement” (as defined in Rule 405) and the Securities have been and remain eligible for registration by the Company on such automatic shelf registration statement.  Each of the Registration Statement and any post-effective amendment thereto has become effective under the 1933 Act.  No stop order suspending the effectiveness of the Registration Statement or any post-effective amendment thereto has been issued under the 1933 Act, no order preventing or suspending the use of any preliminary prospectus or the Prospectus has been issued and to the Company’s knowledge, no proceedings for any of those purposes have been instituted or are

 

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pending or are contemplated.  The Company has complied with each request (if any) from the Commission for additional information.

 

Each of the Registration Statement and any post-effective amendment thereto, at the time of its effectiveness and at each deemed effective date with respect to the Underwriters pursuant to Rule 430B(f)(2) under the 1933 Act Regulations, complied in all material respects with the requirements of the 1933 Act and the 1933 Act Regulations.  Each preliminary prospectus, the Prospectus and any amendment or supplement thereto or any prospectus wrapper prepared in connection therewith, at the time each was filed with the Commission, complied in all material respects with the requirements of the 1933 Act Regulations and each preliminary prospectus and the Prospectus delivered to the Underwriters for use in connection with this offering was identical to the electronically transmitted copies thereof filed with the Commission pursuant to XXXXX, except to the extent permitted by Regulation S-T.

 

The documents incorporated or deemed to be incorporated by reference in the Registration Statement and the Prospectus, when they became effective or at the time they were or hereafter are filed with the Commission, complied and will comply in all material respects with the requirements of the 1934 Act and the rules and regulations of the Commission under the 1934 Act (the “1934 Act Regulations”).

 

(ii)                                  Accurate Disclosure.  Neither the Registration Statement nor any amendment thereto, at its effective time, at the Closing Time or at any Date of Delivery, contained, contains or will contain an untrue statement of a material fact or omitted, omits or will omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading.  As of the Applicable Time, neither (A) the General Disclosure Package nor (B) any individual Issuer Limited Use Free Writing Prospectus, when considered together with the General Disclosure Package, included, includes or will include an untrue statement of a material fact or omitted, omits or will omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.  Neither the Prospectus nor any amendment or supplement thereto (including any prospectus wrapper), as of its issue date, at the time of any filing with the Commission pursuant to Rule 424(b), at the Closing Time or at any Date of Delivery, included, includes or will include an untrue statement of a material fact or omitted, omits or will omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.  The documents incorporated or deemed to be incorporated by reference in the Registration Statement, the General Disclosure Package and the Prospectus, at the time the Registration Statement became effective or when such documents incorporated by reference were filed with the Commission, as the case may be, when read together with the other information in the Registration Statement, the General Disclosure Package or the Prospectus, as the case may be, did not and will not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein (in the case of the General Disclosure Package and the Prospectus, in light of the circumstances under which they were made) not misleading.

 

The representations and warranties in this subsection shall not apply to statements in or omissions from the Registration Statement (or any amendment thereto), the General Disclosure Package, any individual Issuer Limited Use Free Writing Prospectus or the Prospectus (or any amendment or supplement thereto) (including any prospectus wrapper) made in reliance upon and in conformity with written information furnished to the Company by any Underwriter through the Representatives expressly for use therein.  For purposes of this Agreement, the only information so furnished shall be the information in the first paragraph under the heading “Underwriting—

 

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Commissions and Discounts,” the information in the second, third and fourth paragraphs under the heading “Underwriting—Price Stabilization, Short Positions” and the information under the heading “Underwriting—Electronic Distribution” in each case contained in the Prospectus (collectively, the “Underwriter Information”).

 

(iii)                               Issuer Free Writing Prospectuses.  No Issuer Free Writing Prospectus conflicts or will conflict with the information contained in the Registration Statement or the Prospectus, including any document incorporated by reference therein, and any preliminary or other prospectus deemed to be a part thereof that has not been superseded or modified.   Any offer that is a written communication relating to the Securities made prior to the initial filing of the Registration Statement by the Company or any person acting on its behalf (within the meaning, for this paragraph only, of Rule 163(c) of the 1933 Act Regulations) has been filed with the Commission in accordance with the exemption provided by Rule 163 under the 1933 Act Regulations (“Rule 163”) and otherwise complied with the requirements of Rule 163, including without limitation the legending requirement, to qualify such offer for the exemption from Section 5(c) of the 1933 Act provided by Rule 163.

 

(iv)                              Well-Known Seasoned Issuer.  (A) At the original effectiveness of the Registration Statement, (B) at the time of the most recent amendment thereto for the purposes of complying with Section 10(a)(3) of the 1933 Act (whether such amendment was by post-effective amendment, incorporated report filed pursuant to Section 13 or 15(d) of the 1934 Act or form of prospectus), (C) at the time the Company or any person acting on its behalf (within the meaning, for this clause only, of Rule 163(c) under the 0000 Xxx) made any offer relating to the Securities in reliance on the exemption of Rule 163 under the 1933 Act, and (D) as of the Applicable Time, the Company was and is a “well-known seasoned issuer” (as defined in Rule 405).

 

(v)                                 Company Not Ineligible Issuer.  At the time of filing the Registration Statement and any post-effective amendment thereto, at the earliest time thereafter that the Company or another offering participant made a bona fide offer (within the meaning of Rule 164(h)(2) of the 1933 Act Regulations) of the Securities and at the date hereof, 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.

 

(vi)                              Incorporated Documents.  Each document incorporated by reference in the Registration Statement or the Prospectus heretofore filed, when it was 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 1934 Act and the rules and regulations thereunder, and any further documents so filed and incorporated after the date of this Agreement will, when they are filed, conform in all material respects with the requirements of the 1934 Act and the rules and regulations thereunder.

 

(vii)                           Offering Materials.  The Company has not distributed and will not distribute, prior to the later of the Closing Time and the completion of the Underwriters’ distribution of the Securities, any offering material in connection with the offering and sale of the Securities other than the Registration Statement, General Disclosure Package and the Prospectus.

 

(viii)                        NYSE MKT Listing.  The Common Stock is registered pursuant to Section 12(b) of the 1934 Act and is listed on the NYSE MKT LLC stock exchange (the “NYSE MKT”) under the trading symbol “FSP” and the Company has not received any notice from the NYSE MKT regarding the delisting of such securities from the NYSE MKT.  At the Closing Time, the

 

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Securities will be duly listed and admitted and authorized for trading on the NYSE MKT, subject only to official notice of issuance.

 

(ix)                              Good Standing of the Company.  The Company has been duly incorporated, is validly existing as a corporation in good standing under the laws of the jurisdiction of its incorporation, has the corporate power and authority to own its property and to conduct its business as described in in the Registration Statement, the General Disclosure Package and the Prospectus and is duly qualified to transact business and is in good standing in each jurisdiction in which the conduct of its business or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not reasonably be expected to (A) have a material adverse change in the condition, financial or otherwise, or in the earnings, business affairs or business prospects of the Company and its subsidiaries considered as one enterprise (including all of the Properties (as defined below)), whether or not arising in the ordinary course of business, (B) prevent or materially interfere with consummation of the transactions contemplated hereby, or result in the delisting of shares of Common Stock from the NYSE MKT (the occurrence of any such effect, prevention, interference or result described in the foregoing clauses (A) or (B) being herein referred to as a “Material Adverse Effect”).

 

(x)                                 Good Standing of Subsidiaries.  Schedule F attached hereto sets forth a complete and correct list of all of the subsidiaries of the Company (each, a “Subsidiary” and collectively the “Subsidiaries”), including their jurisdiction of organization.  Each Subsidiary of the Company has been duly organized, is validly existing as a corporation, partnership or limited liability company in good standing under the laws of the jurisdiction of its organization, has the corporate, partnership or limited liability company power and authority to own its property and to conduct its business as described in the Registration Statement, the General Disclosure Package and the Prospectus and is duly qualified to transact business and is in good standing in each jurisdiction in which the conduct of its business or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not reasonably be expected to have a Material Adverse Effect; all of the issued shares of capital stock of each Subsidiary of the Company have been duly and validly authorized and issued, are fully paid and non-assessable (to the extent legally applicable) and are owned directly or indirectly by the Company, free and clear of all liens, encumbrances, equities or claims.

 

(xi)                              Authorization of Agreement.  The Company has full right, power and authority to execute and deliver this Agreement and to perform its obligations hereunder This Agreement has been duly authorized, executed and delivered by the Company.

 

(xii)                           Capitalization.  The authorized and outstanding capitalization of the Company is as set forth in the Registration Statement, the General Disclosure Package and the Prospectus, subject, in each case, to the issuance of shares of Common Stock upon exercise of stock options and warrants disclosed as outstanding in the Registration Statement, the General Disclosure Package and the Prospectus, as the case may be, and the grant of options or shares of Common Stock under existing stock incentive plans described in the Registration Statement, the General Disclosure Package and the Prospectus.  The authorized capital stock of the Company conforms and will conform in all material respects as to legal matters to the description thereof contained in the Registration Statement, the General Disclosure Package and the Prospectus.

 

(xiii)                        No Exchange Rights.  No holder of any class of capital stock or other equity or debt interest in any Sponsored REIT (as that term is used in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012, as filed with the Commission) has the right to

 

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convert or exchange any such capital stock or other interest into the equity of the Company or any of its Subsidiaries.

 

(xiv)                       Authorization of Common Stock.  The shares of Common Stock outstanding prior to the issuance of the Securities to be sold by the Company have been duly authorized, are validly issued, fully paid and non-assessable, have been issued in compliance with applicable securities laws and were not issued in violation of any preemptive or similar rights.

 

(xv)                          Authorization and Description of Securities.  The Securities to be purchased by the Underwriters from the Company have been duly authorized for issuance and sale to the Underwriters pursuant to this Agreement and, when issued and delivered by the Company pursuant to this Agreement against payment of the consideration set forth herein, will be validly issued and fully paid and non-assessable; and the issuance of the Securities is not subject to the preemptive, resale rights, rights of first refusal or other similar rights of any securityholder of the Company.

 

(xvi)                       Absence of Violations, Defaults and Conflicts.  Neither the issuance and sale of the Securities by the Company, the execution and delivery by the Company of, nor the performance by the Company of its obligations under, this Agreement conflicts with, or will conflict with, or constitutes, or with the giving of notice or lapse of time, will constitute, a breach, violation, default or Repayment Event under, or result in the imposition of any lien, charge or encumbrance upon any assets of the Company or any of its Subsidiaries pursuant to, or require the consent of any other party to, (i) any statute, law, rule, regulation, judgment, order or decree of any governmental body, regulatory or administrative agency or court having jurisdiction over the Company or any Subsidiary; (ii) the organizational documents of the Company or any of its Subsidiaries; or (iii) any indenture, mortgage, loan or credit agreement, deed of trust, note, contract, franchise, lease or other agreement, obligation, condition, covenant or instrument to which the Company or any of its Subsidiaries (or any of their respective assets) is subject or bound, except with respect to clause (iii), only any such breach, violation, default, Repayment Event or event resulting in the imposition of any lien, charge or encumbrance upon any assets of the Company or any of its Subsidiaries, as applicable, which would not, individually or in the aggregate, be reasonably expected to have a Material Adverse Effect.  As used herein, a “Repayment Event” means any event or condition which gives, or with the giving of notice or lapse of time would give, the holder of any note, debenture or other evidence of indebtedness (or any person acting on such holder’s behalf) the right to require the repurchase, redemption or repayment of all or a portion of such indebtedness by either the Company or any of its Subsidiaries.

 

(xvii)                    Absence of Further Requirements.  No approval, authorization, consent or order of or filing with any federal, state, local or foreign governmental or regulatory commission, board, body, authority or agency, or of or with any self-regulatory organization or other non-governmental regulatory authority (including, without limitation, the NYSE MKT), or approval of the Company’s shareholders, is required in connection with the issuance and sale of the Securities or the consummation of the transactions contemplated hereby, except such as may be required by the federal securities laws, NYSE MKT, the securities or Blue Sky laws of the various states and the Financial Industry Regulatory Association (“FINRA”) in connection with the offer and sale of the Shares, all of which will be, or have been obtained, in accordance with this Agreement.

 

(xviii)                 Absence of Proceedings.  There are no actions, suits, claims, investigations or proceedings pending or, to the Company’s knowledge, threatened or contemplated to which the

 

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Company or any of its Subsidiaries or, to the Company’s knowledge, any of their respective directors or officers (in their capacities as such) is or would be a party or of which any of their respective properties is or would be subject at law or in equity, before or by any federal, state, local or foreign governmental or regulatory commission, board, body, authority or agency, or before or by any self-regulatory organization or other non-governmental regulatory authority (including, without limitation, the NYSE MKT) (i) other than any such action, suit, claim, investigation or proceeding which, if resolved adversely to the Company, any of its Subsidiaries or any of their respective directors or officers, as applicable, would not, individually or in the aggregate, be reasonably expected to have a Material Adverse Effect or (ii) that are required to be described in the Registration Statement, the General Disclosure Package or the Prospectus and are not so described.

 

(xix)                       Accuracy of Exhibits.  There are no statutes, regulations, contracts or other documents that are required to be described in the Registration Statement, the General Disclosure Package or the Prospectus or to be filed as exhibits to the Registration Statement which have not been so described, filed or incorporated by reference as required by the 1933 Act.

 

(xx)                          Investment Company Act.  The Company is not, and after giving effect to the offering and sale of the Securities and the application of the proceeds thereof as described in the Registration Statement, the General Disclosure Package or the Prospectus will not be, required to register as an “investment company” as such term is defined in the Investment Company Act of 1940, as amended (the “1940 Act”).

 

(xxi)                       No Finder’s Fee.  Except for the Underwriters’ discounts and commissions payable by the Company to the Underwriters in connection with the offering of the Securities contemplated herein or as otherwise disclosed in the General Disclosure Package and the Prospectus, the Company has not incurred any liability for any brokerage commission, finder’s fees or similar payments in connection with the offering of the Securities contemplated hereby.

 

(xxii)                    Absence of Certain Relationships.  No transaction has occurred between or among the Company or any of its Subsidiaries, on the one hand, and any of their respective officers or directors or any affiliate or affiliates of any such officer or director, on the other hand, that is required to be described in and is not described or incorporated by reference in the Registration Statement, General Disclosure Package or the Prospectus.  Except as otherwise described in the Registration Statement, General Disclosure Package and Prospectus, there are no material outstanding loans or advances or material guarantees of indebtedness by the Company or any of its Subsidiaries to or for the benefit of any of the officers or directors of the Company or any of their family members.

 

(xxiii)                 Independent Accountants.  Ernst & Young LLP, who certified the financial statements and supporting schedules included or incorporated by reference in the Registration Statement, the General Disclosure Package and the Prospectus are independent registered public accountants with respect to the Company within the applicable rules and regulations adopted by the Commission and the Public Company Accounting Oversight Board (United States) and as required by the 1933 Act and the 1933 Act regulations.

 

(xxiv)                Financial Statements.  The financial statements included or incorporated by reference in the Registration Statement, the General Disclosure Package and the Prospectus, together with the related notes and schedules, present fairly in all materials respects the consolidated financial position of the Company and its Subsidiaries as of the dates indicated and the consolidated results of operations, cash flows and changes in shareholders’ equity of the

 

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Company for the periods specified and have been prepared in all material respects in compliance with the requirements of the 1933 Act and the 1934 Act and in conformity with U.S. generally accepted accounting principles applied on a consistent basis during the periods involved; all pro forma financial statements or data included or incorporated by reference in the Registration Statement, the General Disclosure Package and the Prospectus, if any, comply in all material respects with the requirements of the 1933 Act and the 1934 Act, and the assumptions used in the preparation of such pro forma financial statements and data are reasonable, the pro forma adjustments used therein are appropriate to give effect to the transactions or circumstances described therein and the pro forma adjustments have been properly applied to the historical amounts in the compilation of those statements and data; the other financial data contained or incorporated by reference in the Registration Statement, the General Disclosure Package and the Prospectus are accurately and fairly presented in all material respects and prepared on a basis consistent with the financial statements and books and records of the Company; there are no financial statements (historical or pro forma) that are required to be included or incorporated by reference in the Registration Statement, the General Disclosure Package and the Prospectus that are not included or incorporated by reference as required; the Company and its Subsidiaries do not have any material liabilities or obligations, direct or contingent (including any off-balance sheet obligations), not described in the Registration Statement, the General Disclosure Package or the Prospectus; all disclosures contained or incorporated by reference in the Registration Statement, the General Disclosure Package and the Prospectus regarding “non-GAAP financial measures” (as such term is defined by the rules and regulations of the Commission) comply in all material respects with Regulation G under the 1934 Act and Item 10 of Regulation S-K under the 1933 Act, to the extent applicable; and the interactive data in eXtensible Business Reporting Language incorporated by reference in the Registration Statement, the General Disclosure Package and the Prospectus fairly presents the information called for in all material respects and has been prepared in accordance with the Commission’s rules and guidelines applicable thereto.

 

(xxv)                   Statistical and Market-Related Data.  Any statistical and market-related data included in the Registration Statement, the General Disclosure Package or the Prospectus are based on or derived from sources that the Company reasonably believes to be reliable and accurate, and the Company has obtained the written consent to the use of such data from such sources to the extent required. Each “forward-looking statement” (within the meaning of Section 27A of the 1933 Act or Section 21E of the 0000 Xxx) contained or incorporated by reference in the Registration Statement, General Disclosure Package or Prospectus, and any Issuer Free Writing Prospectus, was made or reaffirmed with a reasonable basis and in good faith at the time of the initial making of such statement or the reaffirmation thereof.

 

(xxvi)                Registration Rights.  There are no contracts, agreements or understandings between the Company and any person granting such person the right to require the Company to file a registration statement under the 1933 Act with respect to any securities of the Company or to require the Company to include such securities with the Securities registered pursuant to the Registration Statement.

 

(xxvii)             Properties.  (A) The Company, directly or indirectly through one or more of its Subsidiaries, has good and marketable fee simple title to each of the properties described in the Registration Statement, the General Disclosure Package and the Prospectus as being one hundred percent (100%) owned by the Company, directly or indirectly (the “Properties”), and the improvements thereon (exclusive of any improvements owned by tenants), in each case free and clear of all liens, encumbrances, claims, security interests and defects, other than those set forth in the Registration Statement, the General Disclosure Package and the Prospectus or those which would not reasonably be expected to have a Material Adverse Effect or materially and adversely

 

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affect the value of such Property or materially interfere with the use, or proposed use, of such Property; (B) none of the Company, any of its subsidiaries or, to the Company’s knowledge, any “Major Tenant” (as defined in Part I, Item 2 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2012) of any Property is in default of any of its material obligations under any lease or sublease relating to any of the Properties, except in all cases for any such defaults or events that would not individually or in the aggregate reasonably be expected to have a Material Adverse Effect or materially and adversely affect the value of such Property; (C) no tenant under any lease of space at any of the Properties has a right of first refusal to purchase the premises demised under such lease for a fixed or below market price; (D) to the Company’s knowledge, each of the Properties complies with all applicable codes, laws and regulations (including, without limitation, building and zoning codes, laws and regulations and laws relating to access to the Properties), except for any noncompliance that, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect or materially and adversely affect the value of such Property or materially interfere with the use, or proposed use, of such Property; (E) there are no pending or, to the Company’s knowledge, threatened condemnation proceedings, zoning changes or other proceedings or actions that would reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect or materially and adversely affect the value of such Property or materially interfere with the use, or proposed use, of such Property; (F) there are no mortgages or deeds of trust encumbering all or any portion of any of the Properties; (G) with respect to each of the Properties, the Company or its Subsidiary, as applicable, has obtained customary title insurance on the fee interest therein; and (H) except as disclosed in or contemplated by the Registration Statement, the General Disclosure Package and the Prospectus, neither the Company nor any of its Subsidiaries has sold any real property to a third party during the immediately preceding twelve (12) calendar months.

 

(xxviii)          Personal Property.  The Company and its Subsidiaries have good and marketable title to all personal property owned by them, free and clear of all liens, encumbrances and defects, except those liens encumbrances and defects set forth in the Registration Statement, the General Disclosure Package and the Prospectus or which would not reasonably be expected to have a Material Adverse Effect.

 

(xxix)                No Material Adverse Change in Business.  Except as otherwise stated therein, since the respective dates as of which information is given in the Registration Statement, the General Disclosure Package or the Prospectus, (A) there has been no Material Adverse Effect,  (B) there have been no transactions entered into by the Company or any of its subsidiaries, other than those in the ordinary course of business, which are material with respect to the Company and its subsidiaries considered as one enterprise, and (C) except for regular quarterly dividends on the Common Stock in amounts per share that are consistent with past practice, there has been no dividend or distribution of any kind declared, paid or made by the Company on any class of its capital stock.

 

(xxx)                   Environmental Compliance.  With respect to each of clauses (A) through (D) below, except as described in the Registration Statement, the General Disclosure Package and the Prospectus or except as would not, singly or in the aggregate, reasonably be expected to result in a Material Adverse Effect, (A) neither the Company nor any of its Subsidiaries has received written notice that, or is aware that, it is in violation of any federal, state, local or foreign statute, law, rule, regulation, ordinance, code, policy or rule of common law or any judicial or administrative interpretation thereof, including any judicial or administrative order, consent, decree or judgment, relating to pollution or protection of human health, the environment (including, without limitation, ambient air, surface water, groundwater, land surface or subsurface strata) or wildlife, including, without limitation, laws and regulations relating to the release or

 

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threatened release of chemicals, pollutants, contaminants, wastes, toxic substances, hazardous substances, petroleum or petroleum products, asbestos-containing materials or mold (collectively, “Hazardous Materials”) or to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials (collectively, “Environmental Laws”), (B) the Company and its Subsidiaries have obtained all permits, authorizations and approvals required under applicable Environmental Laws to conduct their respective businesses and are each in compliance with the requirements of such permits, authorizations and approvals, (C) there are no pending or, to the knowledge of the Company, threatened administrative, regulatory or judicial actions, suits, demands, demand letters, claims, liens, notices of noncompliance or violation, investigation or proceedings relating to any Environmental Law against the Company or any of its Subsidiaries and (D) to the knowledge of the Company, there are no events or circumstances that would reasonably be expected to form the basis of an order for clean-up or remediation, or an action, suit or proceeding by any private party or governmental body or agency, against or affecting the Company, any of its Subsidiaries or any of the Properties relating to Hazardous Materials or any Environmental Laws. The Company and its Subsidiaries have reasonably concluded that the costs and liabilities associated with compliance with Environmental Laws are not, singly, or in the aggregate, reasonably expected to have a Material Adverse Effect, except as set forth in the Registration Statement, the General Disclosure Package and the Prospectus.

 

(xxxi)                Intellectual Property.  Each of the Company and its Subsidiaries, to the knowledge of the Company, owns or possesses all inventions, patent applications, patents, trademarks (both registered and unregistered), trade names, service names, copyrights, trade secrets and other proprietary information described in the Registration Statement, the General Disclosure Package and the Prospectus as being owned or licensed by it or which is necessary for the conduct of, or material to, its businesses (collectively, the “Intellectual Property”), and the Company is unaware of any claim to the contrary or any challenge by any other person to the rights of the Company or any of its Subsidiaries with respect to the Intellectual Property, except for any claim or challenge that would not reasonably be expected to result in a Material Adverse Effect.  To the knowledge of the Company, neither the Company nor any of its Subsidiaries has infringed or is infringing the material intellectual property of a third party, and neither the Company nor any of its Subsidiaries has received written notice of a claim by a third party to the contrary.

 

(xxxii)             Absence of Labor Dispute.  No material labor dispute with the employees of the Company or any of its Subsidiaries exists, except as described in the Prospectus, or, to the knowledge of the Company, is imminent, and the Company is not aware of any existing, threatened or imminent labor disturbance by the employees of any of its principal contractors that could reasonably be expected to have a Material Adverse Effect.

 

(xxxiii)          Insurance.  The Company and each of its Subsidiaries are insured by insurers of recognized financial responsibility, against such losses and risks and in such amounts as are customary in the businesses in which they are engaged.  Neither the Company nor any of its Subsidiaries has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not reasonably be expected to have a Material Adverse Effect.

 

(xxxiv)         Possession of Licenses and Permits. The Company and its Subsidiaries possess all certificates, authorizations and permits issued by the appropriate federal, state or foreign regulatory authorities necessary to conduct their respective businesses, except for such

 

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certificates, authorizations or permits the lack of which would not reasonably be expected to result in a Material Adverse Effect, and neither the Company nor any of its Subsidiaries has received any written notice of proceedings relating to the revocation or modification of any such certificate, authorization or permit which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would reasonably be expected to have a Material Adverse Effect or materially and adversely affect the value of such Property (as described below) or materially interfere with the use, or proposed use, of such Property.

 

(xxxv)            Internal Control Over Financial Reporting.  The Company maintains “internal control over financial reporting” (as defined in Rules 13a-15 and 15d-15 under the 0000 Xxx) in compliance with the requirements of the 1934 Act.  The Company’s internal control over financial reporting has been designed by the Company’s principal executive officer and principal financial officer, or under their supervision, 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 is effective in performing the functions for which it was established.  Except as described in the Registration Statement, General Disclosure Package or Prospectus, since the end of the Company’s most recent audited fiscal year, there has been (i) no significant deficiency or material weakness in the design or operation of the Company’s internal control over financial reporting (whether or not remediated) which is reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information, and (ii) no change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.  The Company and its Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that the Company qualifies as a real estate investment trust (a “REIT”) under the requirements of the Internal Revenue Code of 1986, as amended (the “Code”).

 

(xxxvi)         Disclosure Controls and Procedures. The Company maintains “disclosure controls and procedures” (as such term is defined in Rules 13a-15 and 15d-15 under the 1934 Act); such disclosure controls and procedures are designed to ensure that material information relating to the Company, including its consolidated Subsidiaries, is made known to the Company’s Chief Executive Officer and Chief Financial Officer by others within those entities, and such disclosure controls and procedures are effective at the reasonable assurance level in performing the functions for which they were established; the principal executive officers (or their equivalents) and principal financial officers (or their equivalents) of the Company have made all certifications required by the Xxxxxxxx-Xxxxx Act of 2002 and any related rules and regulations promulgated by the Commission (the “Xxxxxxxx-Xxxxx Act”), and the statements made in each such certification are accurate; the Company and its Subsidiaries and, to the Company’s knowledge, their respective directors and officers (in their capacities as such) are in compliance in all material respects with the applicable provisions of the Xxxxxxxx-Xxxxx Act.

 

(xxxvii)      Taxes.  All U.S. federal, state, local and foreign tax returns required to be filed by the Company or any of its Subsidiaries have been timely filed, and all material taxes and other assessments of a similar nature (whether imposed directly, through withholding or otherwise) including any interest, additions to tax or penalties applicable thereto due or claimed to be due from such entities have been timely paid, other than those being contested in good faith and for which adequate reserves have been provided on the books of the applicable entity.  The Company and its Subsidiaries have established adequate reserves for all taxes that have accrued but are not yet due and payable.  No tax deficiency has been asserted against any such entity, nor does the Company or any of its Subsidiaries know of any tax deficiency which is likely to be asserted

 

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against any such entity that, if determined adversely to any such entity, could reasonably be expected to have a Material Adverse Effect.

 

(xxxviii)                                                   Qualification as REIT.  The Company elected to be taxed as a REIT under the Code commencing with its taxable year ended December 31, 2002.  Commencing with the taxable year ended December 31, 2002 and through the date hereof, the Company has been organized and operated in conformity with the requirements for qualification and taxation as a REIT under the Code, and its current and proposed ownership and method of operation 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, 2013 and in the future.  The Company intends to continue to qualify as a REIT under the Code for all subsequent years.  The Company does not know of any event that would reasonably be expected to cause the Company to fail to qualify as a REIT under the Code for its taxable year ending December 31, 2013 or at any time thereafter.

 

(xxxix)         Legal, Tax and Accounting Advice.  The Company has not relied upon the Representatives or legal counsel for the Representatives for any legal, tax or accounting advice in connection with the offering and sale of the Securities.

 

(xl)                              Tax Disclosures.  The factual description of, and the assumptions and representations regarding, the Company’s organization and current and proposed method of operation set forth in the Prospectus under the headings “Material United States Federal Income Tax Considerations” and “Supplemental Federal Income Tax Considerations” accurately summarizes in all material respects the matters referred to therein.

 

(xli)                           ERISA Compliance.  Neither the Company nor any of its Subsidiaries maintains or contributes to any “pension plan” (within the meaning of Section 3(2) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”)) that is subject to Title IV of ERISA or any “multiemployer plan” (within the meaning of Section 4001(a)(3) of ERISA).  Each “pension plan” (within the meaning of Section 3(2) of ERISA) maintained by the Company or any of its Subsidiaries which is intended to be qualified under Section 401(a) of the Code has received a favorable determination or opinion letter from the Internal Revenue Service that such plan is so qualified (or the Company or such Subsidiaries have timely completed Internal Revenue Service Form 8905, Certification of Intent to Adopt a Pre-approved Plan).  Each “employee benefit plan” (within the meaning of Section 3(3) of ERISA) established or maintained by the Company and/or one or more of its Subsidiaries is in compliance with the currently applicable provisions of ERISA, except for such failures to comply that would not individually or in the aggregate reasonably be expected to result in a Material Adverse Effect.

 

(xlii)                        Unlawful Contributions or Payments.  Neither the Company nor any of its Subsidiaries nor, to the knowledge of the Company, any director, officer, agent, employee or affiliate of the Company or any of its 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; and the Company and its Subsidiaries have instituted and maintain policies and procedures designed to ensure continued compliance therewith, including without limitation a system of internal accounting controls sufficient to provide reasonable assurances that (i) transactions are executed in accordance with management’s general or specific authorization, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain accountability for assets, (iii) access to assets is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded

 

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accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.

 

(xliii)                     OFAC.  None of the Company, any of its subsidiaries or, to the knowledge of the Company, any director, officer, agent, employee or affiliate of the Company or any of its subsidiaries is an individual or entity (“Person”) currently the target of any sanctions enforced by the United States Government, including, without limitation, the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) (collectively, “Sanctions”), nor is the Company located, organized or resident in a country or territory that is the subject of Sanctions; and the Company will not directly or indirectly use the proceeds of the sale of the Securities, or lend, contribute or otherwise make available such proceeds to any subsidiaries, joint venture partners or other Person, for the specific purpose of funding any activities of or business of any Person, or in any country or territory, that, at the time of such funding, is the subject of  Sanctions.

 

(xliv)                    Money Laundering.  The operations of the Company are and have been conducted at all times in compliance with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, applicable money laundering statutes of all jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, the “Money Laundering Laws”), and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company with respect to the Money Laundering Laws is pending or, to the knowledge of the Company, threatened.

 

(xlv)                       No Integration.  The Company has not sold or issued any securities that would be integrated with the offering of Securities pursuant to the 1933 Act and the 1933 Act Regulations or the interpretations thereof by the Commission.

 

(xlvi)                    Absence of Manipulation.  Neither the Company nor any affiliate of the Company has taken, nor will the Company or any affiliate take, directly or indirectly, any action which is designed, or would be expected, to cause or result in, or which constitutes, the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Securities or to result in a violation of Regulation M under the 1934 Act.

 

(xlvii)                 Lending Relationship.  Except as disclosed in the Registration Statement, the General Disclosure Package and the Prospectus, the Company (i) does not have any material lending or other relationship with any bank or lending affiliate of any Underwriter and (ii) does not intend to use any of the proceeds from the sale of the Securities to repay any outstanding debt owed to any affiliate of any Underwriter.

 

(xlviii)              Authorization and Description of the Acquisition Agreements. The Acquisition Agreements have been duly and validly authorized, executed and delivered by the applicable Subsidiary on behalf of the Company, and to the knowledge of the Company, by each of the other parties thereto and constitute valid and binding agreements of the parties thereto, enforceable in accordance with their terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally or by general principles of equity; and to the knowledge of the Company, the descriptions of the Acquisition Agreements contained in the Registration Statement, the General Disclosure Package and the Prospectus, as the case may be, constitute a complete and accurate description of the material terms thereof.

 

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(xlix)                    Acquisition Properties.  To the knowledge of the Company, the representations and warranties contained in Section 1(a)(xxix)(A) of this Agreement are true and correct assuming that the consummation of each of the transactions contemplated by the Acquisition Agreements was effected as of the date of this Agreement.

 

(l)                                     Rating of Securities. The Company has no debt securities or preferred stock that is rated by any “nationally recognized statistical rating agency” (as that term is defined by the Commission for purposes of Rule 436(g)(2) under the 1933 Act).

 

(b)         Officer’s Certificates.  Any certificate signed by any officer of the Company or any of its subsidiaries delivered to the Representatives or to counsel for the Underwriters shall be deemed a representation and warranty by the Company to each Underwriter as to the matters covered thereby; provided, however, any certificate signed by an officer of the Company that is delivered to counsel for the Company, and a copy of which is provided to the Representatives or counsel for the Underwriters for informational purposes only, shall not be deemed to be a representation or warranty by the Company to the Underwriters.  The Company acknowledges that the Underwriters and, for purposes of the opinions to be delivered pursuant to Section 5 hereof, counsel to the Company and counsel to the Underwriters, will rely upon the accuracy and truthfulness of the foregoing representations and hereby consents to such reliance.

 

SECTION 2.                            Sale and Delivery to Underwriters; Closing.

 

(a)                                 Initial Securities.  On the basis of the representations and warranties herein contained and subject to the terms and conditions herein set forth, the Company agrees to sell to each Underwriter, severally and not jointly, and each Underwriter, severally and not jointly, agrees to purchase from the Company, at the price per share set forth in Schedule A, that proportion of the number of Initial Securities set forth in Schedule B opposite the name of the Company, which the number of Initial Securities set forth in Schedule A opposite the name of such Underwriter, plus any additional number of Initial Securities that such Underwriter may become obligated to purchase pursuant to the provisions of Section 10 hereof, bears to the total number of Initial Securities, subject, in each case, to such adjustments among the Underwriters as Xxxxxxx Xxxxx in its sole discretion shall make to eliminate any sales or purchases of fractional shares.

 

(b)                                 Option Securities.  In addition, on the basis of the representations and warranties herein contained and subject to the terms and conditions herein set forth, the Company hereby grants an option to the Underwriters, severally and not jointly, to purchase up to an additional 2,250,000 shares of Common Stock, as set forth in Schedule B, at the price per share set forth in Schedule A, less an amount per share equal to any dividends or distributions declared by the Company and payable on the Initial Securities but not payable on the Option Securities.  The option hereby granted may be exercised for 30 days after the date hereof and may be exercised in whole or in part at any time from time to time upon notice by the Representatives to the Company setting forth the number of Option Securities as to which the several Underwriters are then exercising the option and the time and date of payment and delivery for such Option Securities.  Any such time and date of delivery (a “Date of Delivery”) shall be determined by the Representatives, but shall not be later than seven full business days after the exercise of said option, nor in any event prior to the Closing Time.  If the option is exercised as to all or any portion of the Option Securities, each of the Underwriters, acting severally and not jointly, will purchase that proportion of the total number of Option Securities then being purchased which the number of Initial Securities set forth in Schedule A opposite the name of such Underwriter bears to the total number of Initial Securities, subject, in each case, to such adjustments as Xxxxxxx Xxxxx in its sole discretion shall make to eliminate any sales or purchases of fractional shares.

 

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(c)                                  Payment.  The Initial Securities shall be delivered by the Company to the Representatives, through the facilities of DTC for the account of the Representatives, against payment by the Representatives of the purchase price therefor by wire transfer of immediately available funds to a bank account designated by the Company. The closing of the transactions contemplated thereby shall occur at the offices of Xxxxxxx Procter LLP, 000 Xxxxxx Xxxxxx, Xxx Xxxx, XX 00000, or at such other place as shall be agreed upon by the Representatives and the Company, at 9:00 A.M. (New York City time) on the third (fourth, if the pricing occurs after 4:30 P.M. (New York City time) on any given day) business day after the date hereof (unless postponed in accordance with the provisions of Section 10), or such other time not later than ten business days after such date as shall be agreed upon by the Representatives and the Company (such time and date of payment and delivery being herein called “Closing Time”).

 

In addition, in the event that any or all of the Option Securities are purchased by the Underwriters, such Option Securities shall be delivered by the Company to the Representatives, through the facilities of DTC for the account of the Representatives, against payment by the Representatives of the purchase price therefor by wire transfer of immediately available funds to a bank account designated by the Company, and the closing of such Option Securities shall take place at the above-mentioned offices, or at such other place as shall be agreed upon by the Representatives and the Company, on each Date of Delivery as specified in the notice from Xxxxxxx Xxxxx to the Company.

 

It is understood that each Underwriter has authorized the Representatives, for its account, to accept delivery of, receipt for, and make payment of the purchase price for, the Initial Securities and the Option Securities, if any, which it has agreed to purchase.  Xxxxxxx Xxxxx, individually and not as representative of the Underwriters, may (but shall not be obligated to) make payment of the purchase price for the Initial Securities or the Option Securities, if any, to be purchased by any Underwriter whose funds have not been received by the Closing Time or the relevant Date of Delivery, as the case may be, but such payment shall not relieve such Underwriter from its obligations hereunder.

 

SECTION 3.                            Covenants of the Company.  The Company  covenants with each Underwriter as follows:

 

(a)                                 Compliance with Securities Regulations and Commission Requests.  The Company, subject to Section 3(b), will comply with the requirements of Rule 430B, and will notify the Representatives promptly, and confirm the notice in writing, (i) when any post-effective amendment to the Registration Statement shall become effective or any amendment or supplement to the Prospectus shall have been filed, (ii) of the receipt of any comments from the Commission, (iii) of any request by the Commission for any amendment to the Registration Statement or any amendment or supplement to the Prospectus, including any document incorporated by reference therein or for additional information, (iv) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or any post-effective amendment or of any order preventing or suspending the use of any preliminary prospectus or the Prospectus, or of the suspension of the qualification of the Securities for offering or sale in any jurisdiction, or of the initiation or threatening of any proceedings for any of such purposes or of any examination pursuant to Section 8(d) or 8(e) of the 1933 Act concerning the Registration Statement and (v) if the Company becomes the subject of a proceeding under Section 8A of the 1933 Act in connection with the offering of the Securities.  The Company will effect all filings required under Rule 424(b), in the manner and within the time period required by Rule 424(b) (without reliance on Rule 424(b)(8)), and will take such steps as it deems necessary to ascertain promptly whether the form of prospectus transmitted for filing under Rule 424(b) was received for filing by the Commission and, in the event that it was not, it will promptly file such prospectus.  The Company will use its reasonable efforts to prevent the issuance of any stop order, prevention or suspension and, if any such order is issued, to obtain the lifting thereof at the earliest possible moment.  The Company shall pay the

 

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required Commission filing fees relating to the Securities within the time required by Rule 456(b)(1)(i) under the 1933 Act Regulations without regard to the proviso therein and otherwise in accordance with Rules 456(b) and 457(r) under the 1933 Act Regulations (including, if applicable, by updating the “Calculation of Registration Fee” table in accordance with Rule 456(b)(1)(ii) either in a post-effective amendment to the Registration Statement or on the cover page of a prospectus filed pursuant to Rule 424(b)).

 

(b)                                 Continued Compliance with Securities Laws.  The Company will comply with the 1933 Act, the 1933 Act Regulations, the 1934 Act and the 1934 Act Regulations so as to permit the completion of the distribution of the Securities as contemplated in this Agreement and in the Registration Statement, the General Disclosure Package and the Prospectus.  If at any time when a prospectus relating to the Securities is (or, but for the exception afforded by Rule 172 of the 1933 Act Regulations (“Rule 172”), would be) required by the 1933 Act to be delivered in connection with sales of the Securities, any event shall occur or condition shall exist as a result of which it is necessary, in the opinion of counsel for the Underwriters or for the Company, to (i) amend the Registration Statement in order that the Registration Statement will not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, (ii) amend or supplement the General Disclosure Package or the Prospectus in order that the General Disclosure Package or the Prospectus, as the case may be, will not include any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein not misleading in the light of the circumstances existing at the time it is delivered to a purchaser or (iii) amend the Registration Statement or amend or supplement the General Disclosure Package or the Prospectus, as the case may be, in order to comply with the requirements of the 1933 Act or the 1933 Act Regulations, the Company will promptly (A) give the Representatives notice of such event, (B) prepare any amendment or supplement as may be necessary to correct such statement or omission or to make the Registration Statement, the General Disclosure Package or the Prospectus comply with such requirements and, a reasonable amount of time prior to any proposed filing or use, furnish the Representatives with copies of any such amendment or supplement and (C) file with the Commission any such amendment or supplement; provided that the Company shall not file or use any such amendment or supplement to which the Representatives or counsel for the Underwriters shall reasonably object.  The Company will furnish to the Underwriters such number of copies of such amendment or supplement as the Underwriters may reasonably request.  The Company has given the Representatives notice of any filings made pursuant to the 1934 Act or 1934 Act Regulations within 48 hours prior to the Applicable Time; the Company will give the Representatives notice of its intention to make any such filing from the Applicable Time to the Closing Time and will furnish the Representatives with copies of any such documents a reasonable amount of time prior to such proposed filing, as the case may be, and will not file or use any such document to which the Representatives or counsel for the Underwriters shall reasonably object.

 

(c)                                  Delivery of Registration Statements.  The Company has furnished or will deliver to the Representatives and counsel for the Underwriters, during the period beginning at the Applicable Time and ending on the later of the Closing Date, and such date as a prospectus is no longer required by law to be delivered in connection with sales by the Underwriters (including in circumstances where such requirement may be satisfied pursuant to Rule 172) (the “Delivery Period”) without charge, copies of the Registration Statement as originally filed and each amendment thereto (including exhibits filed therewith or incorporated by reference therein and documents incorporated or deemed to be incorporated by reference therein) and copies of all consents and certificates of experts, and will also deliver to the Representatives, without charge, a conformed copy of the Registration Statement as originally filed and each amendment thereto (without exhibits) as the Underwriters may reasonably request during the Delivery Period.  The copies of the Registration Statement and each amendment thereto furnished to the Underwriters will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to XXXXX, except to the extent permitted by Regulation S-T.

 

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(d)                                 Delivery of Prospectuses.  The Company has delivered to each Underwriter, without charge, as many copies of each preliminary prospectus as such Underwriter reasonably requested, and the Company hereby consents to the use of such copies for purposes permitted by the 1933 Act.  The Company will furnish to each Underwriter, without charge, during the Delivery Period, such number of copies of the Prospectus (as amended or supplemented) as such Underwriter may reasonably request.  The Prospectus and any amendments or supplements thereto furnished to the Underwriters will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to XXXXX, except to the extent permitted by Regulation S-T.

 

(e)                                  Blue Sky Qualifications.  The Company will use its reasonable best efforts, in cooperation with the Underwriters, to qualify the Securities for offering and sale under the applicable securities laws of such states and other jurisdictions (domestic or foreign) as the Representatives may designate and to maintain such qualifications in effect so long as required to complete the distribution of the Securities; provided, however, that the Company shall not be obligated to file any general consent to service of process or to qualify as a foreign corporation or as a dealer in securities in any jurisdiction in which it is not so qualified or to subject itself to taxation in respect of doing business in any jurisdiction in which it is not otherwise so subject.

 

(f)                                   Rule 158.  The Company will timely file such reports pursuant to the 1934 Act as are necessary in order to make generally available to its securityholders as soon as reasonably practicable an earnings statement for the purposes of, and to provide to the Underwriters the benefits contemplated by, the last paragraph of Section 11(a) of the 1933 Act.

 

(g)                                  Use of Proceeds.  The Company will use the net proceeds received by it from the sale of the Securities in the manner specified in the Registration Statement, the General Disclosure Package and the Prospectus under “Use of Proceeds.”

 

(h)                                 Listing.  The Company will use its best efforts to effect and maintain the listing of the Securities on the NYSE MKT.

 

(i)                                     Restriction on Sale of Securities.  During a period of 90 days from the date of the Prospectus, the Company will not, without the prior written consent of Xxxxxxx Xxxxx, (i) directly or indirectly, offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase or otherwise transfer or dispose of any shares of Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock or file any registration statement under the 1933 Act with respect to any of the foregoing or (ii) enter into any swap or any other agreement or any transaction that transfers, in whole or in part, directly or indirectly, the economic consequence of ownership of the Common Stock, whether any such swap or transaction described in clause (i) or (ii) above is to be settled by delivery of Common Stock or such other securities, in cash or otherwise.  The foregoing sentence shall not apply to (A) the Securities to be sold hereunder, (B) any shares of Common Stock issued by the Company upon the exercise of an option or warrant or the conversion of a security outstanding on the date hereof and referred to in the Registration Statement, the General Disclosure Package and the Prospectus, (C) any shares of Common Stock issued or options to purchase Common Stock granted pursuant to existing employee benefit plans of the Company referred to in the Registration Statement, the General Disclosure Package and the Prospectus or (D) any shares of Common Stock issued pursuant to any non-employee director stock plan or dividend reinvestment plan referred to in the Registration Statement, the General Disclosure Package and the Prospectus.  Notwithstanding the foregoing, if (1) during the last 17 days of the 90-day restricted period the Company issues an earnings release or material news or a material event relating to the Company occurs or (2) prior to the expiration of the 90-day restricted period, the Company announces that it will issue an earnings release or becomes aware that material news or a material event will occur during the

 

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16-day period beginning on the last day of the 90-day restricted period, the restrictions imposed in this clause (i) shall continue to apply until the expiration of the 18-day period beginning on the date of the issuance of the earnings release or the occurrence of the material news or material event, unless Xxxxxxx Xxxxx waives, in writing, such extension.

 

(j)                                    Reporting Requirements.  The Company, during the Delivery Period, will file all documents required to be filed with the Commission pursuant to the 1934 Act within the time periods required by the 1934 Act and 1934 Act Regulations.

 

(k)                                 Issuer Free Writing Prospectuses.  The Company agrees that, unless it obtains the prior written consent of the Representatives, it will not make any offer relating to the Securities that would constitute an Issuer Free Writing Prospectus or that would otherwise constitute a “free writing prospectus,” or a portion thereof, required to be filed by the Company with the Commission or retained by the Company under Rule 433; provided that the Representatives will be deemed to have consented to the Issuer Free Writing Prospectuses listed on Schedule D hereto and any “road show that is a written communication” within the meaning of Rule 433(d)(8)(i) that has been reviewed by the Representatives.  The Company represents that it has treated or agrees that it will treat each such free writing prospectus consented to, or deemed consented to, by the Representatives as an “issuer free writing prospectus,” as defined in Rule 433, and that it has complied and will comply with the applicable requirements of Rule 433 with respect thereto, including timely filing with the Commission where required, legending and record keeping.  If at any time following issuance of an Issuer Free Writing Prospectus there occurred or occurs an event or development as a result of which such Issuer Free Writing Prospectus conflicted or would conflict with the information contained in the Registration Statement, any preliminary prospectus or the Prospectus or included or would include an untrue statement of a material fact or omitted or would omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances existing at that subsequent time, not misleading, the Company will promptly notify the Representatives and will promptly amend or supplement, at its own expense, such Issuer Free Writing Prospectus to eliminate or correct such conflict, untrue statement or omission.

 

(l)                                     Qualification and Taxation as a REIT.  The Company will use its best efforts to continue to qualify for taxation as a REIT under the Code and will not take any action to revoke or otherwise terminate the Company’s REIT election, unless the Company’s board of directors determines in good faith that it is no longer in the best interests of the Company and its stockholders to be so qualified.

 

SECTION 4.                            Payment of Expenses.

 

(a)                                 Expenses.  The Company will pay or cause to be paid all expenses incident to the performance of its obligations under this Agreement, including (i) the preparation, printing and filing of the Registration Statement (including financial statements and exhibits) as originally filed and each amendment thereto, (ii) the preparation, printing and delivery to the Underwriters of copies of each preliminary prospectus, each Issuer Free Writing Prospectus and the Prospectus and any amendments or supplements thereto and any costs associated with electronic delivery of any of the foregoing by the Underwriters to investors, (iii) the preparation, issuance and delivery of the Securities to the Underwriters, including any stock or other transfer taxes and any stamp or other duties payable upon the sale, issuance or delivery of the Securities to the Underwriters, (iv) the fees and disbursements of the Company’s counsel, accountants and other advisors, (v) the qualification of the Securities under securities laws in accordance with the provisions of Section 3(e) hereof, including filing fees and the reasonable fees and disbursements of counsel for the Underwriters in connection therewith, (vi) the fees and expenses of any transfer agent or registrar for the Securities, (vii) the costs and expenses of the Company relating to investor presentations on any “road show” undertaken in connection with the marketing of the Securities, including without limitation, expenses associated with the production of road show slides and

 

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graphics, fees and expenses of any consultants engaged in connection with the road show presentations, travel and lodging expenses of the representatives and officers of the Company and any such consultants, and the cost of aircraft and other transportation chartered in connection with the road show and (viii) the fees and expenses incurred in connection with the listing of the Securities on the NYSE MKT.

 

(b)                                 Termination of Agreement.  If this Agreement is terminated by the Representatives in accordance with the provisions of Section 5, Section 9(a)(i) or (iii) or Section 10 hereof, the Company shall reimburse the Underwriters for all of their out-of-pocket expenses, including the reasonable fees and disbursements of counsel for the Underwriters.

 

SECTION 5.                            Conditions of Underwriters’ Obligations.  The obligations of the several Underwriters hereunder are subject to the accuracy of the representations and warranties of the Company contained herein or in certificates of any officer of the Company or any of its subsidiaries delivered pursuant to the provisions hereof, to the performance by the Company of its covenants and other obligations hereunder, and to the following further conditions:

 

(a)                                 Effectiveness of Registration Statement.  The Registration Statement has become effective and, at the Closing Time, no stop order suspending the effectiveness of the Registration Statement or any post-effective amendment thereto has been issued under the 1933 Act, no order preventing or suspending the use of any preliminary prospectus or the Prospectus has been issued and no proceedings for any of those purposes have been instituted or are pending or, to the Company’s knowledge, contemplated; and the Company has complied with each request (if any) from the Commission for additional information.  The Company shall have paid the required Commission filing fees relating to the Securities within the time period required by Rule 456(b)(1)(i) under the 1933 Act Regulations without regard to the proviso therein and otherwise in accordance with Rules 456(b) and 457(r) under the 1933 Act Regulations and, if applicable, shall have updated the “Calculation of Registration Fee” table in accordance with Rule 456(b)(1)(ii) either in a post-effective amendment to the Registration Statement or on the cover page of a prospectus filed pursuant to Rule 424(b).

 

(b)                                 Opinion of Counsel for Company.  At the Closing Time, the Representatives shall have received the favorable opinion, dated the Closing Time, of Xxxxxx Xxxxxx Xxxxxxxxx Xxxx and Xxxx LLP, counsel for the Company, in form and substance satisfactory to counsel for the Underwriters, together with signed or reproduced copies of such letter for each of the other Underwriters to the effect set forth in Exhibit A hereto and to such further effect as counsel to the Underwriters may reasonably request.

 

(c)                                  Opinion of Tax Counsel for Company.  At the Closing Time, the Representative shall have received the favorable opinion, dated as of the Closing Time, of Xxxxxx Xxxxxx Xxxxxxxxx Xxxx and Xxxx LLP, tax counsel for the Company, in form and substance satisfactory to counsel for the Underwriters, together with signed or reproduced copies of such letter for each of the other Underwriters, substantially in the form attached as Exhibit B hereto

 

(d)                                 Opinion of Counsel for Underwriters.  At the Closing Time, the Representatives shall have received the favorable opinion, dated the Closing Time, of Xxxxxxx Procter LLP, counsel for the Underwriters, together with signed or reproduced copies of such letter for each of the other Underwriters with respect to such matters as the Underwriters may reasonable request.

 

(e)                                  Officers’ Certificate.  At the Closing Time, there shall not have been, since the date hereof or since the respective dates as of which information is given in the Registration Statement, the General Disclosure Package or the Prospectus, any material adverse change in the condition, financial or otherwise, or in the earnings, business affairs or business prospects of the Company and its subsidiaries considered as one enterprise, whether or not arising in the ordinary course of business, and the

 

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Representatives shall have received a certificate of the Chief Executive Officer or the President of the Company and of the chief financial or chief accounting officer of the Company, dated the Closing Time, to the effect that (i) there has been no such material adverse change, (ii) the representations and warranties of the Company in this Agreement are true and correct with the same force and effect as though expressly made at and as of the Closing Time, (iii) the Company has complied with all agreements and satisfied all conditions on its part to be performed or satisfied at or prior to the Closing Time, and (iv) no stop order suspending the effectiveness of the Registration Statement under the 1933 Act has been issued, no order preventing or suspending the use of any preliminary prospectus or the Prospectus has been issued and no proceedings for any of those purposes have been instituted or are pending or, to their knowledge, threatened by the Commission.

 

(f)                                   Accountant’s Comfort Letter.  At the time of the execution of this Agreement, the Representatives shall have received from Ernst & Young LLP a letter, dated such date, in form and substance satisfactory to the Representatives, together with signed or reproduced copies of such letter for each of the other Underwriters containing statements and information of the type ordinarily included in accountants’ “comfort letters” to underwriters with respect to the financial statements and certain financial information contained in the Registration Statement, the General Disclosure Package and the Prospectus.

 

(g)                                  Bring-down Comfort Letter.  At the Closing Time, the Representatives shall have received from Ernst & Young LLP a letter, dated as of the Closing Time, to the effect that they reaffirm the statements made in the letter furnished pursuant to subsection (e) of this Section, except that the specified date referred to shall be a date not more than three business days prior to the Closing Time.

 

(h)                           Chief Financial Officer’s Certificate.  At the time of execution of this Agreement, the Representative shall have received a certificate of the Chief Financial Officer of the Company, dated as of such date, in a form reasonably satisfactory to the Representatives, together with signed or reproduced copies of such certificate for each of the other Underwriters.  At the Closing Time, the Representatives shall have received from the Chief Financial Officer a certificate, dated as of the Closing Time, of the Chief Financial Officer of the Company confirming that the certificate delivered by the Company at the time of execution of this Agreement pursuant to the prior sentence of this Section 5(h) hereof remains true and correct as of the Date of Delivery.

 

(i)                               Approval of Listing.  At the Closing Time, the Securities shall have been approved for listing on the NYSE MKT, subject only to official notice of issuance.

 

(j)                              Lock-up Agreements.  At the date of this Agreement, the Representatives shall have received an agreement substantially in the form of Exhibit C hereto signed by the persons listed on Schedule E hereto.

 

(k)                                 Conditions to Purchase of Option Securities.  In the event that the Underwriters exercise their option provided in Section 2(b) hereof to purchase all or any portion of the Option Securities, the representations and warranties of the Company contained herein and the statements in any certificates furnished by the Company and any of its subsidiaries hereunder shall be true and correct as of each Date of Delivery and, at the relevant Date of Delivery, the Representatives shall have received:

 

(i)                                     Officers’ Certificate.  A certificate, dated such Date of Delivery, of the President or a Vice President of the Company and of the chief financial or chief accounting officer of the Company confirming that the certificate delivered at the Closing Time pursuant to Section 5(e) hereof remains true and correct as of such Date of Delivery.

 

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(ii)                              Opinion of Counsel for Company.  If requested by the Representatives, the favorable opinion of Xxxxxx Xxxxxx Xxxxxxxxx Xxxx and Xxxx LLP, counsel for the Company, in form and substance satisfactory to counsel for the Underwriters, dated such Date of Delivery, relating to the Option Securities to be purchased on such Date of Delivery and otherwise to the same effect as the opinion required by Section 5(b) hereof.

 

(iii)                               Opinion of Tax Counsel for Company.  The favorable opinion of Xxxxxx Xxxxxx Xxxxxxxxx Xxxx and Xxxx LLP, tax counsel for the Company, in form and substance satisfactory to counsel for the Underwriters, dated such Date of Delivery, to the same effect as the opinion required by Section 5(c) hereof

 

(iv)                              Opinion of Counsel for Underwriters.  If requested by the Representatives, the favorable opinion of Xxxxxxx Procter LLP, counsel for the Underwriters, dated such Date of Delivery, relating to the Option Securities to be purchased on such Date of Delivery and otherwise to the same effect as the opinion required by Section 5(d) hereof.

 

(v)                                 Bring-down Comfort Letter.  If requested by the Representatives, a letter from Ernst & Young LLP, in form and substance satisfactory to the Representatives and dated such Date of Delivery, substantially in the same form and substance as the letter furnished to the Representatives pursuant to Section 5(g) hereof, except that the “specified date” in the letter furnished pursuant to this paragraph shall be a date not more than three business days prior to such Date of Delivery.

 

(vi)                              Chief Financial Officer’s Certificate.  A certificate of the Chief Financial Officer of the Company, dated such Date of Delivery, substantially in the same form and substance as the certificate furnished to the Representative pursuant to Section 5(h) hereof.

 

(l)                                     Additional Documents.  At the Closing Time and at each Date of Delivery (if any) counsel for the Underwriters shall have been furnished with such documents and opinions as they may reasonably require for the purpose of enabling them to pass upon the issuance and sale of the Securities as herein contemplated, or in order to evidence the accuracy of any of the representations or warranties, or the fulfillment of any of the conditions, herein contained; and all proceedings taken by the Company in connection with the issuance and sale of the Securities as herein contemplated shall be reasonably satisfactory in form and substance to the Representatives and counsel for the Underwriters.

 

(m)                             Termination of Agreement.  If any condition specified in this Section shall not have been fulfilled when and as required to be fulfilled, this Agreement, or, in the case of any condition to the purchase of Option Securities on a Date of Delivery which is after the Closing Time, the obligations of the several Underwriters to purchase the relevant Option Securities, may be terminated by the Representatives by notice to the Company at any time at or prior to Closing Time or such Date of Delivery, as the case may be, and such  termination shall be without liability of any party to any other party except as provided in Section 4 and except that Sections 1, 6, 7, 8, 14, 15 and 16 shall survive any such termination and remain in full force and effect.

 

SECTION 6.                            Indemnification.

 

(a)                                 Indemnification of Underwriters.  The Company agrees to indemnify and hold harmless each Underwriter, its affiliates (as such term is defined in Rule 501(b) under the 1933 Act (each, an “Affiliate”)), its selling agents and each person, if any, who controls any Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act as follows:

 

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(i)                                     against any and all loss, liability, claim, damage and expense whatsoever, as incurred, arising out of any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment thereto), including any information deemed to be a part thereof pursuant to Rule 430B, or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading or arising out of any untrue statement or alleged untrue statement of a material fact included (A) in any preliminary prospectus, any Issuer Free Writing Prospectus, the General Disclosure Package or the Prospectus (or any amendment or supplement thereto) or (B) in any materials or information prepared by the Company provided to investors by, or with the approval of, the Company in connection with the marketing of the offering of the Securities (“Marketing Materials”), including any roadshow or investor presentations made to investors by the Company (whether in person or electronically), or the omission or alleged omission in any preliminary prospectus, Issuer Free Writing Prospectus, Prospectus or in any Marketing Materials of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading;

 

(ii)                                  against any and all loss, liability, claim, damage and expense whatsoever, as incurred, to the extent of the aggregate amount paid in settlement of any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or of any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission; provided that (subject to Section 6(d) below) any such settlement is effected with the written consent of the Company;

 

(iii)                               against any and all expense whatsoever, as incurred (including the fees and disbursements of counsel chosen by Xxxxxxx Xxxxx), reasonably incurred in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, to the extent that any such expense is not paid under (i) or (ii) above;

 

provided, however, that this indemnity agreement shall not apply to any loss, liability, claim, damage or expense to the extent arising out of any untrue statement or omission or alleged untrue statement or omission made in the Registration Statement (or any amendment thereto), including any information deemed to be a part thereof pursuant to Rule 430B, the General Disclosure Package or the Prospectus (or any amendment or supplement thereto) in reliance upon and in conformity with the Underwriter Information.

 

(b)                                 Indemnification of Company, Directors and Officers.  Each Underwriter severally agrees to indemnify and hold harmless the Company, its directors, each of its officers who signed the Registration Statement, and each person, if any, who controls the Company within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, against any and all loss, liability, claim, damage and expense described in the indemnity contained in subsection (a) of this Section, as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions, made in the Registration Statement (or any amendment thereto), including any information deemed to be a part thereof pursuant to Rule 430B, the General Disclosure Package or the Prospectus (or any amendment or supplement thereto) in reliance upon and in conformity with the Underwriter Information.

 

(c)                                  Actions against Parties; Notification.  Each indemnified party shall give notice as promptly as reasonably practicable to each indemnifying party of any action commenced against it in respect of which indemnity may be sought hereunder, but failure to so notify an indemnifying party shall not relieve such indemnifying party from any liability hereunder to the extent it is not materially

 

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prejudiced as a result thereof and in any event shall not relieve it from any liability which it may have otherwise than on account of this indemnity agreement.  In the case of parties indemnified pursuant to Section 6(a) above, counsel to the indemnified parties shall be selected by Xxxxxxx Xxxxx, and, in the case of parties indemnified pursuant to Section 6(b) above, counsel to the indemnified parties shall be selected by the Company.  An indemnifying party may participate at its own expense in the defense of any such action; provided, however, that counsel to the indemnifying party shall not (except with the consent of the indemnified party) also be counsel to the indemnified party.  In no event shall the indemnifying parties be liable for fees and expenses of more than one counsel (in addition to any local counsel) separate from their own counsel for all indemnified parties in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances.  No indemnifying party shall, without the prior written consent of the indemnified parties, settle or compromise or consent to the entry of any judgment with respect to any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever in respect of which indemnification or contribution could be sought under this Section 6 or Section 7 hereof (whether or not the indemnified parties are actual or potential parties thereto), unless such settlement, compromise or consent (i) includes an unconditional release of each indemnified party from all liability arising out of such litigation, investigation, proceeding or claim and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party.

 

(d)                                 Settlement without Consent if Failure to Reimburse.  If at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel, such indemnifying party agrees that it shall be liable for any settlement of the nature contemplated by Section 6(a)(ii) effected without its written consent if (i) such settlement is entered into more than 45 days after receipt by such indemnifying party of the aforesaid request, (ii) such indemnifying party shall have received notice of the terms of such settlement at least 30 days prior to such settlement being entered into and (iii) such indemnifying party shall not have reimbursed such indemnified party in accordance with such request prior to the date of such settlement.

 

SECTION 7.                            Contribution.  If the indemnification provided for in Section 6 hereof is for any reason unavailable to or insufficient to hold harmless an indemnified party in respect of any losses, liabilities, claims, damages or expenses referred to therein, then each indemnifying party shall contribute to the aggregate amount of such losses, liabilities, claims, damages and expenses incurred by such indemnified party, as incurred, (i) in such proportion as is appropriate to reflect the relative benefits received by the Company, on the one hand, and the Underwriters, on the other hand, from the offering of the Securities pursuant to this Agreement or (ii) if the allocation provided by clause (i) is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company, on the one hand, and of the Underwriters, on the other hand, in connection with the statements or omissions which resulted in such losses, liabilities, claims, damages or expenses, as well as any other relevant equitable considerations.

 

The relative benefits received by the Company, on the one hand, and the Underwriters, on the other hand, in connection with the offering of the Securities pursuant to this Agreement shall be deemed to be in the same respective proportions as the total net proceeds from the offering of the Securities pursuant to this Agreement (before deducting expenses) received by the Company, on the one hand, and the total underwriting discount received by the Underwriters, on the other hand, in each case as set forth on the cover of the Prospectus, bear to the aggregate initial public offering price of the Securities as set forth on the cover of the Prospectus.

 

The relative fault of the Company, on the one hand, and the Underwriters, on the other hand, shall be determined by reference to, among other things, whether any such untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied

 

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by the Company or by the Underwriters and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.

 

The Company and the Underwriters agree that it would not be just and equitable if contribution pursuant to this Section 7 were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this Section 7.  The aggregate amount of losses, liabilities, claims, damages and expenses incurred by an indemnified party and referred to above in this Section 7 shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue or alleged untrue statement or omission or alleged omission.

 

Notwithstanding the provisions of this Section 7, no Underwriter shall be required to contribute any amount in excess of the underwriting commissions received by such Underwriter in connection with the Securities underwritten by it and distributed to the public.

 

No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 0000 Xxx) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.

 

For purposes of this Section 7, each person, if any, who controls an Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act and each Underwriter’s Affiliates and selling agents shall have the same rights to contribution as such Underwriter, and each director of the Company, each officer of the Company who signed the Registration Statement, and each person, if any, who controls the Company  within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to contribution as the Company.  The Underwriters’ respective obligations to contribute pursuant to this Section 7 are several in proportion to the number of Initial Securities set forth opposite their respective names in Schedule A hereto and not joint.

 

SECTION 8.                            Representations, Warranties and Agreements to Survive.  All representations, warranties and agreements contained in this Agreement or in certificates of officers of the Company or any of its subsidiaries submitted pursuant hereto, shall remain operative and in full force and effect regardless of (i) any investigation made by or on behalf of any Underwriter or its Affiliates or selling agents, any person controlling any Underwriter, its officers or directors or any person controlling the Company and (ii) delivery of and payment for the Securities.

 

SECTION 9.                            Termination of Agreement.

 

(a)                                 Termination.  The Representatives may terminate this Agreement, by notice to the Company, at any time at or prior to the Closing Time (i) if there has been, in the judgment of the Representatives, since the time of execution of this Agreement or since the respective dates as of which information is given in the Registration Statement (as updated by the Prospectus), the General Disclosure Package or the Prospectus, any material adverse change in the condition, financial or otherwise, or in the earnings, business affairs or business prospects of the Company and its subsidiaries considered as one enterprise, whether or not arising in the ordinary course of business, or (ii) if there has occurred any material adverse change in the financial markets in the United States or the international financial markets, any outbreak of hostilities or escalation thereof or other calamity or crisis or any change or development involving a prospective change in national or international political, financial or economic conditions, in each case the effect of which is such as to make it, in the judgment of the Representatives, impracticable or inadvisable to proceed with the completion of the offering or to enforce contracts for the

 

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sale of the Securities, or (iii) if trading in any securities of the Company has been suspended or materially limited by the Commission or the NYSE MKT, or (iv) if trading generally on the NYSE MKT or the New York Stock Exchange or in the Nasdaq Global Market has been suspended or materially limited, or minimum or maximum prices for trading have been fixed, or maximum ranges for prices have been required, by any of said exchanges or by order of the Commission, FINRA or any other governmental authority, or (v) a material disruption has occurred in commercial banking or securities settlement or clearance services in the United States or with respect to Clearstream or Euroclear systems in Europe, or (vi) if a banking moratorium has been declared by Federal authorities or by New York or Massachusetts authorities.

 

(b)                                 Liabilities.  If this Agreement is terminated pursuant to this Section, such termination shall be without liability of any party to any other party except as provided in Section 4 hereof, and provided further that Sections 1, 6, 7, 8, 14, 15 and 16 shall survive such termination and remain in full force and effect.

 

SECTION 10.                     Default by One or More of the Underwriters.  If one or more of the Underwriters shall fail at the Closing Time or a Date of Delivery to purchase the Securities which it or they are obligated to purchase under this Agreement (the “Defaulted Securities”), the Representatives shall have the right, within 24 hours thereafter, to make arrangements for one or more of the non-defaulting Underwriters, or any other underwriters, to purchase all, but not less than all, of the Defaulted Securities in such amounts as may be agreed upon and upon the terms herein set forth; if, however, the Representatives shall not have completed such arrangements within such 24-hour period, then:

 

(i)                                     if the number of Defaulted Securities does not exceed 10% of the number of Securities to be purchased on such date, each of the non-defaulting Underwriters shall be obligated, severally and not jointly, to purchase the full amount thereof in the proportions that their respective underwriting obligations hereunder bear to the underwriting obligations of all non-defaulting Underwriters, or

 

(ii)                                  if the number of Defaulted Securities exceeds 10% of the number of Securities to be purchased on such date, this Agreement or, with respect to any Date of Delivery which occurs after the Closing Time, the obligation of the Underwriters to purchase, and the Company to sell, the Option Securities to be purchased and sold on such Date of Delivery shall terminate without liability on the part of any non-defaulting Underwriter.

 

No action taken pursuant to this Section shall relieve any defaulting Underwriter from liability in respect of its default.

 

In the event of any such default which does not result in a termination of this Agreement or, in the case of a Date of Delivery which is after the Closing Time, which does not result in a termination of the obligation of the Underwriters to purchase and the Company to sell the relevant Option Securities, as the case may be, either the (i) Representatives or (ii) the Company shall have the right to postpone Closing Time or the relevant Date of Delivery, as the case may be, for a period not exceeding seven days in order to effect any required changes in the Registration Statement, the General Disclosure Package or the Prospectus or in any other documents or arrangements.  As used herein, the term “Underwriter” includes any person substituted for an Underwriter under this Section 10.

 

SECTION 11.                     Notices.  All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if mailed or transmitted by any standard form of telecommunication.  Notices to the Underwriters shall be directed to Xxxxxxx Xxxxx at Xxx Xxxxxx Xxxx, Xxx Xxxx, Xxx Xxxx 00000, attention of Syndicate Department (facsimile: (000) 000-0000), with a copy

 

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to ECM Legal (facsimile: (000) 000-0000); to Xxxxxx X. Xxxxx & Co. Incorporated, 000 Xxxx Xxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxx 00000, attention of Syndicate Department (facsimile: (000) 000-0000); and to BMO Capital Markets Corp., 0 Xxxxx Xxxxxx, Xxx Xxxx, XX 00000; Attention: Equity Capital Markets Syndicate Desk, with a copy to BMO Capital Markets Corp., 0 Xxxxx Xxxxxx, Xxx Xxxx, XX 00000, Attention: General Counsel; with a copy to Xxxxxxx Procter LLP, The New York Times Building, 000 Xxxxx Xxxxxx, Xxx Xxxx, XX, 00000 attention of Xxxx Xxxxx (facsimile (000) 000-0000), and notices to the Company shall be directed to it at Franklin Street Properties Corp., 000 Xxxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxxxxxxxx 00000, attention of General Counsel with a copy to:  Xxxxxx Xxxxxx Xxxxxxxxx Xxxx and Xxxx LLP, 00 Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, attention of Xxxxxxx Xxxxxx, Esq. (facsimile: (000) 000-0000).

 

SECTION 12.                     No Advisory or Fiduciary Relationship.  The Company acknowledges and agrees that (a) the purchase and sale of the Securities pursuant to this Agreement, including the determination of the initial public offering price of the Securities and any related discounts and commissions, is an arm’s-length commercial transaction between the Company and the several Underwriters, on the other hand, (b) in connection with the offering of the Securities and the process leading thereto, each Underwriter is and has been acting solely as a principal and is not the agent or fiduciary of the Company or any of its subsidiaries, or its respective stockholders, creditors, employees or any other party, (c) no Underwriter has assumed or will assume an advisory or fiduciary responsibility in favor of the Company with respect to the offering of the Securities or the process leading thereto (irrespective of whether such Underwriter has advised or is currently advising the Company or any of its subsidiaries on other matters) and no Underwriter has any obligation to the Company with respect to the offering of the Securities except the obligations expressly set forth in this Agreement, (d) the Underwriters and their respective affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Company, and (e) the Underwriters have not provided any legal, accounting, regulatory or tax advice with respect to the offering of the Securities and the Company has consulted its own respective legal, accounting, regulatory and tax advisors to the extent it deemed appropriate.

 

SECTION 13.                     Parties.  This Agreement shall each inure to the benefit of and be binding upon the Underwriters and the Company and their respective successors.  Nothing expressed or mentioned in this Agreement is intended or shall be construed to give any person, firm or corporation, other than the Underwriters and the Company and their respective successors and the controlling persons and officers and directors referred to in Sections 6 and 7 and their heirs and legal representatives, any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision herein contained.  This Agreement and all conditions and provisions hereof are intended to be for the sole and exclusive benefit of the Underwriters and the Company and their respective successors, and said controlling persons and officers and directors and their heirs and legal representatives, and for the benefit of no other person, firm or corporation.  No purchaser of Securities from any Underwriter shall be deemed to be a successor by reason merely of such purchase.

 

SECTION 14.                     Trial by Jury.  The Company (on its behalf and, to the extent permitted by applicable law, on behalf of its stockholders and affiliates) and each of the Underwriters hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.

 

SECTION 15.                     GOVERNING LAW.  THIS AGREEMENT AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF, THE STATE OF NEW YORK WITHOUT REGARD TO ITS CHOICE OF LAW PROVISIONS.

 

27


 

SECTION 16.                     Consent to Jurisdiction; Waiver of Immunity. Any legal suit, action or proceeding arising out of or based upon this Agreement or the transactions contemplated hereby (“Related Proceedings”) shall be instituted in (i) the federal courts of the United States of America located in the City and County of New York, Borough of Manhattan or (ii) the courts of the State of New York located in the City and County of New York, Borough of Manhattan (collectively, the “Specified Courts”), and each party irrevocably submits to the exclusive jurisdiction (except for proceedings instituted in regard to the enforcement of a judgment of any such court (a “Related Judgment”), as to which such jurisdiction is non-exclusive) of such courts in any such suit, action or proceeding.  Service of any process, summons, notice or document by mail to such party’s address set forth above shall be effective service of process for any suit, action or other proceeding brought in any such court.  The parties irrevocably and unconditionally waive any objection to the laying of venue of any suit, action or other proceeding in the Specified Courts and irrevocably and unconditionally waive and agree not to plead or claim in any such court that any such suit, action or other proceeding brought in any such court has been brought in an inconvenient forum.

 

SECTION 17.                     TIME. TIME SHALL BE OF THE ESSENCE OF THIS AGREEMENT. EXCEPT AS OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.

 

SECTION 18.                     Counterparts.  This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute one and the same Agreement.

 

SECTION 19.                     Effect of Headings.  The Section headings herein are for convenience only and shall not affect the construction hereof.

 

28


 

If the foregoing is in accordance with your understanding of our agreement, please sign and return to the Company a counterpart hereof, whereupon this instrument, along with all counterparts, will become a binding agreement between the Underwriters and the Company in accordance with its terms.

 

 

Very truly yours,

 

 

 

FRANKLIN STREET PROPERTIES CORP.

 

 

 

 

 

By

/s/ Xxxxxx X. Xxxxxx

 

 

Title: Xxxxxx X. Xxxxxx

 

 

Name: President and Chief Executive Officer

 

29


 

CONFIRMED AND ACCEPTED,

 

as of the date first above written:

 

 

 

XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX

 

 

INCORPORATED

 

 

 

 

 

By:

/s/ Xxxxx Xxxxx

 

 

Authorized Signatory

 

 

 

 

 

XXXXXX X. XXXXX & CO. INCORPORATED

 

 

 

 

 

By:

/s/ Xxxx Xxxxxx

 

 

Authorized Signatory

 

 

 

 

 

BMO CAPITAL MARKETS CORP.

 

 

 

 

 

By:

/s/ Xxxx Xxxxxx Jr.

 

 

Authorized Signatory

 

 

For themselves and as Representatives of the other Underwriters named in Schedule A hereto.

 

30


 

SCHEDULE A

 

The initial public offering price per share for the Securities shall be $14.00.

 

The purchase price per share for the Securities to be paid by the several Underwriters shall be $13.44, being an amount equal to the initial public offering price set forth above less $0.56 per share, subject to adjustment in accordance with Section 2(b) for dividends or distributions declared by the Company and payable on the Initial Securities but not payable on the Option Securities.

 

Name of Underwriter

 

Number of
Initial Securities

 

Number of
Option Securities

 

 

 

 

 

Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx

 

 

 

 

 

Incorporated

 

6,000,000

 

900,000

Xxxxxx X. Xxxxx & Co. Incorporated

 

3,000,000

 

450,000

BMO Capital Markets Corp.

 

3,000,000

 

450,000

PNC Capital Markets LLC

 

1,500,000

 

225,000

RBS Securities Inc.

 

450,000

 

67,500

Capital One Southcoast, Inc.

 

300,000

 

45,000

Xxxxx Xxxxxxx & Co.

 

300,000

 

45,000

TD Securities (USA) LLC

 

300,000

 

45,000

BB&T Capital Markets,

 

 

 

 

 

a division of BB&T Securities, LLC

 

150,000

 

22,500

 

 

 

 

 

Total

 

15,000,000

 

2,250,000

 

Sch A


 

SCHEDULE B

 

 

 

Number of Initial
Securities to be Sold

 

Maximum Number of Option
Securities to Be Sold

 

 

 

 

 

 

 

Franklin Street Properties Corp.

 

15,000,000

 

2,250,000

 

 

 

 

 

 

 

Total                                        

 

15,000,000

 

2,250,000

 

 

Sch B


 

SCHEDULE C

 

Pricing Terms

 

1.                                      The Company is selling 15,000,000 shares of Common Stock.

 

2.                                      The Company has granted an option to the Underwriters, severally and not jointly, to purchase up to an additional 2,250,000 shares of Common Stock.

 

3.                                      The initial public offering price per share for the Securities shall be $14.00.

 

Sch C


 

SCHEDULE D

 

Free Writing Prospectuses

 

None

 

Sch D


 

SCHEDULE E

 

List of Persons and Entities Subject to Lock-up

 

Xxxxxx X. Xxxxxx

 

Xxxxxxx X. Xxxxxxxx

 

Xxxxx Xxxxx Xxxxxxxxxx

 

Xxxx X. Xxxxx

 

Xxxxx X. Xxxxxx

 

Xxxxxx X. XxXxxxxxxxxx

 

Xxxxxxx Xxxxxx

 

Xxxxx Xxxxxxxxxxx

 

Xxxxxxx X. Xxxxxx

 

Xxxxx X. Xxxxxx

 

Xxxx X. Xxxxxxxx

 

Sch E


 

SCHEDULE F

 

Subsidiaries of Franklin Street Properties Corp.

 

 

FSP 000 Xxxxxxxxx Xxxxxx LLC

 

Delaware

FSP 000 Xxxxx Xxxxxx Xxxxxx LLC

 

Delaware

FSP 0000 Xxxx Xxxxxx Xxxx LLC

 

Delaware

FSP 380 Interlocken Corp.

 

Delaware

FSP 390 Interlocken LLC

 

Delaware

FSP 0000 Xxxxxxxxxx Xxxxxxxxx LLC

 

Delaware

FSP 0000 Xxxxxxx Xxxxxxxxx LLC

 

Delaware

FSP 000 Xxxxx Xxxxxx LLC

 

Delaware

FSP 000 Xxxxxxxxx Xxxxxx LLC

 

Delaware

FSP 0000 Xxxxxxxx LLC

 

Delaware

FSP Addison Circle Corp.

 

Delaware

FSP Addison Circle Limited Partnership

 

Texas

FSP Addison Circle LLC

 

Delaware

FSP Blue Lagoon Drive Corp.

 

Delaware

FSP Blue Lagoon Drive LLC

 

Delaware

FSP Xxxxxxx Crossing Corp.

 

Delaware

FSP Xxxxxxx Crossing Limited Partnership

 

Texas

FSP Xxxxxxx Crossing LLC

 

Delaware

FSP Dulles Virginia LLC

 

Delaware

FSP East Baltimore Street LLC

 

Delaware

FSP Eden Bluff Corporate Center I LLC

 

Delaware

FSP Xxxxxxxx Xxxxx Corp.

 

Delaware

 

Sch F


 

FSP Xxxxxxxx Xxxxx Limited Partnership

 

Texas

FSP Xxxxxxxx Xxxxx LLC

 

Delaware

FSP Emperor Boulevard Limited Partnership

 

Delaware

FSP Forest Park IV LLC

 

Delaware

FSP Forest Park IV NC Limited Partnership

 

North Carolina

FSP Greenwood Plaza Corp.

 

Delaware

FSP Hillview Center Limited Partnership

 

Massachusetts

FSP Holdings LLC

 

Delaware

FSP Innsbrook Corp.

 

Delaware

FSP Investments LLC

 

Massachusetts

FSP Lakeside Crossing I LLC

 

Delaware

FSP Legacy Tennyson Center LLC

 

Delaware

FSP Liberty Plaza Limited Partnership

 

Texas

FSP Montague Business Center Corp.

 

Delaware

FSP Northwest Point LLC

 

Delaware

FSP One Legacy Circle LLC

 

Delaware

FSP One Xxxxxxx Park LLC

 

Delaware

FSP One Ravinia Drive LLC

 

Delaware

FSP Park Seneca Limited Partnership

 

Massachusetts

FSP Park Ten Development Corp.

 

Delaware

FSP Park Ten Development LLC

 

Delaware

FSP Park Ten Limited Partnership

 

Texas

FSP Park Ten LLC

 

Delaware

 


 

FSP Park Ten Phase II Limited Partnership

 

Texas

FSP Property Management LLC

 

Massachusetts

FSP Protective TRS Corp.

 

Massachusetts

FSP PT Houston LLC

 

Delaware

FSP REIT Protective Trust

 

Massachusetts

FSP River Crossing LLC

 

Delaware

FSP Southfield Centre Limited Partnership

 

Massachusetts

FSP Westchase LLC

 

Delaware

FSP Willow Bend Office Center Corp.

 

Delaware

FSP Willow Bend Office Center Limited Partnership

 

Texas

FSP Willow Bend Office Center LLC

 

Delaware

 


 

Exhibit A

 

 

 

FORM OF OPINION OF COUNSEL

FOR THE COMPANY

 

May [  ], 2013

 

Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated

Xxxxxx X. Xxxxx & Co. Incorporated

BMO Capital Markets Corp.

as Representatives of the several Underwriters

 

c/o                               Merrill Lynch, Pierce, Xxxxxx & Xxxxx
       Incorporated

Xxx Xxxxxx Xxxx
Xxx Xxxx, Xxx Xxxx  00000

 

c/o          Xxxxxx X. Xxxxx & Co. Incorporated

00 Xxxx Xxxxxxxxx Xxxxxx

Xxxxxxxxx, Xxxxxxxxx 00000

 

c/o          BMO Capital Markets Corp.

0 Xxxxx Xxxxxx

Xxx Xxxx, XX 00000

 

Re:          Franklin Street Properties Corp.

 

Ladies and Gentlemen:

 

This letter is being furnished to you pursuant to Section 5(b) of the Underwriting Agreement, dated May 9, 2013 (the “Underwriting Agreement”), among Franklin Street Properties Corp., a Maryland corporation (the “Company”), Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, Xxxxxx X. Xxxxx & Co. Incorporated and BMO Capital Markets Corp. as representatives of the several Underwriters named in Schedule A thereto (each an “Underwriter” and collectively, the “Underwriters”).  Capitalized terms used herein and not otherwise defined herein shall have the respective meanings ascribed to them in the Underwriting Agreement.

 

We have acted as counsel for the Company in connection with the sale to the Underwriters by the Company of 15,000,000 shares (the “Shares”) of Common Stock, $0.0001 par value per share, of the Company (“Common Stock”) pursuant to the Underwriting Agreement, including 2,250,000 Shares being sold by the Company to the Underwriters pursuant to the option set forth in Section 2 of the Underwriting Agreement.  As such counsel, we have assisted in the preparation and filing with the Securities and Exchange Commission (the “Commission”) of the Company’s Registration Statement on Form S-3 (File No. 333-181009) filed by the Company

 

 


 

with the Commission under the Securities Act of 1933, as amended (the “1933 Act”), on April 27, 2012.  Such Registration Statement, in the form in which it became effective for purposes of Section 11 of the 1933 Act (as such section applies to the Underwriters), including the documents incorporated by reference therein or otherwise deemed to be a part thereof at the time of effectiveness pursuant to Rule 430A or Rule 430B under the 1933 Act, is referred to herein as the “Registration Statement,” and the prospectus dated April 27, 2012, forming a part of the Registration Statement, including the documents incorporated by reference therein, is referred to herein as the “Base Prospectus.”  The preliminary prospectus supplement dated May 6, 2013, including the documents incorporated by reference therein, as filed with the Commission pursuant to Rule 424(b)(5) of the 1933 Act on May 6, 2013 is referred to herein as the “Preliminary Prospectus Supplement,” and the final prospectus supplement dated May 9, 2013, including the documents incorporated by reference therein, as filed with the Commission pursuant to Rule 424(b)(5) of the 1933 Act on May [·], 2013 is referred to herein as the “Prospectus Supplement.” The Base Prospectus and the Prospectus Supplement are collectively referred to herein as the “Prospectus.”  As used herein, the term “General Disclosure Package” shall refer to the Base Prospectus, as amended and supplemented by the Preliminary Prospectus Supplement, and the other information set forth on Schedule A attached hereto, all considered together, and the term “Time of Sale” shall refer to 5:00 p.m. (Eastern Time) on the date of the Underwriting Agreement, which you have informed us is a time prior to the time of the first sale of the Shares by any Underwriter.

 

We have examined and relied upon the Articles of Incorporation of the Company, as amended to date (the “Articles of Incorporation”), the By-laws of the Company, as amended to date (the “By-laws”), records of meetings of stockholders and of the Board of Directors of the Company, corporate proceedings of the Company regarding the authorization of the execution and delivery of the Underwriting Agreement and the issuance of the Shares, the corporate records of the Company as provided to us by the Company, the Registration Statement, the General Disclosure Package, the Underwriting Agreement, certificates of representatives of the Company, certificates of public officials, and such other documents, instruments and certificates as we have deemed necessary as a basis for the opinions hereinafter expressed.

 

In our examination of the documents referred to above, we have assumed the genuineness of all signatures, the legal capacity of all individual signatories, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as copies, the authenticity of such original documents, and the completeness and accuracy of the corporate records of the Company provided to us by the Company.

 

Insofar as the opinions expressed in this letter relate to factual matters, we have relied, with your permission, upon certificates, statements and representations of officers and other representatives of the Company, representations made in the Underwriting Agreement and statements contained in the Registration Statement, the General Disclosure Package and the Prospectus.  We have not

 

A-2


 

searched any electronic databases or the dockets of any court, administrative body or regulatory or governmental agency or any other filing office in any jurisdiction in connection with the preparation of this letter.

 

Our opinion expressed in paragraph 1 below as to the due incorporation, valid existence and good standing of the Company is based solely on a certificate of legal existence and good standing issued by the State Department of Assessments and Taxation of the State of Maryland, as set forth on Schedule B attached hereto, a copy of which has been made available to your counsel, and our opinion with respect to such matters is rendered as of the date of such certificate and limited accordingly.

 

Our opinion expressed in paragraph 3 below as to the due qualification and good standing of the Company as a foreign corporation is based solely on certificates of qualification and/or good standing issued by the Secretaries of State or other appropriate officials of the jurisdictions set forth on Schedule C attached hereto, copies of which have been made available to your counsel, and our opinion with respect to such matters is rendered as of the dates of such certificates and limited accordingly.  We express no opinion as to the tax good standing of the Company in any jurisdiction.

 

Our opinion expressed in paragraph 4 below as to valid existence and good standing of FSP Holdings LLC, FSP Investments LLC, FSP Property Management LLC and FSP Protective TRS Corp. (collectively, the “Principal Subsidiaries” and individually, a “Principal Subsidiary”) are based solely on certificates of legal existence and/or good standing, as applicable, for each Principal Subsidiary, as listed on Schedule D attached hereto, copies of which have been made available to your counsel, and our opinion with respect to such matters is rendered as of the dates of such certificates and limited accordingly. We express no opinion as to the tax good standing of any of the Principal Subsidiaries in any jurisdiction.

 

We express no opinion herein as to the laws of any jurisdiction other than the state laws of the State of Maryland, the state laws of the Commonwealth of Massachusetts, the statutes codified as 6 Del.C. §§ 18-101 to 1109 and known as the Limited Liability Company Act of the State of Delaware and the federal laws of the United States of America.  To the extent that any other laws govern any of the matters as to which we express an opinion herein, we have assumed for purposes of this letter, with your permission and without independent investigation, that such laws are identical to the state laws of the State of Maryland, and we express no opinion as to whether such assumption is reasonable or correct.  We note that the Underwriting Agreement states that it is governed by the laws of the State of New York.  We also express no opinion herein with respect to (i) the securities or Blue Sky laws of any state or other jurisdiction of the United States or of any foreign jurisdiction or (ii) the by-laws or any rules or other regulations of the Financial Industry Regulatory Authority, Inc.  In addition, we express no opinion and, except as set forth below in the second-to-last paragraph hereof, make no statement herein with respect to the antifraud laws of any jurisdiction.

 

A-3


 

On the basis of and subject to the foregoing, we are of the opinion that:

 

1.             The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Maryland.

 

2.             The Company has corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Registration Statement, the General Disclosure Package and the Prospectus and to enter into and perform its obligations under the Underwriting Agreement.

 

3.             The Company is duly qualified and is in good standing as a foreign corporation authorized to do business in the states listed on Schedule C attached hereto.

 

4.             Each of the Principal Subsidiaries is validly existing as a limited liability company or corporation, as the case may be, in good standing under the law of its jurisdiction of organization as set forth opposite its name on Schedule D attached hereto.  Each Principal Subsidiary has the limited liability company or corporate power, as the case may be, to carry on its business and to own its property as such business and property are described in the Registration Statement, the General Disclosure Package and the Prospectus and is duly qualified and in good standing as a foreign corporation authorized to do business in the states listed on Schedule D attached hereto.

 

5.             The Securities have been duly authorized for issuance and sale to the Underwriters pursuant to the Underwriting Agreement and, when issued and delivered by the Company pursuant to the Underwriting Agreement against payment of the consideration set forth in the Underwriting Agreement, will be validly issued and fully paid and non-assessable.

 

6.             The issuance of the Securities is not subject to any preemptive rights under the Maryland General Corporation Law statute, the Articles of Incorporation or the By-laws or similar contractual rights granted by the Company pursuant to any contract or agreement that is listed on Schedule E attached hereto.

 

7.             The Underwriting Agreement has been duly authorized, executed and delivered by the Company.

 

8.             The execution and delivery of the Underwriting Agreement by the Company and the consummation by the Company of the transactions contemplated thereby will not, whether with or without the giving of notice or lapse of time or both, (a) conflict with or constitute a breach of any of the terms or provisions of, or a default under, the Articles of Incorporation or By-laws or any indenture, loan agreement, mortgage, lease or other agreement or instrument to which the Company is a party and

 

A-4


 

that is filed as an exhibit to the Registration Statement or (b) violate or conflict with any United States federal or Maryland state law, rule or regulation that in our experience is normally applicable in transactions of the type contemplated by the Underwriting Agreement, or any judgment, order or decree specifically naming the Company of which we are aware.

 

9.             The Registration Statement has been declared effective by the Commission under the 1933 Act and the rules and regulations of the Commission thereunder.  The Prospectus Supplement has been filed with the Commission in the manner and within the time period required by Rule 424(b) (without reference to Rule 424(b)(8)).  To our knowledge, (a) no stop order suspending the effectiveness of the Registration Statement has been issued under the 1933 Act and (b) no proceedings for any such purpose have been instituted or are pending or threatened by the Commission.

 

10.          Except as may be required under the 1933 Act, the 1934 Act and the rules and regulations of the Commission under the 1933 Act and 1934 Act, no filing with, or authorization, approval, consent, license, order, registration, qualification or decree of, any United States federal or Maryland state governmental authority or agency is necessary in connection with the authorization, execution and delivery of the Underwriting Agreement or the offering, issuance, sale or delivery of the Securities.

 

11.          The statements in the Prospectus under the caption “Description of Capital Stock,” insofar as such statements constitute matters of law or legal conclusions or summarize the terms of agreements are correct in all material respects.

 

12.          The authorized capital stock of the Company consists of 180,000,000 shares of Common Stock, par value $0.0001 per share, and 20,000,000 shares of Preferred Stock, par value $0.0001 per share.

 

13.          Except as described in the Registration Statement, the General Disclosure Package and the Prospectus, no contract or agreement that has been filed as an exhibit to the Registration Statement grants any person a right to require the Company to register pursuant to the Registration Statement any securities other than the Securities, except for any such right as has been waived.

 

14.          The Company is not, and after giving effect to the issuance and sale of the Securities and the application of the net proceeds therefrom as described in the Prospectus will not be, an “investment company” under the 1940 Act.

 

The foregoing opinions are provided to you, as the Underwriters, as a legal opinion only and not as a guaranty or warranty of the matters discussed herein.  These opinions are based upon currently existing statutes, rules, regulations and judicial decisions and are rendered as of the

 

A-5


 

date hereof, and we disclaim any obligation to advise you of any change in any of the foregoing sources of law or subsequent developments in law or changes in facts or circumstances that might affect any matters or opinions set forth herein.

 

In addition to the opinions provided above, we confirm to you as follows:  In the course of acting as counsel for the Company in connection with the preparation of the Registration Statement, the General Disclosure Package and the Prospectus, we have participated in conferences with officers and other representatives of the Company, representatives of and counsel for the Underwriters and representatives of the registered independent public accounting firm of the Company, during which the contents of the Registration Statement, the General Disclosure Package and the Prospectus were discussed.  While the limitations inherent in the independent verification of factual matters and the character of determinations involved in the registration process are such that we are not passing upon and do not assume any responsibility for the accuracy, completeness or fairness of the statements contained in the Registration Statement, the General Disclosure Package or the Prospectus (except to the extent expressly set forth in opinion 11 above), subject to the foregoing and based on such participation and discussions:

 

(a)                                 the Registration Statement, as of the date of its filing with the Commission, and the Prospectus, as of the date thereof (except for the financial statements, including the notes and schedules thereto, other financial and accounting data included therein or omitted therefrom, and assessments of or reports on the effectiveness of internal control over financial reporting contained therein, as to which we express no view), appear on their face to be appropriately responsive in all material respects to the requirements of the 1933 Act and the applicable rules and regulations of the Commission thereunder;

 

(b)                                 no facts have come to our attention that have caused us to believe that (i) any part of the Registration Statement, when such part becomes effective, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading (except as set forth in the parenthetical in clause (a) above), (ii) the General Disclosure Package, as of the Time of Sale, contained an untrue statement of a material fact or omitted 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 (except as set forth in the parenthetical in clause (a) above) or (iii) the Prospectus as of its date or as of the date hereof, contained or contains an untrue statement of a material fact or omitted or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading (except as set forth in the parenthetical in clause (a) above);

 

(c)                                  we are not aware of any contract or other document of a character required by the 1933 Act and the rules and regulations of the Commission thereunder to be filed as an exhibit to the Registration Statement that is not so filed; and

 

A-6


 

(d)                                 we are not aware of any action, proceeding or litigation pending or threatened against the Company before any court or governmental or administrative agency or body that is required by the 1933 Act or the rules and regulations of the Commission thereunder to be described in the Registration Statement or the Prospectus that is not so described.

 

This letter is rendered only to you, as the representatives of the Underwriters, and is solely for the benefit of the Underwriters in connection with the transactions contemplated by the Underwriting Agreement.  This letter may not be relied upon by the Underwriters for any other purpose, nor may this letter be provided to, quoted to or relied upon by any other person or entity.

 

Very truly yours,

 

XXXXXX XXXXXX XXXXXXXXX
XXXX AND XXXX LLP

 

 

By:

 

 

 

A-7


 

SCHEDULE A

 

Number of Firm Shares to be Sold:  15,000,000 (2,250,000 Additional Shares)

 

Offering size: $210,000,000 ($241,500,000 if the over-allotment option is exercised in full)

 

Estimated net proceeds to the Company (after underwriting discount and estimated offering

 

expenses): $201.1 million ($231.3 million if the over-allotment option is exercised in full)

 

Price per share: $14.00

 

Underwriting discount and commissions per share: $0.56

 

Trade date: May 9, 2013

 

Closing date: May 15, 2013

 

A-8


 

SCHEDULE B

 

Certificate for the Company

 

Jurisdiction of Incorporation

 

Date of Certificate of Public Official

Maryland

 

May [   ], 2013

 

A-9


 

SCHEDULE C

 

Foreign Qualifications

 

Jurisdictions of Foreign Qualification

 

Date of Certificate of Public Official

Colorado

 

May [    ], 2013

Massachusetts

 

May [    ], 2013

Missouri

 

May [    ], 2013

Virginia

 

May [    ], 2013

Washington

 

May [    ], 2013

 

A-10


 

SCHEDULE D

 

Certificates for Principal Subsidiaries

 

Entity

 

Jurisdiction of Incorporation

 

Date of Certificate of Public
Official

FSP Holdings LLC

 

Delaware

 

May [   ], 2013

FSP Investments LLC

 

Massachusetts

 

May [   ], 2013

FSP Property Management LLC

 

Massachusetts

 

May [   ], 2013

FSP Protective TRS Corp.

 

Massachusetts

 

May [   ], 2013

 

A-11


 

SCHEDULE E

 

Contracts and Agreements

 

Agreement and Plan of Merger by and among the Company, Blue Lagoon Acquisition Corp., Innsbrook Acquisition Corp., Willow Bend Acquisition Corp., 380 Interlocken Acquisition Corp., Xxxxxxxx Xxxxx Acquisition Corp., FSP Blue Lagoon Drive Corp., FSP Innsbrook Corp., FSP Willow Bend Office Center Corp., FSP 380 Interlocken Corp. and FSP Xxxxxxxx Xxxxx Corp., dated as of March 15, 2006

 

Agreement and Plan of Merger by and among the Company, Park Ten Phase II Acquisition Corp. and FSP Park Ten Development Corp., dated as of March 19, 2008

 

2002 Stock Incentive Plan of the Company

 

Third Amended and Restated Loan Agreement dated as of October 19, 2007 by and among the Company, certain wholly-owned subsidiaries of the Company, RBS Citizens, National Association, Bank of America, N.A., Wachovia Bank, National Association and Chevy Chase Bank, F.S.B.

 

First Amendment to Third Amended and Restated Loan Agreement dated as of October 15, 2008 by and among the Company, certain wholly-owned subsidiaries of the Company, RBS Citizens, National Association, Bank of America, N.A., Wachovia Bank, National Association and Chevy Chase Bank, F.S.B.

 

Term Loan Agreement dated as of October 15, 2008 by and among the Company, certain of its wholly-owned subsidiaries, RBS Citizens, National Association and Wachovia Bank, National Association

 

ISDA Master Agreement dated as of October 15, 2008, by and between the Company and RBS Citizens, National Association, together with the schedule relating thereto

 

Form of Retention Agreement

 

Change in Control Discretionary Plan

 

Amended and Restated Credit Agreement, dated September 27, 2012, among the Company, certain wholly-owned subsidiaries of the Company, Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer and the other Lenders as parties thereto.

 

ISDA Agreement, dated September 27, 2012, among the Company, Bank of America, N.A., together with the schedule relating thereto.

 

A-12


 

 

Exhibit B

 

FORM OF OPINION OF TAX COUNSEL

FOR THE COMPANY

 

May [  ], 2013

 

Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated

Xxxxxx X. Xxxxx & Co. Incorporated

BMO Capital Markets Corp.

As Representatives of the several Underwriters

 

c/o                               Merrill Lynch, Pierce, Xxxxxx & Xxxxx
          Incorporated

Xxx Xxxxxx Xxxx
Xxx Xxxx, Xxx Xxxx  00000

 

c/o          Xxxxxx X. Xxxxx & Co. Incorporated
000 Xxxx Xxxxxxxxx Xxxxxx

Xxxxxxxxx, Xxxxxxxxx 00000

 

c/o          BMO Capital Markets Corp.
0 Xxxxx Xxxxxx

Xxx Xxxx, XX 00000

 

Re:                             Certain Federal Income Tax Matters Related to Franklin Street Properties Corp.

 

Dear Ladies and Gentlemen:

 

This opinion is being delivered to you pursuant to Section 5(c) of the Underwriting Agreement dated May 9, 2013 (the “Underwriting Agreement”), among Franklin Street Properties Corp., a Maryland corporation (“FSP Corp.”), Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, Xxxxxx X. Xxxxx & Co. Incorporated and BMO Capital Markets Corp. as representatives of the several Underwriters named in Schedule A thereto.

 

  Except as otherwise provided, capitalized terms not defined herein have the meanings set forth in the letter delivered to Xxxxxx Xxxxxx Xxxxxxxxx Xxxx and Xxxx LLP by FSP Corp. containing certain representations of FSP Corp. relevant to this opinion (the “Representation Letter”), a copy of which has been provided to you for informational purposes only.  All section references, unless otherwise indicated, are to the United States Internal Revenue Code of 1986, as amended (the “Code”).

 

The conclusions expressed herein represent our judgment as to the proper application of relevant provisions of the Code, Treasury Regulations, case law, and rulings and other pronouncements of the Internal Revenue Service (the “IRS”) as in effect on the date of this opinion.  No assurances can be given that such laws will not be amended or otherwise changed, or that such changes will not affect the conclusions expressed herein.  Nevertheless, we undertake no responsibility to advise you of any developments in the application or interpretation of the income tax laws of the United States.

 

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Our opinion represents our best judgment of how a court would decide if presented with the issues addressed herein and is not binding upon either the IRS or any court.  Thus, no assurances can be given that a position taken in reliance on our opinion will not be challenged by the IRS or rejected by a court.

 

In our capacity as counsel to FSP Corp., and for purposes of rendering this opinion, we have examined and relied upon the Registration Statement of FSP Corp., filed with the Securities and Exchange Commission (the “Commission”) on Form S-3 on April 27, 2012 (the “Registration Statement”), the prospectus dated April 27, 2012 forming a part of the Registration Statement, the prospectus supplements dated May 6, 2013 and May [  ], 2013 (the “Prospectus Supplements”), as filed with the Commission, the Representation Letter, the Articles of Incorporation of FSP Corp. and the By-Laws of FSP Corp., each as amended through the date hereof, and such other documents as we considered relevant to our analysis.  In our examination of documents, we have assumed the authenticity of original documents, the accuracy of copies, the genuineness of signatures, and the legal capacity of signatories.

 

We have made such factual and legal inquiries, including examination of the documents set forth above, as we have deemed necessary or appropriate for purposes of our opinion.  For purposes of rendering our opinion, however, we have not made an independent investigation or audit of the facts set forth in any of the above-referenced documents, including the Registration Statement, the Prospectus Supplements and the Representation Letter.  We consequently have relied upon the representations contained therein and assumed that the information presented in such documents or otherwise furnished to us is accurate and complete in all respects relevant to our opinion.

 

In our review, we have assumed, with your consent, that all of the obligations imposed by any documents on the parties thereto have been and will be performed or satisfied substantially in accordance with their terms.  We have further assumed that during its taxable year ended December 31, 2002 and subsequent taxable years that FSP Corp. and the Partnership Subsidiaries have operated and will continue to operate in a manner that has made and will make the representations and covenants contained in the Representation Letter true, complete and correct for all such years.  Moreover, we have assumed that FSP Corp. and the Partnership Subsidiaries have been and will continue to be operated in the manner described in the relevant partnership agreement, articles (or certificate) of incorporation or other organizational documents, and in the Registration Statement and the Prospectus Supplements.  Finally, we have assumed that any statement in the Representation Letter that is made “to the knowledge of,” “belief of” or similarly qualified is correct and accurate, and that such representation or statement will continue to be correct and accurate without such qualification.

 

We also have assumed for the purposes of this opinion, without inquiry with respect thereto, that FSP Corp. is a validly organized and duly incorporated corporation under the laws of the State of Maryland.  In the event any of the statements, representations, or assumptions upon which we have relied in rendering this opinion is incorrect or incomplete, our opinion could be adversely affected and may not be relied upon.

 

Opinion

 

Based upon the foregoing, and subject to the various assumptions, limitations, and qualifications set forth in this letter, we are of the opinion that FSP Corp. qualified to be taxed as a REIT pursuant to sections 856 through 860 of the Code for its taxable years ended December 31, 2002 through December 31, 2012, and FSP Corp.’s organization, ownership and proposed method of operation as described in the Registration Statement, the Prospectus Supplements and the Representation Letter will enable it to continue to qualify as a REIT for its taxable year ending December 31, 2013, and in the future.

 

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FSP Corp.’s qualification and taxation as a REIT depends upon FSP Corp.’s ability to meet on a continuing basis, through actual annual operating and other results, the various requirements under the Code as described in the Prospectus Supplements with regard to, among other things, the sources of its gross income, the composition of its assets, the level of distributions to stockholders, and the diversity of its share ownership.  Xxxxxx Xxxxxx Xxxxxxxxx Xxxx and Xxxx LLP will not review FSP Corp.’s compliance with these requirements on an independent or ongoing basis.  No assurance can be given that the actual results of operations of FSP Corp., the sources of its income, the nature of its assets, the level of FSP Corp.’s distributions to its shareholders and the diversity of FSP Corp.’s share ownership for any given taxable year will satisfy the requirements under the Code for qualification and taxation as a REIT or that the relief provisions applicable to REITs will be available to FSP Corp.

 

This opinion addresses only the specific United States federal income tax consequences set forth above under the caption “Opinion” and does not address any other federal, state, local, or foreign income, estate, gift, transfer, sales, use, or other tax consequences that may be applicable to FSP Corp.

 

This letter is rendered only to you, solely for your benefit in connection with the transactions contemplated by the Underwriting Agreement.  This letter may not be relied upon by you for any other purpose, nor may this letter be provided to, quoted to or relied upon by any other person or entity.  This opinion speaks only as of the date hereof, and we undertake no obligation to update or supplement this opinion to reflect any changes of law or fact (including without limitation our subsequent discovery of any facts that are inconsistent with the Representation Letter).

 

IRS CIRCULAR 230 DISCLOSURE:

 

                To ensure compliance with requirements imposed by the Internal Revenue Service, we inform you that:  (i) any United States tax advice contained in this opinion is not intended or written to be used, and cannot be used, for the purpose of avoiding penalties under the Code; (ii) this opinion was written to support the promotion or marketing of the offering and sale of shares of FSP Corp.; and (iii) you should seek advice based on your particular circumstances from independent tax advisors.

 

 

 

Very truly yours,

 

 

 

XXXXXX XXXXXX XXXXXXXXX

 

XXXX AND XXXX LLP

 

 

 

 

 

 

By:

 

 

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FORM OF LOCK-UP AGREEMENT

 

Exhibit C

 

May [  ], 2013

 

Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated

Xxxxxx X. Xxxxx & Co. Incorporated

BMO Capital Markets Corp.

as Representatives of the several Underwriters

 

c/o                               Merrill Lynch, Pierce, Xxxxxx & Xxxxx
                       Incorporated

Xxx Xxxxxx Xxxx
Xxx Xxxx, Xxx Xxxx  00000

 

c/o          Xxxxxx X. Xxxxx & Co. Incorporated
000 Xxxx Xxxxxxxxx Xxxxxx

Xxxxxxxxx, Xxxxxxxxx 00000

 

c/o          BMO Capital Markets Corp.
0 Xxxxx Xxxxxx

Xxx Xxxx, XX 00000

 

Re:          Proposed Public Offering by Franklin Street Properties Corp.

 

Dear Sirs:

 

The undersigned, a stockholder and an officer and/or director of Franklin Street Properties Corp., a Maryland corporation (the “Company”), understands that Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated (“Xxxxxxx Xxxxx”), Xxxxxx X. Xxxxx & Co. Incorporated (“Baird”) and BMO Capital Markets Corp. (“BMO”) propose to enter into an Underwriting Agreement (the “Underwriting Agreement”) with the Company providing for the public offering of shares (the “Securities”) of the Company’s common stock, par value $0.0001 per share (the “Common Stock”).  In recognition of the benefit that such an offering will confer upon the undersigned as a stockholder and an officer and/or director of the Company, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the undersigned agrees with each underwriter to be named in the Underwriting Agreement that, during the period beginning on the date hereof and ending on the date that is [90] [45](1) days from the date of the Underwriting Agreement (subject to extensions as discussed below), the undersigned will not, without the prior written consent of Xxxxxxx Xxxxx, directly or indirectly, (i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant for the sale of, or otherwise dispose of or transfer any shares of the Company’s Common Stock or any securities convertible into or exchangeable or exercisable for Common Stock, whether now owned or hereafter acquired by the undersigned or with respect to which the undersigned has or hereafter acquires the power of disposition (collectively, the “Lock-Up Securities”), or exercise any right with respect to the registration of any of the Lock-up Securities, or file or cause to be filed any registration statement in connection therewith, under the Securities Act of 1933, as amended, or (ii) enter into any swap or any other agreement or any transaction that transfers, in whole

 

(1)  45 days for five outside directors, 90 days for all others.

 

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or in part, directly or indirectly, the economic consequence of ownership of the Lock-Up Securities, whether any such swap or transaction is to be settled by delivery of Common Stock or other securities, in cash or otherwise; [provided, that the foregoing shall not restrict the ability of the undersigned to borrow from any margin account or loan pledged with Lock-Up Securities or to maintain, renew or increase any pledge in effect on the date hereof of Lock-Up Securities as security for a margin account or loan pursuant to the terms of such account or loan insofar as this agreement would otherwise restrict the rights of the xxxxxxx thereunder to exercise its rights and remedies with respect to such pledged shares as and when permitted by the relevant pledge document].(2)

 

Notwithstanding the foregoing, and subject to the conditions below, the undersigned may transfer the Lock-Up Securities without the prior written consent of Xxxxxxx Xxxxx, provided that (1) Xxxxxxx Xxxxx, Xxxxx and BMO receive a signed lock-up agreement for the balance of the lockup period from each donee, trustee, distributee, or transferee, as the case may be, (2) any such transfer shall not involve a disposition for value, (3) such transfers are not required to be reported with the Securities and Exchange Commission on Form 4 in accordance with Section 16 of the Securities Exchange Act of 1934, as amended, and (4) the undersigned does not otherwise voluntarily effect any public filing or report regarding such transfers:

 

(i)                                     as a bona fide gift or gifts; or

 

(ii)                                  to any trust for the direct or indirect benefit of the undersigned or the immediate family of the undersigned (for purposes of this lock-up agreement, “immediate family” shall mean any relationship by blood, marriage or adoption, not more remote than first cousin); or

 

(iii)                               as a distribution to limited partners or stockholders of the undersigned

 

In addition, notwithstanding the foregoing, and subject to the conditions below, the undersigned may also, without the prior written consent of Xxxxxxx Xxxxx, (i) transfer Lock-Up Securities pursuant to a contract, instruction or plan the terms of which comply with the requirements of Rule 10b5-1(c)(1) under the Exchange Act, provided that such contract, instruction or plan was entered into prior to the date hereof; (ii) exercise an option to purchase shares of Common Stock, or accept restricted stock awards, granted under a stock incentive plan of the Company (provided in all cases that any shares of Common Stock received are subject to the restrictions contained in this agreement), or (iii) dispose of shares of restricted stock to the Company pursuant to the terms of such plan or awards to satisfy tax withholding obligations or upon termination of employment with the Company.

 

  Furthermore, the undersigned may sell shares of Common Stock of the Company purchased by the undersigned on the open market following the Public Offering if and only if (i) such sales are not required to be reported in any public report or filing with the Securities Exchange Commission, or otherwise and (ii) the undersigned does not otherwise voluntarily effect any public filing or report regarding such sales.

 

Notwithstanding the foregoing, if:

 

(1)           during the last 17 days of the [90] [45]-day lock-up period, the Company issues an earnings release or material news or a material event relating to the Company occurs; or

 

(2)  Bracketed proviso for outside directors only.

 

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(2)           prior to the expiration of the [90] [45]-day lock-up period, the Company announces that it will release earnings results or becomes aware that material news or a material event will occur during the 16-day period beginning on the last day of the [90] [45]-day lock-up period,

 

the restrictions imposed by this lock-up agreement shall continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release or the occurrence of the material news or material event, as applicable, if, within three days of that issuance or occurrence, Xxxxxxx Xxxxx or [            ] publishes or otherwise distributes a research report or makes a public appearance concerning the Company, or unless Xxxxxxx Xxxxx waives, in writing, such extension.

 

The undersigned agrees that, prior to engaging in any transaction or taking any other action that is subject to the terms of this lock-up agreement during the period from the date of this lock-up agreement to and including the 34th day following the expiration of the initial [90] [45]-day lock-up period, it will give notice thereof to the Company and will not consummate such transaction or take any such action unless it has received written confirmation from the Company that the [90] [45]-day lock-up period (as may have been extended pursuant to the previous paragraph) has expired.  Notwithstanding the foregoing, if the Company has “actively traded securities” within the meaning of Rule 101(c)(1) of Regulation M of the Exchange Act, and otherwise satisfies the requirements set forth in Rule 139 of the Securities Act of 1933 (as determined by Xxxxxxx Xxxxx in its discretion) that would permit Xxxxxxx Xxxxx or any underwriter to publish issuer-specific research reports pursuant to Rule 139, the Lock-Up Period shall not be extended upon the occurrence of (1) or (2) above.

 

The undersigned also agrees and consents to the entry of stop transfer instructions with the Company’s transfer agent and registrar against the transfer of the Lock-Up Securities except in compliance with the foregoing restrictions.

 

 

 

Very truly yours,

 

 

 

 

 

 

Signature:

 

 

 

 

 

Print Name:

 

 

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Filed: May 10th, 2013
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