Exhibit 1.1
EXECUTION COPY
UNDERWRITING AGREEMENT
Lexington Corporate Properties Trust
4,500,000 Common Shares
($0.0001 par value)
April 29, 2003
Wachovia Securities, Inc.
0 Xx. Xxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxx, XX 00000
Ladies and Gentlemen:
Lexington Corporate Properties Trust, a statutory Maryland real estate
investment trust (the "Company"), proposes to issue and sell to Wachovia
Securities, Inc. (the "Underwriter") 4,500,000 common shares (the "Offered
Shares") of beneficial interest of the Company, $.0001 par value per share (the
"Common Shares") as set forth below.
The Company and each of Lepercq Corporate Income Fund, L.P., Lepercq
Corporate Income Fund II, L.P. and Net 3 Acquisition, L.P., for each of which
the Company serves as sole general partner (each, a "Partnership" and
collectively, the "Partnerships"), hereby agree with the Underwriter as follows:
1. Representations and Warranties with Respect to Registration Under the Act. As
of the date hereof, the Company and each Partnership, jointly and severally,
represent and warrant to, and agree with, the Underwriter that:
(a) A registration statement on Form S-3 (File No. 333-49351) with
respect to the Offered Shares, including a base prospectus dated April 10, 1998
(the "Base Prospectus"), was prepared by the Company in conformity with the
requirements of the Securities Act of 1933, as amended (the "Act"), and the
rules and regulations (the "1933 Act Rules and Regulations") of the Securities
and Exchange Commission (the "Commission") thereunder, was filed with the
Commission and was declared effective on April 10, 1998. No stop order
suspending the effectiveness of such registration statement has been issued, and
no proceeding for that purpose has been instituted or, to the knowledge of the
Company, threatened by the Commission. A prospectus supplement (the "Prospectus
Supplement") setting forth the final terms of the offering, sale and plan of
distribution of the Offered Shares and additional information concerning the
Company and its business has been or will be so prepared and will be filed
pursuant to Rule 424(b) of the 1933 Act Rules and Regulations on or before the
second business day after the date hereof (or such earlier time as may be
required by the 1933 Act Rules and Regulations). Copies of such registration
statement, the Prospectus Supplement, including all documents incorporated by
reference therein that were filed with the Commission on or prior to the date of
this Agreement (including one fully executed copy of the registration statement
and of each amendment thereto) have been delivered or made available to the
Underwriter and its counsel. The registration statement, including the Base
Prospectus, as amended at the time it
became effective, including the information (if any) deemed to be part of the
registration statement at the time of effectiveness pursuant to Rule 430A under
the Act and as it may have been subsequently amended, is referred to herein as
the "Registration Statement." The term "Prospectus" as used herein means the
Base Prospectus together with the Prospectus Supplement. Any reference herein to
the Registration Statement or the Prospectus or any amendment or supplement
thereto shall be deemed to refer to and include the Incorporated Documents, and
any reference herein to the terms "amend," "amendment" or "supplement" with
respect to the Registration Statement or the Prospectus shall be deemed to refer
to and include the filing after the execution hereof of any Incorporated
Documents. As used herein, the term "Incorporated Documents" means the documents
which at the time are incorporated by reference in the Registration Statement,
the Prospectus or any amendment or supplement thereto filed prior to the date
hereof or during the period the Prospectus is required to be delivered in
connection with the sale of the Offered Shares by the Underwriter or any dealer
as required by paragraph (b) of Item 12 of Form S-3. For purposes of this
Agreement, all references to the Registration Statement, the Prospectus or to
any amendment or supplement thereto shall be deemed to include any copy filed
with the Commission pursuant to its Electronic Data Gathering Analysis and
Retrieval System (XXXXX), and such copy shall be identical in content to any
Prospectus delivered to the Underwriter for use in connection with the offering
of the Offered Shares.
(b) The Company and the transactions contemplated by this Agreement meet
the requirements and the conditions for use of a registration statement on Form
S-3 under the Act and the 1933 Act Rules and Regulations.
(c) The Registration Statement, when it became effective and on the
Closing Date (as defined in Section 3) (i) contained or will contain all
information required to be set forth therein in accordance with, and complied or
will comply in all material respects with the requirements of, the Act and the
1933 Act Rules and Regulations and (ii) did not or will not include any untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein not misleading. On the date of filing with the
Commission pursuant to Rule 424(b) and on the Closing Date, the Prospectus, as
amended or supplemented at any such time (i) contained or will contain all
information required to be set forth therein in accordance with, and complied or
will comply in all material respects with the requirements of, the Act and the
1933 Act Rules and Regulations and (ii) did not or will not include any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading; except that the representations and warranties set forth
in this Section 1(c) do not apply to statements in the Prospectus based upon
written information concerning the Underwriter that was furnished to the Company
by the Underwriter specifically for use in the preparation thereof, it being
understood and agreed that the only such information is that described as such
in Section 7(b) hereof.
(d) The Incorporated Documents when they became or become effective
under the Act or were or are filed with the Commission under the Act or the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), as the case
may be, conformed or will conform in all material respects with the requirements
of the Act, the 1933 Act Rules and Regulations, the Exchange Act and/or the
rules and regulations of the Commission under the Exchange Act (the "Exchange
Act Rules and Regulations"), as applicable and did not or will not include an
untrue
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statement of a material fact or omit to state a material fact necessary to make
the statements therein, in light of the circumstances in which they were made,
not misleading.
(e) The consolidated financial statements, including the related
schedule and notes thereto, set forth or included or incorporated by reference
in the Registration Statement and Prospectus fairly present the financial
condition of the Company and its consolidated subsidiaries as of the dates
indicated and the results of operations, changes in financial position,
shareholders' equity and cash flows for the periods therein specified, in
conformity with generally accepted accounting principles consistently applied
throughout the periods involved. The summary and selected financial and
statistical data included or incorporated by reference in the Registration
Statement and the Prospectus present fairly the information shown therein and,
to the extent based upon or derived from the financial statements, have been
compiled on a basis consistent with the financial statements presented therein.
In addition, all financial statements required by Rule 3-14 of Regulation S-X
("Rule 3-14") have been included or incorporated by reference in the
Registration Statement and the Prospectus and any such financial statements are
in conformity with the requirements of Rule 3-14. The pro forma financial
information (including the related notes and supporting schedules) included or
incorporated by reference in the Registration Statement and the Prospectus
complies as to form in all material respects to the applicable accounting
requirements of the Act and the 1933 Act Rules and Regulations and management of
the Company believes that the assumptions underlying the pro forma adjustments
provide a reasonable basis for presenting the significant effects directly
attributable to the transactions and events described therein and the related
pro forma adjustments give appropriate effect to those assumptions. All
necessary pro forma adjustments have been properly applied to the historical
amounts in the compilation of the information and such information fairly
presents with respect to the respective entity or entities presented therein the
financial position, results of operations and other information purported to be
shown therein at the respective dates and for the respective periods specified.
No other financial statements are required to be set forth or to be incorporated
by reference in the Registration Statement or the Prospectus under the Act or
the 1933 Act Rules and Regulations.
(f) The descriptions in the Registration Statement and the Prospectus of
the contracts, leases and other legal documents therein described present fairly
the information required to be shown, and there are no contracts, leases, or
other documents of a character required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits to the Registration
Statement which are not described or filed as required; Exhibit 21 to the
Company's Annual Report on Form 10-K for the year ended December 31, 2002
contains a true, correct and complete list of all of the subsidiaries of the
Company controlled directly or indirectly by the Company (each, a "Subsidiary"
and collectively, the "Subsidiaries"); there are no legal or governmental
proceedings pending or threatened to which the Company, the Partnerships or any
Subsidiary is subject that are required to be described in the Registration
Statement or the Prospectus and are not so described; there are no statutes or
regulations applicable to the Company, the Partnerships or any Subsidiary or
certificates, permits or other authorizations from governmental regulatory
officials or bodies required to be obtained or maintained by the Company, the
Partnerships or any Subsidiary of a character required to be disclosed and
properly described therein; all agreements between the Company, the Partnerships
or any Subsidiary and third parties expressly referenced in the Prospectus are
legal, valid and binding obligations of the Company, the Partnerships or the
Subsidiary, enforceable in accordance with their respective
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terms, except to the extent enforceability may be limited by bankruptcy,
insolvency, reorganization or other laws of general applicability relating to or
affecting creditors' rights and by general equity principles.
(g) KPMG LLP, whose reports are incorporated by reference in the
Registration Statement and Prospectus, are and, during the periods covered by
their reports, were independent public accountants within the meaning of the Act
and the applicable rules and regulations thereunder adopted by the Commission.
2. Representations and Warranties of the Company and the Partnerships. As of the
date hereof, the Company and each Partnership, jointly and severally, represent
and warrant to, and agree with, the Underwriter that:
(a) (1) The Company has been duly organized and is an existing statutory
real estate investment trust in good standing under the laws of the State of
Maryland, with power and authority (corporate and other) to own its properties
and conduct its business as described in the Prospectus; and (2) except where
the failure to so qualify or to be in good standing would not result in a
material adverse change in the condition (financial or other), earnings,
investment portfolio, business affairs or prospects of the Company, the
Partnerships or the Subsidiaries, taken as a whole (a "Material Adverse
Effect"), the Company is duly qualified to do business as a foreign entity in
good standing in all other jurisdictions in which its ownership or lease of
property or the conduct of its business requires such qualification.
(b) (1) Each Partnership and each Subsidiary has been duly incorporated
or formed, as the case may be, and each is existing and in good standing under
the laws of the respective jurisdiction of incorporation or formation, with
power and authority (corporate and other) to own its properties and conduct its
business as described in the Prospectus; (2) except where the failure to so
qualify or to be in good standing would not result in a Material Adverse Effect,
each Partnership and each Subsidiary is duly qualified to do business as a
foreign entity in good standing in all other jurisdictions in which its
ownership or lease of property or the conduct of its business requires such
qualification; all of the issued and outstanding equity interests of each
Partnership and each Subsidiary have been duly authorized and validly issued and
are fully paid and nonassessable; and the equity interests of each Subsidiary
owned by the Company or a Partnership, directly or through subsidiaries, are
owned free from security interests, liens, claims, encumbrances and defects.
Immediately prior to the consummation of the transaction contemplated hereby and
the applications of the net proceeds from the sale of the Offered Shares, the
Company owns the sole general partnership interest and a majority of the limited
partnership interests in each Partnership.
(c) As of March 31, 2003, the Company had shareholders' equity of
approximately $337,499,000, total mortgages and notes payable of approximately
$550,507,000, 30,440,885 total common shares outstanding and 5,248,306 total
operating partnership units outstanding. Immediately prior to the Closing Date,
30,482,838 Common Shares will be issued and outstanding and no preferred shares
of beneficial interest will be issued and outstanding. This Agreement and the
issuance and sale of the Offered Shares hereunder has been duly authorized by
all appropriate action of the Company, all outstanding shares of beneficial
interest of the Company are, and, when the Offered Shares have been delivered
and paid for in accordance with
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this Agreement on the Closing Date, such Offered Shares will be, validly issued,
fully paid and nonassessable and will conform to the description thereof
contained in the Prospectus; the issued and outstanding units of partnership
interest in the Partnerships (the "Partnership Units") have been duly authorized
by the Partnerships; all of the issued and outstanding shares of beneficial
interest of the Company and outstanding Partnership Units have been offered,
sold and issued by the Company or the applicable Partnership in compliance with
all applicable laws, including without limitation, federal and state securities
laws; except as described in the Prospectus, there is no outstanding option,
warrant or other right calling for the issuance of, and no commitment, plan or
arrangement to issue, any shares of beneficial interest of the Company or equity
interests in the Partnerships or any security convertible into or exchangeable
for shares of beneficial interest of the Company or equity interests in the
Partnerships, and the shareholders of the Company have no preemptive or similar
rights with respect to any shares of beneficial interest of the Company.
(d) Except as described in the Prospectus, there are no contracts,
agreements or understandings between the Company or the Partnership and any
person that would give rise to a valid claim against the Company or the
Underwriter for a brokerage commission, finder's fee or other like payment in
connection with the offering, issuance and sale of the Offered Shares.
(e) Except as described in the Prospectus, there are no contracts,
agreements or understandings between the Company or the Partnerships and any
person granting such person the right to require the Company to file a
registration statement under the Act with respect to any securities of the
Company owned or to be owned by such person or to require the Company to include
such securities in the securities registered pursuant to the Registration
Statement or in any securities being registered pursuant to any other
registration statement filed by the Company under the Act.
(f) The Offered Shares will be approved for listing on the New York
Stock Exchange on or prior to the Closing Date, subject to final notice of
issuance.
(g) No consent, approval, license, authorization, certificate, permit or
order of, or filing with, any governmental agency or body or any court is
required for the consummation of the transactions contemplated by this Agreement
including the valid authorization, issuance, sale and delivery of the Offered
Shares, except such as may be required under state securities laws.
(h) The execution, delivery and performance of this Agreement and the
issuance and sale of the Offered Shares will not result in a breach or violation
of any of the terms and provisions of, or constitute a default under, any
statute, rule, regulation or order of any governmental agency or body or any
court, domestic or foreign, having jurisdiction over the Company, the
Partnerships or the Subsidiaries or any of their properties, or any agreement or
instrument to which the Company, the Partnerships or Subsidiary is a party or by
which the Company, the Partnerships or any Subsidiary is bound or to which any
of the Properties of the Company, the Partnerships or any Subsidiary is subject,
or the charter, by-laws, partnership agreement, certificate of limited
partnership, operating agreement or other organizational documents of the
Company, the Partnerships or any Subsidiary, and the Company, has full power and
authority to authorize, issue, sell and deliver the Offered Shares as
contemplated by this Agreement.
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(i) This Agreement has been duly authorized, executed and delivered by
the Company and the Partnerships and constitutes the legal, valid and binding
obligation of the Company and the Partnerships enforceable against the Company
and the Partnerships in accordance with its terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally or by general principles of equity.
(j) Except as described in the Prospectus, the Company, the Partnerships
or their Subsidiaries have good and marketable title to all real properties and
all other properties and assets owned by them (each, a "Property" and
collectively, the "Properties"), in each case free from liens, encumbrances and
defects, except where the existence of any lien, encumbrance or defect would not
have a Material Adverse Effect; the Company, each Partnership or the Subsidiary
has obtained an owner's title insurance policy in an amount at least equal to
the cost of acquisition from a title insurance company with respect to each of
its real estate properties; except as disclosed in the Prospectus, the Company,
the Partnerships and the Subsidiaries hold any leased real or personal property
under valid and enforceable leases, except where the invalidity or
unenforceability of such leases, individually or collectively, would not have a
Material Adverse Effect; no person has an option or right of first refusal to
purchase all or part of any Property or any interest therein for other than the
fair market value; neither the Company, the Partnerships nor any Subsidiary has
knowledge of any pending or threatened condemnation proceeding, zoning change,
or other proceeding or action that will in any manner affect the size of, use
of, improvements on, construction on or access to any of the Properties.
(k) The Company, the Partnerships and the Subsidiaries possess adequate
permits, licenses, franchises, certificates, authorities, consents, orders or
approvals issued by appropriate governmental agencies or bodies necessary to
conduct the business now conducted by them or contemplated by the Prospectus and
have not received any notice of proceedings relating to the revocation or
modification of any such permits, licenses, franchises, certificates,
authorities, consents, orders or approvals that, if determined adversely to the
Company, the Partnerships or any Subsidiary, would, individually or in the
aggregate, have a Material Adverse Effect.
(l) No labor dispute with the employees of the Company, the Partnerships
or any subsidiary exists or, to the knowledge of the Company, is imminent that
might have a Material Adverse Effect.
(m) The Company, the Partnerships and the Subsidiaries own, possess or
can acquire on reasonable terms, adequate trademarks, trade names and other
rights to inventions, know-how, patents, copyrights, confidential information
and other intellectual property (collectively, "intellectual property rights")
necessary to conduct the business now operated by them, or presently employed by
them, and have not received any notice of infringement of or conflict with
asserted rights of others with respect to any intellectual property rights that,
if determined adversely to the Company, the Partnerships or any of the
Subsidiaries, would individually or in the aggregate have a Material Adverse
Effect.
(n) Except as otherwise described in the Prospectus, neither the
Company, the Partnerships nor any Subsidiary has authorized or conducted or has
knowledge of the generation, transportation, storage, presence, use, treatment,
disposal, release, or other handling of any
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hazardous substance, hazardous waste, hazardous material, hazardous constituent,
toxic substance, pollutant, contaminant, asbestos, radon, polychlorinated
biphenyls ("PCBs"), petroleum product or waste (including crude oil or any
fraction hereof, natural gas, liquefied gas, synthetic gas or other material
defined, regulated, controlled or potentially subject to any remediation
requirement under any environmental law (collectively, "Hazardous Materials"),
on, in, under or affecting any Property, except in material compliance with
applicable laws; except as disclosed in the Prospectus, to the knowledge of the
trustees and officers of the Company, the Properties are in compliance with all
federal, state and local laws, ordinances, rules, regulations and other
governmental requirements relating to pollution, control of chemicals,
management of waste (collectively, "Environmental Laws"), and the Company, the
Partnerships and the Subsidiaries are in compliance with all licenses, permits,
registrations and government authorizations necessary to operate under all
applicable Environmental Laws in all material respects; except as otherwise
described in the Prospectus, neither the Company, any Partnership or any
Subsidiary has received any written or oral notice from any governmental entity
or any other person and there is no pending, or, to the knowledge of the
trustees and officers of the Company, threatened claim, litigation or any
administrative agency proceeding that: alleges a violation of any Environmental
Laws by the Company, the Partnerships or any Subsidiary; or that the Company,
any Partnership or any Subsidiary is a liable party or a potentially responsible
party under the Comprehensive Environmental Response, Compensation and Liability
Act, 42 U.S.C. ss. 9601, et. seq., or any state superfund law; has resulted in
or could result in the attachment of an environmental lien on any of the
properties; or alleges that the Company, any Partnership or any Subsidiary is
liable for any contamination of the environment, contamination of the Property,
damage to natural resources, property damage, or personal injury based on their
activities or the activities of their predecessors or third parties (whether at
the properties or elsewhere) involving Hazardous Materials, whether arising
under the Environmental Laws common law principles, or other legal standards. In
the ordinary course of its business, the Company, the Partnerships and the
Subsidiaries conduct Phase I environmental assessments on each of the Properties
at the time such Property is acquired and periodic reviews of the effect of
Environmental Laws on the business, operations and properties of the Company,
the Partnerships and the Subsidiaries.
(o) Except as described in the Prospectus, there are no pending actions,
suits or proceedings against or affecting the Company, any Partnership or any
Subsidiary or any of their respective Properties that, if determined adversely
to the Company, any Partnership or such Subsidiary, would individually or in the
aggregate have a Material Adverse Effect, or would materially and adversely
affect the ability of the Company or the Partnerships to perform their
obligations under this Agreement, or which are otherwise material in the context
of the offering, issuance, sale and delivery of the Offered Shares; and no such
actions, suits or proceedings are threatened or, to the Company's or any
Partnership's knowledge, contemplated.
(p) Except as described in the Prospectus, since the date of the latest
audited financial statements included or incorporated by reference in the
Prospectus there has been no material adverse change, nor any development or
event involving a prospective material adverse change in the condition
(financial or other), business, properties or results of operations of the
Company, the Partnerships and the Subsidiaries, taken as a whole, that would
constitute a Material Adverse Effect, and, except as disclosed in or the
Prospectus, there has been no dividend or distribution of any kind declared,
paid or made by the Company on any class of its shares of beneficial interest.
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(q) The Company has implemented controls and other procedures that are
designed to ensure that information required to be disclosed by the Company in
the reports that it files or submits under the Exchange Act is recorded,
processed, summarized and reported, within the time periods specified in the
Commission's rules and forms and is accumulated and communicated to the
Company's management, including its chief executive officer and chief financial
officer, or persons performing similar functions, as appropriate to allow timely
decisions regarding required disclosure; and the Company makes and keeps books,
records, and accounts, which, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of the Company; and the
Company maintains 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 accountability for
assets is compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences; and, to the Company's and each
Partnership's knowledge, neither the Company, any Partnership nor any
Subsidiary, nor any employee or agent thereof, has made any payment of funds of
the Company, the Partnerships or any of the Subsidiaries, as the case may be, or
received or retained any funds, and no funds of the Company, the Partnerships or
any of the Subsidiaries, as the case may be, have been set aside to be used for
any payment, in each case in violation of any law, rule or regulation.
(r) Neither the Company, any Partnership or any Subsidiary is and, after
giving effect to the offering and sale of the Offered Shares and the application
of the proceeds thereof as described in the Prospectus, will not be an
"investment company" or a company "controlled" by an "investment company" within
the meaning of the Investment Company Act of 1940, as amended (the "1940 Act").
(s) The Limited Partnership Agreement of each Partnership, including any
amendments thereto (each a "Partnership Agreement" and, together, the
"Partnership Agreements"), has been duly and validly authorized, executed and
delivered by all partners of the Partnership and constitutes a valid and binding
agreement, enforceable in accordance with its terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally or by general principles of equity.
(t) The Company, the Partnership and the Subsidiaries have complied in
all respects with all laws, regulations and orders applicable to them or their
respective businesses, except as would not have a Material Adverse Effect;
neither the Company, the Partnerships nor any Subsidiary is in breach of, or in
default under (nor has any event occurred which with notice, lapse of time, or
both would constitute a breach of, or default under), its respective declaration
of trust, by-laws, certificate of limited partnership, partnership agreement or
operating agreement, as the case may be, or in the performance or observance of
any material obligation, agreement, covenant or condition contained in any
material license, indenture, mortgage, deed of trust, loan or credit agreement
or other material agreement or instrument to which the Company, any Partnership
or such Subsidiary is a party or by which any of them or their respective
properties is bound.
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(u) Each of the Company, the Partnerships or the Subsidiaries has filed
on a timely basis all necessary federal, state, local and foreign income and
franchise tax returns, if any such returns were required to be filed, through
the date hereof and have paid all taxes shown as due thereon; and no tax
deficiency has been asserted against the Company, any Partnership or any
Subsidiary, nor, to the knowledge of the trustees and officers of the Company,
is any tax deficiency likely to be asserted against the Company or any
Partnership; all tax liabilities, if any, are adequately provided for on the
respective books of the entities.
(v) The Company is organized in conformity with the requirements for
qualification as a real estate investment trust under the Internal Revenue Code
of 1986, as amended (the "Code"), and the Company's current and proposed method
of operation has enabled it and will enable it to meet the requirements for
taxation as a real estate investment trust under the Code; each Partnership has
been and will continue to be treated as a partnership for federal income tax
purposes and not as a corporation or association taxable as a corporation.
(w) Each of the Company, each Partnership and the Subsidiaries maintains
insurance (issued by insurers of recognized financial responsibility) of the
types and in the amounts generally deemed adequate, if any, for their respective
businesses and consistent with insurance coverage maintained by similar
companies in similar businesses, including, but not limited to, insurance
covering real and personal property owned or leased by the Company, the
Partnerships and the Subsidiaries against theft, damage, destruction, acts of
vandalism and all other risks customarily insured against, all of which
insurance is in full force and effect.
(x) Except as otherwise described in the Prospectus, there are no
material outstanding loans or advances or materials guarantees of indebtedness
by the Company, any Partnership or any Subsidiary to or for the benefit of any
of the officers or trustees of the Company or any of their family members.
(y) In connection with the offering of the Offered Shares, the Company
has not offered and will not offer its Common Shares or any other securities
convertible into or exchangeable or exercisable for Common Shares in a manner in
violation of the Act or the 1933 Act Rules and Regulations; the Company has not
distributed and will not distribute any Prospectus or other offering material in
connection with the offer and sale of the Offered Shares, except as contemplated
herein.
(z) None of the entities which prepared appraisals of the Properties or
Phase I environmental assessment reports with respect to such Properties was
employed for such purpose on a contingent basis or has any substantial interest
in the Company, any Partnership or any Subsidiary, and none of their directors,
officers or employees is connected with the Company, any Partnership or any
Subsidiary as a promoter, selling agent, voting trustee, officer or employee.
(aa) The appropriate officers have executed and the Company has filed
with the Commission such certifications required under the Xxxxxxxx-Xxxxx Act.
(bb) The Company is in compliance with the current listing standards of
the New York Stock Exchange.
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3. Purchase, Sale and Delivery of Offered Shares. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company agrees to sell to the
Underwriter, and the Underwriter agrees to purchase from the Company, at a
purchase price of $16.44 per share, the Offered Shares. The Underwriter
represents and warrants that it is purchasing the Offered Shares in its capacity
as an underwriter and that the Offered Shares will be allocated and delivered
directly to the accounts of the investors designated by the Underwriter to whom
the Underwriter has sold the Offered Shares and the Underwriter will not have
any beneficial ownership interest in such Offered Shares.
The Company will deliver the Offered Shares against payment by the
Underwriter of the purchase price in Federal (same day) funds by wire transfer
to an account at a bank acceptable to the Company drawn to the order of the
Company, at the office of Hunton & Xxxxxxxx, at 10:00 A.M., New York time, on
May 5, 2003, or at such other time not later than seven full business days
thereafter as the Underwriter and the Company determine, such time being herein
referred to as the "Closing Date." The certificates for the Offered Shares so to
be delivered will be in definitive form, in such denominations and registered in
such names as the Underwriter requests and will be made available for checking
and packaging at the above office of the Underwriter at least 24 hours prior to
the Closing Date.
4. Offering by Underwriter. It is understood that the Underwriter
proposes to offer the Offered Shares for sale to the public as set forth in the
Prospectus.
5. Conditions of the Underwriter's Obligations. The obligations of the
Underwriter to purchase the Offered Shares shall be subject to the accuracy of
the representations and warranties on the part of the Company and the
Partnerships contained herein as of the time of execution hereof and the Closing
Date, to the accuracy of the statements of the Company and the Partnerships made
in any certificates pursuant to the provisions hereof, to the performance by the
Company and the Partnerships of their obligations hereunder and to the following
additional conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall have
been instituted or threatened.
(b) No order preventing or suspending the use of the Prospectus shall
have been or shall be in effect, and any requests for additional information on
the part of the Commission (to be included in the Registration Statement or the
Prospectus or otherwise) shall have been complied with to the satisfaction of
the Commission and the Underwriter.
(c) The Company shall have furnished to the Underwriter on the Closing
Date, a certificate, dated such Closing Date, signed by the Chairman of the
Board or the President and the chief financial officer or chief accounting
officer of the Company to the effect that the signers of such certificate have
carefully examined the Registration Statement, the Prospectus and this Agreement
and that (i) the representations and warranties of the Company and the
Partnerships in this Agreement are true and correct on and as of such Closing
Date or settlement date with the same effect as if made on such Closing Date,
and the Company has performed all covenants and agreements and satisfied all
conditions to be performed or satisfied by it at or prior to such Closing Date;
(ii) no stop order suspending the effectiveness of the Registration
10
Statement has been issued and, to the best of their knowledge, no proceedings
for that purpose have been instituted or are pending under the Act; and (iii)
since the date of the most recent financial statements included or incorporated
by reference in the Prospectus (exclusive of any supplement thereto), there has
been no Material Adverse Effect.
(d) The Company shall have requested and caused KPMG LLP to have
furnished to the Underwriter, on the date hereof and at the Closing Date,
letters, dated respectively as of the date hereof and as of the Closing Date, in
form and substance satisfactory to the Underwriter, confirming that they are
independent accountants within the meaning of the Act and the applicable rules
and regulations adopted by the Commission thereunder, and stating in effect
that:
(i) In their opinion the audited financial statements included or
incorporated by reference in the Registration Statement and the Prospectus and
reported on by them comply as to form in all material respects with the
applicable accounting requirements of the Act and the Exchange Act and the
related rules and regulations adopted by the Commission;
(ii) On the basis of a reading of the latest unaudited financial
information made available by the Company and its Subsidiaries, including the
unaudited interim financial information for the three-month period ended March
31, 2003, and as at March 31, 2003, filed by the Company in a Current Report on
Form 8-K under the Exchange Act and incorporated by reference in the
Registration Statement and the Prospectus; carrying out certain specified
procedures (but not an examination in accordance with generally accepted
auditing standards) which would not necessarily reveal matters of significance
with respect to the comments set forth in such letter; a reading of the minutes
of the meetings of the shareholders, trustees and executive, audit and
compensation committees of the Company and the Subsidiaries; and inquiries of
certain officials of the Company who have responsibility for financial and
accounting matters of the Company and its Subsidiaries as to transactions and
events subsequent to December 31, 2002, nothing came to their attention which
caused them to believe that:
(A) Any unaudited financial statements included or
incorporated by reference in the Registration Statement and the Prospectus are
not stated on a basis substantially consistent with that of the audited
consolidated financial statements incorporated by reference in the Registration
Statement and Prospectus;
(B) With respect to the period subsequent to December 31,
2002, there were any increases, at a specified date not more than five days
prior to the date of the letter, in the long-term debt of the Company and its
Subsidiaries or changes in capital stock of the Company or decreases in the
shareholders' equity of the Company as compared with the amounts shown on the
December 31, 2002 consolidated balance sheet included or incorporated by
reference in the Registration Statement and the Prospectus, or for the period
from March 31, 2003 to such specified date there were any decreases, as compared
with the corresponding period in the prior year, in revenues or income before
income taxes or in total or per share amounts of net income of the Company and
its Subsidiaries, except in all instances for changes or decreases set forth in
such letter, in which case the letter shall be accompanied by an explanation by
the Company as to the significance thereof unless said explanation is not deemed
necessary by the Underwriter; and
11
(C) The information included or incorporated by reference
in the Registration Statement and Prospectus in response to Regulation S-K, Item
301 (Selected Financial Data) and Item 402 (Executive Compensation) is not in
conformity with the applicable disclosure requirements of Regulation S-K; and
(iii) They have performed certain other specified procedures as a
result of which they determined that certain information of an accounting,
financial or statistical nature (which is limited to accounting, financial or
statistical information derived from the general accounting records of the
Company and its Subsidiaries) set forth in the Registration Statement and the
Prospectus, the information included or incorporated by reference in Items 1, 2,
6, 7 and 11 of, and in Exhibit 12 to, the Company's Annual Report on Form 10-K,
incorporated by reference in the Registration Statement and the Prospectus, and
the information included in the Company's Current Report on Form 8-K
incorporated by reference in the Registration Statement and the Prospectus
agrees with the accounting records of the Company and its Subsidiaries,
excluding any questions of legal interpretation, except as described in such
letter.
References to the Registration Statement and the Prospectus in this
paragraph (e) are to such documents as amended and supplemented at the date of
the letter.
(e) The Underwriter shall have received on the Closing Date from Paul,
Hastings, Xxxxxxxx & Xxxxxx LLP, counsel for the Company, an opinion, addressed
to the Underwriter and dated such Closing Date and stating in effect that:
(i) Each of the Company, the Partnerships and the Subsidiaries
has been duly incorporated, organized or formed and is validly existing as a
corporation, trust, limited liability company or partnership in good standing
under the laws of the jurisdiction in which it is incorporated, organized or
formed and, except where the failure to so qualify or to be in good standing
would not result in a Material Adverse Effect, is duly qualified and in good
standing as a foreign entity in each jurisdiction where its ownership or lease
of property or the conduct of its business requires such qualification;
(ii) Each of the Company, the Partnerships and the Subsidiaries
has all requisite corporate, limited liability company or partnership power and
authority to own and lease its assets and properties and conduct its business as
now being conducted and as described in the Registration Statement and, to enter
into, deliver and perform this Agreement and, with respect to the Company, to
issue and sell the Offered Shares. A wholly-owned subsidiary of the Company is
the sole general partner of each Partnership;
(iii) The Company's authorized equity capitalization is as set
forth in the Prospectus; the capital stock of the Company conforms in all
material respects to the description thereof contained in the Prospectus and
meets the requirements of Item 9 of Form S-3 under the Act; the outstanding
Common Shares have been duly and validly authorized and issued and are fully
paid and nonassessable; the issuance and sale of the Offered Shares have been
duly and validly authorized by the Company, and, when issued and delivered to
and paid for by the Underwriter pursuant to this Agreement, will be fully paid
and nonassessable; the Offered Shares are duly listed, and admitted and
authorized for trading, subject to official notice of issuance, on the New York
Stock Exchange; the certificates for the Offered Shares are in valid and
sufficient
12
form; the holders of outstanding shares of capital stock of the Company are not
entitled to any statutory or, to the best knowledge of counsel, or contractual
preemptive or other rights to subscribe for the Offered Shares; except as set
forth in the Prospectus, no options, warrants or other rights to purchase,
agreements or other obligations to issue, or rights to convert any obligations
into or exchange any securities for, shares of capital stock of or ownership
interests in the Company are outstanding; and no person or entity has a right to
participate in the registration under the Act of the Offered Shares pursuant to
the Registration Statement;
(iv) All of the outstanding equity interests of each Subsidiary
have been duly and validly authorized and issued and are fully paid and
nonassessable, were not issued and are not owned or held in violation of any
preemptive rights, and, except as otherwise set forth in the Prospectus, all
outstanding equity interests of the Subsidiaries are owned by the Company either
directly or through Subsidiaries free and clear of any perfected security
interest and, to the knowledge of such counsel, after due inquiry, any other
security interest, claim, lien or encumbrance. The units of limited partnership
interest in the Partnerships have been issued, offered and sold in compliance
with all applicable laws, including, without limitation, federal and state
securities laws;
(v) This Agreement has been duly and validly authorized, executed
and delivered by the Company and the Partnerships and constitutes the legal,
valid and binding obligation of the Company and each Partnership enforceable
against the Company and each Partnership in accordance with its terms, except as
may be limited by bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting creditors' rights generally or by general principles of equity;
(vi) Neither the issuance, sale and delivery of the Offered
Shares, nor the execution, delivery, and performance of this Agreement nor the
consummation of any other of the transactions herein contemplated nor the
fulfillment of the terms hereof by the Company or the Partnerships will conflict
with or, result in a breach or violation of (A) the charter, by-laws,
partnership agreement, operating agreement, limited liability company
certificate or certificate of limited partnership of the Company or any
Subsidiary; (B) the terms of any material indenture, contract, lease, mortgage,
deed of trust, note agreement, loan agreement or other agreement, obligation,
condition, covenant or instrument to which the Company or its Subsidiaries is a
party or bound or to which its or their property is subject; or (C) any statute,
law, rule, regulation, judgment, order or decree applicable to the Company or
its Subsidiaries of any court, regulatory body, administrative agency,
governmental body, arbitrator or other authority having jurisdiction over the
Company or its Subsidiaries or any of its or their properties or, result in the
creation or imposition of any lien, charge, claim or encumbrance upon any
property or asset of the Company or any Subsidiary;
(vii) No consent, approval, authorization, order, license,
certificate, permit, registration, designation or filing is required for the
execution, delivery and performance of this Agreement by the Company and the
Partnerships or the consummation of the transactions contemplated hereby, except
such as have been obtained under the Act and such as may be required under state
or foreign blue sky laws in connection with the purchase and distribution of the
Offered Shares by the Underwriter in the manner contemplated in this Agreement
and in the Prospectus;
13
(viii) To the knowledge of such counsel, there is no pending or
threatened action, suit or proceeding by or before any court or governmental
agency, authority or body or any arbitrator involving the Company or any of its
Subsidiaries or its or their property which, individually or in the aggregate,
might have a Material Adverse Effect, or affect the consummation of this
Agreement or which are required to be disclosed in the Registration Statement or
the Prospectus that are not so disclosed, and there is no contract, lease or
other document, or statute, rule or regulation, of a character required to be
described in the Registration Statement or Prospectus, or to be filed as an
exhibit thereto, which is not described or filed as required; and the statements
included or incorporated by reference in the Prospectus under the headings
"Federal Income Tax Considerations," "Description of Debt Securities,"
"Description of Preferred Shares," Description of Common Shares," "Restrictions
on Transfers of Capital Shares and Anti-Takeover Provisions" and "Risk Factors"
insofar as such statements constitute summaries of the legal matters, documents
or proceedings referred to therein has been reviewed by such counsel, is correct
in all material respects and the discussion thereunder does not omit any
material provisions with respect to the matters covered and fairly presents the
information called for with respect to such legal matters, documents and
proceedings and fairly summarizes the matters therein described;
(ix) The statements (A) incorporated by reference into the
Prospectus and (B) in the Registration Statement, in each case insofar as such
statements constitute summaries of documents referred to therein or matters of
law, fairly present the information required with respect to such documents and
matters of law and fairly summarize the matters required to be disclosed
therein;
(x) The Registration Statement has become effective under the
Act; any required filing of the Prospectus, and any supplements thereto,
pursuant to Rule 424(b) has been made in the manner and within the time period
required by Rule 424(b); to the knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement has been issued, no
proceedings for that purpose have been instituted or threatened and the
Registration Statement and the Prospectus (other than the financial statements
and supporting schedules and other financial information contained therein, as
to which such counsel need express no opinion) comply as to form in all material
respects with the applicable requirements of the Act and the Exchange Act and
the respective rules thereunder; and the Incorporated Documents (other than the
financial statements and other financial information contained therein, as to
which such counsel need express no opinion) at the time they became effective or
were filed complied as to form in all material respects with the Exchange Act
and the Exchange Act Rules and Regulations;
(xi) The Offered Shares have been listed and admitted and
authorized for trading on the New York Stock Exchange;
(xii) The Company is not, and after giving effect to the offering
and sale of the Offered Shares and the application of the proceeds thereof as
described in the Prospectus, will not be an "investment company" or a company
"controlled" by an "investment company" within the meaning of the 1940 Act; and
14
(xiii) Commencing with its taxable year ended December 31, 1993,
the Company has been organized and has operated in conformity with the
requirements for qualification as a real estate investment trust pursuant to
Sections 856 through 860 of the Code, and the Company's current and proposed
method of operation will enable it to continue to meet the requirements for
qualification and taxation as a real estate investment trust under the Code.
To the extent deemed advisable by such counsel, they may rely as to
matters of fact on certificates of responsible officers of the Company and
public officials on the opinion of Xxxxx Xxxxxxx LLP as to matters of Maryland
law and on the opinions of other counsel satisfactory to the Underwriter as to
matters which are governed by laws other than the laws of Maryland, New York,
Delaware or the Federal laws of the United States; provided that Xxxxx Xxxxxxx
LLP and such other counsel shall state that, in their opinion, the Underwriter
and they are justified in relying on such other opinions. Copies of such
certificates and other opinions shall be furnished to the Underwriter and
counsel for the Underwriter. Such other opinions shall also permit counsel for
the Underwriter to rely thereon.
In addition, such counsel shall state that such counsel has participated
in conferences with officers and other representatives of the Company,
representatives of the Underwriter and representatives of the independent
certified public accountants of the Company, at which conferences the contents
of the Registration Statement and the Prospectus and related matters were
discussed and, although such counsel is not passing upon and does not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement and the Prospectus (except as specified
in the foregoing opinion), on the basis of the foregoing, no facts have come to
the attention of such counsel which lead such counsel to believe that the
Registration Statement at the time it became effective and on the Closing Date
(except with respect to the financial statements and notes and schedules thereto
and other financial data, as to which such counsel need express no belief and
after giving effect to any changes incorporated pursuant to Section 430A under
the Act) contained any 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, or that the Prospectus as amended or supplemented
(except with respect to the financial statements, notes and schedules thereto
and other financial data, as to which such counsel need make no statement) on
the date thereof and on the Closing Date contained any 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.
(f) All proceedings taken in connection with the sale of the Offered
Shares as herein contemplated shall be reasonably satisfactory in form and
substance to the Underwriter, and its counsel and the Underwriter shall have
received on the Closing Date from Hunton & Xxxxxxxx LLP a favorable opinion,
addressed to the Underwriter, with respect to the Offered Shares, the
Registration Statement and the Prospectus, and such other related matters, as
the Underwriter may reasonably request, and the Company shall have furnished to
Hunton & Xxxxxxxx LLP such documents as they may reasonably request for the
purpose of enabling them to pass upon such matters.
15
(g) At the time of execution of this Agreement, the Company shall have
furnished to the Underwriter a letter substantially in the form of Exhibit A
hereto executed by each executive officer and trustee of the Company addressed
to the Underwriter.
(h) The Offered Shares shall have been approved for listing, and
admitted and authorized for trading, on the New York Stock Exchange, subject to
notice of issuance.
(i) The Company shall have furnished or caused to be furnished to the
Underwriter such further certificates or documents as the Underwriter shall
reasonably request.
(j) The Underwriter and the Company shall have executed and delivered an
agreement and waiver, dated as of the date hereof, in form and substance
satisfactory to both the Underwriter and the Company, waiving certain ownership
restrictions in the Company's Declaration of Trust.
6. Certain Agreements of the Company.
(a) The Company agrees with the Underwriter that:
(i) If, at the time this Agreement is executed and delivered, it
is necessary for a post-effective amendment to the Registration Statement to be
declared effective before the offering of the Offered Shares may commence, the
Company will endeavor to cause such post-effective amendment to become effective
as soon as possible and will advise you promptly and, if requested by you, will
confirm such advice in writing, when such post-effective amendment has become
effective. Prior to the termination of the offering of the Offered Shares, the
Company will not file any amendment of the Registration Statement or supplement
to the Prospectus or any Rule 462(b) Registration Statement unless the Company
has furnished you a copy for your review prior to filing and will not file any
such proposed amendment or supplement to which you reasonably object. Subject to
the foregoing sentence, the Company will cause the Prospectus, properly
completed, and any supplement thereto to be filed with the Commission pursuant
to the applicable paragraph of Rule 424(b) within the time period prescribed and
will provide evidence satisfactory to the Underwriter of such timely filing;
(ii) The Company will promptly advise the Underwriter (1) when
the Final Prospectus shall have been filed (if required) with the Commission
pursuant to Rule 424(b) or when any Rule 462(b) Registration Statement shall
have been filed with the Commission, (2) when, prior to termination of the
offering of the Offered Shares, any amendment to the Registration Statement
shall have been filed or become effective, (3) of any request by the Commission
or its staff for any amendment of the Registration Statement, or any Rule 462(b)
Registration Statement, or for any supplement to the Prospectus or for any
additional information, (4) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the institution or
threatening of any proceeding for that purpose and (5) of the receipt by the
Company of any notification with respect to the suspension of the qualification
of the Offered Shares for sale in any jurisdiction or the institution or
threatening of any proceeding for such purpose. The Company will use its best
efforts to prevent the issuance of any such stop order or the suspension of any
such qualification and, if issued, to obtain as soon as possible the withdrawal
thereof;
16
(iii) If, at any time when a prospectus relating to the Offered
Shares is required to be delivered under the Act, any event occurs as a result
of which the Prospectus as then amended or supplemented would include any untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading, or if it shall be necessary to amend or supplement
the Prospectus to comply with the Act, the Exchange Act or the respective rules
thereunder, the Company promptly shall (A) notify the Underwriter of such event,
(B) prepare and file with the Commission, subject to the second sentence of
paragraph (i) of this Section 6(a), an amendment or supplement which shall
correct such statement or omission or an amendment which shall effect such
compliance and (C) supply any supplemented Prospectus to you in such quantities
as you may reasonably request;
(iv) As soon as practicable, the Company will make generally
available to its security holders and to the Underwriter (to the extent
unavailable on open-access public filing retrieval systems) an earnings
statement or statements of the Company and its Subsidiaries which will satisfy
the provisions of Section 11(a) of the Act and Rule 158 under the Act;
(v) Upon your request, the Company shall furnish to the
Underwriter and counsel for the Underwriter, without charge, signed copies of
the Registration Statement (including all exhibits thereto and amendments
thereof), so long as delivery of a prospectus by an Underwriter or dealer may be
required by the Act, as many copies of the Prospectus and any amendments thereof
and supplements thereto as the Underwriter may reasonably request. The Company
shall pay the expenses of printing or other production of all documents relating
to the offering of the Offered Shares;
(vi) The Company will arrange, if necessary, for the
qualification of the Offered Shares for sale under the laws of such
jurisdictions as the Underwriter may designate, will maintain such
qualifications in effect so long as required for the distribution of the Offered
Shares and will pay any fee of the National Association of Securities Dealers,
Inc., in connection with its review of the offering; provided that in no event
shall the Company be obligated to qualify to do business in any jurisdiction
where it is not now so qualified or to take any action that would subject it to
service of process in suits, other than those arising out of the offering or
sale of the Offered Shares, in any jurisdiction where it is not now so subject;
(vii) Without the prior written consent of the Underwriter, until
the Lock-Up Period (as defined in Section 6(b) below) has expired, the Company
and each of its individual trustees and executive officers shall not issue, sell
or register with the Commission (other than on Form S-8 or on any successor
form), or otherwise dispose of, directly or indirectly, any equity securities of
the Company (or any securities convertible into, exercisable for or exchangeable
for equity securities of the Company), except for the issuance of the Offered
Shares pursuant to the Registration Statement, the grant of options and issuance
of Common Shares pursuant to the Company's existing stock option plan or bonus
plan, the issuance of Common Shares pursuant to options granted pursuant to the
Company's existing stock option plan, and the issuance of Common Shares to
holders of Partnership Units where the Company is required to issue such Common
Shares pursuant to conversion rights of such holders of Partnership Units
existing prior to the date of this Agreement, in each case as described, or
incorporated by reference, in the Registration Statement and the Prospectus. In
the event that prior to the expiration of the Lock-
17
Up Period, (A) any Common Shares are issued pursuant to the Company's existing
stock option plan or bonus plan that are exercisable prior to the expiration of
the Lock-Up Period or (B) any registration is effected on Form S-8 or on any
successor form relating to Common Shares that are issuable prior to the
expiration of the Lock-Up Period, the Company shall obtain the written agreement
of such grantee or purchaser or holder of such registered securities who is a
trustee or officer that, until the expiration of the Lock-Up Period, such person
will not, without your prior written consent, offer for sale, sell, distribute,
grant any option for the sale of, or otherwise dispose of, directly or
indirectly, or exercise any registration rights with respect to, any Common
Shares (or any securities convertible into, exercisable for or exchangeable for
any Common Shares) owned by such person;
(viii) On or before completion of this offering, the Company
shall make all filings required under applicable securities laws and by the New
York Stock Exchange (including as required by the Exchange Act); and
(ix) The Company and the Partnerships will apply the net proceeds
from the offering of the Offered Shares in the manner set forth under "Use of
Proceeds" in the Prospectus.
(b) For a period of 90 days after the date of the Prospectus Supplement
(the "Lock-Up Period"), the Company will not, directly or indirectly, (1) offer,
pledge, sell, or contract to sell any Common Shares, (2) sell any option or
contract to sell any Common Shares, (3) purchase any option or contract to sell
any Common Shares, (4) grant any option, right or warrant to purchase any Common
Shares, (5) enter into any swap or other agreement that transfers, in whole or
in part, the economic consequence of ownership of any Common Shares whether any
such swap or transaction is to be settled by delivery of shares or other
securities, in cash or otherwise, (6) take any of the foregoing actions with
respect to any securities convertible into or exchangeable or exercisable for or
repayable with Common Shares, (7) file with the Commission a registration
statement under the Act relating to any additional Common Shares or securities
convertible into or exchangeable or exercisable for its Common Shares, or (8)
publicly disclose the intention to take any of the foregoing actions, without
the prior written consent of the Underwriter, except issuances of Common Shares
(A) in connection with any acquisitions, joint ventures or similar arrangements,
so long as the recipients of those shares agree not to sell or transfer those
shares in a public market transaction during the Lock-Up Period; (B) upon the
exercise of outstanding employee stock options, (C) and options pursuant to
employee benefit plans, (D) pursuant to non-employee director or trustee stock
plans, (E) pursuant to the Company's dividend reinvestment plan, or (F) upon
conversion of any currently outstanding convertible securities.
(c) The Company will not take, directly or indirectly, any action
designed to or which has constituted or which might reasonably be expected to
cause or result, under the Exchange Act or otherwise, in stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the Offered Shares.
(d) If the sale of the Offered Shares provided for herein is not
consummated because (i) any condition to the obligations of the Underwriter set
forth in Section 6 hereof is not satisfied other than by reason of a default by
the
18
Underwriter with respect to its obligations hereunder, (ii) of any termination
pursuant to Section 9 hereof other than by reason of a default by the
Underwriter with respect to its obligations hereunder or (iii) of any refusal,
inability or failure on the part of the Company to perform any agreement herein
or comply with any provision hereof other than by reason of a default by the
Underwriter of its obligations hereunder, then the Company will reimburse the
Underwriter on demand for all out-of-pocket expenses (including reasonable fees
and disbursements of counsel) that shall have been incurred by it in connection
with the proposed purchase and sale of the Offered Shares; provided, however,
that the Company shall not be required to reimburse more than $30,000 of the
Underwriter's out-of-pocket expenses pursuant to this Section 6(d) if the sale
of the Offered Shares provided for herein is not consummated because of a
termination of this Agreement by the Underwriter that results from any event
after the date of this Agreement but prior to delivery of and payment for the
Offered Shares that has no direct relation to the Company or its business or
properties, including, but not limited to, (i) if trading in securities
generally on the New York Stock Exchange shall have been suspended or limited or
minimum prices shall have been established on such Exchange; (ii) a banking
moratorium shall have been declared either by Federal or New York State
authorities; or (iii) there shall have occurred any new outbreak or escalation
of hostilities, declaration by the United States of a national emergency or war,
or other calamity or crisis the effect of which on financial markets is such as
to make it, in the sole judgment of the Underwriter, impractical or inadvisable
to proceed with the offering or delivery of the Offered Shares as contemplated
by the Prospectus.
7. Indemnification.
(a) The Company and the Partnerships, jointly and severally, agree to
indemnify and hold harmless the Underwriter, the directors, officers, employees
and agents of the Underwriter and each person, if any, who controls the
Underwriter within the meaning of either the Act or the Exchange Act against any
and all losses, claims, damages or liabilities, joint or several (including,
without limitation to, any reasonable investigation, legal and other expenses
incurred in connection with, and any amount paid in settlement of, any action,
suit or proceeding or any claim asserted), to which they, or any of them, may
become subject under the Act, the Exchange Act or other Federal or state law or
regulation, at common law or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based (i)
upon any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or the Prospectus or any amendment
thereof or supplement thereto, or in any blue sky application or other
information or other documents executed by the Company filed in any state or
other jurisdiction to qualify any or all of the Offered Shares under the
securities laws thereof or arise out of or are based upon any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading; (ii) in whole or in
part upon any breach of the representations and warranties set forth in Section
1 hereof; or (iii) in whole or in part upon any failure of the Company to
perform any of its obligations hereunder or under law, and agrees to reimburse
each such indemnified party, as incurred, for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action. This indemnity agreement will be
in addition to any liability which the Company may otherwise have.
(b) The Underwriter agrees to indemnify and hold harmless the Company
and the Partnerships and each person, if any, who controls the Company and the
Partnerships within the meaning of either the Act or the Exchange Act, each
director of the Company, and each officer
19
of the Company who signs the Registration Statement, to the same extent as the
foregoing indemnity from the Company to the Underwriter, but only insofar as
such losses, claims, damages or liabilities arise out of or are based upon
written information relating to the Underwriter furnished to the Company by or
on behalf of the Underwriter specifically for inclusion in the Prospectus;
provided, however, that the obligation of the Underwriter to indemnify the
Company (including any controlling person, director or officer thereof) shall be
limited to the net proceeds received by the Company from the Underwriter. The
Company acknowledges that, under the heading "Underwriting" in the Prospectus,
(i) the fourth paragraph describing the manner in which the Underwriter will
offer and sell the Offered Shares and (ii) the section entitled "Price
Stabilization and Short Positions" constitute the only information furnished in
writing by or on behalf of the Underwriter for inclusion in the Prospectus. This
indemnity agreement will be in addition to any liability that the Underwriter
may otherwise have.
(c) Any party that proposes to assert the right to be indemnified under
this Section (or contribution under Section 8, as further provided in the last
sentence to this Section 7(c)) will, promptly after receipt of notice of
commencement of any action, suit or proceeding against such party in respect of
which a claim is to be made against an indemnifying party or parties under this
Section, notify each such indemnifying party of the commencement of such action,
suit or proceeding, enclosing a copy of all papers served. The failure so to
notify the indemnifying party will not relieve it from liability under paragraph
(a) or (b) above unless and to the extent it did not otherwise learn of such
action and such failure results in the forfeiture by the indemnifying party of
substantial rights and defenses and will not, in any event, relieve the
indemnifying party from any obligations to any indemnified party other than the
indemnification obligation provided in paragraph (a) or (b) above. In case any
such action, suit or proceeding shall be brought against any indemnified party
and it shall notify the indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate in, and, to the extent that
it shall wish, jointly with any other indemnifying party similarly notified, to
assume the defense thereof, with counsel reasonably satisfactory to such
indemnified party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof and the
approval by the indemnified party of such counsel, the indemnifying party shall
not be liable to such indemnified party for any legal or other expenses, except
as provided below and except for the reasonable costs of investigation
subsequently incurred by such indemnified party in connection with the defense
thereof. Notwithstanding the indemnifying party's election to appoint counsel to
represent the indemnified party in an action, suit or proceeding, the
indemnified party shall have the right to employ separate counsel (including
local counsel) in any such action, and the fees and expenses of such counsel
shall be at the expense of the indemnifying party if (i) the use of counsel
chosen by the indemnifying party to represent the indemnified party would
present such counsel with a conflict of interest; (ii) the actual or potential
defendants in, or targets of, any such action include both the indemnified party
and the indemnifying party and the indemnified party shall have reasonably
concluded that there may be legal defenses available to it and/or other
indemnified parties which are different from or additional to those available to
the indemnifying party; (iii) the indemnifying party shall not have employed
counsel satisfactory to the indemnified party to represent the indemnified party
within a reasonable time after notice of the institution of such action; or (iv)
the indemnifying party shall authorize the indemnified party to employ separate
counsel at the expense of the indemnifying party. No indemnifying party shall,
without the prior written consent of the indemnified parties, effect any
settlement or compromise of, or consent to
20
the entry of any judgment with respect to, any pending or threatened action,
claim or proceeding in respect of which any indemnified party is or could have
been a party and indemnity or contribution may have been sought hereunder by
such indemnified party, unless such settlement, compromise or consent includes
an unconditional release of such indemnified party from all liability on claims
arising out of such action, claim or proceeding and 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. If an indemnifying party has agreed to assume the
defense of any claim against an indemnified party, the indemnified party shall
provide the indemnifying party with prior written notice of any proposed
settlement and shall not complete any settlement without the prior written
consent of the indemnifying party. An indemnifying party shall not be liable for
any settlement of any action, suit, proceeding or claim effected without its
written consent, which consent shall not be unreasonably withheld or delayed.
8. Contribution. In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in Section 7(a) or 7(b)
is due in accordance with its terms but for any reason is held to be unavailable
to or insufficient to hold harmless an indemnified party under Section 7(a) or
7(b), the Company and the Partnerships, jointly and severally, and the
Underwriter agree to contribute to the aggregate losses, claims, damages and
liabilities (including legal or other expenses reasonably incurred in connection
with investigating or defending same) (collectively "Losses") to which the
Company and the Partnerships and the Underwriter may be subject in such
proportion as is appropriate to reflect the relative benefits received by the
Company and the Partnerships on the one hand and the Underwriter on the other
from the offering of the Offered Shares or, if such allocation is unavailable
for any reason, in such proportion as is appropriate to reflect not only the
relative benefits referred to above but also the relative fault of the Company
on the one hand and the Underwriter on the other in connection with the
statements or omissions which resulted in such Losses, as well as any other
relevant equitable considerations. Benefits received by the Company shall be
deemed to be equal to the total net proceeds from the offering (before deducting
expenses) received by the Company, and benefits received by the Underwriter
shall be deemed to be equal to the total underwriting discount received by the
Underwriter, in each case as set forth on the cover page of the Prospectus. The
relative fault of the Company and the Partnerships or the Underwriter shall be
determined by reference to, among other things, whether any untrue or any
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact related to information supplied by the Company or the
Underwriter and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such untrue statement or omission. The
Company and the Partnerships and the Underwriter agree that it would not be just
and equitable if contribution pursuant to this Section 8 were determined by pro
rata allocation or by any other method of allocation which does not take account
of the equitable considerations referred to above. Notwithstanding the
provisions of this Section 8, (i) in no case shall the Underwriter be liable or
responsible for any amount in excess of the underwriting discount applicable to
the Offered Shares purchased by the Underwriter hereunder; and (ii) the Company
shall be liable and responsible for any amount in excess of such underwriting
discount; provided, however, that no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 8, each person, if any, who
controls the Underwriter within the meaning of the Act or the Exchange Act and
each director, officer, employee and agent of the Underwriter shall have the
same rights to contribution as the
21
Underwriter, and each person, if any, who controls the Company and the
Partnerships within the meaning of either the Act or the Exchange Act, each
officer of the Company who shall have signed the Registration Statement and each
director of the Company shall have the same rights to contribution as the
Company and the Partnerships, subject in each case to clauses (i) and (ii) in
the immediately preceding sentence of this Section 8.
9. Termination. This Agreement shall be subject to termination in the absolute
discretion of the Underwriter, by notice given to the Company prior to delivery
of and payment for the Offered Shares, if at any time after the date of this
Agreement but prior to delivery of and payment for the Offered Shares (i)
trading in the Company's Common Shares shall have been suspended by the
Commission or the New York Stock Exchange or trading in securities generally on
the New York Stock Exchange shall have been suspended or limited or minimum
prices shall have been established on such Exchange; (ii) a banking moratorium
shall have been declared either by Federal or New York State authorities; or
(iii) there shall have occurred any new outbreak or escalation of hostilities,
declaration by the United States of a national emergency or war, or other
calamity or crisis the effect of which on financial markets is such as to make
it, in the sole judgment of the Underwriter, impractical or inadvisable to
proceed with the offering or delivery of the Offered Shares as contemplated by
the Prospectus (exclusive of any supplement thereto).
If this Agreement is terminated pursuant to any of its provisions, the
Company shall not be under any liability to the Underwriter other than with
respect to the Company's obligation to reimburse the Underwriter's out-of-pocket
expenses to the extent provided in Section 6(d) hereof, and the Underwriter
shall not be under any liability to the Company, except that the Underwriter
shall not be relieved of liability to the Company as a result of the failure or
refusal by the Underwriter to purchase the Offered Shares agreed to be purchased
under this Agreement without some reason sufficient hereunder to justify
cancellation or termination by the Underwriter of its obligations under this
Agreement.
10. Miscellaneous.
(a) The respective agreements, representations, warranties, indemnities
and other statements of the Company and the Partnerships or their officers and
of the Underwriter set forth in or made pursuant to this Agreement shall remain
in full force and effect, regardless of any investigation made by or on behalf
of the Underwriter or the Company or any of the officers, directors or
controlling persons referred to in Sections 7 and 8 hereof, and shall survive
delivery of and payment for the Offered Shares. The provisions of Sections 7 and
8 shall survive the termination or cancellation of this Agreement.
(b) This Agreement will inure to the benefit of and be binding upon the
parties hereto and their respective successors and the officers, directors,
employees, agents and controlling persons referred to in Section 8 hereof, and
no other person will have right or obligation hereunder.
(c) All notices and communications hereunder shall be in writing and
mailed or delivered or by telephone or telegraph if subsequently confirmed in
writing, (a) if to the Underwriter, Wachovia Securities, Inc., 0 Xx. Xxxx
Xxxxxx, 0xx Xxxxx, Xxxxxxxxx, Xxxxxxxx 00000
22
Attention: Xxxx Xxxxxxxx, Managing Director, with a copy to: Hunton & Xxxxxxxx
LLP, Riverfront Plaza, East Tower, 000 Xxxx Xxxx Xxxxxx, Xxxxxxxx, Xxxxxxxx
00000-0000 Attention: Xxxxxx X. XxXxx, Esq. and (b) if to the Company, to
Lexington Corporate Properties Trust, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000-0000 Attention: X. Xxxxxx Eglin, President and Chief Operating Officer,
with a copy to: Xxxx Xxxxxxxx Xxxxxxxx & Xxxxxx LLP, 00 Xxxx 00xx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000-0000 Attention: Xxxxx Xxxxxx, Esq.
(d) This Agreement shall be governed by and construed in accordance with
the laws of the State of New York applicable to contracts made and to be
performed within the State of New York.
(e) This Agreement may be signed in any number of counterparts, each of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument.
(f) The section headings used herein are for convenience only and shall
not affect the construction hereof.
[SIGNATURES ON NEXT PAGE]
23
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among the
Company and the Underwriter.
Very truly yours,
Lexington Corporate Properties Trust
By: /s/ X. Xxxxxx Eglin
---------------------------------------
Name: X. Xxxxxx Eglin
Title: Chief Executive Officer,
President and Chief Operating
Officer
Lepercq Corporate Income Fund, L.P.
By: Lex GP-1 Trust, general partner
By: /s/ X. Xxxxxx Eglin
---------------------------------------
Name: X. Xxxxxx Eglin
Title: Vice President
Lepercq Corporate Income Fund II, L.P.
By: Lex GP-1 Trust, general partner
By: /s/ X. Xxxxxx Eglin
---------------------------------------
Name: X. Xxxxxx Eglin
Title: Vice President
Net 3 Acquisition, L.P.
By: Lex GP-1 Trust, general partner
By: /s/ X. Xxxxxx Eglin
----------------------------------------
Name: X. Xxxxxx Eglin
Title: Vice President
[SIGNATURES CONTINUE ON NEXT PAGE]
The foregoing Agreement is hereby confirmed and accepted as of this 29th day of
April, 2003.
Wachovia Securities, Inc.
By:/s/ J. Xxxx Xxxxxxxx
---------------------------------
Name: J. Xxxx Xxxxxxxx
Title: Managing Director
25
EXHIBIT A
---------
Form of Lock-Up Agreement
Offering of Common Shares
of Lexington Corporate Properties Trust
April 29, 2003
Wachovia Securities, Inc.
0 Xx. Xxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxx, XX 00000
Ladies and Gentlemen:
This letter is being delivered to you in connection with the proposed
Underwriting Agreement (the "Underwriting Agreement"), among Lexington Corporate
Properties Trust, a statutory Maryland real estate investment trust (the
"Company"), Lepercq Corporate Income Fund, L.P., a Delaware limited partnership,
Lepercq Corporate Income Fund II, L.P., a Delaware limited partnership, Net 3
Acquisition, L.P., a Delaware limited partnership, and you relating to an
offering of Common Shares, $.0001 par value, of the Company.
In order to induce you to enter into the Underwriting Agreement, the
undersigned will not, without your prior written consent, directly or
indirectly, for a period of 90 days after the date of this agreement (the
"Lock-Up Period"),
(1) offer, sell, contract to sell, pledge or otherwise dispose of (or
enter into any transaction which is designed to, or might reasonably be expected
to, result in the disposition (whether by actual disposition or effective
economic disposition due to cash settlement or otherwise), or
(2) establish or increase a put equivalent position or establish,
liquidate or decrease a call equivalent position within the meaning of Section
16 of the Securities Exchange Act of 1934, as amended, and the rules and
regulations of the Securities and Exchange Commission promulgated thereunder
with respect to,
any shares of capital stock of the Company or any securities convertible into or
exercisable or exchangeable for such capital stock, nor will the undersigned
publicly announce an intention to effect any of the foregoing.
If for any reason the Underwriting Agreement shall be terminated prior
to the Closing Date (as defined in the Underwriting Agreement), the agreement
set forth above shall likewise be terminated. The foregoing restrictions shall
not apply to (i) the exercise by the undersigned of outstanding stock options
held by the undersigned, provided that the common shares received by the
undersigned upon any such exercise shall be subject to the provisions of this
agreement during the Lock-Up Period or (ii) securities disposed of privately
through bona fide gifts to family members or to others approved by you, so long
as the recipients agree to be bound by the same restrictions set forth herein
during the Lock-Up Period.
Yours very truly,
[Signature of officer, director or
major shareholder]
[Name and address of officer,
director or major shareholder]
