WELSH PROPERTY TRUST, INC. [___] Shares Common Stock ($0.01 par value per Share) UNDERWRITING AGREEMENT
EXHIBIT 1.1
[___] Shares
Common Stock
($0.01 par value per Share)
[ ], 2010
[ ], 2010
UBS Securities LLC
X.X. Xxxxxx Securities Inc.
as Managing Underwriters
c/o UBS Securities LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
X.X. Xxxxxx Securities Inc.
as Managing Underwriters
c/o UBS Securities LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
Welsh Property Trust, Inc., a Maryland corporation (the “Company”), proposes to issue and sell
to the underwriters named in Schedule A annexed hereto (the “Underwriters”), for whom you are
acting as representatives, an aggregate of [ ] shares (the “Firm Shares”) of common stock,
$0.01 par value per share (the “Common Stock”), of the Company. In addition, solely for the
purpose of covering over-allotments, the Company proposes to grant to the Underwriters the option
to purchase from the Company up to an additional [ ] shares of Common Stock (the
“Additional Shares”). The Firm Shares and the Additional Shares are hereinafter collectively
sometimes referred to as the “Shares.” The Shares are described in the Prospectus which is
referred to below.
The Company hereby acknowledges that, in connection with the proposed offering of the Shares,
it has requested UBS Financial Services Inc. (“UBS-FinSvc”) to administer a directed share program
(the “Directed Share Program”) under which up to [ ] Firm Shares, or [5]% of the Firm
Shares to be purchased by the Underwriters (the “Reserved Shares”), shall be reserved for sale by
UBS-FinSvc at the initial public offering price to the Company’s officers, directors, employees and
consultants and other persons having a relationship with the Company as designated by the Company
(the “Directed Share Participants”) as part of the distribution of the Shares by the Underwriters,
subject to the terms of this Agreement, the applicable rules, regulations and interpretations of
the Financial Industry Regulatory Authority, Inc. (“FINRA”) and all other applicable laws, rules
and regulations. The number of Shares available for sale to the general public will be reduced to
the extent that Directed Share Participants purchase Reserved Shares. The Underwriters may offer
any Reserved Shares not purchased by Directed Share Participants to the general public on the same
basis as the other Shares being issued and sold hereunder. The Company has supplied UBS-FinSvc
with the names, addresses and telephone numbers of the individuals or other entities which the
Company has designated to be participants in the Directed Share Program. It is understood that any
number of those so designated to participate in the Directed Share Program may decline to do so.
The Company has prepared and filed, in accordance with the provisions of the Securities Act of
1933, as amended, and the rules and regulations thereunder (collectively, the “Act”), with the
Securities and Exchange Commission (the “Commission”) a registration statement on Form S-11 (File
No. 333-165714) under the Act, including a prospectus, relating to the Shares.
Except where the context otherwise requires, “Registration Statement,” as used herein, means
the registration statement, as amended at the time of such registration statement’s effectiveness
for purposes of Section 11 of the Act, as such section applies to the respective Underwriters (the
“Effective Time”), including (i) all documents filed as a part thereof, (ii) any information
contained in a prospectus filed with the Commission pursuant to Rule 424(b) under the Act, to the
extent such information is deemed, pursuant to Rule 430A or Rule 430C under the Act, to be part of
the registration statement at the
Effective Time, and (iii) any registration statement filed to register the offer and sale of
Shares pursuant to Rule 462(b) under the Act.
The Company has furnished to you, for use by the Underwriters and by dealers in connection
with the offering of the Shares, copies of one or more preliminary prospectuses relating to the
Shares. Except where the context otherwise requires, “Preliminary Prospectus,” as used herein,
means each such preliminary prospectus, in the form so furnished.
Except where the context otherwise requires, “Prospectus,” as used herein, means the
prospectus, relating to the Shares, filed by the Company with the Commission pursuant to Rule
424(b) under the Act on or before the second business day after the date hereof (or such earlier
time as may be required under the Act), or, if no such filing is required, the final prospectus
included in the Registration Statement at the time it became effective under the Act, in each case
in the form furnished by the Company to you for use by the Underwriters and by dealers in
connection with the offering of the Shares.
“Permitted Free Writing Prospectuses,” as used herein, means the documents listed on Schedule
B attached hereto and each “road show” (as defined in Rule 433 under the Act), if any, related to
the offering of the Shares contemplated hereby that is a “written communication” (as defined in
Rule 405 under the Act) (each such road show, an “Electronic Road Show”). The Underwriters have
not offered or sold and will not offer or sell, without the Company’s consent, any Shares by means
of any “free writing prospectus” (as defined in Rule 405 under the Act) that is required to be
filed by the Underwriters with the Commission pursuant to Rule 433 under the Act, other than a
Permitted Free Writing Prospectus.
“Covered Free Writing Prospectuses,” as used herein, means (i) each “issuer free writing
prospectus” (as defined in Rule 433(h)(1) under the Act), if any, relating to the Shares, which is
not a Permitted Free Writing Prospectus and (ii) each Permitted Free Writing Prospectus.
“Disclosure Package,” as used herein, means any Preliminary Prospectus together with any
combination of one or more of the Permitted Free Writing Prospectuses, if any.
“Subsidiary,” or, collectively, “Subsidiaries,” as used herein, means the direct and indirect
subsidiaries of the Company, which include Welsh Property Trust, L.P., Welsh Property Trust, L.L.C.
and Welsh TRS, Inc. (collectively, the “Direct Subsidiaries”), and the property and service company
subsidiaries set forth on Schedule D attached hereto (the “Existing Entities”).
As used in this Agreement, “business day” shall mean a day on which the New York Stock
Exchange (the “NYSE”) is open for trading. The terms “herein,” “hereof,” “hereto,” “hereinafter”
and similar terms, as used in this Agreement, shall in each case refer to this Agreement as a whole
and not to any particular section, paragraph, sentence or other subdivision of this Agreement. The
term “or,” as used herein, is not exclusive.
The Company has prepared and filed, in accordance with Section 12 of the Securities Exchange
Act of 1934, as amended, and the rules and regulations thereunder (collectively, the “Exchange
Act”), a registration statement (as amended, the “Exchange Act Registration Statement”) on Form 8-A
(File No. [___]) under the Exchange Act to register, under Section 12(b) of the Exchange Act, the
class of securities consisting of the Common Stock.
The Company, Welsh Property Trust, L.P., a Delaware limited partnership and the operating
partnership of the Company (the “Operating Partnership”), the entities listed on Schedule C
attached hereto (each, a “Principal Controlled Investor” and, collectively, the “Principal
Controlled Investors”)
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and certain other parties listed on Schedule E attached hereto (each, a “Third Party Investor”
and, collectively, the “Third Party Investors”) have engaged in a series of transactions described
in the Registration Statement and the Prospectus (the “Formation Transactions”), including (i) the
contribution by the Principal Controlled Investors and the Third Party Investors of their equity
interests in the Existing Entities in exchange for OP Units (as defined herein), (ii) the
acquisition of certain industrial and office properties from the Company’s acquisition pipeline
using the net proceeds from the offering of the Shares or in exchange for OP Units, and (iii) the
assumption by the Company of certain existing property-related indebtedness, along with a new
revolving credit facility. The following agreements entered into in connection with the Formation
Transactions: (i) the Contribution Agreements among the Principal Controlled Investors, the Third
Party Investors and the Operating Partnership pursuant to which each Principal Controlled
Investor’s and Third Party Investor’s equity interests in the Existing Entities will be contributed
to the Operating Partnership in exchange for OP Units (the “Contribution Agreements”); (ii) the
Representation and Warranty Agreement among the Operating Partnership and certain principals of the
Company (the “Representation and Warranty Agreement”); (iii) the Agreement of Limited Partnership
of the Operating Partnership (the “Operating Partnership Agreement”); (iv) the Registration Rights
Agreement by and among the Company and certain persons listed on Schedule I thereto (the
“Registration Rights Agreement”); (v) the Employment Agreements with each of Xxxxx X. Xxxxxxxxxxx,
the Company’s Chief Executive Officer, and Xxxx X. Xxxx, the Company’s President and Chief
Operating Officer (the “Employment Agreements”) [Describe any other agreements, e.g. acquisition
portfolio agreements and financing transaction agreements], are herein referred to as the
“Formation Transaction Agreements.”
The Company, the Operating Partnership and the Underwriters agree as follows:
1. Sale and Purchase. Upon the basis of the representations and warranties and subject
to the terms and conditions herein set forth, the Company agrees to issue and sell to the
respective Underwriters and each of the Underwriters, severally and not jointly, agrees to purchase
from the Company the number of Firm Shares set forth opposite the name of such Underwriter in
Schedule A attached hereto, subject to adjustment in accordance with Section 8 hereof, in each case
at a purchase price of $[___] per Share. The Company is advised by you that the Underwriters
intend (i) to make a public offering of their respective portions of the Firm Shares as soon after
the effective date of the Registration Statement as in your judgment is advisable and (ii)
initially to offer the Firm Shares upon the terms set forth in the Prospectus. You may from time
to time increase or decrease the public offering price after the initial public offering to such
extent as you may determine.
In addition, the Company hereby grants to the several Underwriters the option (the
“Over-Allotment Option”) to purchase, and upon the basis of the representations and warranties and
subject to the terms and conditions herein set forth, the Underwriters shall have the right to
purchase, severally and not jointly, from the Company, ratably in accordance with the number of
Firm Shares to be purchased by each of them, all or a portion of the Additional Shares as may be
necessary to cover over-allotments made in connection with the offering of the Firm Shares, at the
same purchase price per share to be paid by the Underwriters to the Company for the Firm Shares.
The Over-Allotment Option may be exercised by UBS Securities LLC (“UBS”) on behalf of the several
Underwriters at any time and from time to time on or before the thirtieth day following the date of
the Prospectus, by written notice to the Company. Such notice shall set forth the aggregate number
of Additional Shares as to which the Over-Allotment Option is being exercised and the date and time
when the Additional Shares are to be delivered (any such date and time being herein referred to as
an “additional time of purchase”); provided, however, that no additional time of purchase shall be
earlier than the “time of purchase” (as defined below) nor earlier than the second business day
after the date on which the Over-Allotment Option shall have been exercised nor later than the
tenth business day after the date on which the Over-Allotment Option shall have been exercised.
The number of Additional Shares to be sold to each
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Underwriter shall be the number which bears the same proportion to the aggregate number of
Additional Shares being purchased as the number of Firm Shares set forth opposite the name of such
Underwriter on Schedule A hereto bears to the total number of Firm Shares (subject, in each case,
to such adjustment as UBS may determine to eliminate fractional shares), subject to adjustment in
accordance with Section 8 hereof.
2. Payment and Delivery. Payment of the purchase price for the Firm Shares shall be made
to the Company by Federal Funds wire transfer against delivery of the certificates for the Firm
Shares to you through the facilities of The Depository Trust Company (“DTC”) for the respective
accounts of the Underwriters. Such payment and delivery shall be made at 10:00 A.M., New York City
time, on [ ] (unless another time shall be agreed to by you and the Company or unless
postponed in accordance with the provisions of Section 8 hereof). The time at which such payment
and delivery are to be made is hereinafter sometimes called the “time of purchase.” Electronic
transfer of the Firm Shares shall be made to you at the time of purchase in such names and in such
denominations as you shall specify.
Payment of the purchase price for the Additional Shares shall be made at the additional time
of purchase in the same manner and at the same office and time of day as the payment for the Firm
Shares. Electronic transfer of the Additional Shares shall be made to you at the additional time
of purchase in such names and in such denominations as you shall specify.
Deliveries of the documents described in Section 6 hereof with respect to the purchase of the
Shares shall be made at the offices of Xxxxxxxx Chance US LLP at 00 Xxxx 00xx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, at 9:00 A.M., New York City time, on the date of the closing of the
purchase of the Firm Shares or the Additional Shares, as the case may be.
3. Representations and Warranties of the Company and the Operating Partnership. The
Company and the Operating Partnership, jointly and severally, represent and warrant to and agree
with each of the Underwriters that:
(a) the Registration Statement has heretofore become effective under the Act or,
with respect to any registration statement to be filed to register the offer and sale of Shares
pursuant to Rule 462(b) under the Act, will be filed with the Commission and become effective under
the Act no later than 10:00 P.M., New York City time, on the date of determination of the public
offering price for the Shares; no stop order of the Commission preventing or suspending the use of
any Preliminary Prospectus or Permitted Free Writing Prospectus, or the effectiveness of the
Registration Statement, has been issued, and no proceedings for such purpose have been instituted
or, to the Company’s knowledge, are contemplated by the Commission; the Exchange Act Registration
Statement has become effective as provided in Section 12 of the Exchange Act;
(b) the Registration Statement complied when it became effective, complies as of the
date hereof and, as amended or supplemented, at the time of purchase, each additional time of
purchase, if any, and at all times during which a prospectus is required by the Act to be delivered
(whether physically or through compliance with Rule 172 under the Act or any similar rule) in
connection with any sale of Shares, will comply, in all material respects, with the requirements of
the Act; the conditions to the use of Form S-11 in connection with the offering and sale of the
Shares as contemplated hereby have been satisfied; the Registration Statement did not, as of the
Effective Time, contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not misleading; each
Preliminary Prospectus complied, at the time it was filed with the Commission, and complies as of
the date hereof, in all material respects with the requirements of the Act; at no time during the
period that begins on the earlier of the date of such Preliminary Prospectus and the date such
Preliminary Prospectus was filed with the Commission and ends at the time of purchase did or
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will any Preliminary Prospectus, as then amended or supplemented, include an untrue statement
of a material fact or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not misleading, and at no
time during such period did or will any Preliminary Prospectus, as then amended or supplemented,
together with any combination of one or more of the then issued Permitted Free Writing
Prospectuses, if any, include an untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading; the Prospectus will comply, as of its date, the date that it
is filed with the Commission, the time of purchase, each additional time of purchase, if any, and
at all times during which a prospectus is required by the Act to be delivered (whether physically
or through compliance with Rule 172 under the Act or any similar rule) in connection with any sale
of Shares, in all material respects, with the requirements of the Act (including, without
limitation, Section 10(a) of the Act); at no time during the period that begins on the earlier of
the date of the Prospectus and the date the Prospectus is filed with the Commission and ends at the
later of the time of purchase, the latest additional time of purchase, if any, and the end of the
period during which a prospectus is required by the Act to be delivered (whether physically or
through compliance with Rule 172 under the Act or any similar rule) in connection with any sale of
Shares did or will the Prospectus, as then amended or supplemented, include an untrue statement of
a material fact or omit to state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading; at no time during the
period that begins on the date of such Permitted Free Writing Prospectus and ends at the time of
purchase did or will any Permitted Free Writing Prospectus include an untrue statement of a
material fact or omit to state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading; provided, however,
that the Company and the Operating Partnership make no representation or warranty in this Section
3(b) with respect to any statement contained in the Registration Statement, any Preliminary
Prospectus, the Prospectus or any Permitted Free Writing Prospectus in reliance upon and in
conformity with information concerning an Underwriter and furnished in writing by or on behalf of
such Underwriter through you to the Company expressly for use in the Registration Statement, such
Preliminary Prospectus, the Prospectus or such Permitted Free Writing Prospectus;
(c) prior to the execution of this Agreement, the Company has not, directly or
indirectly, offered or sold any Shares by means of any “prospectus” (within the meaning of the Act)
or used any “prospectus” (within the meaning of the Act) in connection with the offer or sale of
the Shares, in each case other than the Preliminary Prospectuses and the Permitted Free Writing
Prospectuses, if any; the Company has not, directly or indirectly, prepared, used or referred to
any Permitted Free Writing Prospectus except in compliance with Rules 164 and 433 under the Act;
assuming that such Permitted Free Writing Prospectus is accompanied or preceded by the most recent
Preliminary Prospectus that contains a price range or the Prospectus, as the case may be, and that
such Permitted Free Writing Prospectus is so sent or given after the Registration Statement was
filed with the Commission (and after such Permitted Free Writing Prospectus was, if required
pursuant to Rule 433(d) under the Act, filed with the Commission), the sending or giving, by any
Underwriter, of any Permitted Free Writing Prospectus will satisfy the provisions of Rule 164 and
Rule 433 (without reliance on subsections (b), (c) and (d) of Rule 164); the Preliminary Prospectus
dated [ ] is a prospectus that, other than by reason of Rule 433 or Rule 431 under the
Act, satisfies the requirements of Section 10 of the Act, including a price range where required by
rule; neither the Company nor the Underwriters are disqualified, by reason of subsection (f) or (g)
of Rule 164 under the Act, from using, in connection with the offer and sale of the Shares, “free
writing prospectuses” (as defined in Rule 405 under the Act) pursuant to Rules 164 and 433 under
the Act; the Company is not an “ineligible issuer” (as defined in Rule 405 under the Act) as of the
eligibility determination date for purposes of Rules 164 and 433 under the Act with respect to the
offering of the Shares contemplated by the Registration Statement, without taking into account any
determination by the Commission pursuant to Rule 405 under the Act that it is not necessary under
the circumstances that the Company be considered an “ineligible issuer”; the parties hereto agree
and understand that the
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content of any and all “road shows” (as defined in Rule 433 under the Act) related to the
offering of the Shares contemplated hereby is solely the property of the Company; the Company has
caused there to be made available at least one version of a “bona fide electronic road show” (as
defined in Rule 433 under the Act) in a manner that, pursuant to Rule 433(d)(8)(ii) under the Act,
causes the Company not to be required, pursuant to Rule 433(d) under the Act, to file, with the
Commission, any Electronic Road Show;
(d) as of the date of this Agreement, the Company has an authorized and outstanding
capitalization as set forth in the sections of the Registration Statement, the Preliminary
Prospectuses and the Prospectus entitled “Capitalization” and “Description of stock” (and any
similar sections or information, if any, contained in any Permitted Free Writing Prospectus), and,
as of the time of purchase and any additional time of purchase, as the case may be, the Company
shall have an authorized and outstanding capitalization as set forth in the sections of the
Registration Statement, the Preliminary Prospectuses and the Prospectus entitled “Capitalization”
and “Description of stock” (and any similar sections or information, if any, contained in any
Permitted Free Writing 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 (excluding the exhibits thereto), each Preliminary Prospectus and the Prospectus and the
grant of options under existing stock option plans described in the Registration Statement
(excluding the exhibits thereto), each Preliminary Prospectus and the Prospectus); all of the
issued and outstanding shares of capital stock, including the Common Stock, of the Company have
been duly authorized and validly issued and are fully paid and non-assessable, have been issued in
compliance with all applicable securities laws and were not issued in violation of any preemptive
right, resale right, right of first refusal or similar right; the Shares are duly listed, admitted
and authorized for trading, subject to official notice of issuance and evidence of satisfactory
distribution, on the NYSE;
(e) the Company has been duly incorporated and is validly existing as a corporation
in good standing under the laws of the State of Maryland, with full corporate power and authority
to own, lease and operate its properties and conduct its business as described in the Registration
Statement, the Preliminary Prospectuses, the Prospectus and the Permitted Free Writing
Prospectuses, if any, to execute and deliver this Agreement, to issue, sell and deliver the Shares
as contemplated herein, to execute and deliver the Formation Transaction Agreements to which it is
a party and to perform its obligations as contemplated therein;
(f) the Company is duly qualified to do business as a foreign corporation and is in
good standing in each jurisdiction where the ownership or leasing of its properties or the conduct
of its business requires such qualification, except where the failure to be so qualified and in
good standing would not, individually or in the aggregate, either (i) have a material adverse
effect on the business, properties, financial condition, results of operations or prospects of the
Company and the Subsidiaries (as defined below) taken as a whole, (ii) prevent or materially
interfere with the consummation of the transactions contemplated hereby or (iii) prevent the shares
of Common Stock from being accepted for listing on, or result in the delisting of shares of Common
Stock from, the NYSE (the occurrence of any such effect or any such prevention or interference or
any such result described in the foregoing clauses (i), (ii) and (iii) being herein referred to as
a “Material Adverse Effect”);
(g) the Company has no subsidiaries (as defined under the Act) other than the
Subsidiaries; except as disclosed in the Registration Statement, each Preliminary Prospectus and
the Prospectus, the Company owns directly or indirectly all of the issued and outstanding capital
stock or other equity interests of each of the Subsidiaries; except as disclosed in the
Registration Statement, each Preliminary Prospectus and the Prospectus, other than the capital
stock or other equity interests of the Subsidiaries, the Company does not own, directly or
indirectly, any shares of stock or any other equity interests or long-term debt securities of any
corporation, firm, partnership, joint venture, association or other entity; complete and correct
copies of the charters and the bylaws (or comparable organizational documents) of
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the Company, each Subsidiary and each Principal Controlled Investor, and all amendments
thereto have been made available to you, and, except as set forth in the exhibits to the
Registration Statement, no changes therein will be made on or after the date hereof through and
including the time of purchase or, if later, any additional time of purchase; to the knowledge of
the Company and the Operating Partnership, complete and correct copies of the charters and the
bylaws (or comparable organizational documents) of each Third Party Investor, and all amendments
thereto have been made available to you, and, to the knowledge of the Company and the Operating
Partnership, except as set forth in the exhibits to the Registration Statement, no changes therein
will be made on or after the date hereof through and including the time of purchase or, if later,
any additional time of purchase; each Subsidiary has been duly organized and is validly existing as
a corporation, limited liability company, limited partnership, or trust, as applicable, in good
standing under the laws of the jurisdiction of its organization, with full power and authority,
corporate or otherwise, to own, lease and operate its properties and to conduct its business as
described in the Registration Statement, the Preliminary Prospectuses, the Prospectus and the
Permitted Free Writing Prospectuses, if any; each Subsidiary is duly qualified to do business as a
foreign corporation, limited liability company, limited partnership, or trust, as applicable, and
is in good standing in each jurisdiction where the ownership or leasing of its properties or the
conduct of its business requires such qualification, except where the failure to be so qualified
and in good standing would not, individually or in the aggregate, have a Material Adverse Effect;
the Operating Partnership has full power and authority to execute and deliver this Agreement, to
perform its obligations as contemplated herein, to execute and deliver the Formation Transaction
Agreements to which it is a party and to perform its obligations as contemplated therein; each of
the Principal Controlled Investors and, to the knowledge of the Company and the Operating
Partnership, each of the Third Party Investors has been duly organized and is validly existing as a
corporation, limited liability company, limited partnership, or trust, as applicable, is in good
standing under the laws of the jurisdiction of its organization and has full power and authority,
corporate or otherwise, to execute and deliver the Formation Transaction Agreements to which it is
a party and to perform its obligations as contemplated therein; the Company is the sole member of
the general partner of the Operating Partnership; except as disclosed in the Registration
Statement, each Preliminary Prospectus and the Prospectus, all of the outstanding shares of capital
stock or other equity interests of each of the Subsidiaries have been duly authorized and validly
issued, are fully paid and non-assessable, have been issued in compliance with all applicable
securities laws, were not issued in violation of any preemptive right, resale right, right of first
refusal or similar right and are owned by the Company subject to no security interest, other
encumbrance or adverse claims; and, except as disclosed in the Registration Statement, each
Preliminary Prospectus and the Prospectus, no options, warrants or other rights to purchase,
agreements or other obligations to issue or other rights to convert any obligation into shares of
capital stock or ownership interests in the Subsidiaries are outstanding;
(h) the Shares have been duly and validly authorized and, when issued and delivered
against payment therefor as provided herein, will be duly and validly issued, fully paid and
non-assessable and free of statutory and contractual preemptive rights, resale rights, rights of
first refusal and similar rights; the Shares, when issued and delivered against payment therefor as
provided herein, will be free of any restriction upon the voting or transfer thereof pursuant to
the Maryland General Corporation Law or the Company’s charter or bylaws or any agreement or other
instrument to which the Company is a party; the Company will contribute the net proceeds from the
sale of the Shares, as set forth in the Registration Statement, the Preliminary Prospectuses and
the Prospectus, to the Operating Partnership in exchange for a number of units of partner interest
in the Operating Partnership (the “OP Units”) equal to the number of Shares; the OP Units to be
issued by the Operating Partnership in connection with the Company’s contribution of the net
proceeds from the sale of the Shares to the Operating Partnership have been duly and validly
authorized and, when issued and delivered, will be duly and validly issued, fully paid and
non-assessable and free of statutory and contractual preemptive rights, resale rights, rights of
first refusal and similar rights;
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(i) the OP Units to be issued in connection with the Formation Transactions have
been duly and validly authorized for issuance by the Operating Partnership and, when issued and
delivered against payment therefor as provided in the Formation Transaction Agreements, will be
duly and validly issued, fully paid and non-assessable and free of statutory and contractual
preemptive rights, resale rights, rights of first refusal and similar rights; the issuance and sale
by the Operating Partnership of OP Units in connection with the Formation Transactions are exempt
from the registration requirements of the Act and applicable state securities and blue sky laws;
(j) the capital stock of the Company, including the Shares, conforms in all material
respects to each description thereof contained in the Registration Statement, the Preliminary
Prospectuses, the Prospectus and the Permitted Free Writing Prospectuses, if any; the OP Units
conform in all material respects to each description thereof contained in the Registration
Statement, the Preliminary Prospectuses, the Prospectus and the Permitted Free Writing
Prospectuses, if any; and the certificates for the Shares are in due and proper form;
(k) this Agreement has been duly authorized, executed and delivered by each of the
Company and the Operating Partnership;
(l) each of the Formation Transaction Agreements has been duly authorized, executed
and delivered by each of the Company, the Operating Partnership, the Principal Controlled Investors
and, to the knowledge of the Company and the Operating Partnership, the Third Party Investors, as
applicable, and constitutes a valid and binding obligation of the Company, the Operating
Partnership, the Principal Controlled Investors and, to the knowledge of the Company and the
Operating Partnership, the Third Party Investors, as applicable, enforceable against the Company,
the Operating Partnership, the Principal Controlled Investors or, to the knowledge of the Company
and the Operating Partnership, the Third Party Investors, as applicable, in accordance with its
terms, subject to the effect of: (a) bankruptcy, insolvency, reorganization, receivership,
moratorium and other laws affecting creditors’ rights (including, without limitation, the effect of
statutory and other law regarding fraudulent conveyances, fraudulent transfers and preferential
transfers), (b) the exercise of judicial discretion and the application of principles of equity,
good faith, fair dealing, reasonableness, conscionability and materiality (regardless of whether
the Formation Transaction Agreements are considered in a proceeding in equity or at law), and (c)
the unenforceability under certain circumstances under law or court decisions of provisions
providing for the indemnification of or contribution to a party with respect to a liability where
such indemnification or contribution is contrary to public policy;
(m) neither the Company nor any of the Subsidiaries is in breach or violation of or
in default under (nor has any event occurred which, with notice, lapse of time or both, would
result in any breach or violation of, constitute a default under or give the holder of any
indebtedness (or a person acting on such holder’s behalf) the right to require the repurchase,
redemption or repayment of all or a part of such indebtedness under) (A) its charter or bylaws (or
comparable organizational documents), or (B) any indenture, mortgage, deed of trust, bank loan or
credit agreement or other evidence of indebtedness, or any license, lease, contract or other
agreement or instrument to which it is a party or by which it or any of its properties may be bound
or affected, or (C) any federal, state, local or foreign law, regulation or rule, or (D) any rule
or regulation of any self-regulatory organization or other non-governmental regulatory authority
(including, without limitation, the rules and regulations of the NYSE, or (E) any decree, judgment
or order applicable to it or any of its properties;
(n) the execution, delivery and performance of this Agreement and the Formation
Transaction Agreements, the issuance and sale of the Shares and the consummation of the
transactions contemplated hereby and thereby will not conflict with, result in any breach or
violation of or constitute a default under (nor constitute any event which, with notice, lapse of time or both, would
result in any
- 8 -
breach or violation of, constitute a default under or give the holder of any
indebtedness (or a person acting on such holder’s behalf) the right to require the repurchase,
redemption or repayment of all or a part of such indebtedness under) (or result in the creation or
imposition of a lien, charge or encumbrance on any property or assets of the Company or any
Subsidiary pursuant to) (A) the charter or bylaws (or comparable organizational documents) of the
Company, any of the Subsidiaries, any of the Principal Controlled Investors or, to the knowledge
of the Company and the Operating Partnership, any of the Third Party Investors, or (B) any
indenture, mortgage, deed of trust, bank loan or credit agreement or other evidence of
indebtedness, or any license, lease, contract or other agreement or instrument to which the
Company, any of the Subsidiaries, any of the Principal Controlled Investors or, to the knowledge
of the Company and the Operating Partnership, any of the Third Party Investors is a party or by
which any of them or any of their respective properties may be bound or affected, except as could
not reasonably be expected individually or in the aggregate to constitute a Material Adverse Effect
or, (C) the investment terms or policies set forth in either the respective limited liability
company agreements or the private placement memoranda of Welsh US Real Estate Fund, LLC, Welsh
Real Estate Fund IV, LLC or Welsh Midwest Real Estate Fund, LLC, or (D) any federal, state,
local or foreign law, regulation or rule, or (E) any rule or regulation of any self-regulatory
organization or other non-governmental regulatory authority (including, without limitation, the
rules and regulations of the NYSE), or (F) any decree, judgment or order applicable to the Company,
any of the Subsidiaries, any of the Principal Controlled Investors, or, to the knowledge of the
Company and the Operating Partnership, any of the Third Party Investors, or any of their respective
properties;
(o) 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), or approval of the stockholders of the Company, the
partners of the Operating Partnership or the members or partners of, or other holders of equity
interests in, the Principal Controlled Investors or, to the knowledge of the Company or the
Operating Partnership, the Third Party Investors, is required in connection with the issuance and
sale of the Shares or the consummation by the Company, the Operating Partnership, the Principal
Controlled Investors or the Third Party Investors, as applicable, of the transactions contemplated
hereby or by the Formation Transaction Agreements, other than (i) registration of the Shares under
the Act, which has been effected (or, with respect to any registration statement to be filed
hereunder pursuant to Rule 462(b) under the Act, will be effected in accordance herewith), (ii) the
filing of a Form D under the Act with the Commission in connection with the issuance and sale of
the OP Units in connection with the Formation Transactions, (iii) any necessary qualification under
the securities or blue sky laws of the various jurisdictions in which the Shares are being offered
by the Underwriters or (iv) under the Conduct Rules of FINRA;
(p) except as described in the Registration Statement (excluding the exhibits
thereto), each Preliminary Prospectus and the Prospectus, (i) no person has the right, contractual
or otherwise, to cause the Company to issue or sell to it any shares of Common Stock or shares of
any other capital stock or other equity interests of the Company, (ii) no person has any preemptive
rights, resale rights, rights of first refusal or other rights to purchase any shares of Common
Stock or shares of any other capital stock of or other equity interests in the Company and (iii) no
person has the right to act as an underwriter or as a financial advisor to the Company in
connection with the offer and sale of the Shares; no person has the right, contractual or
otherwise, to cause the Company to register under the Act any shares of Common Stock or shares of
any other capital stock of or other equity interests in the Company, or to include any such shares
or interests in the Registration Statement or the offering contemplated thereby;
(q) each of the Company and the Subsidiaries has all necessary licenses,
authorizations, consents and approvals and has made all necessary filings required under any
applicable law, regulation
- 9 -
or rule, and has obtained all necessary licenses, authorizations,
consents and approvals from other persons, in order to conduct their respective businesses; neither
the Company nor any of the Subsidiaries is in violation of, or in default under, or has received
notice of any proceedings relating to revocation or modification of, any such license,
authorization, consent or approval or any federal, state, local or foreign law, regulation or rule
or any decree, order or judgment applicable to the Company or any of the Subsidiaries, except where
such violation, default, revocation or modification would not, individually or in the aggregate,
have a Material Adverse Effect;
(r) all legal or governmental proceedings, affiliate transactions, contracts,
licenses, agreements, leases or documents of a character required to be described in the
Registration Statement, any Preliminary Prospectus or the Prospectus or to be filed as an exhibit
to the Registration Statement have been so described or filed as required;
(s) there are no actions, suits, claims, investigations or proceedings pending or,
to the knowledge of the Company or the Operating Partnership, threatened or contemplated to which
the Company or any of the Subsidiaries or any of their respective directors or officers 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), except any such
action, suit, claim, investigation or proceeding which, if resolved adversely to the Company or any
Subsidiary, would not, individually or in the aggregate, have a Material Adverse Effect;
(t) KPMG LLP, whose reports on (i) the balance sheet of the Company as of January
31, 2010, (ii) the combined financial statements and schedule of the Welsh Predecessor Companies as
of December 31, 2009 and 2008 and for each of the years in the three-year period ended December 31,
2009, (iii) the combined financial statements of the Welsh Contribution Companies as of December
31, 2009 and 2008, and for each of the years in the three-year period ended December 31, 2009, and
(iv) the consolidated financial statements of WelshCo, LLC and its subsidiaries as of December 31,
2009 and for the year ended December 31, 2009, are included in the Registration Statement, the
Preliminary Prospectuses and the Prospectus, are independent registered public accountants as
required by the Act and by the rules of the Public Company Accounting Oversight Board; Boulay,
Heutmaker, Xxxxxx & Co. P.L.L.P., whose reports on (i) the consolidated financial statements of
WelshCo, LLC and its subsidiaries as of December 31, 2008 and for each of the years in the two-year
period ended December 31, 2008, and (ii) the financial statements of Intercen Partners, LLC as of
and for the year ended December 31, 2007, are included in the Registration Statement, the
Preliminary Prospectuses and the Prospectus, are independent registered public accountants as
required by the Act and by the rules of the Public Company Accounting Oversight Board;
(u) the financial statements included in the Registration Statement, the Preliminary
Prospectuses, the Prospectus and the Permitted Free Writing Prospectuses, if any, together with the
related notes and schedules, present fairly the consolidated financial position of the Company as
of the date indicated, of the Welsh Predecessor Companies as of the dates indicated, of the Welsh
Contribution Companies as of the dates indicated, and of WelshCo, LLC and its subsidiaries as of
the dates indicated, and the consolidated results of operations, cash flows and changes in
stockholders’ equity of the Company for the period specified, of the Welsh Predecessor Companies
for the periods specified, of the Welsh Contribution Companies for the periods specified and of
WelshCo, LLC and its subsidiaries for the periods specified, and have been prepared in compliance
with the requirements of the Act and Exchange
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
in the Registration Statement, the Preliminary Prospectuses, the Prospectus and the Permitted Free
Writing Prospectuses, if
- 10 -
any, comply with the requirements of the Act and the Exchange 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 and
statistical data contained in the Registration Statement, the Preliminary Prospectuses, the
Prospectus and the Permitted Free Writing Prospectuses, if any, are accurately and fairly presented
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 in the Registration Statement, any Preliminary Prospectus or the Prospectus that are not
included as required; the Company and the Subsidiaries do not have any material liabilities or
obligations, direct or contingent (including any off-balance sheet obligations), not described in
the Registration Statement (excluding the exhibits thereto), each Preliminary Prospectus and the
Prospectus; and all disclosures contained in the Registration Statement, the Preliminary
Prospectuses, the Prospectus and the Permitted Free Writing Prospectuses, if any, regarding
“non-GAAP financial measures” (as such term is defined by the rules and regulations of the
Commission) comply with Regulation G of the Exchange Act and Item 10 of Regulation S-K under the
Act, to the extent applicable;
(v) except as disclosed in the Registration Statement (excluding the exhibits
thereto), each Preliminary Prospectus and the Prospectus, each stock option granted under any stock
option plan of the Company or any Subsidiary (each, a “Stock Plan”) was granted with a per share
exercise price, if any, no less than the fair market value per share of Common Stock on the grant
date of such option, and no such grant involved any “back-dating,” “forward-dating” or similar
practice with respect to the effective date of such grant; except as would not, individually or in
the aggregate, have a Material Adverse Effect, each such option (i) was granted in compliance with
applicable law and with the applicable Stock Plan(s), (ii) was duly approved by the board of
directors (or a duly authorized committee thereof) of the Company or such Subsidiary, as
applicable, and (iii) has been properly accounted for in the Company’s financial statements in
accordance with U.S. generally accepted accounting principles and disclosed in the Company’s
filings with the Commission;
(w) subsequent to the respective dates as of which information is given in the
Registration Statement, the Preliminary Prospectuses, the Prospectus and the Permitted Free Writing
Prospectuses, if any, in each case excluding any amendments or supplements to the foregoing made
after the execution of this Agreement, there has not been (i) any material adverse change, or any
development involving a prospective material adverse change, in the business, properties,
management, financial condition or results of operations of the Company and the Subsidiaries taken
as a whole, (ii) any transaction which is material to the Company and the Subsidiaries taken as a
whole, (iii) any obligation or liability, direct or contingent (including any off-balance sheet
obligations), incurred by the Company or any Subsidiary, which is material to the Company and the
Subsidiaries taken as a whole, (iv) any change in the capital stock or outstanding indebtedness of
the Company or any Subsidiaries or (v) any dividend or distribution of any kind declared, paid or
made on the capital stock of the Company or any Subsidiary;
(x) the Company has obtained for the benefit of the Underwriters the agreement (a
“Lock-Up Agreement”), in the form set forth as Exhibit A hereto, of (i) each of its directors and
“officers” (within the meaning of Rule 16a-1(f) under the Exchange Act), (ii) each holder of shares
of Common Stock or any security convertible into or exercisable or exchangeable for shares of
Common Stock, including, without limitation, OP Units, or any warrant or other right to acquire
shares of Common Stock or any such security, (iii) each Directed Share Participant purchasing more
than $100,000 in Common Stock in the Directed Share Program, and (iv) each party named in Exhibit
A-1 hereto;
(y) neither the Company nor any Subsidiary is, and at no time during which a
prospectus is required by the Act to be delivered (whether physically or through compliance with
Rule 172 under the
- 11 -
Act or any similar rule) in connection with any sale of Shares will either of
them be, and, after giving effect to the offering and sale of the Shares and the application of the
proceeds thereof, neither of them will be, an “investment company” or an entity “controlled” by an
“investment company,” as such terms are defined in the Investment Company Act of 1940, as amended
(the “Investment Company Act”);
(z) the Company and each of the Subsidiaries have good and marketable title in fee
simple to all real property and good title to all personal property owned by them, including, but
not limited to, all real property described in the Registration Statement, the Preliminary
Prospectuses, the Prospectus and the Permitted Free Writing Prospectuses, if any, as being owned by
them, in each case free and clear of all liens, security interests, pledges, charges, encumbrances,
encroachments, restrictions, mortgages and defects (each, a “Lien” and, collectively, the “Liens”),
in each case except (i) such as may relate to the financing transactions disclosed in the
Registration Statement, each Preliminary Prospectus and the Prospectus, (ii) such as do not
materially and adversely affect the value of such property and do not interfere with the use made
or proposed to be made of such property by the Company or the particular Subsidiary, or (iii) such
as may constitute Permitted Liens (as such term is defined in the Representation and Warranty
Agreement); any real property, buildings, improvements, equipment and personal property held under
lease by the Company or any Subsidiary are held under valid, existing and enforceable leases, with
such exceptions as are disclosed in the Registration Statement, each Preliminary Prospectus and the
Prospectus or are not material and do not interfere with the use made or proposed to be made of
such property, buildings, improvements, equipment and personal property by the Company or such
Subsidiary; the Company or a Subsidiary has obtained an owner’s or leasehold title insurance
policy, from a title insurance company licensed to issue such policy, on any real property owned in
fee or leased, as the case may be, by the Company or any Subsidiary, that insures the Company’s or
the Subsidiary’s fee or leasehold interest, as the case may be, in such real property, which
policies include commercially reasonable exceptions, and with coverages in amounts at least equal
to amounts that are generally deemed in the Company’s industry to be commercially reasonable in the
markets where the Company’s properties are located, or a lender’s title insurance policy insuring
the lien of its mortgage securing the real property with coverage equal to the maximum aggregate
principal amount of any indebtedness held by the Company or a Subsidiary and secured by the real
property;
(aa) (A) neither the Company nor any Subsidiary knows of any violation of any
municipal, state or federal law, rule or regulation (including those pertaining to environmental
matters) concerning any real property owned in fee simple or leased by the Company or the
Subsidiaries as of the date of this Agreement (collectively, for purposes of this subsection only,
the “Properties”) or any part thereof, except for such violations which would not, individually or
in the aggregate, have a Material Adverse Effect; the Company has fairly summarized in the
Registration Statement, each Preliminary Prospectus and the Prospectus all material options and
rights of first refusal to purchase all or part of any Property or any interest therein; (B) each
of the Properties complies with all applicable zoning laws, ordinances, regulations and deed
restrictions or other covenants in all material respects and, if and to the extent there is a
failure to comply, such failure does not materially impair the value of any of the Properties and
will not result in a forfeiture or reversion of title, except for such forfeitures and reversions
that could not have a Material Adverse Effect; (C) neither the Company nor any Subsidiary has
received from any governmental authority any written notice of any condemnation of or zoning change
affecting the Properties or any part thereof, and neither the Company nor any Subsidiary knows of
any such condemnation or zoning change which is threatened, except for such condemnations or zoning
changes which, if consummated, would not, individually or in the aggregate, have a Material Adverse
Effect; (D) all liens, charges, encumbrances, claims, or restrictions on or affecting the
properties and assets (including the Properties) of the Operating Partnership or any of the other
Subsidiaries that are required to be described in the Registration Statement, the Preliminary
Prospectuses or the Prospectus are disclosed
therein; (E) no lessee of any portion of any of the Properties is in default under any of the
leases governing such properties and there is no event which, but for the passage of time or the
giving of notice
- 12 -
or both would constitute a default under any of such leases, except for such
defaults which would not, individually or in the aggregate, have a Material Adverse Effect; (F)
except as described in the Registration Statement, each Preliminary Prospectus and the Prospectus,
no tenant under any lease pursuant to which the Operating Partnership or any of the other
Subsidiaries leases the Properties has an option or right of first refusal to purchase the premises
leased thereunder or the building of which such premises are a part; and (G) except as described in
the Registration Statement, each Preliminary Prospectus and the Prospectus, there are no other
material agreements between the Company, the Operating Partnership or any other Subsidiary and a
tenant under a material lease relating to any of the Properties;
(bb) except as described in the Registration Statement, each Preliminary Prospectus
and the Prospectus, (i) all of the material leases, and, all guaranties related thereto, if any,
are in full force and effect, and (ii) to the knowledge of the Company and the Operating
Partnership, there are no uncured events of default, or events that with the giving of notice or
passage of time, or both, would constitute an event of default that could have a Material Adverse
Effect, by any tenant under any of the terms and provisions of the material leases;
(cc) except as set forth in the Registration Statement, each Preliminary Prospectus
and the Prospectus, the mortgages and deeds of trust encumbering the properties described in the
Registration Statement, the Preliminary Prospectuses, the Prospectus or the Permitted Free Writing
Prospectuses, if any, are not convertible and neither the Company or the Operating Partnership or
any other Subsidiary, nor any person affiliated therewith holds a participating interest therein,
and such mortgages and deeds of trust are not cross-defaulted or cross-collateralized to any
property not owned directly or indirectly in part by the Company or the Operating Partnership or
any other Subsidiary; and none of the Company or the Operating Partnership or any other Subsidiary
holds participating interests in such mortgages or deeds of trust;
(dd) to the knowledge of the Company and the Operating Partnership, water,
stormwater, sanitary sewer, electricity and telephone service are all available at the property
lines of each property owned by the Company, the Operating Partnership or any other Subsidiary,
over duly dedicated streets or perpetual easements of record benefiting the applicable property;
(ee) There are no contracts, letters of intent, term sheets, agreements,
arrangements or understandings with respect to the direct or indirect acquisition or disposition by
the Company, the Operating Partnership or any other Subsidiary, of interests in assets or real
property that is required to be described in the Registration Statement or the Prospectus that is
not already so described;
(ff) each of the Company and the Subsidiaries 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 Preliminary Prospectuses, the Prospectus and the Permitted Free Writing
Prospectuses, if any, 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 the Subsidiaries with respect to the Intellectual Property; neither the Company nor any of
the Subsidiaries has infringed or is infringing the intellectual property of a third party, and
neither the Company nor any Subsidiary has received notice of a claim by a third party to the
contrary;
(gg) neither the Company nor any of the Subsidiaries is engaged in any unfair labor
practice; except for matters which would not, individually or in the aggregate, have a Material
Adverse Effect, (i) there is (A) no unfair labor practice complaint pending or, to the knowledge of
the Company or the
- 13 -
Operating Partnership, threatened against the Company or any of the Subsidiaries
before the National Labor Relations Board, and no grievance or arbitration proceeding arising out
of or under collective bargaining agreements is pending or, to the knowledge of the Company or the
Operating Partnership, threatened, (B) no strike, labor dispute, slowdown or stoppage pending or,
to the Company’s knowledge, threatened against the Company or any of the Subsidiaries and (C) no
union representation dispute currently existing concerning the employees of the Company or any of
the Subsidiaries, (ii) to the Company’s knowledge, no union organizing activities are currently
taking place concerning the employees of the Company or any of the Subsidiaries and (iii) there has
been no violation of any federal, state, local or foreign law relating to discrimination in the
hiring, promotion or pay of employees, any applicable wage or hour laws or any provision of the
Employee Retirement Income Security Act of 1974, as amended (“ERISA”), or the rules and regulations
promulgated thereunder concerning the employees of the Company or any of the Subsidiaries;
(hh) no “reportable event” (as defined in ERISA) has occurred with respect to any
“pension plan” (as defined in ERISA) for which the Company or any Subsidiary would have any
liability; the Company and the Subsidiaries have not incurred and do not expect to incur liability
under (i) Title IV of ERISA with respect to termination of, or withdrawal from, any “pension plan’
or (ii) Sections 412 or 4971 of the Code including the regulations and published interpretations
thereunder; and each “pension plan” for which the Company or any Subsidiary would have any
liability that is intended to be qualified under Section 401(a) of the Code is so qualified in all
material respects and nothing has occurred, whether by action or by failure to act, which would
cause the loss of such qualification, except for such noncompliance, reportable events,
liabilities, or failures to qualify that would not result in a Material Adverse Effect;
(ii) the assets of the Company and the Subsidiaries do not constitute “plan assets”
of an ERISA regulated employee benefit plan;
(jj) the Company and the Subsidiaries and their respective properties, assets and
operations are in compliance with, and the Company and each of the Subsidiaries hold all permits,
authorizations and approvals required under, Environmental Laws (as defined below), except to the
extent that failure to so comply or to hold such permits, authorizations or approvals would not,
individually or in the aggregate, have a Material Adverse Effect; there are no past, present or, to
the knowledge of the Company or the Operating Partnership, reasonably anticipated future events,
conditions, circumstances, activities, practices, actions, omissions or plans that could reasonably
be expected to give rise to any material costs or liabilities to the Company or any Subsidiary
under, or to interfere with or prevent compliance by the Company or any Subsidiary with,
Environmental Laws; except as would not, individually or in the aggregate, have a Material Adverse
Effect, neither the Company nor any of the Subsidiaries (i) is the subject of any investigation,
(ii) has received any notice or claim, (iii) is a party to or affected by any pending or, to the
knowledge of the Company or the Operating Partnership, threatened action, suit or proceeding, (iv)
is bound by any judgment, decree or order or (v) has entered into any agreement, in each case
relating to any alleged violation of any Environmental Law or any actual or alleged liability or
release or threatened release or cleanup at any location of any Hazardous Materials (as defined
below) (as used herein, “Environmental Law” means any federal, state, local or foreign law,
statute, ordinance, rule, regulation, order, decree, judgment, injunction, permit, license,
authorization or other binding requirement, or common law, relating to health, safety or the
protection, cleanup or restoration of the environment or natural resources, including those
relating to the distribution, processing, generation, treatment, storage, disposal, transportation,
other handling or release or threatened release of Hazardous Materials, and “Hazardous Materials”
means any material (including, without limitation, pollutants, contaminants,
hazardous or toxic substances or wastes) that is regulated by or may give rise to liability
under any Environmental Law);
- 14 -
(kk) in the ordinary course of their business, the Company and each of the
Subsidiaries conduct periodic reviews of the effect of the Environmental Laws on their respective
businesses, operations and properties, in the course of which they identify and evaluate associated
costs and liabilities (including, without limitation, any capital or operating expenditures
required for cleanup, closure of properties or compliance with the Environmental Laws or any
permit, license or approval, any related constraints on operating activities and any potential
liabilities to third parties);
(ll) all tax returns required to be filed by the Company or any of the Subsidiaries
have been timely filed, and all taxes and other assessments of a similar nature (whether imposed
directly or through withholding) 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; the Company has no
knowledge of any tax deficiency that has been asserted or threatened against the Company or any
Subsidiary or of any current audit of any tax return of the Company or a Subsidiary by a federal,
state or local taxing authority or agency;
(mm) the Company, upon the sale of the Shares, shall be organized and operated in
conformity with the requirements for qualification and taxation as a “real estate investment trust”
(a “REIT”) under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the
“Code”); the proposed method of operation of the Company as described in the Registration
Statement, the Preliminary Prospectuses, the Prospectus and the Permitted Free Writing
Prospectuses, if any, will enable the Company to meet the requirements for qualification and
taxation as a REIT under the Code, and no actions have been taken (or not taken which are required
to be taken) which would cause such qualification to be lost;
(nn) the description of the Company’s organization and current and proposed method
of operation set forth in the Registration Statement, the Preliminary Prospectuses and the
Prospectus under the heading “Federal Income Tax Considerations” is correct in all material
respects;
(oo) each of the Operating Partnership and any other Subsidiary that is a
partnership or a limited liability company has been properly classified either as a partnership or
as an entity disregarded as separate from the Company for federal income tax purposes throughout
the period from its formation through the date hereof;
(pp) neither the Company nor any of the Subsidiaries has sustained since the date of
the last audited financial statements included in the Registration Statement and the Prospectus any
material loss or interference with its respective business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or court or governmental
action, order or decree;
(qq) the Company and each of the Subsidiaries maintain insurance covering their
respective properties, operations, personnel and businesses as the Company reasonably deems
adequate; such insurance insures against such losses and risks to an extent which is adequate in
accordance with customary industry practice to protect the Company and the Subsidiaries and their
respective businesses; all such insurance is fully in force on the date hereof and will be fully in
force at the time of purchase and each additional time of purchase, if any; neither the Company nor
any Subsidiary has reason to believe that it will not be able to renew any such insurance as and
when such insurance expires;
(rr) neither the Company nor any Subsidiary has sent or received any communication
regarding termination of, or intent not to renew, any of the contracts or agreements described in
any Preliminary Prospectus, the Prospectus or any Permitted Free Writing Prospectus, or described
in or filed as an exhibit to, the Registration Statement, that could, if such termination or
non-renewal occurred, have
- 15 -
a Material Adverse Effect, and no such termination or non-renewal has
been threatened by the Company or any Subsidiary or, to the knowledge of the Company or the
Operating Partnership, any other party to any such contract or agreement;
(ss) the Company and each of the Subsidiaries maintain a system of internal
accounting controls sufficient to provide reasonable assurance that (i) transactions are executed
in accordance with management’s general or specific 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;
(tt) the Company has established and maintains and evaluates “disclosure controls
and procedures” (as such term is defined in Rule 13a-15 and 15d-15 under the Exchange Act) and
“internal control over financial reporting” (as such term is defined in Rule 13a-15 and 15d-15
under the Exchange 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 its Chief Financial Officer by others within
those entities, and such disclosure controls and procedures are effective to perform the functions
for which they were established; the Company’s independent registered public accountants and the
Audit Committee of the Board of Directors of the Company (or if the Audit Committee has not been
established as of the date hereof, the Board of Directors) have been advised of: (i) all
significant deficiencies, if any, in the design or operation of internal controls which could
adversely affect the Company’s ability to record, process, summarize and report financial data; and
(ii) all fraud, if any, whether or not material, that involves management or other employees who
have a role in the Company’s internal controls; all “significant deficiencies” and “material
weaknesses” (as such terms are defined in Rule 1-02(a)(4) of Regulation S-X under the Act) of the
Company, if any, have been identified to the Company’s independent registered public accountants
and are disclosed in the Registration Statement (excluding the exhibits thereto), each Preliminary
Prospectus and the Prospectus; since the date of the most recent evaluation of such disclosure
controls and procedures and internal controls, there have been no significant changes in internal
controls or in other factors that could significantly affect internal controls, including any
corrective actions with regard to significant deficiencies and material weaknesses; and the Company
has taken all necessary actions to ensure that, upon and at all times after the effectiveness of
the Registration Statement, so long as the Company has a class of securities registered under
Section 12 of the Exchange Act, the Company and the Subsidiaries and any of the officers and
directors of the Company and any of its consolidated Subsidiaries, in their capacities as such,
will be in compliance in all material respects with the provisions of the Xxxxxxxx-Xxxxx Act of
2002 (the “Xxxxxxxx-Xxxxx Act”) and the rules and regulations promulgated thereunder;
(uu) each “forward-looking statement” (within the meaning of Section 27A of the Act
or Section 21E of the Exchange Act) contained in the Registration Statement, the Preliminary
Prospectuses, the Prospectus and the Permitted Free Writing Prospectuses, if any, has been made or
reaffirmed with a reasonable basis and in good faith;
(vv) all statistical or market-related data included in the Registration Statement,
the Preliminary Prospectuses, the Prospectus and the Permitted Free Writing Prospectuses, if any,
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;
- 16 -
(ww) neither the Company nor any of the Subsidiaries nor, to the knowledge of the
Company, any director, officer, agent, employee or affiliate of the Company or any of the
Subsidiaries is aware of or has taken any action, directly or indirectly, that would result in a
violation by such persons of the Foreign Corrupt Practices Act of 1977, as amended, and the rules
and regulations thereunder (the “Foreign Corrupt Practices Act”); and the Company, the Subsidiaries
and, to the knowledge of the Company, its affiliates have instituted and maintain policies and
procedures designed to ensure continued compliance therewith;
(xx) the operations of the Company and the Subsidiaries are and have been conducted
at all times in compliance with applicable financial recordkeeping and reporting requirements of
the Currency and Foreign Transactions Reporting Act of 1970, as amended, the money laundering
statutes of all jurisdictions, the rules and regulations thereunder and any related or similar
rules, regulations or guidelines, issued, administered or enforced by any governmental agency
(collectively, the “Money Laundering Laws”); and no action, suit or proceeding by or before any
court or governmental agency, authority or body or any arbitrator or non-governmental authority
involving the Company or any of the Subsidiaries with respect to the Money Laundering Laws is
pending or, to the Company’s knowledge, threatened;
(yy) neither the Company nor any of the Subsidiaries nor, to the knowledge of the
Company, any director, officer, agent, employee or affiliate of the Company or any of the
Subsidiaries is currently subject to any U.S. sanctions administered by the Office of Foreign
Assets Control of the U.S. Treasury Department (“OFAC”); and the Company will not directly or
indirectly use the proceeds of the offering of the Shares contemplated hereby, or lend, contribute
or otherwise make available such proceeds to any Subsidiary, joint venture partner or other person
or entity for the purpose of financing the activities of any person currently subject to any U.S.
sanctions administered by OFAC;
(zz) no Subsidiary is currently prohibited or restricted, directly or indirectly,
from paying any dividends to the Company, from making any other distribution on such Subsidiary’s
capital stock or other equity interests, from repaying to the Company any loans or advances to such
Subsidiary from the Company or from transferring any of such Subsidiary’s property or assets to the
Company or any other Subsidiary of the Company, except as described in the Registration Statement
(excluding the exhibits thereto), each Preliminary Prospectus and the Prospectus;
(aaa) the issuance and sale of the Shares as contemplated hereby will not cause any
holder of any shares of capital stock, securities convertible into or exchangeable or exercisable
for capital stock or options, warrants or other rights to purchase capital stock or any other
securities of the Company to have any right to acquire any shares of preferred stock of the
Company;
(bbb) the Company has not received any notice from the NYSE regarding the delisting
of the Common Stock from the NYSE;
(ccc) except pursuant to this Agreement, neither the Company nor any of the
Subsidiaries has incurred any liability for any finder’s or broker’s fee or agent’s commission in
connection with the execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby or by the Registration Statement;
(ddd) neither the Company nor any of the Subsidiaries nor any of their respective
directors, officers, affiliates or controlling persons has taken, directly or indirectly, any
action designed, or which has constituted or might reasonably be expected to cause or result in the
stabilization or manipulation of the price of any security of the Company to facilitate the sale or
resale of the Shares;
- 17 -
(eee) to the knowledge of the Company or the Operating Partnership, there are no
affiliations or associations between (i) any member of FINRA and (ii) the Company or any of the
Company’s officers, directors or 5% or greater security holders or any beneficial owner of the
Company’s unregistered equity securities that were acquired at any time on or after the 180th day
immediately preceding the date the Registration Statement was initially filed with the Commission,
except as disclosed in the Registration Statement (excluding the exhibits thereto), the Preliminary
Prospectuses and the Prospectus;
(fff) except as described in the Registration Statement, each Preliminary Prospectus
and the Prospectus, neither the Company nor any of its affiliates (i) is required to register as a
“broker” or “dealer” in accordance with the provisions of the Exchange Act or (ii) directly or
indirectly through one or more intermediaries, controls or has any other association with (within
the meaning of Article I of the Bylaws of FINRA) any member firm of FINRA; and Welsh Securities,
LLC is duly registered as a broker-dealer under the Exchange Act, is a member of FINRA and is duly
registered or qualified as a broker-dealer under the state blue sky or securities laws and the
rules and regulations thereunder of each jurisdiction in which the conduct of its business requires
such registration or qualification, except to the extent that the failure to be so registered or
qualified would not, individually or in the aggregate, have a Material Adverse Effect.
(ggg) the Registration Statement, each Preliminary Prospectus, the Prospectus and
each Permitted Free Writing Prospectus comply, and any further amendments or supplements thereto
will comply, with any applicable laws or regulations of any foreign jurisdiction in which any
Preliminary Prospectus, the Prospectus or any Permitted Free Writing Prospectus is distributed in
connection with the Directed Share Program; and no approval, authorization, consent or order of or
filing with any governmental or regulatory commission, board, body, authority or agency, other than
those heretofore obtained, is required in connection with the offering of the Reserved Shares in
any jurisdiction where the Reserved Shares are being offered; and
(hhh) the Company has not offered, or caused the Underwriters to offer, Shares to
any person pursuant to the Directed Share Program with the intent to influence unlawfully (i) a
customer or supplier of the Company or any of the Subsidiaries to alter the customer’s or
supplier’s level or type of business with the Company or any of the Subsidiaries, or (ii) a trade
journalist or publication to write or publish favorable information about the Company or any of the
Subsidiaries or any of their respective products or services.
For purposes of the representations and warranties above with respect to the Third Party
Investors, the knowledge of the Company and the Operating Partnership is based on the
representations and warranties of the relevant Third Party Investor in the Contribution Agreement
executed by such Third Party Investor, and neither the Company nor the Operating Partnership has
made any independent inquiry or investigation with respect to such representations and warranties;
provided, that neither the Company nor the Operating Partnership is aware of any facts or
circumstances which would make such representations and warranties untrue.
In addition, any certificate signed by any officer of the Company or any of the Subsidiaries
and delivered to any Underwriter or counsel for the Underwriters in connection with the offering of
the Shares shall be deemed to be a representation and warranty by the Company, as to matters
covered thereby, to each Underwriter.
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4. Certain Covenants of the Company and the Operating Partnership. The Company and the
Operating Partnership hereby jointly and severally agree:
(a) to furnish such information as may be required and otherwise to cooperate in
qualifying the Shares for offering and sale under the securities or blue sky laws of such states or
other jurisdictions as you may designate and to maintain such qualifications in effect so long as
you may request for the distribution of the Shares; provided, however, that the Company shall not
be required to qualify as a foreign corporation or to consent to the service of process under the
laws of any such jurisdiction (except service of process with respect to the offering and sale of
the Shares); and to promptly advise you of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Shares for offer or sale in any jurisdiction
or the initiation or threatening of any proceeding for such purpose;
(b) to make available to the Underwriters in New York City, as soon as practicable
after this Agreement becomes effective, and thereafter from time to time to furnish to the
Underwriters, as many copies of the Prospectus (or of the Prospectus as amended or supplemented if
the Company shall have made any amendments or supplements thereto after the effective date of the
Registration Statement) as the Underwriters may request for the purposes contemplated by the Act;
in case any Underwriter is required to deliver (whether physically or through compliance with Rule
172 under the Act or any similar rule), in connection with the sale of the Shares, a prospectus
after the nine-month period referred to in Section 10(a)(3) of the Act, the Company will prepare,
at its expense, promptly upon request such amendment or amendments to the Registration Statement
and the Prospectus as may be necessary to permit compliance with the requirements of Section
10(a)(3) of the Act;
(c) if, at the time this Agreement is executed and delivered, it is necessary or
appropriate for a post-effective amendment to the Registration Statement, or a Registration
Statement under Rule 462(b) under the Act, to be filed with the Commission and become effective
before the Shares may be sold, the Company will use its best efforts to cause such post-effective
amendment or such Registration Statement to be filed and become effective, and will pay any
applicable fees in accordance with the Act, as soon as possible; and the Company will advise you
promptly and, if requested by you, will confirm such advice in writing, (i) when such
post-effective amendment or such Registration Statement has become effective, and (ii) if Rule 430A
under the Act is used, when the Prospectus is filed with the Commission pursuant to Rule 424(b)
under the Act (which the Company agrees to file in a timely manner in accordance with such Rules);
(d) to advise you promptly, confirming such advice in writing, of any request by the
Commission for amendments or supplements to the Registration Statement or the Exchange Act
Registration Statement, any Preliminary Prospectus, the Prospectus or any Permitted Free Writing
Prospectus or for additional information with respect thereto, or of notice of institution of
proceedings for, or the entry of a stop order, suspending the effectiveness of the Registration
Statement and, if the Commission should enter a stop order suspending the effectiveness of the
Registration Statement, to use its best efforts to obtain the lifting or removal of such order as
soon as possible; to advise you promptly of any proposal to amend or supplement the Registration
Statement or the Exchange Act Registration Statement, any Preliminary Prospectus or the Prospectus,
and to provide you and Underwriters’ counsel copies of any such documents for review and comment a
reasonable amount of time prior to any proposed filing and to file no such amendment or supplement
to which you shall object in writing;
(e) subject to Section 4(d) hereof, to file promptly all reports and documents and
any preliminary or definitive proxy or information statement required to be filed by the Company
with the Commission in order to comply with the Exchange Act for so long as a prospectus is
required by the Act
to be delivered (whether physically or through compliance with Rule 172 under the Act or any
similar
- 19 -
rule) in connection with any sale of Shares; and to provide you, for your review and
comment, with a copy of such reports and statements and other documents to be filed by the Company
pursuant to Section 13, 14 or 15(d) of the Exchange Act during such period a reasonable amount of
time prior to any proposed filing, and to file no such report, statement or document to which you
shall have objected in writing; and to promptly notify you of such filing;
(f) to advise the Underwriters promptly of the happening of any event within the
period during which a prospectus is required by the Act to be delivered (whether physically or
through compliance with Rule 172 under the Act or any similar rule) in connection with any sale of
Shares, which event could require the making of any change in the Prospectus then being used so
that the Prospectus would not include an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the light of the circumstances
under which they are made, not misleading, and to advise the Underwriters promptly if, during such
period, it shall become necessary to amend or supplement the Prospectus to cause the Prospectus to
comply with the requirements of the Act, and, in each case, during such time, subject to Section
4(d) hereof, to prepare and furnish, at the Company’s expense, to the Underwriters promptly such
amendments or supplements to such Prospectus as may be necessary to reflect any such change or to
effect such compliance;
(g) to make generally available to its security holders, and to deliver to you, an
earnings statement of the Company (which will satisfy the provisions of Section 11(a) of the Act)
covering a period of twelve months beginning after the effective date of the Registration Statement
(as defined in Rule 158(c) under the Act) as soon as is reasonably practicable after the
termination of such twelve-month period but in any case not later than [ ];
(h) to furnish to you three copies of the Registration Statement, as initially filed
with the Commission, and of all amendments thereto (including all exhibits thereto) and sufficient
copies of the foregoing (other than exhibits) for distribution of a copy to each of the other
Underwriters;
(i) to furnish to you as early as practicable prior to the time of purchase and any
additional time of purchase, as the case may be, but not later than two business days prior
thereto, a copy of the latest available unaudited interim and monthly consolidated financial
statements, if any, of the Company and the Subsidiaries which have been read by the Company’s
independent registered public accountants, as stated in their letter to be furnished pursuant to
Section 6(c) hereof;
(j) to apply the net proceeds from the sale of the Shares in the manner set forth
under the caption “Use of proceeds” in the Prospectus and to file such reports with the Commission
with respect to the sale of the Shares and the application of the proceeds therefrom as may be
required by Rule 463 under the Act;
(k) to pay all costs, expenses, fees and taxes in connection with (i) the
preparation and filing of the Registration Statement, each Preliminary Prospectus, the Prospectus,
each Permitted Free Writing Prospectus and any amendments or supplements thereto, and the printing
and furnishing of copies of each thereof to the Underwriters and to dealers (including costs of
mailing and shipment), (ii) the registration, issue, sale and delivery of the Shares including any
stock or transfer taxes and stamp or similar duties payable upon the sale, issuance or delivery of
the Shares to the Underwriters, (iii) the producing, word processing and/or printing of this
Agreement, any Agreement Among Underwriters, any dealer agreements, any Powers of Attorney and any
closing documents (including compilations thereof) and the reproduction and/or printing and
furnishing of copies of each thereof to the Underwriters and (except closing documents) to dealers
(including costs of mailing and shipment), (iv) the qualification of the
Shares for offering and sale under state or foreign laws and the determination of their
eligibility for investment under state or foreign law (including the legal fees and filing fees
and other disbursements of
- 20 -
counsel for the Underwriters) and the printing and furnishing of copies
of any blue sky surveys or legal investment surveys to the Underwriters and to dealers, (v) any
listing of the Shares on any securities exchange or qualification of the Shares for quotation on
the NYSE and any registration thereof under the Exchange Act, (vi) any filing for review of the
public offering of the Shares by FINRA, including the legal fees and filing fees and other
disbursements of counsel to the Underwriters relating to FINRA matters, (vii) the fees and
disbursements of any transfer agent or registrar for the Shares, (viii) the costs and expenses of
the Company relating to presentations or meetings undertaken in connection with the marketing of
the offering and sale of the Shares to prospective investors and the Underwriters’ sales forces,
including, without limitation, expenses associated with the production of road show slides and
graphics, fees and expenses of any consultants engaged in connection with the road show
presentations, travel, lodging and other expenses incurred by the officers of the Company and any
such consultants, and the cost of any aircraft chartered in connection with the road show, (ix) the
costs and expenses of qualifying the Shares for inclusion in the book-entry settlement system of
the DTC, (x) the preparation and filing of the Exchange Act Registration Statement, including any
amendments thereto, (xi) the offer and sale of the Reserved Shares, including all costs and
expenses of UBS-FinSvc and the Underwriters, including the fees and disbursement of counsel for the
Underwriters, and (xiii) the performance of the Company’s other obligations hereunder; provided
that, except as otherwise set forth in this Agreement, the Company shall not be obligated to pay
any fees and expenses of counsel for any of the Underwriters;
(l) to comply with Rule 433(d) under the Act (without reliance on Rule 164(b) under
the Act) and with Rule 433(g) under the Act;
(m) beginning on the date hereof and ending on, and including, the date that is one
year after the date of the Prospectus (the “Lock-Up Period”), without the prior written consent of
UBS, not to (i) issue, sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant
any option to purchase or otherwise dispose of or agree to dispose of, directly or indirectly, or
establish or increase a put equivalent position or liquidate or decrease a call equivalent position
within the meaning of Section 16 of the Exchange Act and the rules and regulations of the
Commission promulgated thereunder, with respect to, any Common Stock or any other securities of the
Company that are substantially similar to Common Stock, or any securities convertible into or
exchangeable or exercisable for, or any warrants or other rights to purchase, the foregoing,
including, without limitation, OP Units, (ii) file or cause to become effective a registration
statement under the Act relating to the offer and sale of any Common Stock or any other securities
of the Company that are substantially similar to Common Stock, or any securities convertible into
or exchangeable or exercisable for, or any warrants or other rights to purchase, the foregoing,
including, without limitation, OP Units, (iii) enter into any swap or other arrangement that
transfers to another, in whole or in part, any of the economic consequences of ownership of Common
Stock or any other securities of the Company that are substantially similar to Common Stock, or any
securities convertible into or exchangeable or exercisable for, or any warrants or other rights to
purchase, the foregoing, including, without limitation, OP Units, whether any such transaction is
to be settled by delivery of Common Stock or such other securities, in cash or otherwise or (iv)
publicly announce an intention to effect any transaction specified in clause (i), (ii) or (iii),
except, in each case, for (A) the registration of the offer and sale of the Shares as contemplated
by this Agreement, (B) issuances of Common Stock upon the exercise of options or warrants disclosed
as outstanding in the Registration Statement (excluding the exhibits thereto), each Preliminary
Prospectus and the Prospectus, and (C) the issuance of employee stock options not exercisable
during the Lock-Up Period pursuant to stock option plans described in the Registration Statement
(excluding the exhibits thereto), each Preliminary Prospectus and the Prospectus; provided,
however, that if (a) during the period that begins on the date that is fifteen (15) calendar days
plus three (3) business days before the last day of the Lock-Up Period and ends on the last day of
the Lock-Up Period, the Company issues an earnings release or material news
or a material event relating to the Company occurs; or (b) prior to the expiration of the
Lock-Up Period, the Company announces that it will release earnings results during the sixteen (16)
day period beginning
- 21 -
on the last day of the Lock-Up Period, then the restrictions imposed by this
Section 4(m) shall continue to apply until the expiration of the date that is fifteen (15)
calendar days plus three (3) business days after the date on which the issuance of the earnings
release or the material news or material event occurs;
(n) prior to the time of purchase or any additional time of purchase, as the case
may be, to issue no press release or other communication directly or indirectly and hold no press
conferences with respect to the Company or any Subsidiary, the financial condition, results of
operations, business, properties, assets, or liabilities of the Company or any Subsidiary, or the
offering of the Shares, without your prior consent;
(o) not, at any time at or after the execution of this Agreement, to, directly or
indirectly, offer or sell any Shares by means of any “prospectus” (within the meaning of the Act),
or use any “prospectus” (within the meaning of the Act) in connection with the offer or sale of the
Shares, in each case other than the Prospectus;
(p) not to, and to cause the Subsidiaries not to, take, directly or indirectly, any
action designed, or which will constitute, or has constituted, or might reasonably be expected to
cause or result in the stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares;
(q) to use its best efforts to cause the Common Stock, including the Shares, to be
listed on the NYSE and to maintain such listing and to file with the NYSE all documents and notices
required by the NYSE of companies that have securities that are listed on the NYSE;
(r) to engage and maintain a transfer agent and, if necessary under the jurisdiction
of incorporation of the Company, a registrar for the Common Stock;
(s) to use its best efforts to meet the requirements for qualification and taxation
as a REIT under the Code for the Company’s taxable year ending December 31, 2010, and to use its
best efforts to continue to qualify for taxation as a REIT under the Code 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 continue to qualify as a REIT under the Code; and
(t) to cause each Directed Share Participant purchasing more than $100,000 in Common
Stock in the Directed Share Program, to execute a Lock-Up Agreement and otherwise to cause the
Reserved Shares to be restricted from sale, transfer, assignment, pledge or hypothecation to such
extent as may be required by FINRA and its rules, and to direct the transfer agent to place stop
transfer restrictions upon such Reserved Shares during the Lock-Up Period or any such longer period
of time as may be required by FINRA and its rules; and to comply with all applicable securities and
other laws, rules and regulations in each jurisdiction in which the Reserved Shares are offered in
connection with the Directed Share Program.
5. Reimbursement of the Underwriters’ Expenses. If, after the execution and delivery of
this Agreement, the Shares are not delivered for any reason other than the termination of this
Agreement pursuant to the fifth paragraph of Section 8 hereof, or pursuant to clause (2) of Section
7 hereof, or the default by one or more of the Underwriters in its or their respective obligations
hereunder, the Company and the Operating Partnership, jointly and severally, shall, in addition to
paying the amounts described in
Section 4(k) hereof, reimburse the Underwriters for all of their out-of-pocket expenses, including
the fees and disbursements of their counsel.
- 22 -
6. Conditions of the Underwriters’ Obligations. The several obligations of the
Underwriters hereunder are subject to the accuracy of the respective representations and warranties
on the part of the Company and the Operating Partnership on the date hereof, at the time of
purchase and, if applicable, at the additional time of purchase, the performance by the Company and
the Operating Partnership of each of their respective obligations hereunder and to the following
additional conditions precedent:
(a) The Company and the Operating Partnership shall furnish to you at the time of
purchase and, if applicable, at the additional time of purchase, an opinion of Xxxxxx and Xxxxxx,
P.A., counsel for the Company and the Operating Partnership, addressed to the Underwriters, and
dated the time of purchase or the additional time of purchase, as the case may be, with executed
copies for each Underwriter, and in form and substance satisfactory to UBS, in the form set forth
in Exhibit B hereto.
(b) The Company shall furnish to you at the time of purchase and, if applicable, at
the additional time of purchase, an opinion of Xxxxxxx LLP, special counsel for the Company with
respect to Maryland law, addressed to the Underwriters, and dated the time of purchase or the
additional time of purchase, as the case may be, with executed copies for each Underwriter, and in
form and substance satisfactory to UBS, in the form set forth in Exhibit C hereto.
(c) You shall have received from KPMG LLP and Boulay, Heutmaker, Xxxxxx & Co.
P.L.L.P letters dated, respectively, the date of this Agreement, the date of the Prospectus, the
time of purchase and, if applicable, the additional time of purchase, and addressed to the
Underwriters (with executed copies for each Underwriter) in the forms satisfactory to UBS, which
letters shall cover, without limitation, the various financial disclosures contained in the
Registration Statement, the Preliminary Prospectuses, the Prospectus and the Permitted Free Writing
Prospectuses, if any.
(d) You shall have received at the time of purchase and, if applicable, at the
additional time of purchase, the favorable opinion of Xxxxxxxx Chance US LLP, counsel for the
Underwriters, dated the time of purchase or the additional time of purchase, as the case may be, in
form and substance reasonably satisfactory to UBS.
(e) No Prospectus or amendment or supplement to the Registration Statement or the
Prospectus shall have been filed to which you shall have objected in writing.
(f) The Registration Statement, the Exchange Act Registration Statement and any
registration statement required to be filed, prior to the sale of the Shares, under the Act
pursuant to Rule 462(b) shall have been filed and shall have become effective under the Act or the
Exchange Act, as the case may be. If Rule 430A under the Act is used, the Prospectus shall have
been filed with the Commission pursuant to Rule 424(b) under the Act at or before 5:30 P.M., New
York City time, on the second full business day after the date of this Agreement (or such earlier
time as may be required under the Act).
(g) Prior to and at the time of purchase, and, if applicable, the additional time of
purchase, (i) no stop order with respect to the effectiveness of the Registration Statement shall
have been issued under the Act or proceedings initiated under Section 8(d) or 8(e) of the Act;
(ii) the Registration Statement and all amendments thereto shall not contain an untrue statement of
a material fact or omit to state a material fact required to be stated therein or necessary to make
the statements therein not misleading; (iii) none of the Preliminary Prospectuses or the
Prospectus, and no amendment or
supplement thereto, shall include an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the light of the circumstances
under which they are made, not misleading; (iv) no Disclosure Package, and no amendment or
supplement thereto, shall
- 23 -
include an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the light of the circumstances
under which they are made, not misleading; and (v) none of the Permitted Free Writing Prospectuses,
if any, shall include an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the circumstances under which
they are made, not misleading.
(h) The Company and the Operating Partnership will, at the time of purchase and, if
applicable, at the additional time of purchase, deliver to you a certificate of the Company’s Chief
Executive Officer and its Chief Financial Officer, dated the time of purchase or the additional
time of purchase, as the case may be, in the form attached as Exhibit D hereto.
(i) You shall have received each of the signed Lock-Up Agreements referred to in
Section 3(x) hereof, and each such Lock-Up Agreement shall be in full force and effect at the time
of purchase and the additional time of purchase, as the case may be.
(j) The Company and the Operating Partnership shall have furnished to you such other
documents and certificates as to the accuracy and completeness of any statement in the Registration
Statement, any Preliminary Prospectus, the Prospectus or any Permitted Free Writing Prospectus as
of the time of purchase and, if applicable, the additional time of purchase, as you may reasonably
request.
(k) The Shares shall have been approved for listing on the NYSE, subject only to
notice of issuance and evidence of satisfactory distribution at or prior to the time of purchase or
the additional time of purchase, as the case may be.
(l) FINRA shall not have raised any objection with respect to the fairness or
reasonableness of the underwriting, or other arrangements of the transactions, contemplated hereby.
7. Effective Date of Agreement; Termination. This Agreement shall become effective when
the parties hereto have executed and delivered this Agreement.
The obligations of the several Underwriters hereunder shall be subject to termination in the
absolute discretion of UBS, if (1) since the time of execution of this Agreement or the earlier
respective dates as of which information is given in the Registration Statement, the Preliminary
Prospectuses, the Prospectus and the Permitted Free Writing Prospectuses, if any, there has been
any change or any development involving a prospective change in the business, properties,
management, financial condition or results of operations of the Company and the Subsidiaries taken
as a whole, the effect of which change or development is, in the sole judgment of UBS, so material
and adverse as to make it impractical or inadvisable to proceed with the public offering or the
delivery of the Shares on the terms and in the manner contemplated in the Registration Statement,
the Preliminary Prospectuses, the Prospectus and the Permitted Free Writing Prospectuses, if any,
or (2) since the time of execution of this Agreement, there shall have occurred: (A) a suspension
or material limitation in trading in securities generally on the NYSE, the NYSE Amex or the NASDAQ;
(B) a suspension or material limitation in trading in the Company’s securities on the NYSE; (C) a
general moratorium on commercial banking activities declared by either federal or New York State
authorities or a material disruption in commercial banking or securities settlement or clearance
services in the United States; (D) an outbreak or escalation of hostilities or acts of terrorism
involving the United States or a declaration by the United States of a national emergency or war;
or (E) any other calamity or crisis or any change in financial, political or economic conditions in
the United States or elsewhere, if the effect of any such event specified in clause (D) or (E),
in the sole judgment of UBS, makes it impractical or inadvisable to proceed with the public
offering or the delivery of the Shares on the terms and in the manner contemplated in the
Registration Statement, the Preliminary Prospectuses, the Prospectus and the Permitted Free Writing
Prospectuses, if any, or (3) since
- 24 -
the time of execution of this Agreement, there shall have
occurred any downgrading, or any notice or announcement shall have been given or made of: (A) any
intended or potential downgrading or (B) any watch, review or possible change that does not
indicate an affirmation or improvement in the rating accorded any securities of or guaranteed by
the Company or any Subsidiary by any “nationally recognized statistical rating organization,” as
that term is defined in Rule 436(g)(2) under the Act.
If UBS elects to terminate this Agreement as provided in this Section 7, the Company and each
other Underwriter shall be notified promptly in writing.
If the sale to the Underwriters of the Shares, as contemplated by this Agreement, is not
carried out by the Underwriters for any reason permitted under this Agreement, or if such sale is
not carried out because the Company or the Operating Partnership, as the case may be, shall be
unable to comply with any of the terms of this Agreement, the Company and the Operating Partnership
shall not be under any obligation or liability under this Agreement (except to the extent provided
in Sections 4(k), 5 and 9 hereof), and the Underwriters shall be under no obligation or liability
to the Company or the Operating Partnership under this Agreement (except to the extent provided in
Section 9 hereof) or to one another hereunder.
8. Increase in Underwriters’ Commitments. Subject to Sections 6 and 7 hereof, if any
Underwriter shall default in its obligation to take up and pay for the Firm Shares to be purchased
by it hereunder (otherwise than for a failure of a condition set forth in Section 6 hereof or a
reason sufficient to justify the termination of this Agreement under the provisions of Section 7
hereof) and if the number of Firm Shares which all Underwriters so defaulting shall have agreed but
failed to take up and pay for does not exceed 10% of the total number of Firm Shares, the
non-defaulting Underwriters (including the Underwriters, if any, substituted in the manner set
forth below) shall take up and pay for (in addition to the aggregate number of Firm Shares they are
obligated to purchase pursuant to Section 1 hereof) the number of Firm Shares agreed to be
purchased by all such defaulting Underwriters, as hereinafter provided. Such Shares shall be taken
up and paid for by such non-defaulting Underwriters in such amount or amounts as you may designate
with the consent of each Underwriter so designated or, in the event no such designation is made,
such Shares shall be taken up and paid for by all non-defaulting Underwriters pro rata in
proportion to the aggregate number of Firm Shares set forth opposite the names of such
non-defaulting Underwriters in Schedule A.
Without relieving any defaulting Underwriter from its obligations hereunder, the Company
agrees with the non-defaulting Underwriters that it will not sell any Firm Shares hereunder unless
all of the Firm Shares are purchased by the Underwriters (or by substituted Underwriters selected
by you with the approval of the Company or selected by the Company with your approval).
If a new Underwriter or Underwriters are substituted by the Underwriters or by the Company for
a defaulting Underwriter or Underwriters in accordance with the foregoing provision, the Company or
you shall have the right to postpone the time of purchase for a period not exceeding five business
days in order that any necessary changes in the Registration Statement and the Prospectus and other
documents may be effected.
The term “Underwriter” as used in this Agreement shall refer to and include any Underwriter
substituted under this Section 8 with like effect as if such substituted Underwriter had originally
been named in Schedule A hereto.
If the aggregate number of Firm Shares which the defaulting Underwriter or Underwriters agreed
to purchase exceeds 10% of the total number of Firm Shares which all Underwriters agreed to
purchase hereunder, and if neither the non-defaulting Underwriters nor the Company shall make
arrangements
- 25 -
within the five business day period stated above for the purchase of all the Firm
Shares which the defaulting Underwriter or Underwriters agreed to purchase hereunder, this
Agreement shall terminate without further act or deed and without any liability on the part of the
Company or the Operating Partnership to any Underwriter and without any liability on the part of
any non-defaulting Underwriter to the Company or to the Operating Partnership. Nothing in this
paragraph, and no action taken hereunder, shall relieve any defaulting Underwriter from liability
in respect of any default of such Underwriter under this Agreement.
9. Indemnity and Contribution.
(a) The Company and the Operating Partnership, jointly and severally, agree to
indemnify, defend and hold harmless each Underwriter, its partners, directors, officers and
members, any person who controls any Underwriter within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, and any “affiliate” (within the meaning of Rule 405 under the Act)
of such Underwriter, and the successors and assigns of all of the foregoing persons, from and
against any loss, damage, expense, liability or claim (including the reasonable cost of
investigation) which, jointly or severally, any such Underwriter or any such person may incur under
the Act, the Exchange Act, the common law or otherwise, insofar as such loss, damage, expense,
liability or claim arises out of or is based upon (i) any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement (or in the Registration
Statement as amended by any post-effective amendment thereof by the Company) or arises out of or is
based upon any omission or alleged omission to state a material fact required to be stated therein
or necessary to make the statements therein not misleading, except insofar as any such loss,
damage, expense, liability or claim arises out of or is based upon any untrue statement or alleged
untrue statement of a material fact contained in, and in conformity with information concerning
such Underwriter furnished in writing by or on behalf of such Underwriter through you to the
Company expressly for use in, the Registration Statement or arises out of or is based upon any
omission or alleged omission to state a material fact in the Registration Statement in connection
with such information, which material fact was not contained in such information and which material
fact was required to be stated in such Registration Statement or was necessary to make such
information not misleading, (ii) any untrue statement or alleged untrue statement of a material
fact included in any Prospectus (the term Prospectus for the purpose of this Section 9 being deemed
to include any Preliminary Prospectus, the Prospectus and any amendments or supplements to the
foregoing), in any Covered Free Writing Prospectus, in any “issuer information” (as defined in Rule
433 under the Act) of the Company or in any Prospectus together with any combination of one or more
of the Covered Free Writing Prospectuses, if any, or arises out of or is based upon any omission or
alleged omission 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, with respect to such
Prospectus or any Permitted Free Writing Prospectus, insofar as any such loss, damage, expense,
liability or claim arises out of or is based upon any untrue statement or alleged untrue statement
of a material fact contained in, and in conformity with information concerning such Underwriter
furnished in writing by or on behalf of such Underwriter through you to the Company expressly for
use in, such Prospectus or Permitted Free Writing Prospectus or arises out of or is based upon any
omission or alleged omission to state a material fact in such Prospectus or Permitted Free Writing
Prospectus in connection with such information, which material fact was not contained in such
information and which material fact was necessary in order to make the statements in such
information, in the light of the circumstances under which they were made, not misleading or (iii)
the Directed Share Program, except, with respect to this clause (iii), insofar as such loss,
damage, expense, liability or claim is finally judicially determined to have resulted from the
gross negligence or willful misconduct of the Underwriters in conducting the Directed Share
Program.
Without limitation of and in addition to its obligations under the other paragraphs of this
Section 9, the Company and the Operating Partnership, jointly and severally, agree to indemnify,
defend
- 26 -
and hold harmless UBS-FinSvc and its partners, directors, officers and members, and any
person who controls UBS-FinSvc within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, and the successors and assigns of all of the foregoing persons, from and against any
loss, damage, expense, liability or claim (including the reasonable cost of investigation) which,
jointly or severally, UBS-FinSvc or any such person may incur under the Act, the Exchange Act, the
common law or otherwise, insofar as such loss, damage, expense, liability or claim (1) arises out
of or is based upon (a) any of the matters referred to in clauses (i) through (iii) of the first
paragraph of this Section 9(a), or (b) any untrue statement or alleged untrue statement of a
material fact contained in any material prepared by or on behalf or with the consent of the Company
for distribution to Directed Share Participants in connection with the Directed Share Program or
caused by any omission or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading; (2) is or was caused by the
failure of any Directed Share Participant to pay for and accept delivery of Reserved Shares that
the Directed Share Participant has agreed to purchase; or (3) otherwise arises out of or is based
upon the Directed Share Program, provided, however, that neither the Company nor the Operating
Partnership shall be responsible under this clause (3) for any loss, damage, expense, liability or
claim that is finally judicially determined to have resulted from the gross negligence or willful
misconduct of UBS-FinSvc in conducting the Directed Share Program. Section 9(c) shall apply
equally to any Proceeding (as defined below) brought against UBS-FinSvc or any such person in
respect of which indemnity may be sought against the Company or the Operating Partnership pursuant
to the immediately preceding sentence, except that the Company and the Operating Partnership shall
be liable for the expenses of one separate counsel (in addition to any local counsel) for
UBS-FinSvc and any such person, separate and in addition to counsel for the persons who may seek
indemnification pursuant to the first paragraph of this Section 9(a), in any such Proceeding.
(b) Each Underwriter severally agrees to indemnify, defend and hold harmless the
Company, the Operating Partnership, the Company’s directors and officers and any person who
controls the Company within the meaning of Section 15 of the Act or Section 20 of the Exchange Act,
and the successors and assigns of all of the foregoing persons, from and against any loss, damage,
expense, liability or claim (including the reasonable cost of investigation) which, jointly or
severally, the Company, the Operating Partnership, or any such person may incur under the Act, the
Exchange Act, the common law or otherwise, insofar as such loss, damage, expense, liability or
claim arises out of or is based upon (i) any untrue statement or alleged untrue statement of a
material fact contained in, and in conformity with information concerning such Underwriter
furnished in writing by or on behalf of such Underwriter through you to the Company expressly for
use in, the Registration Statement (or in the Registration Statement as amended by any
post-effective amendment thereof by the Company), or arises out of or is based upon any omission or
alleged omission to state a material fact in such Registration Statement in connection with such
information, which material fact was not contained in such information and which material fact was
required to be stated in such Registration Statement or was necessary to make such information not
misleading or (ii) any untrue statement or alleged untrue statement of a material fact contained
in, and in conformity with information concerning such Underwriter furnished in writing by or on
behalf of such Underwriter through you to the Company expressly for use in, a Prospectus or a
Permitted Free Writing Prospectus, or arises out of or is based upon any omission or alleged
omission to state a material fact in such Prospectus or Permitted Free Writing Prospectus in
connection with such information, which material fact was not contained in such information and
which material fact was necessary in order to make the statements in such information, in the light
of the circumstances under which they were made, not misleading.
(c) If any action, suit or proceeding (each, a “Proceeding”) is brought against a
person (an “indemnified party”) in respect of which indemnity may be sought against the Company,
the Operating
Partnership or an Underwriter (as applicable, the “indemnifying party”) pursuant to subsection
(a) or (b), respectively, of this Section 9, such indemnified party shall promptly notify such
indemnifying party in
- 27 -
writing of the institution of such Proceeding and such indemnifying party
shall assume the defense of such Proceeding, including the employment of counsel reasonably
satisfactory to such indemnified party and payment of all fees and expenses; provided, however,
that the omission to so notify such indemnifying party shall not relieve such indemnifying party
from any liability which such indemnifying party may have to any indemnified party or otherwise.
The indemnified party or parties shall have the right to employ its or their own counsel in any
such case, but the fees and expenses of such counsel shall be at the expense of such indemnified
party or parties unless the employment of such counsel shall have been authorized in writing by the
indemnifying party in connection with the defense of such Proceeding or the indemnifying party
shall not have, within a reasonable period of time in light of the circumstances, employed counsel
to defend such Proceeding or such indemnified party or parties shall have reasonably concluded that
there may be defenses available to it or them which are different from, additional to or in
conflict with those available to such indemnifying party (in which case such indemnifying party
shall not have the right to direct the defense of such Proceeding on behalf of the indemnified
party or parties), in any of which events such fees and expenses shall be borne by such
indemnifying party and paid as incurred (it being understood, however, that, except as provided in
the second paragraph of Section 9(a), such indemnifying party shall not be liable for the expenses
of more than one separate counsel (in addition to any local counsel) in any one Proceeding or
series of related Proceedings in the same jurisdiction representing the indemnified parties who are
parties to such Proceeding). The indemnifying party shall not be liable for any settlement of any
Proceeding effected without its written consent but, if settled with its written consent, such
indemnifying party agrees to indemnify and hold harmless the indemnified party or parties from and
against any loss or liability by reason of such settlement. Notwithstanding the foregoing
sentence, if at any time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel as contemplated by the second
sentence of this Section 9(c), then the indemnifying party agrees that it shall be liable for any
settlement of any Proceeding effected without its written consent if (i) such settlement is entered
into more than 60 business days after receipt by such indemnifying party of the aforesaid request,
(ii) such indemnifying party shall not have fully reimbursed the indemnified party in accordance
with such request prior to the date of such settlement and (iii) such indemnified party shall have
given the indemnifying party at least 30 days’ prior notice of its intention to settle. No
indemnifying party shall, without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened Proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such indemnified party from all
liability on claims that are the subject matter of such Proceeding and does not include an
admission of fault or culpability or a failure to act by or on behalf of such indemnified party.
(d) If the indemnification provided for in this Section 9 is unavailable to an
indemnified party under subsections (a) and (b) of this Section 9 or insufficient to hold an
indemnified party harmless in respect of any losses, damages, expenses, liabilities or claims
referred to therein, then each applicable indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, damages, expenses, liabilities or
claims (i) in such proportion as is appropriate to reflect the relative benefits received by the
Company and the Operating Partnership on the one hand and the Underwriters on the other hand from
the offering of the Shares or (ii) if the allocation provided by clause (i) above is not permitted
by applicable law, in such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company and the Operating
Partnership on the one hand and of the Underwriters on the other in connection with the statements
or omissions which resulted in such losses, damages, expenses, liabilities or claims, as well as
any other relevant equitable considerations. The relative benefits received by the Company and the
Operating Partnership on the one hand and the Underwriters on the other shall be deemed to be in
the
same respective proportions as the total proceeds from the offering (net of underwriting
discounts and commissions but before deducting expenses) received by the Company, and the total
underwriting
- 28 -
discounts and commissions received by the Underwriters, bear to the aggregate public
offering price of the Shares. The relative fault of the Company and the Operating Partnership on
the one hand and of the Underwriters on the other shall be determined by reference to, among other
things, whether the untrue statement or alleged untrue statement of a material fact or omission or
alleged omission relates to information supplied by the Company or by the Underwriters and the
parties’ relative intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The amount paid or payable by a party as a result of the losses,
damages, expenses, liabilities and claims referred to in this subsection shall be deemed to include
any legal or other fees or expenses reasonably incurred by such party in connection with
investigating, preparing to defend or defending any Proceeding.
(e) The Company, the Operating Partnership and the Underwriters agree that it would
not be just and equitable if contribution pursuant to this Section 9 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such purpose) or by any other
method of allocation that does not take account of the equitable considerations referred to in
subsection (d) above. Notwithstanding the provisions of this Section 9, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total price at which the
Shares underwritten by such Underwriter and distributed to the public were offered to the public
exceeds the amount of any damage which such Underwriter has otherwise been required to pay by
reason of such untrue statement or alleged untrue statement or omission or alleged omission. 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. The Underwriters’ obligations to contribute pursuant to this Section 9 are
several in proportion to their respective underwriting commitments and not joint.
(f) The indemnity and contribution agreements contained in this Section 9 and the
covenants, warranties and representations of the Company and the Operating Partnership contained in
this Agreement shall remain in full force and effect regardless of any investigation made by or on
behalf of any Underwriter, its partners, directors, officers or members or any person (including
each partner, officer, director or member of such person) who controls any Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, or by or on behalf of the
Company, the Operating Partnership, the Company’s directors or officers or any person who controls
the Company within the meaning of Section 15 of the Act or Section 20 of the Exchange Act, and
shall survive any termination of this Agreement or the issuance and delivery of the Shares. The
Company, the Operating Partnership and each Underwriter agree promptly to notify each other of the
commencement of any Proceeding against it and, in the case of the Company, against any of the
Company’s officers or directors in connection with the issuance and sale of the Shares, or in
connection with the Registration Statement, any Preliminary Prospectus, the Prospectus or any
Permitted Free Writing Prospectus.
10. Information Furnished by the Underwriters. The statements set forth in the last
paragraph on the cover page of the Prospectus and the statements set forth in the sixth, seventh,
fifteenth, sixteenth, seventeenth and eighteenth paragraphs under the caption “Underwriting” in the
Prospectus, only insofar as such statements relate to the amount of selling concession and
reallowance or to over-allotment and stabilization activities that may be undertaken by the
Underwriters, constitute the only information furnished by or on behalf of the Underwriters, as
such information is referred to in Sections 3 and 9 hereof.
11. Notices. Except as otherwise herein provided, all statements, requests, notices and
agreements shall be in writing or by telegram or facsimile and, if to the Underwriters, shall be
sufficient in all respects if delivered or sent to UBS Securities LLC, 000 Xxxx Xxxxxx, Xxx Xxxx,
XX 00000-0000, Attention: Syndicate Department; and if to the Company or the Operating
Partnership, shall be sufficient in all
respects if delivered or sent to the Company or the Operating Partnership at the offices of the
Company at 0000 Xxxxx Xxxx, Xxxxx 000, Xxxxxxxxxx, XX 00000 (facsimile: (000) 000-0000),
Attention: Xxxxx X.
- 29 -
Xxxxxxxxxxx and Xxxx Xxxxx, with a copy to Xxxxxx and Xxxxxx, P.A., 0000 XXX
Xxxxxx, Xxxxxxxxxxx, XX 00000 (facsimile: (000) 000-0000), Attention: Xxxxxx X. Xxxx and Xxxx X.
Xxxxxx.
12. Governing Law; Construction. This Agreement and any claim, counterclaim or dispute
of any kind or nature whatsoever arising out of or in any way relating to this Agreement (“Claim”),
directly or indirectly, shall be governed by, and construed in accordance with, the laws of the
State of New York. The section headings in this Agreement have been inserted as a matter of
convenience of reference and are not a part of this Agreement.
13. Submission to Jurisdiction. Except as set forth below, no Claim may be commenced,
prosecuted or continued in any court other than the courts of the State of New York located in the
City and County of New York or in the United States District Court for the Southern District of New
York, which courts shall have exclusive jurisdiction over the adjudication of such matters, and the
Company and the Operating Partnership each consents to the jurisdiction of such courts and personal
service with respect thereto. The Company and the Operating Partnership each hereby consents to
personal jurisdiction, service and venue in any court in which any Claim arising out of or in any
way relating to this Agreement is brought by any third party against any Underwriter or any
indemnified party. Each Underwriter and the Company (on its behalf and, to the extent permitted by
applicable law, on behalf of its stockholders and affiliates) and the Operating Partnership each
waive all right to trial by jury in any action, proceeding or counterclaim (whether based upon
contract, tort or otherwise) in any way arising out of or relating to this Agreement. The Company
and the Operating Partnership each agrees that a final judgment in any such action, proceeding or
counterclaim brought in any such court shall be conclusive and binding upon the Company and the
Operating Partnership and may be enforced in any other courts to the jurisdiction of which the
Company or the Operating Partnership, as the case may be, is or may be subject, by suit upon such
judgment.
14. Parties at Interest. The Agreement herein set forth has been and is made solely for
the benefit of the Underwriters, the Company and the Operating Partnership and to the extent
provided in Section 9 hereof the controlling persons, partners, directors, officers, members and
affiliates referred to in such Section, and their respective successors, assigns, heirs, personal
representatives and executors and administrators. No other person, partnership, association or
corporation (including a purchaser, as such purchaser, from any of the Underwriters) shall acquire
or have any right under or by virtue of this Agreement.
15. No Fiduciary Relationship. The Company and the Operating Partnership each hereby
acknowledges that the Underwriters are acting solely as underwriters in connection with the
purchase and sale of the Company’s securities. The Company and the Operating Partnership each
further acknowledges that the Underwriters are acting pursuant to a contractual relationship
created solely by this Agreement entered into on an arm’s length basis, and in no event do the
parties intend that the Underwriters act or be responsible as a fiduciary to the Company, the
Operating Partnership, their respective management, stockholders, partners or creditors or any
other person in connection with any activity that the Underwriters may undertake or have undertaken
in furtherance of the purchase and sale of the Company’s securities, either before or after the
date hereof. The Underwriters hereby expressly disclaim any fiduciary or similar obligations to
the Company or the Operating Partnership, either in connection with the transactions contemplated
by this Agreement or any matters leading up to such transactions, and the Company and the Operating
Partnership each hereby confirms its understanding and agreement to that effect. The Company, the
Operating Partnership and the Underwriters agree that they are each responsible for making their
own independent judgments with respect to any such transactions and that any opinions or views
expressed by the Underwriters to the Company or the Operating Partnership
regarding such transactions, including, but not limited to, any opinions or views with respect to
the price or market for the Company’s securities, do not constitute advice or recommendations to
the Company or
- 30 -
the Operating Partnership. The Company and the Underwriters agree that the
Underwriters are acting as principal and not the agent or fiduciary of the Company or the Operating
Partnership and no Underwriter has assumed, and none of them will assume, any advisory
responsibility in favor of the Company or the Operating Partnership with respect to the
transactions contemplated hereby or the process leading thereto (irrespective of whether any
Underwriter has advised or is currently advising the Company or the Operating Partnership on other
matters). The Company and the Operating Partnership each hereby waives and releases, to the
fullest extent permitted by law, any claims that the Company or the Operating Partnership may have
against the Underwriters with respect to any breach or alleged breach of any fiduciary, advisory or
similar duty to the Company or the Operating Partnership in connection with the transactions
contemplated by this Agreement or any matters leading up to such transactions.
16. Counterparts. This Agreement may be signed by the parties in one or more
counterparts which together shall constitute one and the same agreement among the parties.
17. Successors and Assigns. This Agreement shall be binding upon the Underwriters, the
Company and the Operating Partnership and their successors and assigns and any successor or assign
of any substantial portion of the Company’s, the Operating Partnership’s and any of the
Underwriters’ respective businesses and/or assets.
18. Miscellaneous. UBS, an indirect, wholly owned subsidiary of UBS AG, is not a bank
and is separate from any affiliated bank, including any U.S. branch or agency of UBS AG. Because
UBS is a separately incorporated entity, it is solely responsible for its own contractual
obligations and commitments, including obligations with respect to sales and purchases of
securities. Securities sold, offered or recommended by UBS are not deposits, are not insured by
the Federal Deposit Insurance Corporation, are not guaranteed by a branch or agency, and are not
otherwise an obligation or responsibility of a branch or agency.
[The Remainder of This Page Intentionally Left Blank; Signature Page Follows]
- 31 -
If the foregoing correctly sets forth the understanding among the Company, the Operating
Partnership and the several Underwriters, please so indicate in the space provided below for that
purpose, whereupon this Agreement and your acceptance shall constitute a binding agreement among
the Company, the Operating Partnership and the Underwriters, severally.
| Very truly yours, WELSH PROPERTY TRUST, INC. |
||||
| By: | ||||
| Name: | Xxxxx X. Xxxxxxxxxxx | |||
| Title: | Chief Executive Officer | |||
| WELSH PROPERTY TRUST, L. P. |
||||
| By: | Welsh Property Trust, LLC, | |||
| its General Partner | ||||
| By: | Welsh Property Trust, Inc., | |||
| Sole Member of the General Partner | ||||
| By: | ||||
| Name: | Xxxxx X. Xxxxxxxxxxx | |||
| Title: | Chief Executive Officer | |||
Accepted and agreed to as of the date
first above written, on behalf of
themselves and the other several
Underwriters named in Schedule A
first above written, on behalf of
themselves and the other several
Underwriters named in Schedule A
UBS SECURITIES LLC
X. X. XXXXXX SECURITIES INC.
X. X. XXXXXX SECURITIES INC.
By: UBS SECURITIES LLC
| By: | ||||
| Name: | ||||
| Title: | ||||
| By: | ||||
| Name: | ||||
| Title: | ||||
By: X.X. XXXXXX SECURITIES INC.
| By: | ||||
| Name: | ||||
| Title: | ||||
EXHIBIT A
Lock-Up Agreement
_____ __, 2010
UBS Securities LLC
Together with the other Underwriters
named in Schedule A to the Underwriting Agreement
referred to herein
Together with the other Underwriters
named in Schedule A to the Underwriting Agreement
referred to herein
c/o UBS Securities LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
This Lock-Up Agreement is being delivered to you in connection with the proposed Underwriting
Agreement (the “Underwriting Agreement”) to be entered into by Welsh Property Trust, Inc., a
Maryland corporation (the “Company”), Welsh Property Trust, L.P., a Delaware limited partnership
(the “Operating Partnership”), and you and the other underwriters named in Schedule A to the
Underwriting Agreement, with respect to the public offering (the “Offering”) of common stock, par
value $0.01 per share, of the Company (the “Common Stock”).
In order to induce you to enter into the Underwriting Agreement, the undersigned agrees that,
for a period (the “Lock-Up Period”) beginning on the date hereof and ending on, and including, the
date that is one year after the date of the final prospectus relating to the Offering, the
undersigned will not, without the prior written consent of UBS Securities LLC, (i) sell, offer to
sell, contract or agree to sell, hypothecate, pledge, grant any option to purchase or otherwise
dispose of or agree to dispose of, directly or indirectly, or file (or participate in the filing
of) a registration statement with the Securities and Exchange Commission (the “Commission”) in
respect of, or establish or increase a put equivalent position or liquidate or decrease a call
equivalent position within the meaning of Section 16 of the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated thereunder (the “Exchange
Act”) with respect to, any Common Stock or any other securities of the Company that are
substantially similar to Common Stock, or any securities convertible into or exchangeable or
exercisable for, or any warrants or other rights to purchase, the foregoing, including, without
limitation, units of partnership interests in the Operating Partnership (the “OP Units”), (ii)
enter into any swap or other arrangement that transfers to another, in whole or in part, any of the
economic consequences of ownership of Common Stock or any other securities of the Company that are
substantially similar to Common Stock, or any securities convertible into or exchangeable or
exercisable for, or any warrants or other rights to purchase, the foregoing, including, without
limitation, OP Units, whether any such transaction is to be settled by delivery of Common Stock or
such other securities, in cash or otherwise or (iii) publicly announce an intention to effect any
transaction specified in clause (i) or (ii). The foregoing sentence shall not apply to (a) the
registration of the offer and sale of Common Stock as contemplated by the Underwriting Agreement
and the sale of the Common Stock to the Underwriters (as defined in the Underwriting Agreement) in
the Offering, (b) bona fide gifts, provided the recipient thereof agrees in writing with UBS
Securities LLC to be bound by the terms of this Lock-Up Agreement or (c) dispositions to any trust
for the direct or indirect benefit of the undersigned and/or the immediate family of the
undersigned, provided that such trust agrees in writing with UBS Securities LLC to be bound by the
terms of this Lock-Up Agreement, or (d) transfers or other dispositions to an affiliate, provided
that such affiliate agrees in writing with UBS Securities LLC to be bound by the terms of this
Lock Up Agreement. For purposes of this paragraph, “immediate family” shall mean the
undersigned and the spouse, any lineal descendent, father, mother, brother or sister of the
undersigned; and “affiliate” shall mean any person or entity controlling, controlled by or under
common control with the undersigned.
In addition, for the duration of the Lock-Up Period, the undersigned hereby waives any rights
the undersigned may have to require registration of Common Stock in connection with the filing of a
registration statement relating to the Offering. The undersigned further agrees that, for the
Lock-Up Period, the undersigned will not, without the prior written consent of UBS Securities LLC,
make any demand for, or exercise any right with respect to, the registration of Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock, or warrants or other
rights to purchase Common Stock or any such securities, including, without limitation, OP Units.
Notwithstanding the above, if (a) during the period that begins on the date that is fifteen
(15) calendar days plus three (3) business days before the last day of the Lock-Up Period and ends
on the last day of the Lock-Up Period, the Company issues an earnings release or material news or a
material event relating to the Company occurs; or (b) prior to the expiration of the Lock-Up
Period, the Company announces that it will release earnings results during the sixteen (16) day
period beginning on the last day of the Lock-Up Period, then the restrictions imposed by this
Lock-Up Agreement shall continue to apply until the expiration of the date that is fifteen (15)
calendar days plus three (3) business days after the date on which the issuance of the earnings
release or the material news or material event occurs.
In addition, the undersigned hereby waives any and all preemptive rights, participation
rights, resale rights, rights of first refusal and similar rights that the undersigned may have in
connection with the Offering or with any issuance or sale by the Company or the Operating
Partnership of any equity or other securities before the Offering, except for any such rights as
have been heretofore duly exercised.
The undersigned hereby confirms that the undersigned has not, directly or indirectly, taken,
and hereby covenants that the undersigned will not, directly or indirectly, take, any action
designed, or which has constituted or will constitute or might reasonably be expected to cause or
result in the stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of shares of Common Stock.
The undersigned hereby authorizes the Company and its transfer agent, during the Lock-Up
Period, to decline the transfer of or to note stop transfer restrictions on the stock register and
other records relating to shares of Common Stock or other securities subject to this Lock-Up
Agreement of which the undersigned is the record holder, and, with respect to shares of Common
Stock or other securities subject to this Lock-Up Agreement of which the undersigned is the
beneficial owner but not the record holder, the undersigned hereby agrees to cause such record
holder to authorize the Company and its transfer agent, during the Lock-Up Period, to decline the
transfer of or to note stop transfer restrictions on the stock register and other records relating
to such shares or other securities.
* * *
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If (i) the Company notifies you in writing that it does not intend to proceed with the
Offering, (ii) the registration statement filed with the Commission with respect to the Offering is
withdrawn or (iii) for any reason the Underwriting Agreement shall be terminated prior to the “time
of purchase” (as defined in the Underwriting Agreement), this Lock-Up Agreement shall be terminated
and the undersigned shall be released from its obligations hereunder.
- 3 -
The agreements of the undersigned set forth in this Lock-Up Agreement shall only be effective
if all executive officers and directors of the Company and all holders of one percent (1%) or more
of the Common Stock and all holders of one percent (1%) or more of the OP Units prior to the
completion of the Offering shall have entered into written lock-up agreements with you
substantially similar to this Lock-Up Agreement.
| Yours very truly, |
||||
| Name: | ||||
- 4 -
