Exh. 1
AMERIVEST PROPERTIES INC.
Common Stock
(par value $.001 per share)
UNDERWRITING AGREEMENT
----------------------
__________, 2001
Xxxxxx, Xxxxx Xxxxx, Incorporated
As Representative of the several Underwriters
c/o Ferris, Xxxxx Xxxxx, Incorporated
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Ladies and Gentlemen:
Introductory.
AmeriVest Properties Inc., a Maryland corporation (the "Company"), proposes
to issue and sell to the several underwriters named in Schedule A (the
"Underwriters") an aggregate of 2,000,000 shares (the "Firm Common Shares") of
its common stock, par value $.001 per share (the "Common Stock"). In addition,
the Company has granted to the Underwriters an option to purchase up to an
additional 300,000 shares (the "Optional Common Shares") of Common Stock, as
provided in Section 2. The Firm Common Shares and, if and to the extent such
option is exercised, the Optional Common Shares are collectively called the
"Common Shares." Xxxxxx, Xxxxx Xxxxx, Incorporated ("FBW") has agreed to act as
representative of the several Underwriters (in such capacity, the
"Representative") in connection with the offering and sale of the Common Shares.
The Company has prepared and filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form SB-2 (File No.
333-63934), which contains a form of prospectus to be used in connection with
the public offering and sale of the Common Shares. Such registration statement,
as amended, including the financial statements, exhibits and schedules thereto,
in the form in which it was declared effective by the Commission under the
Securities Act of 1933, as amended, and the rules and regulations promulgated
thereunder (collectively, the "Securities Act"), including any information
deemed to be a part thereof at the time of effectiveness pursuant to Rule 430A
or Rule 434 under the Securities Act, is called the "Registration Statement."
Any registration statement filed by the Company pursuant to Rule 462(b) under
the Securities Act is called the "Rule 462(b) Registration Statement," and from
and after the date and time of filing of the Rule 462(b) Registration Statement,
the term "Registration Statement" shall include the Rule 462(b) Registration
Statement. Such prospectus, in the form first used by the Underwriters to
confirm sales of the Common Shares, is called the "Prospectus." All references
in this Agreement to the Registration Statement, the Rule 462(b) Registration
Statement, a preliminary prospectus or the Prospectus, or any amendments or
supplements to any of the foregoing, shall include any copy thereof filed with
the Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval
System ("XXXXX").
The Company hereby confirms its agreements with the Underwriters as
follows:
Section 1. Representations and Warranties.
The Company hereby represents, warrants and covenants to each Underwriter
as follows:
(a) Compliance with Registration Requirements. The Registration
Statement and any Rule 462(b) Registration Statement have been declared
effective by the Commission under the Securities Act. The Company has complied
to the Commission's satisfaction with all requests of the Commission for
additional or supplemental information. No stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b) Registration
Statement is in effect and no proceedings for such purpose have been instituted
or are pending or, to the best of the Company's knowledge, are contemplated or
threatened by the Commission.
Each preliminary prospectus and the Prospectus when filed complied in all
material respects with the Securities Act and, if filed by electronic
transmission pursuant to XXXXX (except as may be permitted by Regulation S-T
under the Securities Act), was identical to the copy thereof delivered to the
Underwriters for use in connection with the offer and sale of the Common Shares.
Each of the Registration Statement (including any Rule 462(b) Registration
Statement) and any post-effective amendment thereto, at the time it became
effective and at all subsequent times, complied and will comply in all material
respects with the Securities Act and did not and will not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading. Each
preliminary prospectus, at the time of filing thereof, did not contain any
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading. The Prospectus, as amended and
supplemented, as of its date and at all subsequent times, did not and will not
contain any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The representations
and warranties set forth in the three immediately preceding sentences do not
apply to statements in or omissions from the Registration Statement, any Rule
462(b) Registration Statement, or any post-effective amendment thereto, any
preliminary prospectus, or the Prospectus, or any amendments or supplements
thereto, made in reliance upon and in conformity with information relating to
any Underwriter furnished to the Company in writing by the Representative
expressly for use therein.
(b) Offering Materials Furnished to Underwriters. The Company
has delivered to the Representative a complete manually signed copy of the
Registration Statement
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and of each consent and certificate of experts filed as a part thereof, and
conformed copies of the Registration Statement (without exhibits) and
preliminary prospectuses and the Prospectus, as amended or supplemented, in such
quantities and at such places as the Representative has reasonably requested for
each of the Underwriters.
(c) Distribution of Offering Material by the Company. The Company has
not distributed and will not distribute, prior to the later of the Second
Closing Date (as defined below) and the completion of the Underwriters'
distribution of the Common Shares, any offering material in connection with the
offering and sale of the Common Shares other than a preliminary prospectus, the
Prospectus or the Registration Statement.
(d) Exhibits; Material Contracts. There are no contracts or other
documents required to be described in the Prospectus or to be filed as exhibits
to the Registration Statement which have not been described or filed as
required. The contracts so described in the Prospectus to which the Company is a
party have been duly authorized, executed and delivered by the Company,
constitute valid and binding agreements of the Company, and are enforceable
against and by the Company in accordance with their respective terms. Neither
the Company nor, to the best of the Company's knowledge, any other party is in
material breach of or material default under any of such contracts.
(e) The Underwriting Agreement. This Agreement has been duly
authorized, executed and delivered by the Company.
(f) Authorization of the Common Shares. The Common Shares to be
purchased by the Underwriters from the Company have been duly authorized for
issuance and sale pursuant to this Agreement and, when issued and delivered by
the Company pursuant to this Agreement, will be validly issued, fully paid and
non-assessable.
(g) No Applicable Registration or Other Similar Rights. There are no
persons with registration or other similar rights to have any equity or debt
securities registered for sale under the Registration Statement or included in
the offering contemplated by this Agreement, except for such rights as have been
duly satisfied or waived.
(h) No Material Adverse Change. Except as otherwise disclosed in the
Prospectus, subsequent to the respective dates as of which information is given
in the Prospectus: (i) there has been no material adverse change, or any
development that could reasonably be expected to result in a material adverse
change, in the condition, financial or otherwise, or in the earnings, business,
operations or prospects, whether or not arising from transactions in the
ordinary course of business, of the Company and its subsidiaries, considered as
one enterprise (any such change or development is called a "Material Adverse
Change"); (ii) the Company and its subsidiaries, considered as one enterprise,
have not incurred any material liability or obligation, indirect, direct or
contingent, not in the ordinary course of business, nor entered into any
material transaction or agreement not in the ordinary course of business; (iii)
there has been no material casualty loss or condemnation or other material
adverse event with respect to any of the real properties owned by the Company
and its Subsidiaries (collectively, the "Properties"); and (iv) there has been
no dividend or distribution of any kind declared, paid or made by the Company
or, except for dividends or distributions paid to the Company or other
subsidiaries, any
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of its subsidiaries on any class of capital stock or other equity interests or
repurchase or redemption by the Company or any of its subsidiaries of any class
of capital stock or other equity interests.
(i) Independent Accountants. Both Xxxxxx Xxxxxxxx LLP and Xxxxxxx
Wasoff, P.C., who have expressed their opinions with respect to the financial
statements (which term as used in this Agreement includes the related notes
thereto) filed with the Commission as a part of the Registration Statement and
included in the Prospectus, are independent public or certified public
accountants as required by the Securities Act and the Securities Exchange Act of
1934, as amended, and the rules and regulations promulgated thereunder
(collectively, the "Exchange Act").
(j) Preparation of the Financial Statements. The financial statements
filed with the Commission as a part of the Registration Statement and included
in the Prospectus present fairly and accurately (i) the consolidated financial
position of the Company and its subsidiaries as of and at the dates indicated
and the results of their operations and cash flows for the periods specified and
(ii) the revenue and certain expenses of Sheridan Plaza at Inverness, LLC for
the periods specified. Any supporting schedules included in the Registration
Statement present fairly and accurately the information required to be stated
therein. Such financial statements and supporting schedules have been prepared
in conformity with generally accepted accounting principles applied on a
consistent basis throughout the periods involved, except as may be expressly
stated in the related notes thereto. The pro forma consolidated financial
statements of the Company and its subsidiaries and the related notes thereto and
the statement of estimated taxable operating results and cash to be made
available by operations based thereon included in the Prospectus and the
Registration Statement present fairly and accurately the information contained
therein, have been prepared in accordance with the Commission's rules and
guidelines with respect thereto and have been properly presented on the bases
described therein, and the assumptions used in the preparation thereof are
reasonable and the adjustments used therein are appropriate to give effect to
the transactions and circumstances referred to therein. No other financial
statements or supporting schedules are required to be included in the
Registration Statement. The financial data set forth in the Prospectus under the
captions "Prospectus Summary--Summary Financial Data," "Selected Financial
Information" and "Capitalization" fairly and accurately present the information
set forth therein on a basis consistent with that of the financial statements
contained in the Registration Statement when read in conjunction with the
textual information included in those sections.
(k) Organization and Good Standing of the Company and its
Subsidiaries. Each of the Company and its subsidiaries that is a corporation has
been duly incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation and has corporate power
and authority to own, lease and operate its properties and to conduct its
business as described in the Prospectus and, in the case of the Company, to
enter into and perform its obligations under this Agreement. Each subsidiary of
the Company that is a limited liability company has been duly organized and is
validly existing as a limited liability company in good standing under the laws
of the jurisdiction of its organization and has limited liability company power
and authority to own, lease and operate its properties and to conduct its
business as described in the Prospectus. Each of the Company and its
subsidiaries is duly qualified as a foreign corporation or limited liability
company, as the case may be, to transact
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business and is in good standing in each other jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except for such jurisdictions where the
failure to so qualify or to be in good standing would not, individually or in
the aggregate, result in a Material Adverse Change. All of the issued and
outstanding capital stock of each subsidiary of the Company that is a
corporation has been duly authorized and validly issued, is fully paid and non-
assessable and is owned by the Company, directly or through subsidiaries, free
and clear of any security interest, mortgage, pledge, lien, claim, restriction
or encumbrance, and all of the issued and outstanding membership interests of
each subsidiary of the Company that is a limited liability company have been
duly authorized and validly issued and are fully paid and are owned by the
Company, directly or through subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, claim, restriction or encumbrance. The Company
does not own or control, directly or indirectly, any corporation, association or
other entity other than the subsidiaries listed in Exhibit 21 to the
Registration Statement.
(l) Capitalization and Other Capital Stock Matters. The authorized,
issued and outstanding capital stock of the Company is as set forth in the
Prospectus under the caption "Capitalization" (other than for subsequent
issuances, if any, pursuant to employee benefit plans described in the
Prospectus, upon exercise of outstanding options or warrants described in the
Prospectus or under the Company's current dividend reinvestment plan(the
"DRIP")). The Common Stock (including the Common Shares) conforms in all
material respects to the description thereof contained in the Prospectus. All of
the issued and outstanding shares of Common Stock have been duly authorized and
validly issued, are fully paid and non-assessable and have been issued in
compliance with applicable federal and state securities laws. None of the
outstanding shares of Common Stock was issued in violation of any preemptive
rights, rights of first refusal or other similar rights to subscribe for or
purchase securities of the Company. There are no authorized or outstanding
options, warrants, preemptive rights, rights of first refusal or other rights to
purchase, or equity or debt securities convertible into or exchangeable or
exercisable for, any capital stock of the Company or any of its subsidiaries
other than those described in the Prospectus. The description of the Company's
stock option, stock bonus and other stock plans or arrangements, and of the
options or other rights granted thereunder, set forth in the Prospectus fairly
and accurately presents the information required to be shown with respect to
such plans, arrangements, options and rights.
(m) Exchange Act Registration; Stock Exchange Listing. The Common
Stock is registered pursuant to Section 12(b) of the Exchange Act, and is listed
on the American Stock Exchange (the "AMEX"), and the Company has taken no action
designed to, or likely to have the effect of, terminating the registration of
the Common Stock under the Exchange Act or delisting the Common Stock from the
AMEX, nor has the Company received any notification that the Commission or the
AMEX is contemplating terminating such registration or listing. Application has
been made to list the Common Shares on the AMEX, and as of the Closing Date with
respect thereto, the Common Shares shall have been approved for listing on the
AMEX, subject to official notice of issuance.
(n) Non-Contravention of Existing Instruments; No Further
Authorizations or Approvals Required. Neither the Company nor any of its
subsidiaries is in violation of its charter or by-laws or other organizational
documents or in default (or, with the giving of notice or lapse
5
of time or both, would be in default) ("Default") under any material indenture,
mortgage, loan or credit agreement, note, contract, franchise, lease or other
instrument to which the Company or any of its subsidiaries is a party or by
which it or any of them may be bound, or to which any of the property or assets
of the Company or any of its subsidiaries is subject (each, an "Existing
Instrument"), except such Defaults as would not, individually or in the
aggregate, result in a Material Adverse Change. The Company's execution,
delivery and performance of this Agreement and consummation of the transactions
contemplated hereby and by the Prospectus (i) have been duly authorized by all
necessary corporate action and will not result in any violation of the
provisions of the charter or by-laws or other organizational documents of the
Company or any of its subsidiaries, (ii) will not conflict with or constitute a
breach of, or a Default or Debt Repayment Triggering Event (as defined below)
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any of its
subsidiaries pursuant to, or require the consent of any other party to, any
Existing Instrument, and (iii) will not result in any violation of any law,
administrative regulation or administrative or court decree applicable to the
Company or any of its subsidiaries. No consent, approval, authorization or other
order of, or registration or filing with, any court or other governmental or
regulatory authority or agency, is required for the Company's execution,
delivery and performance of this Agreement and consummation of the transactions
contemplated hereby and by the Prospectus, except such as have been obtained or
made by the Company and are in full force and effect under the Securities Act
and applicable state securities or blue sky laws and from the National
Association of Securities Dealers, Inc. (the "NASD").
As used herein, a "Debt Repayment Triggering Event" means any event or
condition which gives, or with the giving of notice or lapse of time or both
would give, the holder of any note, debenture or other evidence of indebtedness
(or any person acting on such holder's behalf) the right to require the
repurchase, redemption or repayment of all or a portion of such indebtedness by
the Company or any of its subsidiaries.
(o) No Material Actions or Proceedings. There are no legal or
governmental actions, suits or proceedings pending or, to the best of the
Company's knowledge, threatened (i) against or affecting the Company or any of
its subsidiaries, (ii) which has as the subject thereof any officer or director
of, or property owned or leased by, the Company or any of its subsidiaries or
(iii) relating to environmental or discrimination matters, where in any such
case (A) there is a reasonable possibility that such action, suit or proceeding
might be determined adversely to the Company or such subsidiary and (B) any such
action, suit or proceeding, if so determined adversely, would reasonably be
expected to result in a Material Adverse Change or adversely affect the
consummation of the transactions contemplated by this Agreement. No material
labor dispute with the employees of the Company, any of its subsidiaries or its
advisor, exists or, to the best of the Company's knowledge, is threatened or
imminent.
(p) Intellectual Property Rights. The Company and its subsidiaries
own or possess sufficient trademarks, trade names, patent rights, copyrights,
licenses, approvals, trade secrets and other similar rights (collectively, the
"Intellectual Property Rights") reasonably necessary to conduct their businesses
as now conducted or as proposed to be conducted as described in the Prospectus;
and the expected expiration of any of such Intellectual Property Rights would
not result in a Material Adverse Change. Neither the Company nor any of its
subsidiaries has received any notice of infringement or conflict with asserted
Intellectual
6
Property Rights of others, which, individually or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would result in a
Material Adverse Change.
(q) All Necessary Permits, etc. The Company and each of its
subsidiaries possesses such valid and current certificates, authorizations,
licenses, registrations and permits issued by the appropriate state, federal or
foreign regulatory agencies or bodies necessary to conduct their respective
businesses, and neither the Company nor any such subsidiary has received any
notice of proceedings relating to the revocation or modification of, or non-
compliance with, any such certificate, authorization, license, registration or
permit which, individually or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would result in a Material Adverse Change.
(r) Properties. The Company and each of its subsidiaries owns or
leases all such properties as are necessary to its operations as now conducted
or as proposed to be conducted as described in the Prospectus, except where the
failure to so own or lease, individually or together with all such other
failures, would not result in a Material Adverse Change. The Company and its
subsidiaries have good and marketable title in fee simple to all of the
Properties, free and clear of all security interests, mortgages, pledges, liens,
claims, restrictions or encumbrances of any kind, except such as (i) are
described in the Prospectus or (ii) do not, individually or in the aggregate,
materially affect the value of such Property and do not interfere with the use
made and proposed to be made of such Property. All security interests,
mortgages, pledges, liens, claims, restrictions and encumbrances of any kind on
or affecting the Properties or the other assets of the Company and its
subsidiaries that are required to be disclosed in the Prospectus are disclosed
therein. There is no violation by the Company of any municipal, state or federal
law, rule or regulation (including, but not limited to, those pertaining to
environmental matters) concerning the Properties or any part thereof which would
result in a Material Adverse Change. Each of the Properties complies with all
applicable zoning laws, ordinances, regulations and deed restrictions or other
covenants and, if and to the extent there is a failure to comply, such failure
would not, individually or together with all such other failures, result in a
Material Adverse Change or result in a forfeiture or reversion. Neither the
Company nor any of its subsidiaries has received any notice from any
governmental or regulatory authority or agency of any condemnation of or zoning
change affecting the Properties or any part thereof, and the Company does not
know of any such condemnation or zoning change which is threatened. 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 giving of notice or both, would constitute a default under any of such
leases, except such defaults as would not, individually or in the aggregate,
result in a Material Adverse Change.
(s) Mortgages and Deeds of Trust. Except as set forth in the
Prospectus, the mortgages and deeds of trust encumbering the Properties and any
other assets described in the Prospectus are not convertible and none of the
Company, any of its subsidiaries or any other 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 by the Company or any of its subsidiaries.
(t) Tax Law Compliance. The Company and its subsidiaries have filed
all necessary federal, state and foreign income and franchise tax returns or
have properly requested
7
extensions thereof and have paid all taxes required to be paid by it and, if due
and payable, any related or similar assessment, fine or penalty levied against
any of them. The Company has made adequate charges, accruals and reserves in the
applicable financial statements referred to in Section 1(j) above in respect of
all federal, state and foreign income and franchise taxes for all periods as to
which the tax liability of the Company or any of its subsidiaries has not been
finally determined.
(u) Qualification as a REIT. Commencing with the taxable year ended
December 31, 1996 and through the date hereof, the Company has been and is
organized in conformity with the requirements for qualification as a real estate
investment trust ("REIT") under the Internal Revenue Code of 1986, as amended,
and the regulations and published interpretations thereunder (collectively, the
"Code"), and its method of operation has enabled and will enable it to meet the
requirements for qualification and taxation as a REIT under the Code. No
transaction or other event has occurred which would cause the Company to not be
able to qualify as a REIT for its current taxable year or future taxable years.
(v) Company Not an "Investment Company." The Company has been advised
of the rules and requirements under the Investment Company Act of 1940, as
amended (the "Investment Company Act"). The Company is not, and after receipt of
payment for the Common Shares will not be, an "investment company" within the
meaning of the Investment Company Act and will conduct its business in a manner
so that it will not become subject to the Investment Company Act.
(w) Insurance. The Company and each of its subsidiaries is insured by
recognized, financially sound and reputable institutions with policies in such
amounts and with such deductibles and covering such risks as are generally
deemed in the Company's industry to be adequate and customary for their
businesses, including, but not limited to, policies covering real and personal
property owned or leased by the Company and its subsidiaries against theft,
damage, destruction and acts of vandalism and, with respect to the Properties,
defects in title. The Company has no reason to believe that it or any of its
subsidiaries will not be able (i) to renew its existing insurance coverage as
and when such policies expire or (ii) to obtain comparable coverage from similar
institutions as may be necessary or appropriate to conduct its business as now
conducted or as proposed to be conducted as described in the Prospectus and at a
cost that would not result in a Material Adverse Change. Neither the Company nor
any of its subsidiaries has been denied any insurance coverage which it has
sought or for which it has applied.
(x) No Price Stabilization or Manipulation. Except for purchases or
issuances of shares of Common Stock pursuant to the DRIP, the Company has not
taken and will not take, directly or indirectly, any action designed to or that
might be reasonably expected to cause or result in stabilization or manipulation
of the price of any security of the Company to facilitate the sale or resale of
the Common Shares. None of such purchases and issuances pursuant to the DRIP was
made by the administrator of the DRIP at the request of the Company with the
purpose or intent of stabilizing or manipulating the price of any security of
the Company to facilitate the sale or resale of the Common Shares.
8
(y) Related Party Transactions. There are no business relationships
or related-party transactions involving the Company or any of its subsidiaries
or any other person required to be described in the Prospectus which have not
been described as required.
(z) No Unlawful Contributions or Other Payments. Neither the Company
nor any of its subsidiaries nor, to the best of the Company's knowledge, any
employee or agent of the Company or any subsidiary, has made any contribution or
other payment to any official of, or candidate for, any federal, state or
foreign office in violation of any law or of the character required to be
disclosed in the Prospectus.
(aa) Compliance with Environmental Laws. Except as otherwise disclosed
in the Prospectus, or except as would not, individually or in the aggregate,
result in a Material Adverse Change, (i) the Company and its subsidiaries have
been and are in compliance with applicable Environmental Laws (as defined
below), (ii) none of the Company, any of its subsidiaries or, to the best of the
Company's knowledge, any other owners of any of the Properties at any time or
any other party, has at any time released (as such term is defined in CERCLA (as
defined below)) or otherwise disposed of Hazardous Materials (as defined below)
on, to, in, under or from the Properties or any other real properties previously
owned, leased or operated by the Company or any of its subsidiaries, except as
described in Schedule B with respect to the industrial/showroom building
previously owned by the Company, (iii) neither the Company nor any of its
subsidiaries intends to use the Properties or any subsequently acquired
properties, other than in compliance with applicable Environmental Laws, (iv)
neither the Company nor any of its subsidiaries has received any notice of, or
has any knowledge of any occurrence or circumstance which, with notice or
passage of time or both, would give rise to a claim under or pursuant to any
Environmental Law with respect to the Properties, any other real properties
previously owned, leased or operated by the Company or any of its subsidiaries,
or the assets described in the Prospectus or arising out of the conduct of the
Company or its subsidiaries, (v) none of the Properties are included or, to the
best of the Company's knowledge, proposed for inclusion on the National
Priorities List issued pursuant to CERCLA by the United States Environmental
Protection Agency or, to the best of the Company's knowledge, proposed for
inclusion on any similar list or inventory issued pursuant to any other
Environmental Law or issued by any other Governmental Authority (as defined
below), (vi) none of the Company, any of its subsidiaries or any other person or
entity for whose conduct any of them is or may be held responsible, has
generated, manufactured, refined, transported, treated, stored, handled,
disposed, transferred, produced or processed any Hazardous Material at any of
the Properties, except in compliance with all applicable Environmental Laws, and
has not transported or arranged for the transport of any Hazardous Material from
the Properties or any other real properties previously owned, leased or operated
by the Company or any of its subsidiaries to another property, except in
compliance with all applicable Environmental Laws, (vii) no lien has been
imposed on the Properties by any Governmental Authority in connection with the
presence on or off such Property of any Hazardous Material, and (viii) none of
the Company, any of its subsidiaries or any other person or entity for whose
conduct any of them is or may be held responsible, has entered into or been
subject to any consent decree, compliance order, or administrative order with
respect to the Properties or any facilities or improvements or any operations or
activities thereon.
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As used herein, "Hazardous Material" shall include, without limitation, any
flammable materials, explosives, radioactive materials, hazardous materials,
hazardous substances, hazardous wastes, toxic substances or related materials,
asbestos, petroleum, oil, petroleum products and any hazardous material as
defined by any federal, state or local environmental law, statute, bylaw,
ordinance, rule or regulation, including, without limitation, the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended, 42
U.S.C. (S)(S) 9601-9675 ("CERCLA"), the Hazardous Materials Transportation Act,
as amended, 49 U.S.C. (S)(S) 1801-1819, the Resource Conservation and Recovery
Act, as amended, 42 U.S.C. (S)(S) 6901-K, the Emergency Planning and Community
Right-to-Know Act of 1986, 42 U.S.C. (S)(S) 1101-11050, the Toxic Substances
Control Act, 15 U.S.C. (S)(S) 2601-2671, the Federal Insecticide, Fungicide and
Rodenticide Act, 7 U.S.C. (S)(S) 136-136y, the Clean Air Act, 42 U.S.C. (S)(S)
7401-7642, the Clean Water Act (Federal Water Pollution Control Act), 33 U.S.C.
(S)(S) 1251-1387, the Safe Drinking Water Act, 42 U.S.C. (S)(S) 300f-300j-26,
and the Occupational Safety and Health Act, 29 U.S.C. (S)(S) 651-678, and any
analogous state laws, as any of the above may be amended from time to time and
in the regulations promulgated pursuant to each of the foregoing (including
environmental statutes and laws not specifically defined herein) (individually,
an "Environmental Law" and collectively, the "Environmental Laws") or by any
federal, state or local governmental authority having or claiming jurisdiction
over the properties and assets of the Company and its subsidiaries (a
"Governmental Authority").
(bb) Periodic Review of Costs of Environmental Compliance. In the
ordinary course of its business, the Company conducts a periodic review of the
effect of Environmental Laws on the business, operations and properties of the
Company and its subsidiaries, in the course of which it identifies and evaluates
associated costs and liabilities (including, without limitation, any capital or
operating expenditures required for clean-up, closure of properties or
compliance with Environmental Laws or any permit, license or approval, any
related constraints on operating activities and any potential liabilities to
third parties). On the basis of such review and the amount of its established
reserves, the Company has reasonably concluded that such associated costs and
liabilities would not, individually or in the aggregate, result in a Material
Adverse Change.
(cc) ERISA Compliance. The Company and any "employee benefit plan" (as
defined under the Employee Retirement Income Security Act of 1974, as amended,
and the regulations and published interpretations thereunder (collectively,
"ERISA")) established or maintained by the Company or its ERISA Affiliates (as
defined below) are in compliance in all material respects with ERISA. "ERISA
Affiliate" means, with respect to the Company, any member of any group of
organizations described in Sections 414(b), (c), (m) or (o) of the Code of which
the Company is a member. No "reportable event" (as defined under ERISA) has
occurred or is reasonably expected to occur with respect to any "employee
benefit plan" established or maintained by the Company or any of its ERISA
Affiliates. No "employee benefit plan" established or maintained by the Company
or any of its ERISA Affiliates, if such "employee benefit plan" were terminated,
would have any "amount of unfunded benefit liabilities" (as defined under
ERISA). Neither the Company nor any of its ERISA Affiliates has incurred or
reasonably expects to incur any liability under (i) Title IV of ERISA with
respect to termination of, or withdrawal from, any "employee benefit plan" or
(ii) Sections 412, 4971, 4975 or 4980B of the Code. Each "employee benefit plan"
established or maintained by the Company or any of its ERISA Affiliates that is
intended to be qualified under Section 401(a) of the Code is
10
so qualified and nothing has occurred, whether by action or failure to act,
which would cause the loss of such qualification.
(dd) Doing Business with Cuba. The Company is in compliance with all
provisions of Florida Statutes (S) 517.075 and the regulations thereunder,
relating to issuers doing business with Cuba.
Any certificate signed by an officer of the Company and delivered to the
Representative or to counsel for the Underwriters shall be deemed to be a
representation and warranty by the Company to each Underwriter as to the matters
set forth therein.
Section 2. Purchase, Sale and Delivery of the Common Shares.
(a) The Firm Common Shares. The Company agrees to issue and sell to
the several Underwriters the Firm Common Shares upon the terms herein set forth.
On the basis of the representations, warranties and agreements herein contained,
and upon the terms but subject to the conditions herein set forth, the
Underwriters agree, severally and not jointly, to purchase from the Company the
respective number of Firm Common Shares set forth opposite their names on
Schedule A. The purchase price per Firm Common Share to be paid by the several
Underwriters to the Company shall be $___ per share.
(b) The First Closing Date. Delivery of certificates for the Firm
Common Shares to be purchased by the Underwriters and payment therefor shall be
made at the offices of the Representative (or such other place as may be agreed
to by the Company and the Representative) at 10:00 a.m. Eastern time, on
________, 2001, or such other time and date as the Representative shall
designate by notice to the Company (the time and date of such closing are called
the "First Closing Date"), but in no event more than seven business days after
the effective date of the Registration Statement. The Company hereby
acknowledges that circumstances under which the Representative may provide
notice to postpone the First Closing Date as originally scheduled include, but
are not limited to, any determination by the Company or the Representative to
recirculate to the public copies of an amended or supplemented Prospectus or a
delay as contemplated by the provisions of Section 10.
(c) The Optional Common Shares; the Second Closing Date. In addition,
on the basis of the representations, warranties and agreements herein contained,
and upon the terms but subject to the conditions herein set forth, the Company
hereby grants an option to the several Underwriters to purchase, severally and
not jointly, up to an aggregate of 300,000 Optional Common Shares from the
Company at the purchase price per share to be paid by the Underwriters for the
Firm Common Shares. The option granted hereunder is for use by the Underwriters
solely in covering any overallotments in connection with the sale and
distribution of the Firm Common Shares. The option granted hereunder may be
exercised at any time upon notice by the Representative to the Company, which
notice may be given at any time within 30 days from the date of this Agreement.
Such notice shall set forth (i) the aggregate number of Optional Common Shares
as to which the Underwriters are exercising the option, (ii) the names and
denominations in which the certificates for the Optional Common Shares are to be
registered and (iii) the time, date and place at which such certificates will be
delivered (which time and date may not be earlier than the First Closing Date;
and in the case that such date is simultaneous with
11
the First Closing Date, the term "First Closing Date" shall refer to the time
and date of delivery of certificates for the Firm Common Shares and the Optional
Common Shares). Such time and date of delivery, if subsequent to the First
Closing Date, is called the "Second Closing Date" and shall be determined by the
Representative and shall not be earlier than three nor later than ten full
business days after delivery of such notice of exercise. If any Optional Common
Shares are to be purchased, each Underwriter agrees, severally and not jointly,
to purchase the number of Optional Common Shares (subject to such adjustments to
eliminate fractional shares as the Representative may determine) that bears the
same proportion to the total number of Optional Common Shares to be purchased as
the number of Firm Common Shares set forth on Schedule A opposite the name of
such Underwriter bears to the total number of Firm Common Shares. The
Representative may cancel the option at any time prior to its expiration by
giving written notice of such cancellation to the Company.
(d) Public Offering of the Common Shares. The Representative hereby
advises the Company that the Underwriters intend to offer for sale to the
public, as described in the Prospectus, their respective portions of the Common
Shares as soon after this Agreement has been executed and the Registration
Statement has been declared effective as the Representative, in its sole
judgment, has determined is advisable and practicable.
(e) Payment for the Common Shares. Payment for the Common Shares
shall be made at the First Closing Date (and, if applicable, at the Second
Closing Date) by wire transfer of immediately available funds to the order of
the Company.
It is understood that the Representative has been authorized, for its own
account and the accounts of the several Underwriters, to accept delivery of and
receipt for, and make payment of the purchase price for, the Firm Common Shares
and any Optional Common Shares the Underwriters have agreed to purchase. FBW,
individually and not as Representative of the Underwriters, may (but shall not
be obligated to) make payment for any Common Shares to be purchased by any
Underwriter whose funds shall not have been received by the Representative by
the First Closing Date or the Second Closing Date, as the case may be, for the
account of such Underwriter, but any such payment shall not relieve such
Underwriter from any of its obligations under this Agreement.
(f) Delivery of the Common Shares. The Company shall deliver, or
cause to be delivered, to the Representative for the accounts of the several
Underwriters certificates for the Firm Common Shares at the First Closing Date,
against the irrevocable release of a wire transfer of immediately available
funds for the amount of the purchase price therefor. The Company also shall
deliver, or cause to be delivered, to the Representative for the accounts of the
several Underwriters, certificates for the Optional Common Shares the
Underwriters have agreed to purchase at the First Closing Date or the Second
Closing Date, as the case may be, against the irrevocable release of a wire
transfer of immediately available funds for the amount of the purchase price
therefor. The certificates for the Common Shares shall be in definitive form and
registered in such names and denominations as the Representative shall have
requested at least two full business days prior to the First Closing Date (or
the Second Closing Date, as the case may be) and shall be made available for
inspection on the business day preceding the First Closing Date (or the Second
Closing Date, as the case may be) at a location the Representative
12
may reasonably designate. Time shall be of the essence, and delivery at the time
and place specified in this Agreement is a further condition to the obligations
of the Underwriters.
(g) Delivery of Prospectus to the Underwriters. Not later than 12:00
p.m. on the second business day following the date the Common Shares are first
released by the Underwriters for sale to the public, the Company shall deliver
or cause to be delivered, copies of the Prospectus in such quantities and at
such places as the Representative shall request.
Section 3. Additional Covenants. The Company further covenants and agrees
with each Underwriter as follows:
(a) Representative's Review of Proposed Amendments and Supplements.
During such period beginning on the date hereof and ending on the later of the
First Closing Date or such date, as in the opinion of counsel for the
Underwriters, the Prospectus is no longer required by law to be delivered in
connection with sales by an Underwriter or dealer (the "Prospectus Delivery
Period"), prior to amending or supplementing the Registration Statement
(including any registration statement filed under Rule 462(b) under the
Securities Act) or the Prospectus, the Company shall furnish to the
Representative for review a copy of each such proposed amendment or supplement,
and the Company shall not file any such proposed amendment or supplement to
which the Representative reasonably objects.
(b) Securities Act Compliance. After the date of this Agreement, the
Company shall promptly advise the Representative in writing of (i) the receipt
of any comments of, or requests for additional or supplemental information from,
the Commission, (ii) the time and date of any filing of any post-effective
amendment to the Registration Statement or any amendment or supplement to any
preliminary prospectus or the Prospectus, (iii) the time and date that any post-
effective amendment to the Registration Statement becomes effective and (iv) the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or any post-effective amendment thereto or of any order
preventing or suspending the use of any preliminary prospectus or the
Prospectus, or of any proceedings to remove, suspend or terminate from listing
or quotation the Common Stock from any securities exchange upon which it is
listed for trading or included or designated for quotation, or of the
threatening or initiation of any proceedings for any of such purposes. If the
Commission shall enter any such stop order at any time, the Company will use its
best efforts to obtain the lifting of such order at the earliest possible
moment. Additionally, the Company agrees that it shall comply with the
provisions of Rules 424(b), 430A and 434, as applicable, under the Securities
Act and will use its reasonable efforts to confirm that any filings made by the
Company under such Rule 424(b) were received in a timely manner by the
Commission.
(c) Amendments and Supplements to the Prospectus and Other Securities
Act Matters. If, during the Prospectus Delivery Period, any event shall occur or
condition exist as a result of which the Prospectus, as then amended or
supplemented, would include an untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein, in the light
of the circumstances when the Prospectus is delivered to a purchaser, not
misleading, or if in the opinion of the Representative or counsel for the
Underwriters it is otherwise necessary to amend or supplement the Prospectus to
comply with law, the Company agrees to promptly prepare (subject to Section 3(a)
hereof), file with the Commission and furnish
13
at its own expense to the Underwriters and to dealers, amendments or supplements
to the Prospectus so that the statements in the Prospectus as so amended or
supplemented will not include an untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein, in the light
of the circumstances when the Prospectus is delivered to a purchaser, not
misleading or so that the Prospectus, as amended or supplemented, will comply
with law.
(d) Copies of any Amendments and Supplements to the Prospectus. The
Company agrees to furnish the Representative, without charge, during the
Prospectus Delivery Period, as many copies of the Prospectus and any amendments
and supplements thereto as the Representative may reasonably request.
(e) Blue Sky Compliance. The Company shall cooperate with the
Representative and counsel for the Underwriters to qualify or register the
Common Shares for sale under (or obtain exemptions from the application of) the
state securities or blue sky laws or Canadian provincial securities laws of
those jurisdictions designated by the Representative, shall comply with such
laws and shall continue such qualifications, registrations and exemptions in
effect so long as required for the distribution of the Common Shares. Company
counsel will prepare and assist the Company in obtaining all such
qualifications, registrations and exemptions. The Company shall not be required
to qualify as a foreign corporation or to take any action that would subject it
to general service of process in any such jurisdiction where it is not presently
qualified or where it would be subject to taxation as a foreign corporation. The
Company will advise the Representative promptly of the suspension of the
qualification or registration of (or any such exemption relating to) the Common
Shares for offering, sale or trading in any jurisdiction or any initiation or
threat of any proceeding for any such purpose, and in the event of the issuance
of any order suspending such qualification, registration or exemption, the
Company shall use its best efforts to obtain the withdrawal thereof at the
earliest possible moment.
(f) Use of Proceeds. The Company shall apply the net proceeds from
the sale of the Common Shares sold by it in the manner described under the
caption "Use of Proceeds" in the Prospectus.
(g) Transfer Agent. The Company shall maintain, at its expense, a
registrar and transfer agent for the Common Stock.
(h) Earning Statement. As soon as practicable, the Company will make
generally available to its security holders and to the Representative an earning
statement (which need not be audited) covering the twelve-month period ending
_________ that satisfies the provisions of Section 11(a) of the Securities Act.
(i) Periodic Reporting Obligations. During the Prospectus Delivery
Period, the Company shall file, on a timely basis, with the Commission and the
AMEX all reports and documents required to be filed under the Exchange Act.
(j) Agreement Not to Offer or Sell Additional Securities. During the
period of 180 days following the date of the Prospectus, the Company will not,
without the prior written
14
consent of FBW (which consent may be withheld at the sole discretion of FBW),
directly or indirectly, sell, offer, contract or grant any option to sell,
pledge, transfer or establish an open "put equivalent position" within the
meaning of Rule 16a-1(h) under the Exchange Act, or otherwise dispose of or
transfer, or announce the offering of, or file any registration statement under
the Securities Act in respect of, any shares of Common Stock, options or
warrants to acquire shares of Common Stock or securities exchangeable or
exercisable for or convertible into shares of Common Stock (other than as
contemplated by this Agreement with respect to the Common Shares); provided,
however, that the Company may (i) issue shares of Common Stock upon the exercise
of warrants outstanding on the date hereof and described in the Prospectus, (ii)
grant options to purchase Common Stock and issue shares of Common Stock upon the
exercise of options, in both cases, pursuant to any stock option plan or
arrangement described in the Prospectus, (iii) issue shares of Common Stock
under the DRIP, and (iv) issue shares of Common Stock in payment of all or a
portion of the purchase price for properties acquired from sellers who are not
affiliates of the Company; provided that each recipient of such shares enters
into a lock-up agreement with terms substantially equivalent to the lock-up
agreements delivered to the Representative pursuant to Section 5(h).
(k) Future Reports to the Representative. During the period of five
years hereafter, the Company will furnish to the Representative at 0000
Xxxxxxxxxxxx Xxxxxx, X.X., Xxxxx 000, Xxxxxxxxxx, X.X. 00000, Attention: Xx.
Xxxx X. Xxxxxx, Xx.: (i) at the same time as distributed to the Company's
stockholders after the end of each fiscal year, copies of the Annual Report of
the Company containing the balance sheet of the Company as of the close of such
fiscal year and statements of income, stockholders' equity and cash flows for
the year then ended and the opinion thereon of the Company's independent public
or certified public accountants; (ii) as soon as practicable after the filing
thereof, copies of each proxy statement, Annual Report on Form 10-K, Quarterly
Report on Form 10-Q, Current Report on Form 8-K or other report filed by the
Company with the Commission, the NASD or any securities exchange; and (iii) at
the same time as mailed to the Company's stockholders, copies of any report or
communication of the Company mailed generally to holders of its capital stock.
(l) Qualification as a REIT. The Company will use its best efforts to
meet the requirements to qualify as a REIT under the Code, subject to the
fiduciary duties of the Board of Directors of the Company to manage the business
of the Company in the best interests of its stockholders.
Section 4. Payment of Expenses. The Company agrees to pay all costs, fees
and expenses incurred in connection with the performance of its obligations
hereunder and in connection with the transactions contemplated hereby,
including, without limitation, (i) all expenses incident to the issuance and
delivery of the Common Shares (including all printing and engraving costs), (ii)
all fees and expenses of the registrar and transfer agent of the Common Stock,
(iii) all necessary issue, transfer and other stamp taxes in connection with the
issuance and sale of the Common Shares to the Underwriters, (iv) all fees,
disbursements and other expenses of the Company's counsel, independent public or
certified public accountants and other advisors, (v) all costs and expenses
incurred in connection with the preparation, printing, filing, shipping and
distribution of the Registration Statement (including financial statements,
exhibits, schedules, consents and certificates of experts), each preliminary
prospectus and the Prospectus, and all amendments and supplements thereto, and
this Agreement, (vi) the filing fees incident to
15
the NASD's review and approval of the Underwriters' participation in the
offering and distribution of the Common Shares, (vii) the fees and expenses
associated with listing the Common Shares on the AMEX, and (viii) all other
fees, costs and expenses referred to in Item 25 of Part II of the Registration
Statement. In addition, the Company agrees to pay on demand all out-of-pocket
expenses reasonably incurred by the Representative in connection with the
purchase and offering and sale of the Common Shares, the performance of its
obligations hereunder and the transactions contemplated hereby (whether or not
such transactions are consummated), including, but not limited to, fees and
disbursements of counsel, printing expenses, travel expenses, postage, and
facsimile and telephone charges; provided that the Representative shall (A) keep
--------
the Company apprised regularly of any expenses incurred after the date hereof
and (B) obtain the approval of the Company in advance for any expenses in excess
of $100,000 in the aggregate, which approval shall not be unreasonably withheld.
Section 5. Conditions of the Obligations of the Underwriters. The
obligations of the several Underwriters to purchase and pay for the Common
Shares as provided herein on the First Closing Date and, with respect to the
Optional Common Shares, the Second Closing Date, shall be subject to the
accuracy of the representations and warranties on the part of the Company set
forth in Section 1 hereof as of the date hereof and as of the First Closing Date
as though then made and, with respect to the Optional Common Shares, as of the
Second Closing Date as though then made, to the timely performance by the
Company of its covenants and other obligations hereunder, and to each of the
following additional conditions:
(a) Accountants' Comfort Letters. On the date hereof, the
Representative shall have received from Xxxxxx Xxxxxxxx LLP and Xxxxxxx Wasoff,
P.C., independent public or certified public accountants for the Company,
letters dated the date hereof addressed to the Underwriters, in form and
substance satisfactory to the Representative, containing statements and
information of the type ordinarily included in accountants' "comfort letters" to
underwriters, delivered according to Statement of Auditing Standards No. 72 (or
any successor bulletin), with respect to the audited and unaudited financial
statements and certain financial information contained in the Registration
Statement and the Prospectus.
(b) Compliance with Registration Requirements; No Stop Order; No
Objection from NASD. For the period from and after effectiveness of this
Agreement and prior to the First Closing Date and, with respect to the Optional
Common Shares, the Second Closing Date:
(i) the Company shall have filed the Prospectus with the
Commission (including the information required by Rule 430A under the
Securities Act) in the manner and within the time period required by Rule
424(b) under the Securities Act; or the Company shall have filed a post-
effective amendment to the Registration Statement containing the
information required by such Rule 430A, and such post-effective amendment
shall have become effective;
(ii) no stop order suspending the effectiveness of the
Registration Statement (including any Rule 462(b) Registration Statement)
or any post-effective amendment to the Registration Statement, shall be in
effect and no proceedings for such purpose shall have been instituted or
threatened by the Commission; and
16
(iii) the NASD shall have raised no objection to the fairness
and reasonableness of the underwriting terms and arrangements.
(c) No Material Adverse Change. For the period from and after the
date of this Agreement and prior to the First Closing Date and, with respect to
the Optional Common Shares, the Second Closing Date, in the judgment of the
Representative there shall not have occurred any Material Adverse Change.
(d) Opinion of Counsel for the Company. On each of the First Closing
Date and the Second Closing Date, the Representative shall have received the
favorable opinion of Xxxxxx Xxxxx LLP, counsel for the Company, dated as of such
Closing Date, the form of which is attached as Exhibit A.
(e) Opinion of Counsel for the Underwriters. On each of the First
Closing Date and the Second Closing Date, the Representative shall have received
the favorable opinion of Xxxxxxx Procter LLP, counsel for the Underwriters,
dated as of such Closing Date, in form and substance satisfactory to the
Representative.
(f) Officers' Certificate. On each of the First Closing Date and the
Second Closing Date, the Representative shall have received a written
certificate executed by the Chairman of the Board, Chief Executive Officer or
President of the Company and the Chief Financial Officer or Chief Accounting
Officer of the Company, dated as of such Closing Date, to the effect set forth
in subsection (b)(ii) of this Section 5, and further to the effect that:
(i) for the period from and after the date of this Agreement
and prior to such Closing Date, there has not occurred any Material Adverse
Change;
(ii) the representations, warranties and covenants of the
Company set forth in this Agreement are true and correct with the same
force and effect as though expressly made on and as of such Closing Date;
and
(iii) the Company has complied with all the agreements hereunder
and satisfied all the conditions on its part to be performed or satisfied
hereunder at or prior to such Closing Date.
(g) Bring-down Comfort Letters. On each of the First Closing Date and
the Second Closing Date, the Representative shall have received from Xxxxxx
Xxxxxxxx LLP and Xxxxxxx Wasoff, P.C., independent public or certified public
accountants for the Company, letters dated such date, in form and substance
satisfactory to the Representative, to the effect that they reaffirm the
statements made in the letters furnished by them pursuant to subsection (a) of
this Section 5, except that the specified date referred to therein for the
carrying out of procedures shall be no more than three business days prior to
the First Closing Date or Second Closing Date, as the case may be.
(h) Lock-Up Agreements from Securityholders. On or before the date
hereof, the Company shall have furnished to the Representative an agreement in
the form of Exhibit B hereto from each director, officer and beneficial owner of
five percent or more of Common Stock
17
(including optionholders and warrantholders) of the Company, and such agreement
shall be in full force and effect on each of the First Closing Date and the
Second Closing Date.
(i) Additional Documents. On or before each of the First Closing Date
and the Second Closing Date, the Representative and counsel for the Underwriters
shall have received such information, documents and opinions as they may
reasonably require for the purposes of enabling them to pass upon the issuance
and sale of the Common Shares as contemplated herein, or in order to evidence
the accuracy of any of the representations and warranties, or the satisfaction
of any of the conditions or agreements, herein contained.
If any condition specified in this Section 5 is not satisfied when and as
required to be satisfied, this Agreement may be terminated by the Representative
by notice to the Company at any time on or prior to the First Closing Date and,
with respect to the Optional Common Shares, at any time prior to the Second
Closing Date, which termination shall be without liability on the part of any
party to any other party, except that Section 4, Section 6, Section 8 and
Section 9 shall at all times be effective and shall survive such termination.
Section 6. Reimbursement of Underwriters' Expenses. If this Agreement is
terminated by the Representative pursuant to Section 5 or Section 11 or by the
Company pursuant to Section 7 or if the sale to the Underwriters of the Common
Shares on the First Closing Date is not consummated because of any refusal,
inability or failure on the part of the Company to perform any agreement herein
or to comply with any provision hereof, the Company agrees, in addition to the
payment of all expenses described in Section 4 (subject to the last sentence of
this Section 6), to reimburse the Underwriters (or such Underwriters as have
terminated this Agreement with respect to themselves), severally, upon demand
for all out-of-pocket expenses that shall have been reasonably incurred by the
Underwriters in connection with the proposed purchase and offering and sale of
the Common Shares, including, but not limited to, fees and disbursements of
counsel, printing expenses, travel expenses, postage, and facsimile and
telephone charges. It is acknowledged and agreed that any payments to which the
Representative may be entitled under this Section 6 shall be in addition to any
such payments to which the Representative may otherwise be entitled under
Section 4, and the aggregate amount of such payments under Section 4 and this
Section 6 may exceed the $100,000 limit set forth in Section 4 without the
Representative having obtained the prior approval of the Company.
Section 7. Effectiveness of this Agreement. This Agreement shall not become
effective until the later of (i) the execution of this Agreement by the parties
hereto and (ii) notification by the Commission to the Company and the
Representative of the effectiveness of the Registration Statement under the
Securities Act.
Prior to such effectiveness, this Agreement may be terminated by any party
by notice to each of the other parties hereto, and any such termination shall be
without liability on the part of (a) the Company to any Underwriter, except that
the Company shall be obligated to reimburse the expenses of the Representative
and the Underwriters pursuant to Sections 4 and 6 hereof, (b) any Underwriter to
the Company, or (c) any party hereto to any other party, except that the
provisions of Section 8 and Section 9 shall at all times be effective and shall
survive such termination.
18
Section 8. Indemnification.
(a) Indemnification of the Underwriters. The Company agrees to
indemnify and hold harmless each Underwriter, its officers and employees, and
each person, if any, who controls any Underwriter within the meaning of the
Securities Act and the Exchange Act against any loss, claim, damage, liability
or expense, as incurred, to which such Underwriter or such controlling person
may become subject, under the Securities Act, the Exchange Act or other federal
or state statutory law or regulation, or at common law or otherwise (including
in settlement of any litigation, if such settlement is effected with the written
consent of the Company), insofar as such loss, claim, damage, liability or
expense (or actions in respect thereof as contemplated below) arises out of or
is based (i) upon any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement, or any amendment thereto,
including any information deemed to be a part thereof pursuant to Rule 430A or
Rule 434 under the Securities Act, or the omission or alleged omission therefrom
of a material fact required to be stated therein or necessary to make the
statements therein not misleading; or (ii) upon any untrue statement or alleged
untrue statement of a material fact contained in any preliminary prospectus or
the Prospectus (or any amendment or supplement thereto), or the omission or
alleged omission therefrom of a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; or (iii) in whole or in part upon any inaccuracy in the
representations and warranties of the Company contained herein; or (iv) in whole
or in part upon any failure of the Company to perform its obligations hereunder
or under law; or (v) any act or failure to act or any alleged act or failure to
act by any Underwriter in connection with, or relating in any manner to, the
Common Stock or the offering contemplated hereby, and which is included as part
of or referred to in any loss, claim, damage, liability or action arising out of
or based upon any matter covered by clause (i) or (ii) above, provided that the
Company shall not be liable under this clause (v) to the extent that a court of
competent jurisdiction shall have determined by a final judgment that such loss,
claim, damage, liability or action resulted directly from any such acts or
failures to act undertaken or omitted to be taken by such Underwriter through
its bad faith or willful misconduct; and to reimburse each Underwriter and each
such person for any and all expenses (including the fees and disbursements of
counsel chosen by FBW) as such expenses are reasonably incurred by such
Underwriter or such person in connection with investigating, defending,
settling, compromising or paying any such loss, claim, damage, liability,
expense or action; provided, however, that the foregoing indemnity agreement
shall not apply to any loss, claim, damage, liability or expense to the extent,
but only to the extent, arising out of or based upon any untrue statement or
alleged untrue statement or omission or alleged omission made in reliance upon
and in conformity with written information furnished to the Company by the
Representative expressly for use in the Registration Statement, any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto), as the
same is described in Section 8(b) below; and provided, further, that with
respect to any preliminary prospectus, the foregoing indemnity agreement shall
not inure to the benefit of any Underwriter from whom the person asserting any
loss, claim, damage, liability or expense purchased Common Shares, or any person
controlling such Underwriter, if copies of the Prospectus were timely delivered
to the Underwriter pursuant to Section 2 and a copy of the Prospectus (as then
amended or supplemented if the Company shall have furnished any amendments or
supplements thereto) was not sent or given by or on behalf of such Underwriter
to such person, if required by law so to have been delivered, at or prior to the
written
19
confirmation of the sale of the Common Shares to such person, and if the
Prospectus (as so amended or supplemented) would have cured the defect giving
rise to such loss, claim, damage, liability or expense. The indemnity agreement
set forth in this Section 8(a) shall be in addition to any liabilities that the
Company may otherwise have.
(b) Indemnification of the Company, its Directors and Officers. Each
Underwriter agrees, severally and not jointly, to indemnify and hold harmless
the Company, each of its directors, each of its officers who signed the
Registration Statement and each person, if any, who controls the Company within
the meaning of the Securities Act or the Exchange Act, against any loss, claim,
damage, liability or expense, as incurred, to which the Company, or any such
director, officer or controlling person may become subject, under the Securities
Act, the Exchange Act, or other federal or state statutory law or regulation, or
at common law or otherwise (including in settlement of any litigation, if such
settlement is effected with the written consent of such Underwriter), insofar as
such loss, claim, damage, liability or expense (or actions in respect thereof as
contemplated below) arises out of or is based upon any untrue or alleged untrue
statement of a material fact contained in the Registration Statement, any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto), or arises out of or is based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or omission
or alleged omission was made in the Registration Statement, any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto), in
reliance upon and in conformity with written information furnished to the
Company by the Representative expressly for use therein; and to reimburse the
Company, or any such director, officer or controlling person for any legal and
other expenses reasonably incurred by the Company, or any such director, officer
or controlling person in connection with investigating, defending, settling,
compromising or paying any such loss, claim, damage, liability, expense or
action. The Company hereby acknowledges that the only information that the
Underwriters have furnished to the Company expressly for use in the Registration
Statement, any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto) are the statements set forth in the table in the first
paragraph and in the second paragraph and the eighth through eleventh paragraphs
under the caption "Underwriting" in the Prospectus. The indemnity agreement set
forth in this Section 8(b) shall be in addition to any liabilities that each
Underwriter may otherwise have.
(c) Notifications and Other Indemnification Procedures. Promptly
after receipt by an indemnified party under this Section 8 of notice of the
commencement of any action, such indemnified party will, if a claim in respect
thereof is to be made against an indemnifying party under this Section 8, notify
the indemnifying party in writing of the commencement thereof, but the omission
so to notify the indemnifying party will not relieve it from any liability which
it may have to any indemnified party for contribution or otherwise under the
indemnity agreement contained in this Section 8 or to the extent it is not
prejudiced as a proximate result of such failure. In case any such action is
brought against any indemnified party and such indemnified party seeks or
intends to seek indemnity from an indemnifying party, the indemnifying party
will be entitled to participate in, and, to the extent that it shall elect,
jointly with all other indemnifying parties similarly notified, by written
notice delivered to the indemnified party promptly after receiving the aforesaid
notice from such indemnified party, to assume the defense thereof with counsel
reasonably satisfactory to such indemnified party;
20
provided, however, if the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that a conflict may arise between the positions of the
indemnifying party and the indemnified party in conducting the defense of any
such action or that there may be legal defenses available to it and/or other
indemnified parties which are different from or additional to those available to
the indemnifying party, the indemnified party or parties shall have the right to
select separate counsel to assume such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified party or
parties. Upon receipt of notice from the indemnifying party to such indemnified
party of such indemnifying party's election so to assume the defense of such
action and approval by the indemnified party of counsel, the indemnifying party
will not be liable to such indemnified party under this Section 8 for any legal
or other expenses subsequently incurred by such indemnified party in connection
with the defense thereof unless (i) the indemnified party shall have employed
separate counsel in accordance with the proviso to the next preceding sentence
(it being understood, however, that the indemnifying party shall not be liable
for the expenses of more than one separate counsel (together with local counsel)
representing the indemnified parties who are parties to such action) or (ii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of commencement of the action, in each of which cases the
reasonable fees and expenses of counsel shall be at the expense of the
indemnifying party.
(d) Settlements. The indemnifying party under this Section 8 shall
not be liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
against any loss, claim, damage, liability or expense by reason of such
settlement or judgment. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement, compromise or consent
to the entry of judgment in any pending or threatened action, suit or proceeding
in respect of which any indemnified party is or could have been a party and
indemnity was or could have been sought hereunder by such indemnified party,
unless such settlement, compromise or consent includes an unconditional release
of such indemnified party from all liability on claims that are the subject
matter of such action, suit or proceeding.
Section 9. Contribution. If the indemnification provided for in Section 8
is for any reason held to be unavailable to or otherwise insufficient to hold
harmless an indemnified party in respect of any losses, claims, damages,
liabilities or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount paid or payable by such indemnified party, as
incurred, as a result of any losses, claims, damages, liabilities or expenses
referred to therein (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company, on the one hand, and the
Underwriters, on the other hand, from the offering of the Common Shares pursuant
to this Agreement 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, on the one hand, and the Underwriters, on the other hand,
in connection with the statements or omissions or inaccuracies in the
representations and warranties herein which resulted in such losses, claims,
damages, liabilities or expenses, as well as any other relevant equitable
considerations. The relative benefits received by the Company, on the one hand,
and the
21
Underwriters, on the other hand, in connection with the offering of the Common
Shares pursuant to this Agreement shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of the Common Shares
pursuant to this Agreement (before deducting expenses) received by the Company,
and the total underwriting discount and commissions received by the
Underwriters, in each case as set forth on the front cover page of the
Prospectus bear to the aggregate initial public offering price of the Common
Shares as set forth on such cover. The relative fault of the Company, on the one
hand, and the Underwriters, on the other hand, shall be determined by reference
to, among other things, whether any such untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact or any
such inaccurate or alleged inaccurate representation or warranty relates to
information supplied by the Company, on the one hand, or the Underwriters, on
the other hand, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The amount paid or payable by a party as a result of the losses, claims,
damages, liabilities and expenses referred to above shall be deemed to include,
subject to the limitations set forth in Section 8(c), any legal or other fees or
expenses reasonably incurred by such party in connection with investigating or
defending any action or claim. The provisions set forth in Section 8(c) with
respect to notice of commencement of any action shall apply if a claim for
contribution is to be made under this Section 9; provided, however, that no
additional notice shall be required with respect to any action for which notice
has been given under Section 8(c) for purposes of indemnification.
The Company 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 which does not take account of the
equitable considerations dereferred to in this Section 9.
Notwithstanding the provisions of this Section 9, no Underwriter shall be
required to contribute any amount in excess of the underwriting discount and
commissions received by such Underwriter in connection with the Common Shares
underwritten by it and distributed to the public. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute
pursuant to this Section 9 are several, and not joint, in proportion to their
respective underwriting commitments as set forth opposite their names in
Schedule A. For purposes of this Section 9, each officer and employee of an
Underwriter and each person, if any, who controls an Underwriter within the
meaning of the Securities Act and the Exchange Act shall have the same rights to
contribution as such Underwriter, and each director of the Company, each officer
of the Company who signed the Registration Statement, and each person, if any,
who controls the Company within the meaning of the Securities Act and the
Exchange Act shall have the same rights to contribution as the Company.
Section 10. Default of One or More of the Several Underwriters. If, on the
First Closing Date or the Second Closing Date, as the case may be, any one or
more of the several Underwriters shall fail or refuse to purchase Common Shares
that it or they have agreed to purchase hereunder on such date, and the
aggregate number of Common Shares which such
22
defaulting Underwriter or Underwriters agreed but failed or refused to purchase
does not exceed 10% of the aggregate number of the Common Shares to be purchased
on such date, the other Underwriters shall be obligated, severally, in the
proportions that the number of Firm Common Shares set forth opposite their
respective names on Schedule A bears to the aggregate number of Firm Common
Shares set forth opposite the names of all such non-defaulting Underwriters, or
in such other proportions as may be specified by the Representative with the
consent of the non-defaulting Underwriters, to purchase the Common Shares which
such defaulting Underwriter or Underwriters agreed but failed or refused to
purchase on such date.
If, on the First Closing Date or the Second Closing Date, as the case may
be, any one or more of the Underwriters shall fail or refuse to purchase Common
Shares and the aggregate number of Common Shares with respect to which such
default occurs exceeds 10% of the aggregate number of Common Shares to be
purchased on such date, and arrangements satisfactory to the Representative and
the Company for the purchase of such Common Shares are not made within 48 hours
after such default, this Agreement shall terminate without liability on the part
of any non-defaulting Underwriter, except that the provisions of Section 4,
Section 8 and Section 9 shall at all times be effective and shall survive such
termination. In any such case, either the Representative or the Company shall
have the right to postpone the First Closing Date or the Second Closing Date, as
the case may be, but in no event for longer than seven days in order that the
required changes, if any, to the Registration Statement and the Prospectus or
any other documents or arrangements may be effected.
As used in this Agreement, the term "Underwriter" shall be deemed to
include any person substituted for a defaulting Underwriter under this Section
10. Any action taken under this Section 10 shall not relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
this Agreement.
Section 11. Termination of this Agreement. Prior to the First Closing Date,
this Agreement may be terminated by the Representative by notice given to the
Company if at any time (i) trading or quotation in any of the Company's
securities shall have been suspended or limited by the Commission or by the
AMEX, or trading in securities generally on any of the Nasdaq Stock Market, the
AMEX or the New York Stock Exchange shall have been suspended or limited, or
minimum or maximum prices shall have been generally established on any of such
stock exchanges by the Commission or the NASD; (ii) a general banking moratorium
shall have been declared by any federal, Colorado, Maryland or New York
authorities; (iii) there shall have occurred any outbreak or escalation of
national or international hostilities or any crisis or calamity, or any change
in the United States or international financial markets, or any substantial
change or development involving a prospective substantial change in United
States' or international political, financial or economic conditions, as in the
judgment of the Representative is material and adverse and makes it
impracticable to market the Common Shares in the manner and on the terms
described in the Prospectus or to enforce contracts for the sale of securities;
(iv) in the judgment of the Representative there shall have occurred any
Material Adverse Change; or (v) the Company shall have sustained a loss by
strike, fire, flood, earthquake, accident or other calamity of such character as
in the judgment of the Representative may interfere materially with the conduct
of the business and operations of the Company regardless of whether or not such
loss shall have been insured. Any termination pursuant to this Section 11 shall
be without liability on the part of (a) the Company to any Underwriter, except
that the Company shall be obligated to
23
reimburse the expenses of the Representative and the Underwriters pursuant to
Sections 4 and 6 hereof, (b) any Underwriter to the Company, or (c) of any party
hereto to any other party, except that the provisions of Section 8 and Section 9
shall at all times be effective and shall survive such termination.
Section 12. Representations and Indemnities to Survive Delivery. The
respective indemnities, agreements, representations, warranties and other
statements of the Company, of its officers and of the several Underwriters set
forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of any Underwriter
or the Company or any of its or their partners, officers or directors or any
controlling person, as the case may be, and will survive delivery of and payment
for the Common Shares sold hereunder and any termination of this Agreement.
Section 13. Notices. All communications hereunder shall be in writing and
shall be mailed, hand delivered or telecopied and confirmed to the parties
hereto as follows:
If to the Representative:
Xxxxxx, Xxxxx Xxxxx, Incorporated
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxx 000
Xxxxxxxxxx, X.X. 00000
Facsimile: (000) 000-0000
Attention: Xxxx X. Xxxxxx, Xx.
with a copy to:
Xxxxxxx Xxxxxxx XXX
Xxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx, P.C.
If to the Company:
AmeriVest Properties Inc.
0000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx
with a copy to:
Xxxxxx Xxxxx LLP
0000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxx X. Xxxxxxxxx, Esq.
24
Any party hereto may change the address for receipt of communications by
giving written notice to the others.
Section 14. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto, including any substitute Underwriters pursuant
to Section 10 hereof, and to the benefit of the employees, officers and
directors and controlling persons referred to in Section 8 and Section 9, and in
each case their respective successors, and no other person will have any right
or obligation hereunder. The term "successors" shall not include any purchaser
of the Common Shares as such from any of the Underwriters merely by reason of
such purchase.
Section 15. Partial Unenforceability. The invalidity or unenforceability of
any Section, paragraph or provision of this Agreement shall not affect the
validity or enforceability of any other Section, paragraph or provision hereof.
If any Section, paragraph or provision of this Agreement is for any reason
determined to be invalid or unenforceable, there shall be deemed to be made such
minor changes (and only such minor changes) as are necessary to make it valid
and enforceable.
Section 16. Governing Law Provisions.
(a) Governing Law Provisions. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of Maryland
applicable to agreements made and to be performed in such state.
(b) Consent to Jurisdiction. Any legal suit, action or proceeding
arising out of or based upon this Agreement or the transactions contemplated
hereby ("Related Proceedings") may be instituted in the federal courts of the
United States of America located in the State of Maryland or the courts of the
State of Maryland (collectively, the "Specified Courts"), and each party
irrevocably submits to the exclusive jurisdiction (except for proceedings
instituted in regard to the enforcement of a judgment of any such court (a
"Related Judgment"), as to which such jurisdiction is non-exclusive) of such
courts in any such suit, action or proceeding. Service of any process, summons,
notice or document by mail to such party's address set forth above shall be
effective service of process for any suit, action or other proceeding brought in
any such court. The parties irrevocably and unconditionally waive any objection
to the laying of venue of any suit, action or other proceeding in the Specified
Courts and irrevocably and unconditionally waive and agree not to plead or claim
in any such court that any such suit, action or other proceeding brought in any
such court has been brought in an inconvenient forum.
(c) Waiver of Immunity. With respect to any Related Proceeding, each
party irrevocably waives, to the fullest extent permitted by applicable law, all
immunity (whether on the basis of sovereignty or otherwise) from jurisdiction,
service of process, attachment (both before and after judgment) and execution to
which it might otherwise be entitled in the Specified Courts, and with respect
to any Related Judgment, each party waives any such immunity in the Specified
Courts or any other court of competent jurisdiction, and will not raise or claim
or cause to be pleaded any such immunity at or in respect of any such Related
Proceeding or Related Judgment, including, without limitation, any immunity
pursuant to the United States Foreign Sovereign Immunities Act of 1976, as
amended.
25
Section 17. General Provisions. This Agreement constitutes the entire
agreement of the parties to this Agreement and supersedes all prior written or
oral and all contemporaneous oral agreements, understandings and negotiations
with respect to the subject matter hereof. This Agreement may be executed in two
or more counterparts, each one of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement may not be amended or modified unless in writing by all of the
parties hereto, and no condition herein (express or implied) may be waived
unless waived in writing by each party whom the condition is meant to benefit.
The Section headings herein are for the convenience of the parties only and
shall not affect the construction or interpretation of this Agreement.
Each of the parties hereto acknowledges that it is a sophisticated business
person who was adequately represented by counsel during negotiations regarding
the provisions hereof, including, without limitation, the indemnification
provisions of Section 8 and the contribution provisions of Section 9, and is
fully informed regarding said provisions. Each of the parties hereto further
acknowledges that the provisions of Sections 8 and 9 hereto fairly allocate the
risks in light of the ability of the parties to investigate the Company, its
affairs and its business in order to assure that adequate disclosure has been
made in the Registration Statement, any preliminary prospectus and the
Prospectus (and any amendments and supplements thereto), as required by the
Securities Act and the Exchange Act.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
26
If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to the Company the enclosed copies hereof, whereupon this
instrument, along with all counterparts hereof, shall become a binding agreement
in accordance with its terms.
Very truly yours,
AmeriVest Properties Inc.
By:_______________________________
Name:
Title:
The foregoing Underwriting Agreement is hereby confirmed and accepted by the
Representative as of the date first above written.
Xxxxxx, Xxxxx Xxxxx, Incorporated
Acting as Representative of the
several Underwriters named in
the attached Schedule A.
By:__________________________________
Name:
Title:
27
SCHEDULE A
Number of Firm
Common Shares to be
Underwriters Purchased
------------ ---------
Xxxxxx, Xxxxx Xxxxx, Incorporated.........................
---------
Total................................... 2,000,000
=========
EXHIBIT A
[The final opinion in draft form will be attached as Exhibit A at the time this
Agreement is executed.]
Opinion of counsel for the Company to be delivered pursuant to Section 5(d)
of the Underwriting Agreement. References to the Prospectus in this Exhibit A
include any supplements thereto at the Closing Date.
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Maryland.
(ii) The Company has corporate power and authority to own, lease
and operate its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under the
Underwriting Agreement.
(iii) Each subsidiary of the Company has been duly organized and
is validly existing as a corporation or limited liability company, as the
case may be, in good standing under the laws of the jurisdiction of its
incorporation or organization and has corporate or limited liability
company power, as the case may be, and authority to own, lease and operate
its properties and to conduct its business as described in the Prospectus.
(iv) All of the issued and outstanding capital stock of each
subsidiary of the Company that is a corporation has been duly authorized
and validly issued, is fully paid and non-assessable and is owned by the
Company, directly or through subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, claim, restriction or encumbrance, and
all of the issued and outstanding membership interests of each subsidiary
of the Company that is a limited liability company have been duly
authorized and validly issued and are fully paid and are owned by the
Company, directly or through subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, claim, restriction or encumbrance.
(v) Each of the Company and its subsidiaries is duly qualified
as a foreign corporation or limited liability company, as the case may be,
to transact business and is in good standing in each jurisdiction in which
such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except for such
jurisdictions where the failure to so qualify or to be in good standing
would not, individually or in the aggregate, result in a Material Adverse
Change.
(vi) The authorized capital stock of the Company (including the
Common Stock) conforms to the descriptions thereof set forth in the
Prospectus under the caption "Description of Securities." The Company has
the authorized capital stock as set forth under the caption
"Capitalization" in the Prospectus, and all of the outstanding shares of
the Company's capital stock have been duly authorized and validly issued
and are fully paid and non-assessable. The form of certificate used to
evidence the Common
Stock is in due and proper form and complies with all applicable
requirements of the articles of incorporation and bylaws of the Company and
the General Corporation Law of the State of Maryland. Except as disclosed
in the Prospectus, to the best knowledge of such counsel, the Company has
not granted any rights, warrants or options to acquire, instruments
convertible into or exchangeable or exercisable for, or entered into any
commitments, plans or arrangements to issue, any shares of capital stock of
the Company or any security convertible into or exchangeable for capital
stock of the Company.
(vii) No stockholder of the Company or any other person has any
preemptive right, right of first refusal or other similar right to
subscribe for or purchase securities of the Company arising (a) by
operation of the articles of incorporation or bylaws of the Company or the
General Corporation Law of the State of Maryland or (b) to the best
knowledge of such counsel, otherwise.
(viii) The Underwriting Agreement has been duly authorized,
executed and delivered by the Company.
(ix) The Common Shares to be purchased by the Underwriters from
the Company have been duly authorized for issuance and sale pursuant to the
Underwriting Agreement and, when issued and delivered by the Company
pursuant to the Underwriting Agreement against payment of the consideration
set forth therein, will be validly issued, fully paid and non-assessable.
(x) Each of the Registration Statement and the Rule 462(b)
Registration Statement, if any, has been declared effective by the
Commission under the Securities Act. To the best knowledge of such counsel,
no stop order suspending the effectiveness of either the Registration
Statement or the Rule 462(b) Registration Statement, if any, has been
issued under the Securities Act and no proceedings for such purpose have
been instituted or are pending or are contemplated or threatened by the
Commission. Any required filing of the Prospectus and any supplement
thereto pursuant to Rule 424(b) under the Securities Act has been made in
the manner and within the time period required by such Rule 424(b).
(xi) The Registration Statement, including any Rule 462(b)
Registration Statement, the Prospectus, and each amendment or supplement to
the Registration Statement and the Prospectus, as of their respective
effective or issue dates (other than the financial statements included
therein, as to which no opinion need be rendered) comply as to form in all
material respects with the applicable requirements of the Securities Act.
(xii) The statements (a) in the Prospectus under the captions
"Risk Factors--We may incur tax liabilities as a result of failing to
qualify as a REIT," "--We may have to borrow money to make required
distributions to our stockholders," "--Some of our buildings are subject to
special income tax considerations which could result in our being required
to pay substantial taxes upon their sale," and "--The ability of our
stockholders to control our policies or affect a change in control of our
company is limited, which may not be in our stockholders' best interests,"
"Business and
A-2
Properties--Legal Proceedings," "Executive Compensation--Employment,
Severance and Separation Agreements with Xxxxx X. Xxxxx," "--Stock Option
Plans," and "--Sheridan Realty Advisors, LLC's Warrants," "Transactions
Between AmeriVest and Related Parties," "Description of Securities," "U.S.
Federal Income Tax Consequences" and "Securities and Exchange Commission
Position on Certain Indemnification" and (b) in Item 24 and Item 26 of the
Registration Statement, insofar as such statements constitute matters of
law, summaries of legal matters, the Company's articles of incorporation or
bylaw provisions, documents or legal proceedings, or legal conclusions,
have been reviewed by such counsel and fairly and accurately present and
summarize, in all material respects, the matters referred to therein.
(xiii) To the best knowledge of such counsel, there are no legal
or governmental actions, suits or proceedings pending or threatened which
are required to be disclosed in the Registration Statement, other than
those disclosed therein.
(xiv) To the best knowledge of such counsel, there are no
Existing Instruments required to be described or referred to in the
Registration Statement or to be filed as exhibits thereto other than those
described or referred to therein or filed as exhibits thereto; and the
descriptions thereof and references thereto are correct in all material
respects.
(xv) No consent, approval, authorization or other order of, or
registration or filing with, any court or other governmental or regulatory
authority or agency, is required for the Company's execution, delivery and
performance of the Underwriting Agreement and consummation of the
transactions contemplated thereby and by the Prospectus, except as required
under the Securities Act and applicable state securities or blue sky laws
and from the NASD.
(xvi) The execution and delivery of the Underwriting Agreement
by the Company, the performance by the Company of its obligations
thereunder (other than the performance by the Company of its obligations
under the indemnification section of the Underwriting Agreement, as to
which no opinion need be rendered) and the consummation of the transactions
contemplated thereby and by the Prospectus (including the issuance and sale
of the Common Shares and the use of proceeds of the Common Shares as
described in the Prospectus under the caption "Use of Proceeds") (a) have
been duly authorized by all necessary corporate action on the part of the
Company, (b) will not result in any violation of the provisions of the
articles of incorporation or bylaws or other organizational documents of
the Company or any of its subsidiaries, (c) will not conflict with or
constitute a breach of, or a Default or Debt Repayment Triggering Event
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any of its
subsidiaries pursuant to, or require the consent of any other party to, any
Existing Instrument, or (d) to the best knowledge of such counsel, will not
result in any violation of any law, administrative regulation or
administrative or court decree applicable to the Company or any of its
subsidiaries.
A-3
(xvii) The Company is not, and after receipt of payment for the
Common Shares will not be, an "investment company" within the meaning of
the Investment Company Act.
(xviii) Except as disclosed in the Prospectus, to the best
knowledge of such counsel, there are no persons with registration or other
similar rights to have any equity or debt securities registered for sale
under the Registration Statement or included in the offering contemplated
by the Underwriting Agreement, except for such rights as have been duly
satisfied or waived.
In addition, such counsel shall state that they have participated in
conferences with officers and other representatives of the Company,
representatives of the independent public or certified public accountants for
the Company and with representatives of the Underwriters at which the contents
of the Registration Statement and the Prospectus, and any supplements or
amendments thereto, and related matters were discussed and, although such
counsel is not passing upon and does not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus (other than as specified above), and
any supplements or amendments thereto, on the basis of the foregoing, nothing
has come to their attention which would lead them to believe that either the
Registration Statement or any amendments thereto, at the time the Registration
Statement or such amendments became effective, contained an untrue statement of
a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or that the
Prospectus, as of its date or at the First Closing Date or the Second Closing
Date, as the case may be, contained an untrue statement of a material fact or
omitted to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading (it being understood that such counsel need express no belief as to
the financial statements or schedules or other financial or statistical data
derived therefrom, included in the Registration Statement or the Prospectus or
any amendments or supplements thereto).
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the State of
Colorado, the General Corporation Law of the State of Maryland, or the federal
law of the United States, to the extent they deem proper and specified in such
opinion, upon the opinion (which shall be dated the First Closing Date or the
Second Closing Date, as the case may be, shall be satisfactory in form and
substance to the Underwriters, shall expressly state that the Underwriters may
rely on such opinion as if it were addressed to them and shall be furnished to
the Representative) of other counsel of good standing whom they believe to be
reliable and who are satisfactory to counsel for the Underwriters; provided,
however, that such counsel shall further state that they believe that they and
the Underwriters are justified in relying upon such opinion of other counsel,
and (B) as to
A-4
matters of fact, to the extent they deem proper, on certificates of responsible
officers of the Company and public officials.
A-5
EXHIBIT B
LOCK UP AGREEMENT
Xxxxxx, Xxxxx Xxxxx, Incorporated
As Representative of the Several Underwriters
c/o Ferris, Xxxxx Xxxxx, Incorporated
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Re: AmeriVest Properties Inc. (the "Company")
-----------------------------------------
Ladies and Gentlemen:
The undersigned is an owner of record or beneficially of certain shares of
common stock, $.001 par value per share, of the Company ("Common Stock") or
securities convertible into or exchangeable or exercisable for Common Stock. The
Company proposes to carry out a public offering of Common Stock (the "Offering")
for which you will act as the representative of the underwriters. The
undersigned recognizes that the Offering will be of benefit to the undersigned
and will benefit the Company by, among other things, raising additional capital
for its operations. The undersigned acknowledges that you and the other
underwriters are relying on the representations and agreements of the
undersigned contained in this letter in carrying out the Offering and in
entering into underwriting arrangements with the Company with respect to the
Offering.
In consideration of the foregoing, the undersigned hereby agrees that the
undersigned will not, without the prior written consent of Xxxxxx, Xxxxx Xxxxx,
Incorporated (which consent may be withheld in its sole discretion), directly or
indirectly, sell, offer, contract or grant any option to sell (including,
without limitation, any short sale), pledge, transfer, establish an open "put
equivalent position" within the meaning of Rule 16a-1(h) under the Securities
Exchange Act of 1934, as amended, or otherwise dispose of any shares of Common
Stock, options or warrants to acquire shares of Common Stock, or securities
exchangeable or exercisable for or convertible into shares of Common Stock
currently or hereafter owned either of record or beneficially (as defined in
Rule 13d-3 under the Securities Exchange Act of 1934, as amended) by the
undersigned (other than as a bona fide gift, provided that the donee thereof
agrees in writing to be bound by this Agreement), or publicly announce the
undersigned's intention to do any of the foregoing, for a period commencing on
the date hereof and continuing to and including the date that is 180 days after
the effective date of the registration statement of the Company related to the
Offering. The undersigned also agrees and consents to the entry of stop transfer
instructions with the Company's transfer agent and registrar against the
transfer of shares of Common Stock or securities convertible into or
exchangeable or exercisable for Common Stock held by the undersigned except in
compliance with the foregoing restrictions.
This agreement is irrevocable and will be binding on the undersigned and
the respective successors, heirs, personal representatives, and assigns of the
undersigned.
Dated: _______________, 2001
Printed Name of Holder:
________________________________________
Signature
________________________________________
Printed Name of Person Signing
________________________________________
Capacity of Person Signing if Signing as
Custodian, Trustee, or on Behalf of an
Entity
B-2
