MIDLANTIC OFFICE TRUST, INC. SHARES OF COMMON STOCK UNDERWRITING AGREEMENT August [ ], 2005
EXHIBIT 1.1
MIDLANTIC OFFICE TRUST, INC.
SHARES OF COMMON STOCK
SHARES OF COMMON STOCK
August [ ], 2005
FRIEDMAN, BILLINGS, ▇▇▇▇▇▇ & CO., INC.
as Representative of the several Underwriters
c/o Friedman, Billings, ▇▇▇▇▇▇ & Co., Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
as Representative of the several Underwriters
c/o Friedman, Billings, ▇▇▇▇▇▇ & Co., Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
Midlantic Office Trust, Inc., a Maryland corporation (the “Company”), and Midlantic
Partnership, L.P., a Delaware limited partnership (the “Operating Partnership”), each confirms its
agreement with each of the Underwriters listed on Schedule I hereto (collectively, the
“Underwriters”), for whom Friedman, Billings, ▇▇▇▇▇▇ & Co., Inc. is acting as Representative (in
such capacity, the “Representative”), with respect to (i) the sale by the Company of [12,750,000]
shares (the “Initial Shares”) of common stock, par value $.01 per share, of the Company (“Common
Stock”), and the purchase by the Underwriters, acting severally and not jointly, of the respective
number of shares of Common Stock set forth opposite the names of the Underwriters in Schedule I
hereto, and (ii) the grant of the option described in Section 1(b) hereof to purchase all or any
part of [1,912,500] additional shares of Common Stock to cover over-allotments (the “Option
Shares”), if any, from the Company to the Underwriters, acting severally and not jointly, in the
respective numbers of shares of Common Stock set forth opposite the names of the Underwriters in
Schedule I hereto. The [12,750,000] Initial Shares and all or any part of the [1,912,500]
Option Shares are hereinafter called, collectively, the “Shares.”
In connection with the purchase and sale of the Initial Shares, the Company and the Operating
Partnership will complete a series of transactions described in the Preliminary Prospectus (as
defined herein) and the Prospectus (as defined herein) under the captions “Prospectus Summary —
Our Formation Transactions” and “Certain Relationships and Related Party Transactions — Our
Formation Transactions” (such transactions, including the transactions referenced in the next
sentence, the “Formation Transactions”). As part of the Formation Transactions, (i) the
Company entered into a license and non-competition agreement (the “License and Non-Competition
Agreement”) with ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, Inc. (“▇▇▇▇▇▇▇ & ▇▇▇▇▇▇”) and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
(ii) ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ (and its co-investors, as applicable) entered into purchase and sale
agreements (the “Purchase and Sale Agreements”) with the Company and the Operating Partnership (or
one or more of the Subsidiaries (as defined herein)) pursuant to which ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ (and its
co-investors, as applicable) will agree to sell eight properties to the Operating Partnership (or
one of the Subsidiaries) in exchange for approximately $196.1 million, including approximately
$125.9 million of assumed debt, (ii) ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ will enter into an assignment agreement with
the Company and the Operating Partnership (the “Assignment Agreement”) pursuant to which ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇ will assign to the Operating Partnership (or one of the Subsidiaries) its right to purchase
the Blue ▇▇▇▇ Plaza property for approximately $32.0 million, including approximately $17.1 million
of assumed
debt (the Blue ▇▇▇▇ Plaza property, together with the eight properties referred to in clause
(i), the “Initial Properties”), (iii) the Company, in exchange for limited partnership units of the
Operating Partnership (“Units”), will contribute to the Operating Partnership the net proceeds from
the sale of the Initial Shares to the several Underwriters, (iv) the Operating Partnership will
issue to ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ an aggregate of [255,000] LTIP units in consideration for executing the
License and Non-Competition Agreement (plus such number as equals 2% of any Option Shares sold to
the Underwriters), (v) the Company will effect a stock split in the form of a stock dividend so
that ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, as a result of his ownership of the 1,000 shares of the Common Stock that
he acquired in March 2005, will own [63,750] shares, (vi) the Operating Partnership will issue to
the Company’s executive officers and non-employee directors an aggregate of approximately [147,000]
LTIP units (such LTIP units, together with the LTIP units referred to in clause (iv), having the
features described in the Prospectus under the caption “Management — LTIP Units,” the “LTIP
Units”), (vii) the Operating Partnership will enter into an employee lease and transition services
agreement (the “Employee Lease and Transition Services Agreement”) with ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ to support
the Company’s operations for up to nine months following completion of the offering described in
the Prospectus, and (viii) the existing property management agreements for the Initial Properties
will be terminated and the Company or one of the Subsidiaries will enter into new property
management agreements in respect of the Initial Properties as described in the Prospectus. In
addition, to the extent any or all of the Option Shares are purchased by the several Underwriters,
the Company, at the Option Closing Time for such purchase, will contribute to the Operating
Partnership the net proceeds from the sale of such Option Shares. As used in this Agreement, the
term “Formation Agreements” means (i) the Purchase and Sale Agreements; (ii) the Assignment
Agreement; (iii) the License and Non-Competition Agreement, and (iv) the Employee Lease and
Transition Services Agreement.
The Company understands that the Underwriters propose to make a public offering of the Shares,
subject to and in accordance with the terms hereof after this Agreement, has been executed and
delivered.
The Company has filed with the Securities and Exchange Commission (the “Commission”), a
registration statement on Form S-11 (No. 333-124933) and a related preliminary prospectus for the
registration of the Shares under the Securities Act of 1933, as amended (the “Securities Act”), and
the rules and regulations thereunder (the “Securities Act Regulations”). The Company has prepared
and filed such amendments thereto, if any, and such amended preliminary prospectuses, if any, as
may have been required to the date hereof. The registration statement, as amended at the time it
became effective (including all information deemed to be a part of the registration statement at
the time it became effective pursuant to Rule 430A of the Securities Act Regulations), is
hereinafter called the “Registration Statement,” except that, if the Company files any
post-effective amendment to such registration statement that becomes effective prior to the Closing
Time, “Registration Statement” shall refer to such registration statement as so amended. Any
registration statement filed pursuant to Rule 462(b) of the Securities Act Regulations is
hereinafter called the “Rule 462(b) Registration Statement,” and after such filing the term
“Registration Statement” shall include the 462(b) Registration Statement. The term “Preliminary
Prospectus” means the preliminary prospectus, dated July 27, 2005, relating to the Shares, as such
prospectus shall have been amended or supplemented from time to time prior to the date of the
Prospectus. The term “Prospectus” means the final prospectus, as first filed with the Commission
pursuant to Rule 424(b) of the Securities Act
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Regulations.
The Company, the Operating Partnership and the Underwriters agree as follows:
1. Sale and Purchase
(a) Initial Shares. Upon the basis of the warranties and representations and other terms and
conditions herein set forth, at the purchase price per share of $[ ], the Company agrees to
sell to the Underwriters the Initial Shares, and each Underwriter agrees, severally and not
jointly, to purchase from the Company the number of Initial Shares set forth in Schedule I
opposite such Underwriter’s name, plus any additional number of Initial Shares that such
Underwriter may become obligated to purchase pursuant to the provisions of Section 8 hereof,
subject in each case, to such adjustments among the Underwriters as the Representative in its sole
discretion shall make to eliminate any sales or purchases of fractional shares.
(b) Option Shares. In addition, upon the basis of the warranties and representations and other
terms and conditions herein set forth, at the purchase price per share set forth in paragraph (a),
the Company hereby grants an option to the Underwriters, acting severally and not jointly, to
purchase from the Company, all or any part of the Option Shares, plus any additional number of
Option Shares that such Underwriter may become obligated to purchase pursuant to the provisions of
Section 8 hereof. The option hereby granted will expire 30 days after the date hereof and may be
exercised in whole or in part from time to time, but not more than two times, only for the purpose
of covering over-allotments that may be made in connection with the offering and distribution of
the Initial Shares upon written notice by the Representative to the Company setting forth the
number of Option Shares as to which the several Underwriters are then exercising the option and the
time and date of payment and delivery for such Option Shares. Any such time and date of delivery
(an “Option Closing Time”) shall be determined by the Representative, but shall not be earlier than
three full business days nor later than five full business days after the exercise of such option,
nor in any event prior to the Initial Closing Time (as hereinafter defined). If the option is
exercised as to all or any portion of the Option Shares, the Company will sell that number of
Option Shares then being purchased, and each of the Underwriters, acting severally and not jointly,
will purchase that proportion of the total number of Option Shares then being purchased which the
number of Initial Shares set forth in Schedule I opposite the name of such Underwriter
bears to the total number of Initial Shares, subject in each case to such adjustments among the
Underwriters as the Representative in its sole discretion shall make to eliminate any sales or
purchases of fractional shares.
2. Payment and Delivery
(a) Initial Shares. The Initial Shares to be purchased by each Underwriter hereunder, in
definitive form, and in such authorized denominations and registered in such names as the
Representative may request upon at least two full business days’ prior notice to the Company shall
be delivered by or on behalf of the Company to the Representative, including, at the option of the
Representative, through the facilities of The Depository Trust Company (“DTC”) for the account of
such Underwriter, against payment by or on behalf of such Underwriter of the purchase price
therefor by wire transfer of Federal (same-day) funds to the account specified in writing to the
Representative by the Company upon at least two full business days’ prior notice. The Company will
use commercially reasonable efforts to cause the certificates representing the
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Initial Shares to be made available for checking and packaging at least one full business
day’s prior to the Initial Closing Time with respect thereto at the office of Friedman, Billings,
▇▇▇▇▇▇ & Co., ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at the office of DTC or its
designated custodian or such other location as the parties may agree, as the case may be (the
“Designated Office”). The time and date of such delivery and payment shall be 9:30 a.m., New York
City time, on the third (fourth, if pricing occurs after 4:30 p.m., New York City time) business
day after the date hereof (unless another time and date shall be agreed to by the Representative
and the Company). The time at which such payment and delivery are actually made is hereinafter
sometimes called the “Initial Closing Time.”
(b) Option Shares. Any Option Shares to be purchased by each Underwriter hereunder, in
definitive form, and in such authorized denominations and registered in such names as the
Representative may request upon at least two full business days’ prior notice to the Company shall
be delivered by or on behalf of the Company to the Representative, including, at the option of the
Representative, through the facilities of DTC for the account of such Underwriter, against payment
by or on behalf of such Underwriter of the purchase price therefor by wire transfer of Federal
(same-day) funds to the account specified in writing to the Representative by the Company upon at
least two full business days’ prior notice. The Company will use commercially reasonable efforts to
cause the certificates representing the Option Shares to be made available for checking and
packaging at least one full business days’ prior to the Option Closing Time with respect thereto at
the Designated Office. The time and date of such delivery and payment shall be 9:30 a.m., New York
City time, on the date specified by the Representative in the notice given by the Representative to
the Company of the Underwriters’ election to purchase such Option Shares or on such other time and
date as the Company and the Representative may agree upon in writing.
(c) Directed Shares. It is understood that approximately [255,000] shares of the Initial
Shares (“Directed Shares”) initially will be reserved by the Underwriters for offer and sale to
directors, officers, employees and persons designated by the Company (“Directed Share
Participants”) upon the terms and conditions set forth in the Prospectus and in accordance with the
rules and regulations of the National Association of Securities Dealers, Inc. (the “Directed Share
Program”). To the extent that any Directed Shares are not affirmatively reconfirmed for purchase by
any of the Directed Share Participants on or immediately after the date of this Agreement, such
Directed Shares may be offered to the public as part of the public offering contemplated herein.
3. Representations and Warranties of the Company and the Operating Partnership
The Company and the Operating Partnership, jointly and severally, represent and warrant to the
Underwriters that:
(a) the Company has an authorized capitalization, and will have immediately after the Closing
Time for the purchase and sale of the Initial Shares, an actual capitalization, as set forth in the
Prospectus; the outstanding shares of capital stock or, as applicable, partnership or membership
interests, of the Company and each subsidiary of the Company, including the Operating Partnership
and its subsidiaries (each, a “Subsidiary” and collectively, the “Subsidiaries”), have been duly
authorized and validly issued and are fully paid and, with respect to shares of capital stock,
membership interests and limited partnership interests, non-
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assessable (except to the extent such non-assessability may be affected by Section 17-607 of
the Delaware Revised Uniform Limited Partnership Act or Section 18-607 of the Delaware Limited
Liability Company Act), and, except as disclosed in the Prospectus, all of the outstanding shares
of capital stock or partnership or membership interests of the Subsidiaries are directly or
indirectly owned of record and beneficially by the Company, free and clear of any pledge, lien,
encumbrance, security interest or other claim, and, except as disclosed in the Prospectus, there
are no outstanding (i) securities or obligations of the Company or any of the Subsidiaries
convertible into or exchangeable or redeemable for any capital stock or other equity interests of
the Company or any such Subsidiary, (ii) warrants, rights or options to subscribe for or purchase
from the Company or any such Subsidiary any such capital stock or other equity interests or any
such convertible or exchangeable securities or obligations, or (iii) obligations of the Company or
any such Subsidiary to issue any shares of capital stock or other equity interests, any such
convertible or exchangeable or redeemable securities or obligations, or any such warrants, rights
or options;
(b) each of the Company and the Subsidiaries (all of which Subsidiaries are named in Exhibit
21.1 to the Registration Statement) has been duly incorporated or organized and is validly existing
as a corporation, limited partnership or limited liability company, as applicable, in good standing
under the laws of its respective jurisdiction of incorporation or organization with full corporate
or other power and authority to own its respective assets and to conduct its respective business as
described in the Registration Statement and the Prospectus and, in the case of each of the Company
and the Operating Partnership, to execute and deliver this Agreement and the Formation Agreements
to which it is a party and to consummate the transactions contemplated herein and therein;
(c) each of the Company and the Subsidiaries is duly qualified and is in good standing in each
jurisdiction in which the nature or conduct of its business requires such qualification and in
which the failure, individually or in the aggregate, to be so qualified could reasonably be
expected to have a material adverse effect on (i) the performance of this Agreement or the
consummation of the transactions contemplated hereby (including, without limitation, the
consummation of the Formation Transactions), (ii) the assets, business, operations, earnings,
prospects or condition (financial or otherwise) of the Company and the Subsidiaries taken as a
whole, or (iii) the assets to be acquired upon consummation of the Formation Agreements, taken as a
whole, or the operations or earnings thereof (a “Material Adverse Effect”); except as (i) disclosed
in the Prospectus, (ii) in accordance with the terms of the indebtedness proposed to be assumed by
the Company in connection with its proposed acquisition of the Initial Properties or (iii) as may
be required by law, no Subsidiary is prohibited or restricted, directly or indirectly, from paying
dividends to the Company, or from making any other distribution with respect to such Subsidiary’s
capital stock or other equity interests or from repaying to the Company or any other Subsidiary any
amounts that may from time to time become due under any loans or advances to such Subsidiary from
the Company or such other Subsidiary, or from transferring any such Subsidiary’s assets to the
Company or to any other Subsidiary; other than as disclosed in the Prospectus and other than the
Subsidiaries, the Company does not own, directly or indirectly, any capital stock or other equity
securities of any other corporation or any ownership interest in any limited liability company,
partnership, joint venture or other association;
(d) the agreement of limited partnership of the Operating Partnership (the
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“Partnership Agreement”) has been duly and validly authorized, executed and delivered by or on
behalf of Midlantic Office Properties, LLC, as the general partner of the Operating Partnership
(the “General Partner”), and the Company as a limited partner of the Operating Partnership and
constitutes a legal, valid and binding agreement of such parties thereto, enforceable in accordance
with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors’ rights generally or by general principles of
equity;
(e) upon completion of the offering of the Shares, (i) the Company will be a holder of Units
representing a limited partner interest in the Operating Partnership in the amount described in the
Prospectus, (ii) the General Partner will be the holder of the sole general partner interest in the
Operating Partnership, free and clear of any pledge, lien, encumbrance, security interest or other
claim, and (iii) the Company will own a 100% membership interest in the General Partner, free and
clear of any pledge, lien, encumbrance, security interest or other claim;
(f) the Company and the Subsidiaries are, and will be upon consummation of the Formation
Transactions, in compliance with all applicable federal, state, local or foreign laws, regulations,
rules, decrees, judgments and orders, including those relating to transactions with affiliates
except where any failures to be in compliance could not reasonably be expected to have a Material
Adverse Effect;
(g) the conduct of business by the Company and the Subsidiaries as presently and proposed to
be conducted is not subject to continuing supervision or examination by any governmental official
or body of the United States or any other jurisdiction wherein the Company or the Subsidiaries
conducts or proposes to conduct such business, except (i) as described in the Prospectus or (ii)
such supervision and examinations as is applicable to commercial enterprises and public companies
generally.
(h) neither the Company nor any Subsidiary is in breach of or in default under (nor has any
event occurred that with notice, lapse of time, or both would constitute a breach of, or default
under) its respective organizational documents, or in the performance or observance of any
obligation, agreement, covenant or condition contained in any license, indenture, mortgage, deed of
trust, loan or credit agreement or other agreement or instrument to which the Company or any
Subsidiary is a party or by which any of them or their respective assets is bound, except for such
breaches or defaults that, individually or in the aggregate, could not reasonably be expected to
have a Material Adverse Effect;
(i) the execution, delivery and performance of this Agreement and the Formation Agreements,
and consummation of the transactions contemplated herein or therein will not (i) conflict with, or
result in any breach of, or constitute a default under (nor constitute any event that with notice,
lapse of time, or both would constitute a breach of, or default under), (A) any provision of the
organizational documents of the Company or any Subsidiary, or (B) any provision of any license,
indenture, mortgage, deed of trust, loan or credit agreement or other agreement or instrument to
which the Company or any Subsidiary is a party or by which any of them or their respective assets
(including those to be acquired upon consummation of the Formation Transactions) may be bound or
affected, or under any federal, state, local or foreign law, regulation or rule or any decree,
judgment or order applicable to the Company or any Subsidiary, except in the case of this clause
(B) for such conflicts, breaches or defaults that,
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individually or in the aggregate, could not reasonably be expected to have a Material Adverse
Effect; or (ii) except as disclosed in the Prospectus, result in the creation or imposition of any
material lien, charge, claim or encumbrance upon any asset of the Company or any Subsidiary or any
of the assets to be acquired pursuant to the Formation Agreements;
(j) this Agreement has been duly authorized, executed and delivered by the Company and the
Operating Partnership and is a legal, valid and binding agreement of the Company enforceable in
accordance with its terms, except as may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors’ rights generally, and by general equitable
principles, and except to the extent that the indemnification and contribution provisions of
Section 9 hereof may be limited by federal or state securities laws and public policy
considerations in respect thereof;
(k) the execution and delivery and performance of the Formation Agreements and each of the
documents, agreements and instruments executed and delivered in connection therewith, and the
consummation of the transactions contemplated by the foregoing, has been duly authorized by all
necessary corporate or other action by the Company and the Subsidiaries including, but not limited
to, any vote of the stockholders or other holders of equity interests that may be required by
applicable organizational document, state law or the requirements of the New York Stock Exchange;
the Formation Agreements are in full force and effect on the date hereof and are the legal, valid
and binding agreements of the parties thereto enforceable in accordance with their respective
terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting creditors’ rights generally and by general equitable principles, and neither the
Company or any of the Subsidiaries nor, to the knowledge of the Company, any of the other parties
thereto is in breach or default of its obligations thereunder (nor has any event occurred that with
notice, lapse of time, or both would constitute a breach of, or default thereunder, by the Company
or, to the knowledge of the Company, any of the other parties thereto); the Formation Agreements
and documents contemplated thereby are sufficient to effect the valid transfer to the Operating
Partnership of all real property and other assets described in the Prospectus as being transferred
to the Operating Partnership in connection with the Formation Transactions, upon payment of the
consideration therefor;
(l) no approval, authorization, consent or order of or filing with any federal, state, local
or foreign governmental or regulatory commission, board, body, authority or agency or any other
third party is required in connection with the Company’s or the Operating Partnership’s execution,
delivery and performance of this Agreement, their consummation of the transactions contemplated
herein or the Company’s sale and delivery of the Shares or in connection with the execution,
delivery and performance of the Formation Agreements or the consummation of the transactions
contemplated therein by the Company or any Subsidiary party thereto, or, to the knowledge of the
Company, any other party thereto, other than (i) such as have been obtained, or will have been
obtained at the Initial Closing Time or the relevant Option Closing Time, as the case may be, under
the Securities Act and the Securities Exchange Act of 1934 (the “Exchange Act”), (ii) such
approvals as have been obtained in connection with the approval of the listing of the Shares on the
New York Stock Exchange, (iii) any necessary qualification under the securities or blue sky laws of
the various jurisdictions in which the Shares are being offered by the Underwriters, and (iv) such
approvals, authorizations, consents or orders or filings, the absence of which could not reasonably
be expected to have a Material Adverse Effect, individually or in the aggregate;
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(m) each of the Company and the Subsidiaries has, and will have upon consummation of the
Formation Transactions, all necessary licenses, authorizations, consents and approvals and has made
all necessary filings required under any federal, state, local or foreign law, regulation or rule,
and has obtained all necessary authorizations, consents and approvals from other persons, required
in order to conduct their respective businesses as described in the Prospectus, except to the
extent that any failure to have any such licenses, authorizations, consents or approvals, to make
any such filings or to obtain any such authorizations, consents or approvals could not,
individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; neither
the Company nor any of the Subsidiaries is in violation of, in default under, or has received any
notice regarding a possible violation, default or revocation of any such license, authorization,
consent or approval or any federal, state, local or foreign law, regulation or rule or any decree,
judgment or order applicable to the Company or any of the Subsidiaries, the effect of which could
reasonably be expected to result in a Material Adverse Effect; and no such license, authorization,
consent or approval contains a materially burdensome restriction that is not adequately disclosed
in the Prospectus;
(n) the Registration Statement has become effective under the Securities Act and no stop order
suspending the effectiveness of the Registration Statement has been issued under the Securities Act
and no proceedings for that purpose have been instituted or are pending or, to the knowledge of the
Company, are threatened by the Commission, and, to the knowledge of the Company, the Company has
complied to the Commission’s satisfaction with any request on the part of the Commission for
additional information;
(o) the Preliminary Prospectus and the Registration Statement comply, and the Prospectus and
any amendments or supplements to the Registration Statement or Prospectus will, as of their
effective date or issue date, as the case may be, comply, in all material respects with the
requirements of the Securities Act and the Securities Act Regulations; the Registration Statement
did not, and any amendment thereto will not, in each case as of the applicable effective date,
contain an untrue statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading; and the Preliminary
Prospectus does not, and the Prospectus and any amendment or supplement thereto will not, as of the
applicable issue date and at the Initial Closing Time and at each Option Closing Time (if any),
include an untrue statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided, however, that the Company makes
no warranty or representation with respect to any statement contained in the Registration
Statement, the Preliminary Prospectus or the Prospectus in reliance upon and in conformity with the
information concerning the Underwriters and furnished in writing by or on behalf of the
Underwriters through the Representative to the Company expressly for use in the Registration
Statement, the Preliminary Prospectus or the Prospectus (that information being limited to that
described in the penultimate sentence of the first paragraph of Section 9(b) hereof);
(p) the Preliminary Prospectus was and the Prospectus and any further amendments or
supplements thereto delivered to the Underwriters for use in connection with this offering will be
identical to the respective version of the Preliminary Prospectus, Prospectus and any further
amendments or supplements thereto created to be transmitted to the Commission under the
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Securities Act for filing via the Electronic Data Gathering Analysis and Retrieval System
(“▇▇▇▇▇”), except to the extent permitted by Regulation S-T;
(q) in connection with this offering, the Company has not offered and will not offer its
Common Stock or any other securities convertible into or exchangeable or exercisable or redeemable
for Common Stock in a manner in violation of the Securities Act; the Company has not distributed
and will not distribute any prospectus or other offering material, other than the Preliminary
Prospectus and the Prospectus, in connection with the offer and sale of the Shares;
(r) there are no actions, suits, proceedings, inquiries or investigations pending or, to the
knowledge of the Company, threatened against the Company or any Subsidiary or any of their
respective officers and directors or to which the assets of any such entity (including any to be
acquired upon consummation of the Formation Transactions) are subject, at law or in equity, before
or by any federal, state, local or foreign governmental or regulatory commission, board, body,
authority, arbitral panel or agency, that could reasonably be expected to result in a judgment,
decree, award or order having a Material Adverse Effect;
(s) the financial statements, including the related supporting schedules and notes, included
in the Registration Statement and the Prospectus present fairly the consolidated financial position
of the entities to which such financial statements relate (the “Covered Entities”) as of the dates
indicated and the consolidated results of operations and changes in financial position and cash
flows of the Covered Entities for the periods specified; such financial statements have been
prepared in conformity with generally accepted accounting principles as applied in the United
States and on a consistent basis during the periods involved (except as may be expressly stated in
the related notes thereto) and in accordance with Regulation S-X promulgated by the Commission; the
financial data in the Registration Statement and the Prospectus under the captions “Summary
Financial and Other Data,” and “Selected Financial and Other Data” fairly present the information
shown therein and have been compiled on a basis consistent with the financial statements included
in the Registration Statement and the Prospectus; no other financial statements or supporting
schedules are required to be included in the Registration Statement or the Prospectus; the
unaudited pro forma financial information (including the related notes) included in the
Registration Statement and the Prospectus complies as to form in all material respects with the
applicable accounting requirements of the Securities Act and the Securities Act Regulations, and
management of the Company believes that the assumptions underlying the pro forma adjustments are
reasonable; such pro forma adjustments have been properly applied to the historical amounts in the
compilation of the information and such information fairly presents with respect to the Company,
the Subsidiaries and the Initial Properties, the financial position, results of operations and
other information purported to be shown therein at the respective dates and for the respective
periods specified; no other pro forma financial information is required to be included in the
Registration Statement or the Prospectus;
(t) Deloitte & Touche LLP, whose reports on the consolidated financial statements of the
Company and on the statements of revenues and certain expenses of the Initial Properties are filed
with the Commission as part of the Registration Statement and the Prospectus, and Ernst & Young LLP
and any other accounting firm that has certified financial statements of the Initial Properties and
delivered its reports with respect thereto, are, and were during the periods covered by their
reports, independent public accountants as required by the Securities Act and the Securities Act
Regulations;
9
(u) subsequent to the respective dates as of which information is given in the Registration
Statement and the Prospectus, and except as stated in the Registration Statement and the
Prospectus, there has not been (i) any change, or any development or event that could result in a
change, that has had or reasonably could be expected to have, a Material Adverse Effect, whether or
not arising in the ordinary course of business, (ii) any transaction that is material to the
Company and the Subsidiaries taken as a whole entered into or agreed to be entered into by the
Company or any of the Subsidiaries, (iii) any obligation, contingent or otherwise, directly or
indirectly incurred by the Company or any Subsidiary that is material to the Company and
Subsidiaries taken as a whole or (iv) any dividend or distribution of any kind declared, paid or
made by the Company on any class of its capital stock or by the Operating Partnership on any of its
partnership interests;
(v) the Shares and the shares of Common Stock and Units (including the LTIP Units) issued or
to be issued in connection with the Formation Transactions conform in all material respects to the
description thereof contained in the Registration Statement and the Prospectus;
(w) the Units (including the LTIP Units) to be issued in connection with the Formation
Transactions have been duly authorized and, when issued and duly delivered against payment therefor
as contemplated by this Agreement or by the Formation Agreements (to the extent applicable), will
be validly issued, fully paid and, except to the to the extent such non-assessability may be
affected by Section 17-607 of the Delaware Revised Uniform Limited Partnership Act, non-assessable,
free and clear of any pledge, lien, encumbrance, security interest or other claim, and the issuance
and sale of such Units by the Operating Partnership is not subject to preemptive or other similar
rights arising by operation of law, under the organizational documents of the Company or the
Operating Partnership or under any agreement to which the Company or any Subsidiary is a party or
otherwise;
(x) the Common Stock issued in the Formation Transactions has been duly authorized and is
validly issued, fully paid and non-assessable, free and clear of any pledge, lien, encumbrance,
security interest or other claim created by or known to the Company other than as disclosed in the
Prospectus, and the issuance and sale of such Common Stock by the Company was not subject to
preemptive or other similar rights arising by operation of law, under the organizational documents
of the Company or under any agreement to which the Company or any of the Subsidiaries is a party or
otherwise;
(y) the Shares have been duly authorized and, when issued and duly delivered against payment
therefor as contemplated by this Agreement, will be validly issued, fully paid and non-assessable,
free and clear of any pledge, lien, encumbrance, security interest or other claim, and the issuance
and sale of the Shares by the Company is not subject to preemptive or other similar rights arising
by operation of law, under the organizational documents of the Company or under any agreement to
which the Company or any Subsidiary is a party or otherwise;
(z) there are no persons with registration or other similar rights to have any equity or debt
securities, including securities that are convertible into or exchangeable or redeemable for equity
securities, registered pursuant to the Registration Statement or otherwise registered by the
Company or the Operating Partnership under the Securities Act except for the registration rights
arising under the Partnership Agreement;
10
(aa) the Common Stock has been registered under Section 12(b) of the Exchange Act and the
Shares and the shares of Common Stock issued or to be issued in the Formation Transactions have
been approved for listing on the New York Stock Exchange, subject to official notice of issuance;
(bb) the form of certificate used to evidence the Common Stock complies in all material
respects with all applicable statutory requirements, with any applicable requirements of the
organizational documents of the Company and the requirements of the New York Stock Exchange;
(cc) all securities issued by the Company, any of the Subsidiaries or any trusts established
by the Company or any Subsidiary have been issued and sold in compliance in all material respects
with (i) all applicable federal and state securities laws, (ii) the laws of the applicable
jurisdiction of incorporation of the issuing entity and the provisions of the organizational
documents of the issuing entity, and (iii) to the extent applicable to the issuing entity, the
requirements of the New York Stock Exchange; and the issuance and sale of the Units (including the
LTIP Units) to be issued in the Formation Transactions will be exempt from registration or
qualification under the Securities Act and state securities laws;
(dd) the Company has not taken, and will not take, directly or indirectly, any action that is
designed to or that has constituted or that might reasonably be 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 Shares;
(ee) none of the Company nor any of its affiliates (i) is required to register as a “broker”
or “dealer” in accordance with the provisions of the Exchange Act, or the rules and regulations
thereunder (the “Exchange Act Regulations”), or (ii) directly, or indirectly through one or more
intermediaries, controls or has any other association with (within the meaning of Article I of the
Bylaws of the National Association of Securities Dealers, Inc. (the “NASD”)) any member firm of the
NASD;
(ff) upon consummation of the Formation Transactions, the Company and the Subsidiaries will
have good and marketable title in fee simple to all of the real property described in the
Prospectus, and good title to all personal property owned (or to be owned upon consummation of the
Formation Transactions) by them, in each case free and clear of all liens, security interests,
pledges, charges, encumbrances, encroachments, restrictions, mortgages and defects, except such as
are disclosed in the Prospectus or such as do not materially and adversely affect the value of such
property and do not materially interfere with the use made or proposed to be made of such property
by the Company and the Subsidiaries; any real property improvements, equipment and personal
property held under lease (or to be held under lease upon the consummation of the Formation
Transactions) by the Company or any Subsidiary will be held under valid, existing and enforceable
leases except to the extent enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors’ rights generally or by general
equitable principles, with such exceptions as are disclosed in the Prospectus or do not materially
interfere with the use made or proposed to be made of such property improvements, equipment and
personal property by the Company or such Subsidiary; the Company or a Subsidiary will have obtained
an owner’s title insurance policy, from a title
11
insurance company licensed to issue such policy, on any real property to be owned in fee upon
the consummation of the Formation Transactions, by the Company or any Subsidiary, that insures the
Company’s or the Subsidiary’s fee interest, as the case may be, in such real property, which
policies include only commercially reasonable exceptions, and with coverages in amounts at least
equal to amounts that are generally deemed in the Company’s industry to be commercially reasonable
in the markets where the Company’s properties are located;
(gg) all real property owned by the Company or a Subsidiary (or to be owned upon consummation
of the Formation Transactions) is, to the knowledge of the Company and ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, free of
material structural defects and all material building systems contained therein are in satisfactory
working order in all material respects, subject to ordinary wear and tear or, in each instance, the
Company has created an adequate reserve to effect reasonably required repairs, maintenance and
capital expenditures; water, storm water, sanitary sewer, electricity and telephone service are all
available at the property lines of such property over duly dedicated streets or perpetual easements
of record benefiting such property except as could not reasonably be expected to have a Material
Adverse Effect; except as described in the Prospectus, to the knowledge of the Company and ▇▇▇▇▇▇▇
& ▇▇▇▇▇▇, there is no pending or threatened special assessment, tax reduction proceeding or other
action that, individually or in the aggregate, could reasonably be expected to increase or decrease
the real property taxes or assessments of any of such property, that, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect;
(hh) the mortgages and deeds of trust upon consummation of the Formation Transactions to be
encumbering any real property owned in fee or leased by the Company or a Subsidiary (or to be owned
or leased upon consummation of the Formation Transactions) (i) will not be convertible (in the
absence of foreclosure) into an equity interest in the real property or in the Company or any
Subsidiary, and none of the Company and the Subsidiaries will hold a participating interest
therein, (ii) except as set forth in the Prospectus, will not be cross-defaulted to any
indebtedness other than indebtedness of the Company or any of the Subsidiaries and (iii) will not
be cross-collateralized to any property not owned by the Company or any of the Subsidiaries;
(ii) there are no real property interests that any of the Company and the Subsidiaries
directly or indirectly intends to acquire or lease, or any contracts, letters of intent, term
sheets, agreements, arrangements or understandings with respect to the direct or indirect
acquisition or disposition by the Company or the Subsidiaries of interests in real property that
are required to be described in the Registration Statement or the Prospectus and are not so
described;
(jj) the descriptions in the Registration Statement and the Prospectus of the legal or
governmental proceedings, contracts, leases and other legal documents therein described present
fairly in all material respects the information required to be disclosed, and there are no legal or
governmental proceedings, contracts, leases, or other documents of a character required to be
described in the Registration Statement or the Prospectus or to be filed as exhibits to the
Registration Statement that are not described or filed as required; all agreements between the
Company or any of the Subsidiaries and third parties expressly referenced in the Registration
Statement or the Prospectus are legal, valid and binding obligations of the Company or one or more
of the Subsidiaries, enforceable in accordance with their respective terms, except to the extent
enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or
12
similar laws affecting creditors’ rights generally and by general equitable principles and, to
the knowledge of the Company, no party is in breach or default (with or without the passage of time
or giving of notice or both) under any such agreements the effect of which could reasonably be
expected to result in a Material Adverse Effect;
(kk) the Company and the Subsidiaries own or possess, and upon completion of the Formation
Transactions will own or possess, adequate licenses or other rights to use all patents, trademarks,
service marks, trade names, copyrights, software and design licenses, trade secrets, manufacturing
processes, other intangible property rights and know-how (collectively “Intangibles”) necessary to
entitle the Company and the Subsidiaries to conduct their businesses as described in the
Registration Statement and the Prospectus, and neither the Company nor any Subsidiary has received
notice of infringement of or conflict with (and the Company knows of no such infringement of or
conflict with) asserted rights of others with respect to any Intangibles that, individually or in
the aggregate, could reasonably be expected to have a Material Adverse Effect;
(ll) each of the Company and the Subsidiaries has filed on a timely basis (including in
accordance with any applicable extensions) all necessary federal, state, local and foreign income
and franchise tax returns required to be filed through the date hereof or have properly requested
extensions thereof, and have paid all taxes shown as due thereon, and if due and payable, any
related or similar assessment, fine or penalty levied against the Company or any of the
Subsidiaries; no tax deficiency has been asserted against any such entity, and the Company and the
Subsidiaries do not know of any tax deficiency that is likely to be asserted against any such
entity that, individually or in the aggregate, if determined adversely to any such entity, could
reasonably be expected to have a Material Adverse Effect; all tax liabilities are adequately
provided for on the respective books of the Company and the Subsidiaries;
(mm) the Company and each of the Subsidiaries have administered their “employee benefit plans”
(as defined in ERISA) in compliance in all material respects with all presently applicable
provisions of the Employee Retirement Income Security Act of 1974, as amended, including the
regulations and published interpretations thereunder (“ERISA”); no “reportable event” (as defined
in ERISA) has occurred with respect to any “pension plan” (as defined in ERISA) for which the
Company or any of the Subsidiaries would have any material liability; the Company and the
Subsidiaries have not incurred and do not expect to incur material liability under (i) Title IV of
ERISA with respect to termination of, or withdrawal from, any “pension plan,” or (ii) Section 412
or 4971 of the Internal Revenue Code of 1986, as amended, including the regulations and published
interpretations thereunder (“Code”); and each “pension plan” for which the Company or any of the
Subsidiaries would have any material liability that is intended to be qualified under Section
401(a) of the Code is so qualified in all material respects and, to the knowledge of the Company,
nothing has occurred, whether by action or by failure to act, that would cause the loss of such
qualification;
(nn) commencing with the taxable year ending December 31, 2005, the Company will be organized
and operated in conformity with the requirements for qualification as a real estate investment
trust (“REIT”) under the Code, and the current and proposed method of operation of the Company and
the Subsidiaries as described in the Prospectus will enable the Company to meet the requirements
for qualification and taxation as a REIT under the Code, and the Operating Partnership is treated
as a partnership for federal income tax purposes and not as a
13
corporation or association taxable as a corporation; the Company intends to continue to
qualify as a REIT under the Code for all subsequent years, and the Company does not know of any
event that could reasonably be expected to cause the Company to fail to qualify as a REIT under the
Code at any time;
(oo) neither the Company nor any of the Subsidiaries nor, to the Company’s knowledge, any
officer or director purporting to act on behalf of the Company or any of the Subsidiaries has at
any time (i) made any contributions to any candidate for political office, or failed to disclose
fully any such contributions, in violation of law, (ii) made any payment to any state, federal or
foreign governmental officer or official, or other person charged with similar public or
quasi-public duties, other than payments required or allowed by applicable law and any code of
ethics or business conduct adopted by the Company, or (iii) engaged in any transactions, maintained
any bank account or used any corporate funds except for transactions, bank accounts and funds that
have been and are reflected in the normally maintained books and records of the Company and the
Subsidiaries;
(pp) there are no material outstanding loans or advances or material guarantees of
indebtedness by the Company or any of the Subsidiaries to or for the benefit of any of the officers
or directors of the Company or any of the Subsidiaries or any of the members of the families of any
of them;
(qq) neither the Company nor any of the Subsidiaries nor, to the knowledge of the Company, any
employee or agent of the Company or any of the Subsidiaries, has made any payment of funds of the
Company or of any Subsidiary or received or retained any funds in violation of any law, rule or
regulation or of a character required to be disclosed in the Prospectus that is not so disclosed;
(rr) except as otherwise disclosed in the Prospectus, (i) none of the Company, the
Subsidiaries, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ or, to the knowledge of the Company and ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, any other
former owners of the Initial Properties or any other party has handled, stored, treated,
transported, manufactured, spilled, leaked, discharged, dumped, transferred or otherwise disposed
of Hazardous Materials (as hereinafter defined) on, in, under, to or from any of the Initial
Properties, except in connection with the ordinary use of retail or commercial properties in
compliance in all material respects with all applicable Environmental Statutes (hereinafter
defined) and in a manner that could not reasonably be expected to result in a Material Adverse
Effect; (ii) the Company does not intend to use the Initial Properties or any subsequently acquired
properties for the purpose of using, handling, storing, treating, transporting, manufacturing,
spilling, leaking, discharging, dumping, transferring or otherwise disposing of Hazardous Materials
except in connection with the ordinary use of retail or commercial properties owned by the
Subsidiaries in compliance in all material respects with all applicable Environmental Statues and
in a manner that could not reasonably be expected to result in a Material Adverse Effect; (iii)
neither the Company nor ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ knows of any seepage, leak, discharge, release, emission,
spill, or dumping of Hazardous Materials into waters on or adjacent to the Initial Properties, or
onto lands from which Hazardous Materials seep, flow or drain into such waters that could
reasonably likely result in a Material Adverse Effect; (iv) none of the Company, the Subsidiaries
and ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ has received any notice of, or has any knowledge of any occurrence or
circumstance that, with notice or passage of time or both, would give rise to a claim under or
pursuant to any federal, state or local environmental statute,
14
regulation or rule under common law, pertaining to Hazardous Materials on or originating from
any of the Initial Properties or arising out of the conduct of the Company or any of the
Subsidiaries, including without limitation a claim under or pursuant to any Environmental Statute
that could reasonably be expected to result in a Material Adverse Effect; (v) none of the Initial
Properties is included or, to the Company’s or ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇’▇ knowledge, proposed for inclusion
on the National Priorities List issued pursuant to CERCLA (as hereinafter defined) by the United
States Environmental Protection Agency (the “EPA”) or, to the Company’s or ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇’▇
knowledge, proposed for inclusion on any similar list or inventory issued pursuant to any other
Environmental Statute or issued by any other governmental authority; and (vi) the Company has
obtained a phase I environmental assessment for each of the Initial Properties;
as used herein, “Hazardous Material” means any flammable explosives, radioactive substances,
hazardous materials, hazardous wastes, toxic substances, asbestos or any hazardous material
as defined by any federal, state or local environmental law, regulation or rule, including,
without limitation, the Comprehensive Environmental Response, Compensation, and Liability
Act of 1980, as amended, 42 U.S.C. Sections 9601-9675 (“CERCLA”), the Hazardous Materials
Transportation Act, as amended, 49 U.S.C. Sections 1801-1819, the Resource Conservation and
Recovery Act, as amended, 42 U.S.C. Sections 6901-6992K, the Emergency Planning and
Community Right-to-Know Act of 1986, 42 U.S.C. Sections 11001-11050, the Toxic Substances
Control Act, 15 U.S.C. Sections 2601-2671, the Federal Insecticide, Fungicide and
Rodenticide Act, 7 U.S.C. Sections 136-136y, the Clean Air Act, 42 U.S.C. Sections
7401-7642, the Clean Water Act (Federal Water Pollution Control Act), 33 U.S.C. Sections
1251-1387, the Safe Drinking Water Act, 42 U.S.C. Sections 300f-300j-26, and the
Occupational Safety and Health Act, 29 U.S.C. Sections 651-678, as any of the above statutes
may be amended from time to time, and in the regulations promulgated pursuant to each of the
foregoing (individually, an “Environmental Statute” and collectively the “Environmental
Statutes”) or by any federal, state or local governmental authority having or claiming
jurisdiction over the assets described in the Registration Statement or the Prospectus;
(ss) there are no costs or liabilities associated with the Initial Properties arising under
any Environmental Statute (including, without limitation, any capital or operating expenditures
required for clean-up, closure of properties or compliance with any Environmental Statute or any
permit, license or approval, any related constraints on operating activities and any potential
liabilities to third parties) that, individually or in the aggregate, could reasonably be expected
to have a Material Adverse Effect;
(tt) none of the entities that prepared phase I environmental assessments or other
environmental studies for or on behalf of the Company with respect to the Initial Properties was
employed for such purpose on a contingent basis or has any substantial interest in the Company or
any of the Subsidiaries, and none of their directors, officers or employees is connected with the
Company or any of the Subsidiaries as a promoter, selling agent, officer, director or employee;
(uu) (i) neither the Company nor ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ knows of any violation of any municipal,
state or federal law, rule or regulation concerning the Initial Properties or any part
15
thereof that, individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect; (ii) the Initial Properties comply with all applicable zoning laws,
ordinances, regulations and deed restrictions or other covenants in all material respects and, if
and to the extent there is a failure to comply, such failure could not reasonably be expected to
result in a Material Adverse Effect; (iii) except as described in the Prospectus, none of the
Company, the Subsidiaries and ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ has received any written notice from any
governmental authority of any condemnation of or zoning change affecting any of the Initial
Properties or any part thereof, and none of the Company and ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ knows of any such
condemnation or zoning change that is threatened and that, individually or in the aggregate, if
consummated could reasonably be expected to have a Material Adverse Effect; (iv) each lease of any
portion of the Initial Properties constitutes the legal, valid and binding agreement of the parties
thereto, and no party thereto is in default under any such lease and there is no event that, but
for the passage of time or the giving of notice or both, would constitute a default under any of
such lease, except such failures to be legal, valid and binding and such defaults that,
individually or in the aggregate, could not reasonably be expected to have a Material Adverse
Effect; and (v) no tenant under any lease pursuant to which any portion of the Initial Properties
is leased has an option or right of first refusal to purchase the premises leased thereunder or the
building of which such premises are a part, except for such options or rights of first refusal
that, individually or in the aggregate, if exercised, could not reasonably be expected to have a
Material Adverse Effect;
(vv) each of the Company and the Subsidiaries maintains insurance (issued by insurers of
recognized financial responsibility) of the types and in the amounts generally deemed adequate for
their respective businesses and consistent with insurance coverage maintained by similar companies
in similar businesses, including, but not limited to, insurance covering real and personal property
owned or leased by the Company and the Subsidiaries against theft, damage, destruction, acts of
vandalism, terrorism, earthquakes, flood and all other risks customarily insured against, all of
which insurance is in full force and effect;
(ww) the Company has not incurred any liability for any finder’s fees or similar payments in
connection with the transactions herein contemplated;
(xx) no relationship, direct or indirect, exists between or among the Company or any of the
Subsidiaries on the one hand, and the directors, officers, equity holders (including ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇), customers or suppliers of the Company or any of the Subsidiaries on the other hand, that
is required by the Securities Act and the Securities Act Regulations to be described in the
Registration Statement and the Prospectus and that is not so described in all material respects;
(yy) neither the Company nor any of the Subsidiaries is or, after giving effect to the
offering and sale of the Shares, will be an “investment company” or an entity “controlled” by an
“investment company,” as such terms are defined in the Investment Company Act of 1940, as amended
(the “Investment Company Act”);
(zz) there are no existing or, to the knowledge of the Company or the Subsidiaries, threatened
labor disputes with the employees of the Company or any of the Subsidiaries;
(aaa) no consent, approval, authorization or order of, or qualification with, any governmental
body or agency, other than those obtained, is required in connection with the offering of the
Directed Shares in any jurisdiction where the Directed Shares are being offered;
16
the Company has not offered, or caused the Representative to offer, Shares to any person
pursuant to the Directed Share Program with the specific intent to unlawfully influence (i) a
customer, borrower, tenant or supplier of the Company to alter the customer’s or supplier’s level
or type of business with the Company or (ii) a trade journalist or publication to write or publish
favorable information about the Company or its business;
(bbb) the statistical and market related data included in the Prospectus and the Registration
Statement are based on or derived from sources that the Company believes to be reliable and
accurate;
(ccc) the Company has not relied upon the Representative or legal counsel for the Underwriters
for any legal, tax or accounting advice in connection with the offering and sale of the Shares; and
(ddd) any certificate signed by any officer of the Company or any Subsidiary delivered to the
Representative or to counsel for the Underwriters pursuant to or in connection with this Agreement
shall be deemed a representation and warranty by the Company to each Underwriter as to the matters
covered thereby.
4. Certain Covenants
The Company and the Operating Partnership hereby, jointly and severally, agree with each
Underwriter:
(a) to furnish such information as may be required and otherwise to reasonably cooperate in
qualifying the Shares for offering and sale under the securities or blue sky laws of such
jurisdictions (both domestic and foreign) as the Representative may designate and to maintain such
qualifications in effect as long as requested by the Representative for the distribution of the
Shares; provided that neither the Company nor the Operating Partnership shall 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 or partnership;
(b) if, at the time this Agreement is executed and delivered, it is necessary for a
post-effective amendment to the Registration Statement to be declared effective before the offering
of the Shares may commence, to endeavor to cause such post-effective amendment to become effective
as soon as possible;
(c) to prepare the Prospectus in a form reasonably approved by the Underwriters and file such
Prospectus with the Commission pursuant to Rule 424(b) under the Securities Act not later than
10:00 a.m. (New York City time), on the second day following the execution and delivery of this
Agreement or on such other day as the parties may mutually agree and to furnish promptly (and with
respect to the initial delivery of such Prospectus, not later than 10:00 a.m. (New York City time))
on the second day following the execution and delivery of this Agreement, or on such other day as
the parties may mutually agree, to the Underwriters copies of the Prospectus (or of the Prospectus
as amended or supplemented if the Company shall have made any amendments or supplements thereto) in
such quantities and at such locations as the Underwriters may reasonably request for the purposes
contemplated by the Securities Act
17
Regulations, which Prospectus and any amendments or supplements thereto furnished to the
Underwriters will be identical to the version created to be transmitted to the Commission for
filing via ▇▇▇▇▇, except to the extent permitted by Regulation S-T;
(d) if necessary or appropriate, timely file the Rule 462(b) Registration Statement;
(e) to advise the Representative promptly and, if requested by the Representative, to confirm
such advice in writing, when any post-effective amendment to the Registration Statement becomes
effective;
(f) to advise the Representative promptly, and, if requested by the Representative, to confirm
such advice in writing, of (i) the receipt of any comments from, or any request by, the Commission
for amendments or supplements to the Registration Statement or Prospectus or for additional
information with respect thereto, or (ii) the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or of any order preventing or suspending
the use of the Preliminary Prospectus or Prospectus, or of the suspension of the qualification of
the Shares for offering or sale in any jurisdiction, or of the initiation or threatening of any
proceedings for any of such purposes and, if the Commission or any other government agency or
authority should issue any such order, to make every reasonable effort to obtain the lifting or
removal of such order as soon as possible; and to advise the Representative promptly of any
proposal to amend or supplement the Registration Statement or Prospectus and, except to the extent
required by law, to file no such amendment or supplement to which the Representative shall
reasonably object in writing;
(g) to advise the Underwriters promptly of the happening of any event known to the Company or
the Operating Partnership within the time during which a prospectus relating to the Shares is
required to be delivered under the Securities Act, the Securities Act Regulations, the Exchange Act
or the Exchange Act Regulations that, in the judgment of the Company or in the reasonable opinion
of the Representative or counsel for the Underwriters, would require the making of any change in
the Prospectus then being used so that the Prospectus would not include an untrue statement of a
material fact or omit to state a material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which they were made, not
misleading, or if it is necessary at any time to amend or supplement the Prospectus to comply with
the Securities Act and the Securities Act Regulations and, during such time, to prepare and furnish
promptly to the Underwriters copies of the proposed amendment or supplement before filing any such
amendment or supplement with the Commission and thereafter promptly furnish at the Company’s own
expense to the Underwriters and to dealers, copies in such quantities and at such locations as the
Representative may from time to time reasonably request of an appropriate amendment to the
Registration Statement or supplement to the Prospectus so that the Prospectus as so amended or
supplemented will not, in the light of the circumstances when it is so delivered, be misleading, or
so that the Prospectus will comply with the Securities Act and the Securities Act Regulations;
(h) to file promptly with the Commission any amendment to the Registration Statement or the
Prospectus or any supplement to the Prospectus that may, in the judgment of the Company after
consultation with the Representative, be required by the Securities Act or Securities Act
Regulations or requested by the Commission;
18
(i) prior to filing with the Commission any 462(b) Registration Statement or amendment to the
Registration Statement or supplement to the Prospectus or any prospectus pursuant to Rule 424 under
the Securities Act, to furnish for review a copy thereof to the Representative and counsel for the
Underwriters and, except to the extent required by law, not to file any such proposed 462(b)
Registration Statement, amendment or supplement to which the Representative reasonably objects;
(j) to furnish promptly to the Representative a signed copy of the Registration Statement, as
initially filed with the Commission, and of all amendments or supplements thereto (including all
exhibits filed therewith or incorporated by reference therein) and such number of conformed copies
of the foregoing as the Representative may reasonably request;
(k) to furnish to the Representative, not less than one business day before filing with the
Commission subsequent to the date of the Prospectus and during the period in which a prospectus
relating to the Shares is required to be delivered under the Securities Act, the Securities Act
Regulations, the Exchange Act or the Exchange Act Regulations a copy of any document proposed to be
filed with the Commission pursuant to Section 13, 14, or 15(d) of the Exchange Act and during such
period to file all such documents in the manner and within the time periods required by the
Exchange Act and the Exchange Act Regulations;
(l) to apply the net proceeds of the sale of the Shares in accordance with its statements
under the caption “Use of Proceeds” in the Prospectus;
(m) to make generally available to its security holders and the Representative as soon as
reasonably practicable an earnings statement satisfying the provisions of Section 11(a) of the
Securities Act and Rule 158 under the Securities Act Regulations) covering a period of 12 months
beginning after the end of the quarter which the effective date of the Registration Statement
occurred;
(n) to use its best efforts to maintain the listing of the Shares on the New York Stock
Exchange and to file with the New York Stock Exchange all documents and notices required by the New
York Stock Exchange of companies that have securities that are traded on the New York Stock
Exchange;
(o) to engage and maintain, at its expense, a registrar and transfer agent for the Shares;
(p) to refrain during a period of 180 days from the date of the Prospectus, without the prior
written consent of the Representative, from, directly or indirectly, (i) offering, pledging,
selling, contracting to sell, selling any option or contract to purchase, purchasing any option or
contract to sell, granting any option for the sale of, or otherwise disposing of or transferring
(or entering into any transaction or device that is designed to, or could be expected to, result in
the disposition by any person at any time in the future of), any share of Common Stock or any
securities convertible into or exercisable, exchangeable or redeemable for Common Stock (including
Units and LTIP Units), or filing any registration statement under the Securities Act with respect
to any of the foregoing, or (ii) entering into any swap or any other agreement or any transaction
that transfers, in whole or in part, directly or indirectly, the economic consequence of ownership
of Common Stock, whether any such swap or transaction described in clause (i) or (ii)
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above is to be settled by delivery of Common Stock or such other securities, in cash or
otherwise; provided, however, that the foregoing shall not apply to (A) grants of stock options,
LTIP Units or restricted stock to employees, consultants or directors pursuant to an employee
benefit plan in existence on the date hereof and described in the Registration Statement and the
Prospectus (and the filing of a registration statement under the Securities Act on Form S-8 for
such plan) or (B) issuances of Common Stock, Units or LTIP Units or other securities convertible
into or exercisable, exchangeable or redeemable for Common Stock as consideration for the Company’s
acquisition of (i) real property, (ii) loans with respect to real property, or (iii) entities that
own or control real property;
(q) not to, and to use its best efforts to cause its officers, directors and affiliates not
to, (i) take, directly or indirectly, prior to termination of the underwriting syndicate
contemplated by this Agreement, any action designed to stabilize or manipulate the price of any
security of the Company, or which causes or results in, or which might in the future reasonably be
expected to cause or result in, the stabilization or manipulation of the price of any security of
the Company, to facilitate the sale or resale of any of the Shares, (ii) except as contemplated
herein, sell, bid for, purchase or pay anyone any compensation for soliciting purchases of the
Shares or (iii) except as contemplated herein, pay or agree to pay to any person any compensation
for soliciting any order to purchase any other securities of the Company;
(r) to use its best efforts to cause ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ and each executive officer and director
of the Company (including those individuals identified in the Prospectus as becoming an executive
officer or director of the Company after the Initial Closing Time) to furnish to the
Representative, prior to the first Initial Closing Time, a letter or letters, substantially in the
form of Exhibit A hereto;
(s) to obtain or maintain, as appropriate, Directors and Officers liability insurance in the
minimum amount of [$ ], which shall apply to the offering contemplated herein;
(t) to comply with all of the provisions of any undertakings in the Registration Statement and
to file with the Commission such reports as may be required pursuant to Rule 463 of the Securities
Act Regulations;
(u) to use its best efforts to meet the requirements to qualify as a REIT under the Code for
its taxable year ending December 31, 2005;
(v) to use its best efforts not to invest, or otherwise use the proceeds received by the
Company from its sale of the Shares in such a manner as would require the Company or any of its
Subsidiaries to register as an investment company under the Investment Company Act;
(w) in connection with the Directed Share Program, to use its best efforts ensure that the
Directed Shares will be restricted from sale, transfer, assignment, pledge or hypothecation to the
extent required by the NASD or the NASD rules for a minimum period of 180 days following the date
of the effectiveness of the Registration Statement; and to direct the transfer agent to place stop
transfer restrictions upon such securities for such period of time; and
(x) to use its best efforts to consummate, as promptly as practicable, the Formation
Transactions as described in the Registration Statement and Prospectus and as provided in the
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Formation Agreements as in existence on the date hereof.
5. Payment of Expenses
(a) The Company agrees to pay all costs and expenses incident to the performance of its
obligations under this Agreement, whether or not the transactions contemplated hereunder are
consummated or this Agreement is terminated, including expenses, fees and taxes in connection with:
(i) the preparation and filing of the Registration Statement, the Preliminary Prospectus, the
Prospectus, and any amendments or supplements thereto, and the printing and furnishing of a
reasonable number of copies of each thereof to the Underwriters and to dealers (including costs of
mailing and shipment) in accordance with the terms hereof; (ii) the preparation, issuance and
delivery of the certificates for the Shares to the Underwriters, including any stock or other
transfer taxes or duties payable upon the sale of the Shares to the Underwriters; (iii) the
qualification of the Shares for offering and sale under state laws that the Company and the
Representative have mutually agreed are appropriate and the determination of their eligibility for
investment under state law as aforesaid (excluding reasonable legal fees and other disbursements of
counsel for the Underwriters), and the printing and furnishing of copies of any blue sky surveys or
legal investment surveys to the Underwriters and to dealers; (iv) filing for review of the public
offering of the Shares by the NASD (excluding legal fees and other disbursements of counsel for the
Underwriters but including NASD filing fees); (v) the fees and expenses of any transfer agent or
registrar for the Shares and miscellaneous expenses referred to in the Registration Statement; (vi)
the fees and expenses incurred in connection with the inclusion of the Shares in the New York Stock
Exchange; (vii) all costs and expenses incident to the travel and accommodation of employees of the
Company in making road show presentations with respect to the offering of the Shares, including
charter and commercial flight expenses, car and limousine expenses and costs of road show
luncheons; (viii) costs and expenses of any internet road show; (ix) CommScan database fees; (x)
preparing and distributing six bound volumes of transaction documents for the Representative and
their legal counsel; and (xi) the performance of the Company’s and the Operating Partnership’s
other obligations hereunder. Upon the request of the Representative, the Company will provide funds
in advance for filing fees.
(b) The Company agrees to reimburse the Representative for its out-of-pocket expenses, up to a
maximum amount of $350,000 in connection with the performance of its activities under this
Agreement (or up to a maximum of $275,000 if this Agreement in terminated for any reason),
including, but not limited to, costs such as printing, facsimile, courier service, direct computer
expenses, accommodations and travel, including the fees and expenses of the Underwriters’ outside
legal counsel and any other advisors, accountants, appraisers, etc. The Company agrees that the
Underwriters may deduct from the aggregate purchase price for the Initial Shares or the Option
Shares otherwise payable to the Company pursuant to this Agreement the amounts for which the
Representative is entitled to reimbursement pursuant to this subsection (b) and any additional
amounts the Representative incurs on behalf of the Company that are payable by the Company pursuant
to subsection (a) above; provided, however, the Underwriters provide the Company in writing and in
advance with a description of all such expenses in reasonable detail and the Company does not
reasonably object thereto.
6. Conditions of the Underwriters’ Obligations
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The obligations of the Underwriters hereunder to purchase Shares at the Initial Closing Time
or at each Option Closing Date, as applicable, are subject to the accuracy of the representations
and warranties on the part of the Company and the Operating Partnership hereunder on the date
hereof and at the Initial Closing Time and at each Option Closing Date, as applicable, the
performance by the Company and the Operating Partnership of their respective obligations hereunder
and the satisfaction of the following further conditions at the Initial Closing Time or at each
Option Closing Date, as applicable:
(a) The Company shall furnish to the Representative at the Initial Closing Time and at each
Option Closing Time an opinion of Hunton & ▇▇▇▇▇▇▇▇ LLP, counsel for the Company and the
Subsidiaries, addressed to the Representative on behalf of the Underwriters and dated the Initial
Closing Time and each Option Closing Time and in form and substance reasonably satisfactory to DLA
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ US LLP, counsel for the Underwriters, stating as provided on Exhibit
B attached hereto.
(b) The Company shall furnish to the Representative at the Initial Closing Time and at each
Option Closing Time an opinion of ▇▇▇▇▇▇▇ LLP, special Maryland counsel of the Company, addressed
to the Representative on behalf of the Underwriters and dated the Initial Closing Time and each
Option Closing Time and in form and substance satisfactory to DLA ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ US LLP,
counsel for the Underwriters, stating as set forth on Exhibit C attached hereto.
(c) The Company shall furnish to the Representative at the Initial Closing Time an opinion of
Shaiman, Drucker, Beckman, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, LLP, company counsel to ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, addressed to
the Representative on behalf of Underwriters and dated the Initial Closing Time in form and
substance satisfactory to DLA ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ US LLP, counsel for the Underwriters, stating
as set forth on Exhibit D.
(d) The Representative shall have received from Deloitte & Touche LLP a letter dated as of the
date of this Agreement, the Initial Closing Time and each Option Closing Time, as the case may be,
addressed to the Representative, in form and substance satisfactory to the Representative, relating
to the financial statements, including pro forma financial statements, of the Company and the
Initial Properties and such other matters customarily covered by comfort letters issued in
connection with registered public offerings.
(e) The Representative shall have received at the Initial Closing Time and at each Option
Closing Time the favorable opinion of DLA ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ US LLP, dated the Initial Closing
Time or such Option Closing Time, addressed to the Representative on behalf of the Underwriters and
in form and substance satisfactory to the Representative.
(f) No amendment or supplement to the Registration Statement or Prospectus shall have been
filed to which the Underwriters shall have reasonably objected in writing.
(g) Prior to the Initial Closing Time and each Option Closing Time (i) no stop order
suspending the effectiveness of the Registration Statement or any order preventing or suspending
the use of the Preliminary Prospectus or Prospectus shall have been issued, and no proceedings for
such purpose shall have been initiated or threatened, by the Commission, and no suspension
22
of the qualification of the Shares for offering or sale in any jurisdiction, or the initiation
or threatening of any proceedings for any of such purposes, shall have occurred; (ii) all requests
for additional information on the part of the Commission shall have been complied with to the
reasonable satisfaction of the Representative; and (iii) the Registration Statement and the
Prospectus shall not contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(h) All filings with the Commission required by Rule 424 and Rule 430A under the Securities
Act to have been filed by the Initial Closing Time shall have been made within the applicable time
period prescribed for such filing by such Rule.
(i) The Shares shall have been approved for listing on the New York Stock Exchange, subject
only to official notice of issuance.
(j) The NASD shall not have raised any objection with respect to the fairness and
reasonableness of the underwriting terms and arrangements.
(k) The Representative shall have received lock-up agreements from ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ and each
executive officer and director of the Company (including those individuals identified in the
Prospectus as becoming an executive officer or director of the Company after the Initial Closing
Time) in the form of Exhibit A attached hereto, and such letter agreements shall be in full
force and effect.
(l) The Representative shall have received at or before the Initial Closing Time and at each
Option Closing Time, a certificate of the Company’s Chairman of the Board, President and Chief
Executive Officer or Chief Financial Officer, to the effect that:
(i) the representations and warranties of the Company and the Operating Partnership in this
Agreement that are not qualified by materiality or Material Adverse Effect are true and correct in
all material respects and the representations and warranties of the Company and the Operating
Partnership in this Agreement that are qualified by materiality or Material Adverse Effect are true
and correct in all respects, as if made on and as of such date, and the Company and the Operating
Partnership have complied in all material respects with all the agreements and satisfied all the
conditions on their part to be performed or satisfied at or prior to the date hereof;
(ii) no stop order suspending the effectiveness of the Registration Statement or any
post-effective amendment thereto has been issued and no proceedings for that purpose have been
instituted or are pending or threatened under the Securities Act;
(iii) the Registration Statement, when it became effective, did not, and the Prospectus, as of
its date or the date of such certificate, did not and does not include any untrue statement of a
material fact or omit to state a material fact required to be stated therein or necessary in order
to make the statements therein, in the light of the circumstances under which they were made, not
misleading; and, since the effective date of the Registration Statement, there has occurred no
event required to be set forth in an amendment or supplement to the Prospectus that has not been so
set forth; and
23
(iv) subsequent to the respective dates as of which information is given in the Registration
Statement and Prospectus and except as stated in the Prospectus, there has not been (A) any change,
or any development or event that could result in a change, that has had or could reasonably be
expected to have a Material Adverse Effect, whether or not arising in the ordinary course of
business, (B) any transaction that is material to the Company and the Subsidiaries considered as
one enterprise, (C) any obligation, direct or contingent, that is material to the Company and the
Subsidiaries considered as one enterprise, incurred by the Company or the Subsidiaries, (D) any
change in the capital stock or outstanding indebtedness of the Company or any Subsidiary that is
material to the Company and the Subsidiaries considered as one enterprise, or (E) any dividend or
distribution of any kind declared, paid or made on the capital stock or other equity interests of
the Company or any Subsidiary.
7. Termination
The obligations of the several Underwriters hereunder shall be subject to termination in the
absolute discretion of the Representative, at any time prior to the Initial Closing Time or the
Option Closing Time, (a) if any of the conditions specified in Section 6 shall not have been
fulfilled when and as required by this Agreement to be fulfilled, or (b) if, in the judgment of the
Representatives, there has been since the respective dates as of which information is given in the
Registration Statement, any change, or any development or event that could result in a change, that
has had or reasonably could be expected to have, a Material Adverse Effect, or any material change
in management of the Company or any Subsidiary, whether or not arising in the ordinary course of
business, or (c) if there has occurred any outbreak or escalation of hostilities or other national
or international calamity or crisis (including, without limitation, any terrorist or similar
attack) or change in national or international economic, political or other conditions, the effect
of which on the financial markets of the United States is such as to make it, in the sole judgment
of the Representative, impracticable to market the Shares or enforce contracts for the sale of the
Shares, or (d) if trading in any securities of the Company has been suspended by the Commission or
by the New York Stock Exchange, or if trading generally on the New York Stock Exchange has been
suspended (including an automatic halt in trading pursuant to market-decline triggers, other than
those in which solely program trading is temporarily halted), or limitations on prices for trading
(other than limitations on hours or numbers of days of trading) have been fixed, or maximum ranges
for prices for securities have been required, by such exchange or by order of the Commission or any
other governmental authority, or (e) a general banking moratorium shall have been declared by any
federal, Maryland or New York authorities, or (f) any federal or state statute, regulation, rule or
order of any court or other governmental authority has been enacted, published, decreed or
otherwise promulgated that, in the reasonable opinion of the Representatives, will have a Material
Adverse Effect, or (g) the Company or any of the Subsidiaries or any of the Initial Properties
shall have sustained a loss by labor dispute, fire, flood, earthquake, accident or other calamity,
whether or not covered by insurance, of such character as in the sole judgment of the
Representative materially adversely affects or will materially adversely affect the business of the
Company or the Subsidiaries taken as a whole, or (h) any action has been taken by any federal,
state or local government or agency in respect of its monetary or fiscal affairs that, in the
reasonable judgment of the Representative, has a material adverse effect on the securities markets
in the United States.
If the Representative elects to terminate this Agreement as provided in this Section 7, the
24
Company and the Underwriters shall be notified promptly by telephone, promptly confirmed by
facsimile.
If the sale to the Underwriters of the Shares, as contemplated by this Agreement, is not
carried out by the Underwriters for any reason permitted under this Agreement or if such sale is
not carried out because the Company shall be unable to comply in all material respects with any of
the terms of this Agreement, the Company shall not be under any obligation or liability under this
Agreement (except to the extent provided in Sections 5 and 9 hereof) and the Underwriters shall be
under no obligation or liability to the Company under this Agreement (except to the extent provided
in Section 9 hereof) or to one another hereunder.
8. Increase in Underwriters’ Commitments
If any Underwriter shall default at the Initial Closing Time or at an Option Closing Time in
its obligation to take up and pay for the Shares to be purchased by it under this Agreement on such
date, the Representative shall have the right, within 48 hours after such default, to make
arrangements for one or more of the non-defaulting Underwriters, or any other underwriters, to
purchase all, but not less than all, of the Shares that such Underwriter shall have agreed but
failed to take up and pay for (the “Defaulted Shares”). Absent the completion of such arrangements
within such 48-hour period, (a) if the total number of Defaulted Shares does not exceed 10% of the
total number of Shares to be purchased on such date, each non-defaulting Underwriter shall take up
and pay for (in addition to the number of Shares that it is otherwise obligated to purchase on such
date pursuant to this Agreement) the portion of the total number of Shares agreed to be purchased
by the defaulting Underwriter on such date in the proportion that its underwriting obligations
hereunder bears to the underwriting obligations of all non-defaulting Underwriters; and (b) if the
total number of Defaulted Shares exceeds 10% of such total, the Representative may terminate this
Agreement by notice to the Company, without liability of any party to any other party (other than
the defaulting Underwriter), except that the provisions of Sections 5 and 9 hereof shall at all
times be effective and shall survive such termination.
If a new Underwriter or Underwriters are substituted for a defaulting Underwriter in
accordance with the foregoing provision, the Company or the non-defaulting Underwriters shall have
the right to postpone the Initial Closing Time or the relevant Option Closing Time for a period not
exceeding five business days in order that any necessary changes in the Registration Statement and
Prospectus and other documents may be effected.
The term “Underwriter” as used in this Agreement shall refer to and include any Underwriter
substituted under this Section 8 with the same effect as if such substituted Underwriter had
originally been named in this Agreement. Nothing in this Section 8 shall relieve a defaulting
Underwriter from liability for its default.
9. Indemnity and Contribution by the Company, the Operating Partnership and the Underwriters
(a) The Company and the Operating Partnership, jointly and severally, agree to indemnify,
defend and hold harmless each Underwriter and any person who controls any Underwriter within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act and each of their
affiliates, from and against any loss, expense, liability, damage
25
or claim (including the reasonable cost of investigation) that, jointly or severally, any such
Underwriter or controlling person or affiliate may incur under the Securities Act, the Exchange Act
or otherwise, insofar as such loss, expense, liability, damage or claim arises out of or is based
upon (i) any breach of any representation, warranty of the Company or the Operating Partnership
contained herein, (ii) any failure on the part of the Company to comply with any applicable law,
rule or regulation relating to the offering of securities being made pursuant to the Prospectus,
(iii) any untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement or Prospectus (the term Prospectus for the purpose of this Section 9 being
deemed to include the Preliminary Prospectus and any other preliminary prospectus, the Prospectus
and any amendment or supplement thereto and any prospectus wrapper material distributed to
residents of Canada or other foreign jurisdictions), or (iv) any omission or alleged omission to
state a material fact required to be stated in the Registration Statement or Prospectus or
necessary to make the statements made therein, in the light of the circumstances under which they
were made, not misleading; except insofar as any such loss, expense, liability, damage or claim
arises out of or is based upon any untrue statement or alleged untrue statement or omission or
alleged omission of a material fact contained in and in conformity with information furnished in
writing by the Underwriters through the Representative to the Company expressly for use in such
Registration Statement or Prospectus; and except that, with respect to the Preliminary Prospectus
or other preliminary prospectus, the foregoing indemnity agreement shall not inure to the benefit
of any Underwriter from whom the person asserting any loss, expense, liability, damage, or claim
purchased Shares, or any person controlling such Underwriter, or any of their affiliates, if copies
of the Prospectus were timely delivered to the Underwriter 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 confirmation of the sale of the Shares to such
person, and if the Prospectus (as so amended or supplemented) would have cured the defect giving
rise to such loss, expense, liability, damage, or claim. The indemnity agreement set forth in this
Section 9(a) shall be in addition to any liabilities that the Company and the Operating Partnership
may otherwise have.
If any action is brought against an Underwriter or controlling person in respect of which
indemnity may be sought against the Company pursuant to the foregoing paragraph, such Underwriter
shall promptly notify the Company in writing of the institution of such action, and the Company and
the Operating Partnership shall assume the defense of such action, including the employment of
counsel and payment of expenses; provided, however, that any failure or delay to so notify the
Company will not relieve the Company or the Operating Partnership of any obligation hereunder,
except to the extent that their ability to defend is actually impaired by such failure or delay.
Such Underwriter or controlling person shall have the right to employ its or their own counsel in
any such case, but the fees and expenses of such counsel shall be at the expense of such
Underwriter or such controlling person unless the employment of such counsel shall have been
authorized in writing by the Company in connection with the defense of such action, or the Company
and the Operating Partnership shall not have employed counsel to have charge of the defense of such
action within a reasonable time or such indemnified party or parties shall have reasonably
concluded (based on the advice of counsel) that there may be defenses available to it or them which
are different from or additional to those available to the Company and the Operating Partnership
(in which case neither the Company nor the Operating Partnership shall have the right to assume or
direct the defense of such action on behalf of the indemnified party or parties), in any of which
events such fees and expenses shall be borne by the Company and the
26
Operating Partnership and paid as incurred (it being understood, however, that the Company
shall not be liable for the expenses of more than one separate firm of attorneys for the
Underwriters or controlling persons in any one action or series of related actions in the same
jurisdiction (other than local counsel in any such jurisdiction) representing the indemnified
parties who are parties to such action).
(b) Each Underwriter agrees, severally and not jointly, to indemnify, defend and hold harmless
the Company, the Operating Partnership, the Company’s directors, the Company’s officers and any
person who controls the Company within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act and each of their affiliates, from and against any loss, expense, liability,
damage or claim (including the reasonable cost of investigation) that, jointly or severally, the
Company, the Operating Partnership or any such person may incur under the Securities Act, the
Exchange Act or otherwise, but only insofar as such loss, expense, liability, damage or claim
arises out of or is based upon (i) any untrue statement or alleged untrue statement of a material
fact contained in and in conformity with information furnished in writing by such Underwriter
through the Representative to the Company expressly for use in the Registration Statement or the
Prospectus, or (ii) any omission or alleged omission to state a material fact in connection with
such information required to be stated either in such Registration Statement or Prospectus or
necessary to make such information, in the light of the circumstances under which made, not
misleading; provided, however, that the statements in the [___] paragraphs under the caption
“Underwriting” in the Preliminary Prospectus and the Prospectus constitute the only information
furnished by or on behalf of any Underwriter through the Representative to the Company for purposes
of Section 3(o) and this Section 9. The indemnity agreement set forth in this Section 9(b) shall be
in addition to any liabilities that such Underwriter may otherwise have.
If any action is brought against the Company, the Operating Partnership or any such person in
respect of which indemnity may be sought against any Underwriter pursuant to the foregoing
paragraph, the Company, the Operating Partnership or such person shall promptly notify the
Representative in writing of the institution of such action and the Representative, on behalf of
the Underwriters, shall assume the defense of such action, including the employment of counsel and
payment of expenses; provided, however, that any failure or delay to so notify the Representative
will not relieve the Underwriters of any obligation hereunder, except to the extent that their
ability to defend is actually impaired by such failure or delay. The Company, the Operating
Partnership or such person shall have the right to employ its own counsel in any such case, but the
fees and expenses of such counsel shall be at the expense of the Company, the Operating Partnership
or such person unless the employment of such counsel shall have been authorized in writing by the
Representative in connection with the defense of such action or the Representative shall not have
employed counsel to have charge of the defense of such action within a reasonable time or such
indemnified party or parties shall have reasonably concluded (based on the advice of counsel) that
there may be defenses available to it or them that are different from or additional to those
available to the Underwriters (in which case the Representative shall not have the right to assume
or direct the defense of such action on behalf of the indemnified party or parties), in any of
which events such fees and expenses shall be borne by the Underwriters and paid as incurred (it
being understood, however, that the Underwriters shall not be liable for the expenses of more than
one separate firm of attorneys in any one action or series of related actions in the same
jurisdiction (other than local counsel in any such jurisdiction) representing the indemnified
parties who are parties to such action).
27
(c) The indemnifying party under this Section 9 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 (to the extent
provided in this Section 9) the indemnified party against any loss, expense, liability, damage or
claim by reason of such settlement or judgment. No indemnifying party shall, without the prior
written consent of the indemnified party (which consent shall not be unreasonably withheld), 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 reasonably have been a
party and indemnity was or could reasonably 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.
(d) If the indemnification provided for in this Section 9 is unavailable or insufficient to
hold harmless an indemnified party under subsections (a), (b) and (c) of this Section 9 in respect
of any losses, expenses, liabilities, damages or claims referred to therein, then each applicable
indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, expenses, liabilities,
damages or claims (i) in such proportion as is appropriate to reflect the relative benefits
received by the Company and the Operating Partnership and by the Underwriters from the offering of
the Shares or (ii) if (but only if) the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above, but also the relative fault of the Company and the Operating
Partnership and of the Underwriters in connection with the statements or omissions that resulted in
such losses, expenses, liabilities, damages or claims, as well as any other relevant equitable
considerations. The relative benefits received by the Company and the Operating Partnership and by
the Underwriters shall be deemed to be in the same proportion as the total proceeds from the
offering (net of underwriting discounts and commissions and expenses of the Underwriters paid by
the Company but before deducting expenses otherwise incurred by or on behalf of the Company)
received by the Company (which, for purposes of this subsection, account for the relative benefits
received by the Operating Partnership) bear to the underwriting discounts and commissions plus
reimbursed expenses received by the Underwriters. The relative fault of the Company and the
Operating Partnership and of the Underwriters shall be determined by reference to, among other
things, whether the untrue statement or alleged untrue statement of a material fact or omission or
alleged omission relates to information supplied by the Company or the Operating Partnership or by
the Underwriters and the parties’ relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. The amount paid or payable by a party as a result
of the losses, claims, damages and liabilities referred to above shall be deemed to include any
legal or other fees or expenses reasonably incurred by such party in connection with investigating
or defending any claim or action.
(e) The Company, the Operating Partnership and the Underwriters agree that it would not be
just and equitable if contribution pursuant to this Section 9 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such purpose) or by any other
method of allocation that does not take account of the equitable considerations referred to in
clause (i) and, if applicable clause (ii), of subsection (d) above. Notwithstanding the provisions
of this Section 9, no Underwriter shall be required to contribute any amount in excess of the
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underwriting discounts and commissions applicable to the Shares purchased by such Underwriter
plus reimbursed expenses. 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 in proportion to their respective underwriting commitments and not
joint. For purposes of this Section 9, each officer and director of an Underwriter and each person,
if any, who controls an Underwriter within the meaning of the Section 15 of the Securities Act and
Section 20 of the Exchange Act and each of their affiliates shall have the same rights to
contribution as such Underwriter, and each director of the Company, each officer of the Company,
and each person, if any, who controls the Company within the meaning of Section 15 of the
Securities Act and Section 20 of the Exchange Act and each of their affiliates shall have the same
rights to contribution as the Company.
(f) The Company and the Operating Partnership, jointly and severally, agree to indemnify and
hold harmless each Underwriter and its affiliates and each person, if any, who controls any
Underwriter or its affiliates within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act, from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses reasonably incurred in
connection with defending or investigating any such action or claim) (i) caused by any untrue
statement or alleged untrue statement of a material fact contained in any material prepared by the
Company or delivered to and not objected to by the Company or its counsel for distribution to
participants in connection with the Directed Share Program, or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or necessary to make the
statements therein not misleading; (ii) as a result of the failure of any participant to pay for
and accept delivery of Directed Shares that the participant has agreed to purchase; or (iii)
related to, arising out of, or in connection with the Directed Share Program.
10. Survival
The indemnity and contribution agreements contained in Section 9 and the covenants, warranties
and representations of the Company and the Operating Partnership contained in Sections 3, 4 and 5
of this Agreement shall remain in full force and effect regardless of any investigation made by or
on behalf of any Underwriter, or any person who controls any Underwriter within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act, or by or on behalf of the
Company, its directors and officers, the Operating Partnership or any person who controls the
Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act,
and shall survive any termination of this Agreement or the sale and delivery of the Shares. That
certain letter agreement dated February 9, 2005, between Friedman, Billings, ▇▇▇▇▇▇ & Co. and
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, Inc., as it may be subsequently amended, shall survive the execution, delivery,
performance and termination of this Agreement (except as otherwise provided therein and herein),
and the Company agrees to the appointment of Friedman, Billings, ▇▇▇▇▇▇ & Co., Inc. contained in
Section 2 thereof. In the event of any inconsistency between the letter agreement and this
Agreement with respect to expense reimbursement as provided in Section 5 of this Agreement, the
provisions of this Agreement shall control. The Company and each Underwriter agree promptly to
notify the others of the commencement of any litigation or proceeding against it and, in the case
of the Company, against any of the Company’s officers and directors, in connection with the sale
and delivery of the Shares, or in connection with the Registration Statement or Prospectus.
29
11. Notices
Except as otherwise herein provided, all statements, requests, notices and agreements shall be
in writing or by telegram and, if to the Underwriters, shall be sufficient in all respects if
delivered to Friedman, Billings, ▇▇▇▇▇▇ & Co., Inc., ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇, Attention: Syndicate Department, or if to the Company or the Operating Partnership, shall be
sufficient in all respects if delivered to the Company at the offices of the Company at ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
12. Governing Law; Headings
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES. The section headings in this Agreement
have been inserted as a matter of convenience of reference and are not a part of this Agreement.
13. No Fiduciary Relationship
Each of the Company and the Operating Partnership acknowledge and agree that (i) it is
contracting with the Underwriters on an arm’s length basis to provide the services described
herein, (ii) the Underwriters are not acting in a fiduciary capacity with respect to it, and (iii)
the Underwriters are not assuming any duties or obligations in connection with the offering of the
Shares, other than those expressly set forth in this Agreement. Further, the Company and the
Operating Partnership acknowledge and agree that it is not their intention to create a fiduciary
relationship among the parties to this Agreement.
14. Parties at Interest
The Agreement herein set forth has been and is made solely for the benefit of the
Underwriters, the Company, the Operating Partnership and the controlling persons, directors and
officers and affiliates referred to in Sections 9 and 10 hereof, and their respective successors,
assigns, executors and administrators. No other person, partnership, association or corporation
(including a purchaser, as such purchaser, from any of the Underwriters) shall acquire or have any
right under or by virtue of this Agreement.
15. Counterparts and Facsimile Signatures
This Agreement may be signed by the parties in counterparts, which together shall constitute
one and the same agreement among the parties. A facsimile signature shall constitute an original
signature for all purposes. If the foregoing correctly sets forth the understanding among the
Company, the Operating Partnership and the Underwriters, please so indicate in the space provided
below for the purpose, whereupon this Agreement shall constitute a binding agreement among the
Company, the Operating Partnership and the Underwriters.
Very truly yours,
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| By: | ||||||
| Name: | ||||||
| Title: | ||||||
| MIDLANTIC PARTNERSHIP, LP | ||||||||
| By: | Midlantic Office Properties, LLC, its sole general partner | |||||||
| By: | Midlantic Office Trust, Inc., its sole member | |||||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
Accepted and agreed to as
of the date first above written:
of the date first above written:
FRIEDMAN, BILLINGS, ▇▇▇▇▇▇ & CO., INC.
By: |
||||||
Name: |
||||||
Title: |
||||||
For themselves and as Representative of the other
Underwriters named on Schedule I hereto.
Underwriters named on Schedule I hereto.
31
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