INVESTORS REAL ESTATE TRUST 6,000,000 COMMON SHARES OF BENEFICIAL INTEREST (NO PAR VALUE, PER SHARE) UNDERWRITING AGREEMENT
Exhibit 1.1
6,000,000 COMMON SHARES OF BENEFICIAL INTEREST
(NO PAR VALUE, PER SHARE)
October 17, 2007
October 17, 2007
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & CO. INCORPORATED
▇.▇. ▇▇▇▇▇▇▇▇ & Co.
J.J.B. ▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇, Inc.
c/o ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co. Incorporated
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Investors Real Estate Trust, a North Dakota real estate investment trust (the “Company”), proposes to issue and sell to the several Underwriters named in Schedule I hereto (the “Underwriters”) 6,000,000 common shares of beneficial interest, no par value per share, of the Company (the “Firm Shares”).
The Company also proposes to issue and sell to the several Underwriters up to an additional 900,000 common shares of beneficial interest, no par value per share, of the Company (the “Additional Shares”), if and to the extent that ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co. Incorporated (“Baird”), as manager of the offering, shall have determined to exercise its over-allotment option on behalf of the Underwriters. The Firm Shares and the Additional Shares are hereinafter collectively referred to as, the “Shares.” The common shares of beneficial interest, no par value per share, of the Company to be outstanding after giving effect to the sales contemplated hereby are hereinafter referred to as the “Common Shares.”
The Company has prepared and filed, in accordance with the Securities Act of 1933, as amended (the “Securities Act”), and the rules and regulations thereunder (the “Securities Act Regulations”), with the Securities and Exchange Commission (the “Commission”) a registration statement on Form S‑3 (Registration No. 333-112465), including a related prospectus, for the registration of the Shares under the Securities Act and the Securities Act Regulations. The Company has prepared and filed such amendments to the registration statement and such amendments or supplements to the related prospectus as may have been required to the date hereof, and will file such amendments or supplements as may hereafter be required. The registration statement as amended at the time it became effective by the Commission (and, if the Company files a post-effective amendment to such registration statement that becomes effective prior to the Initial Closing Date (as defined below)), including the documents filed as part thereof or incorporated by reference thereto in accordance with Item 12 of Form S‑3 under Securities Act or otherwise and information contained in the prospectus or otherwise deemed to be part of the registration statement at the time of effectiveness pursuant to Rule 430A or Rule 430B under the Securities Act (“Rule 430 Information”), is hereinafter referred to as the “Registration Statement.” If the Company files an abbreviated registration statement to register additional Common Shares pursuant to Rule 462(b) under the Securities Act (a “Rule 462 Registration Statement”), then any reference
herein to the term “Registration Statement” shall be deemed to include such Rule 462 Registration Statement. Any prospectus filed with the Commission pursuant to Rule 424 under the Securities Act and the prospectus included in the Registration Statement at the time of its effectiveness that omits Rule 430 Information, is hereinafter referred to as the “Preliminary Prospectus.” The term “Prospectus” means the final prospectus, as first filed with the Commission pursuant to Rule 424(b) of the Securities Act Regulations, and any amendments thereof or supplements thereto.
For purposes of this Agreement, “Issuer Free Writing Prospectus” has the meaning set forth in Rule 433 of the Securities Act; “Free Writing Prospectus” has the meaning set forth in Rule 405 of the Securities Act; “Disclosure Package” means the Preliminary Prospectus as most recently amended or supplemented immediately prior to the Time of Sale (as defined below), together with the Issuer Free Writing Prospectuses, if any, each identified in Schedule II, the Free Writing Prospectuses, if any, each identified in Schedule III hereto (each, a “Permitted Free Writing Prospectus”), and other information conveyed to purchasers of the Shares at or prior to the Time of Sale as set forth in Schedule IV hereto; “Time of Sale” means 5:00 p.m. (New York Time) on the date of this Agreement; and “Road Show” has the meaning set forth in Rule 433(h)(4) under the Securities Act.
Upon consummation of the transactions contemplated hereby and the application of the net proceeds from the sale of the Firm Shares, the Company through its subsidiary IRET, Inc., a North Dakota corporation, will own 74% of the partnership interests of IRET Properties, a North Dakota limited partnership (the “Partnership”). The Company and the Partnership, directly or indirectly, currently owns 69 multi-family properties and 153 commercial properties as described in the Disclosure Package (individually, a “Property” and collectively, the “Properties”).
1. Representations and Warranties of the Company and the Partnership. The Company and the Partnership, jointly and severally, represent and warrant to and agree with each of the Underwriters on the date hereof, on the Closing Date and on each Option Closing Date, if any, that:
(a) Each of the Registration Statement, any Rule 462(b) Registration Statement and any post-effective amendment thereto has become effective under the Securities Act; no stop order suspending the effectiveness of the Registration Statement, any Rule 462(b) Registration Statement and any post-effective amendment thereto or preventing or suspending the use of any Preliminary Prospectus or the Prospectus is in effect, no proceedings for such purpose are pending before or, to the best knowledge of the Company, contemplated or threatened by the Commission or by the state securities authority of any jurisdiction and any request on the part of the Commission or the state securities authority for any jurisdiction for additional information has been complied with. The Company has prepared and filed such amendments to such Registration Statement and the Prospectus as may have been required to the date hereof, and covenants and agrees that it will file such additional amendments thereto and as may hereafter be required.
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(c) (i) Each part of the Registration Statement (including each document incorporated by reference therein), when such part became effective, did not contain and each such part, as amended or supplemented, if applicable, will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; (ii) the Registration Statement, as of the date hereof, does not contain and, as amended or supplemented, if applicable, will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; (iii) the Preliminary Prospectus (including the documents incorporated by reference therein) does not and the Prospectus (including the documents incorporated by reference therein) or any amendment or supplement thereto will not, as of the applicable filing date, the date hereof and at the Closing Date (as defined in Section 4) and on each Option Closing Date (as defined in Section 2) (if any), contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; (iv) the Disclosure Package does not (including each document incorporated by reference therein), and at the Time of Sale, at the Closing Date and each Option Closing Date (if any), the Disclosure Package, as then amended or supplemented by the Company, if applicable, will not, contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; (v) each Issuer Free Writing Prospectus (including each document incorporated by reference therein) does not conflict with the information contained in the Registration Statement and, when considered together with the Disclosure Package, did not, and at the time of each sale of Shares and at the Closing Date and each Option Closing Date, each Issuer Free Writing Prospectus will not, contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading; (vii) each Road Show, when considered together with the Disclosure Package, does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that the representations and warranties set forth in this Section 1(c) or Section 1(b) above do not apply to statements or omissions in the Registration Statement, the Disclosure Package, any Issuer Free Writing Prospectus, any Road Show, or the Prospectus or any amendments or supplements thereto based upon information relating to any Underwriters furnished to the Company in writing by such Underwriters through Baird expressly for use therein.
(d) Prior to the execution of this Agreement, the Company has not, directly or indirectly, offered or sold any Shares by means of any “prospectus” (within the meaning of the
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Securities Act) or used any “prospectus” (within the meaning of the Securities Act) in connection with the offer or sale of the Shares, in each case other than the Preliminary Prospectus and/or any Permitted Free Writing Prospectuses; the Company has not, directly or indirectly, prepared, used or referred to any free writing prospectuses, without the prior written consent of Baird, other than the Permitted Free Writing Prospectuses and Road Shows furnished or presented to Baird before first use. Each Permitted Free Writing Prospectus has been prepared, used or referred to in compliance with Rules 164 and 433 under the Securities Act Regulations; the Company filed the Registration Statement with the Commission before using any Permitted Free Writing Prospectus; and each Permitted Free Writing Prospectus was preceded or accompanied by the most recent Preliminary Prospectus satisfying the requirements of Section 10 under the Securities Act; assuming that such Permitted Free Writing Prospectus is so sent or given after the Registration Statement was filed with the Commission (and after such Permitted Free Writing Prospectus was, if required pursuant to Rule 433(d) under the Securities Act Regulations, filed with the Commission), the sending or giving, by Baird, of any Permitted Free Writing Prospectus will satisfy the provisions of Rule 164 and Rule 433 (without reliance on subsections (b), (c) and (d) of Rule 164); the conditions set forth in one or more of subclauses (i) through (iv), inclusive, of Rule 433(b)(1) under the Securities Act Regulations are satisfied, and the registration statement relating to the offering of the Shares contemplated hereby, as initially filed with the Commission, includes a prospectus that, other than by reason of Rule 433 or Rule 431 under the Securities Act Regulations, satisfies the requirements of Section 10 of the Securities Act; neither the Company nor the Underwriters are disqualified, by reason of subsection (f) or (g) of Rule 164 under the Securities Act Regulations, from using, in connection with the offer and sale of the Shares, free writing prospectuses pursuant to Rules 164 and 433 under the Securities Act; any free writing prospectus that the Company is required to file pursuant to Rules 164 and 433 under the Securities Act Regulations has been, or will be, filed with the Commission in accordance with the requirements of the Securities Act and the Securities Act Regulations; each Permitted Free Writing Prospectus that the Company has filed, or is required to file, pursuant to Rule 433(d) under the Securities Act Regulations or that was prepared by or on behalf of or used or referred to by the Company complies or will comply in all material respects with the requirements of the Securities Act and the Securities Act Regulations; no Permitted Free Writing Prospectus conflicts with the information contained in the Registration Statement, any Preliminary Prospectus, the Disclosure Package or the Prospectus; and, to the Company’s knowledge, no free writing prospectus prepared by or on behalf of or used by any Underwriter contains any “issuer information” within the meaning of Rule 433(h)(2) under the Securities Act Regulations.
(e) The Company was determined, at the time the Registration Statement was initially filed and when it became effective, eligible to use Form S‑3 to register the offering of the Shares contemplated hereby. The Company was not an “ineligible issuer” (as defined in Rule 405 under the Securities Act Regulations) as of the eligibility determination date for purposes of Rules 164 and 433 under the Securities Act Regulations with respect to the offering of the Shares contemplated by the Registration Statement.
(f) The Preliminary Prospectus, the Prospectus and any Permitted Free Writing Prospectuses (to the extent any such Permitted Free Writing Prospectus was required to
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be filed with the Commission) delivered to the Underwriters for use in connection with the public offering of the Shares contemplated herein have been and will be identical in all material respects to the versions of such documents transmitted to the Commission for filing via the Electronic Data Gathering Analysis and Retrieval System (“▇▇▇▇▇”), except to the extent permitted by Regulation S‑T.
(g) The Common Shares are listed on the Nasdaq Global Select Market (“NASDAQ”), and the Company has not received any notice from the NASDAQ regarding the delisting of such shares from the NASDAQ. The Shares are duly listed for quotation, and admitted and authorized for trading, subject to official notice of issuance, on the NASDAQ. The Company is in compliance with all applicable corporate governance requirements set forth in the Nasdaq Marketplace Rules and upon and at all times after NASDAQ shall have approved the Shares for inclusion, it will be in compliance with all applicable corporate governance set forth in the Nasdaq Marketplace Rules that are then in effect and is taking steps as are necessary to ensure that it will be in compliance with other applicable corporate governance requirements set forth in the Nasdaq Marketplace Rules standards not currently in effect upon the effectiveness of such requirements. To the Company’s knowledge, there are no affiliations or associations between (i) any member of the FINRA and (ii) the Company or any of the Company’s officers, trustees or 5% or greater security holders or any beneficial owner of the Company’s unregistered equity securities that were acquired at any time on or after the 180th day immediately preceding the date the Registration Statement was initially filed with the Commission, except as disclosed in the Registration Statement (excluding the exhibits thereto), the Disclosure Package and the Prospectus.
(h) The Company has been duly organized, is validly existing as a real estate investment trust in good standing under the laws of the jurisdiction of its organization, has the requisite power and authority to own its property and to conduct its business as described in the Disclosure Package and the Prospectus and is duly qualified or licensed to transact business and is in good standing in each jurisdiction in which the conduct of its business or its ownership or leasing of property requires such qualification or in which the failure, individually or in the aggregate, to be so qualified or be in good standing would not (i) have a material adverse effect on the assets, business, condition (financial or otherwise), results of operation or prospects of the Company and its Subsidiaries (as defined herein), taken as a whole, (ii) prevent or materially interfere with the consummation of the transactions contemplated hereby, or (iii) result in the delisting of the Common Shares from the NASDAQ (the occurrence of any such effect, prevention, interference or result described in the foregoing clauses (i), (ii) or (iii) being herein referred to as a “Material Adverse Effect” or “Material Adverse Change”).
(i) The Company is the sole general partner of the Partnership and owns, directly or indirectly, 71% of the partnership interests (“Units”) in the Partnership; each subsidiary of the Company and the Partnership (each, including the Partnership, except where noted, a “Subsidiary”, and collectively, “Subsidiaries”) has been duly organized, is validly existing as a corporation, limited partnership or limited liability company, as the case may be, in good standing under the laws of the jurisdiction of its organization, has the corporate, limited partnership or limited liability company power and authority, as the case may be, to own its
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property and to conduct its business as described in the Disclosure Package and the Prospectus and is duly qualified or licensed to transact business and is in good standing in each jurisdiction in which the conduct of its business or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not have a Material Adverse Effect; all of the issued shares of capital stock of each Subsidiary have been duly and validly authorized and issued, are fully paid and non-assessable and are owned, except as disclosed in the Disclosure Package and the Prospectus, directly or indirectly by the Company, free and clear of all liens, encumbrances, equities or claims; except as disclosed in the Disclosure Package and the Prospectus, 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 from repaying to the Company or any other Subsidiary any amounts which 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 property or asset to the Company or to any other Subsidiary.
(j) This Agreement has been duly authorized, executed and delivered by the Company and the Partnership and is a legal, valid and binding agreement of the Company and the Partnership enforceable in accordance with its terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or similar law’s affecting creditor’s rights generally and by general equitable principles.
(k) The authorized and outstanding capitalization of the Company is as set forth under the heading “Actual Consolidated” in the section captioned “Capitalization” of each of the Disclosure Package and the Prospectus, and the Company shall have an authorized and outstanding capitalization as set forth under the heading “Pro Forma Consolidated” in the section captioned “Capitalization” of the Disclosure Package and the Prospectus.
(l) All of the outstanding shares of beneficial interest of the Company and all of the outstanding shares of capital stock or other than equity interests of each of the Subsidiaries have been duly and validly authorized and issued and are fully paid and non-assessable, and, except as disclosed in each Preliminary Prospectus, the Prospectus and the Disclosure Package, all of the outstanding shares of capital stock or other than equity interests of each of the Subsidiaries are directly or indirectly owned of record and beneficially by the Company or the Partnership. Except as disclosed in each Preliminary Prospectus, the Prospectus and the Disclosure Package, there are no outstanding (i) securities or obligations of the Company or any of the Subsidiaries convertible into or exchangeable for any beneficial interest of the Company or any capital stock or other than equity interests of any Subsidiary, (ii) warrants, rights or options to subscribe for or purchase from the Company or any such Subsidiary, any such beneficial interest, 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 beneficial interest, capital stock or other equity interests or any such convertible or exchangeable securities or obligation, or any such warrants, rights or options.
(m) Each of the Company and the Subsidiaries are in compliance with all governmental rules and regulations necessary to conduct their respective businesses as now
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operated, except when failure thereof would not result in a Material Adverse Effect and have not received any notice of changes in existing governmental rules or regulations that, if modified adversely to the Company and the Subsidiaries, would have a Material Adverse Effect.
(n) The Shares have been duly authorized and, when issued and delivered in accordance with the terms of this Agreement, will be validly issued, fully paid and non‑assessable, will have been issued in compliance with all applicable state, federal and foreign securities laws, free and clear of any pledge, lien, encumbrance, security interest or other claim, and the issuance of such Shares will not be subject to any preemptive or 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.
(o) Neither the Company nor any Subsidiary is in violation of their respective organizational documents (including, without limitation, partnership agreement, declaration of trust, articles or certificate of incorporation, articles of formation, charter, operating agreement, bylaws or other organizational documents) (“Organizational Documents”). Neither the Company nor any Subsidiary is in breach of or default in, nor to the knowledge of the Company and the Partnership has any event occurred which with notice, lapse of time, or both would constitute a breach of or default in, the performance or observance by the Company or any Subsidiary, as the case may be, of any obligation, agreement, contract, franchise, covenant or condition contained in any license, indenture, mortgage, deed of trust, loan or credit agreement, lease or other agreement or instrument to which the Company or any Subsidiary is a party or by which any of them or their respective properties is bound, except for such breaches or defaults that, individually or in the aggregate, would not have a Material Adverse Effect.
(p) Except as disclosed in the Registration Statement, the Disclosure Package and the Prospectus, there are no persons with registration or other similar rights to have any equity or debt securities, including securities which are convertible into or exchangeable for equity securities, registered pursuant to the Registration Statement or otherwise registered by the Company under the Securities Act; and no person has a right of participation or first refusal with respect to the sale of the Shares by the Company.
(q) The issuance of the Units to the Company in exchange for contribution of proceeds from the sale of the Shares described in the Disclosure Package and the Prospectus has been duly authorized by the Partnership, and when issued and duly delivered against payment therefor, will be validly issued, fully paid and nonassessable, free and clear of any pledge, lien, encumbrance, security interest or other claim created by or known to the Company or the Partnership; and the issuance of Units by the Partnership is not subject to preemptive or other similar rights arising by operation of law under the organizational documents of the Partnership or under any agreement to which the Partnership is a party.
(r) Neither the execution, delivery by the Company or the Partnership of, nor the performance by the Company or the Partnership of their obligations under this Agreement, the issuance, sale and delivery by the Company of the Shares and consummation of the transactions contemplated herein, do nor will conflict with, contravene, result in a breach or
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violation of, or imposition of any lien, charge or encumbrance upon any assets of the Company or any of its subsidiaries pursuant to, or constitute a default under (i) any statute, law, rule, regulation, judgment, order or decree of any governmental body, regulatory or administrative agency or court having jurisdiction over the Company or any subsidiary; (ii) the Organizational Documents of the Company or the respective Organizational Documents of any of the Subsidiaries; or (iii) any contract, agreement, obligation, franchise, license, indenture, mortgage, deed of trust, loan or credit agreement, lease or other agreement or instrument to which the Company or any of the Subsidiaries (or any of their respective assets) is subject or bound or affected except in the cases of clause (iii), for such conflicts, breaches or defaults that individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect.
(s) No approval, authorization, consent or order of or filing with any federal, state, local or foreign governmental or regulatory commission, board, body, authority or agency, or of or with any self-regulatory organization or other non-governmental regulatory authority (including, without limitation, the NASDAQ), or approval of the Company’s shareholders, is required in connection with the Company’s or the Partnership’s execution, delivery and performance of this Agreement, the issuance and sale of the Shares or the consummation of the transactions contemplated hereby, other than (i) such approvals as have been obtained, or will have been obtained at the Closing Date or the relevant Option Closing Date, as the case may be, under the Securities Act and the Securities Exchange Act of 1934, as amended (the “Exchange Act”), (ii) such approvals as have been obtained in connection with the approval of the listing of the Shares on the NASDAQ, (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) under the FINRA Conduct Rules.
(t) There are no actions, suits, claims, investigations or proceedings pending or, to the Company’s knowledge, threatened or contemplated to which the Company or any of the Subsidiaries, any of their respective trustees, directors or officers, any Property with respect to the Properties is or would be a party or of which any of their respective properties is or would be subject at law or in equity, before or by any federal, state, local or foreign governmental or regulatory commission, board, body, authority or agency, or before or by any self-regulatory organization or other non-governmental regulatory authority (including, without limitation, the NASDAQ) (i) other than any such action, suit, claim, investigation or proceeding accurately described in the Disclosure Package and the Prospectus or which, if resolved adversely to the Company or any of its subsidiaries, would not, individually or in the aggregate, have a Material Adverse Effect. There are no statutes, regulations, contracts or other documents that are required to be described in the Registration Statement, the Disclosure Package or the Prospectus or to be filed as exhibits to the Registration Statement that are not described or filed as required by the Securities Act and the Securities Act Regulations.
(u) Neither the Company nor any Subsidiary is, and after giving effect to the offering and sale of the Shares and the application of the proceeds thereof as described in the Disclosure Package and the Prospectus will not be, required to register as an “investment company” as such term is defined in the Investment Company Act of 1940, as amended.
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(v) Deloitte & Touche LLP, which has audited certain financial statements of the Company and has expressed its opinion in reports with respect to the consolidated financial statements of the Company filed with the Commission as part of the Registration Statement, Disclosure Package and Prospectus, are, and were during the periods covered by its respective reports, independent public accountants with respect to the Company as required by the Securities Act and the Securities Act Regulations and are registered with the Public Company Accounting Oversight Board.
(w) The consolidated financial statements included in the Registration Statement, the Disclosure Package and the Prospectus, together with the related notes and schedules, present fairly the consolidated financial position of the Company and the Subsidiaries to which such financial statements relate as of the dates indicated and the consolidated results of operations, cash flows and changes in shareholders’ equity of the respective entities to which such financial statements relate for the periods specified and have been prepared in compliance with the requirements of the Securities Act and Exchange Act and in conformity with U.S. generally accepted accounting principles applied on a consistent basis during the periods involved and in accordance with Regulation S‑X promulgated by the Commission; the financial statement schedules included in the Registration Statement and the amounts in both the Prospectus and the Disclosure Package under the captions “Prospectus Supplement Summary - Summary Consolidated Financial and Other Data” fairly present the information shown therein and have been compiled on a basis consistent with the financial statements included in each of the Registration Statement, the Prospectus or the Disclosure Package; all pro forma financial statements or data included in the Registration Statement, the Disclosure Package and the Prospectus, if any, comply with the requirements of the Securities Act and the Exchange Act, and the assumptions used in the preparation of such pro forma financial statements and data are reasonable, the pro forma adjustments used therein are appropriate to give effect to the transactions or circumstances described therein and the pro forma adjustments have been properly applied to the historical amounts in the compilation of those statements and data; the other financial and statistical data contained in the Registration Statement, the Disclosure Package and the Prospectus are accurately and fairly presented and prepared on a basis consistent with the financial statements and books and records of the Company; there are no financial statements (historical or pro forma) that are required to be included in the Registration Statement, the Disclosure Package or the Prospectus that are not included or as required; the Company and its subsidiaries do not have any material liabilities or obligations, direct or contingent (including any off‑balance sheet obligations), not described in the Disclosure Package and the Prospectus; and all disclosures contained in the Disclosure Package and the Prospectus regarding “non‑GAAP financial measures” (as such term is defined by the rules and regulations of the Commission), if any, comply with Regulation G under the Exchange Act and Item 10 of Regulation S‑K under the Securities Act, to the extent applicable.
(x) All statistical or market-related data included in the Disclosure Package, the Prospectus and the Permitted Free Writing Prospectuses are based on or derived from sources that the Company reasonably believes to be reliable and accurate, and the Company has obtained the written consent to the use of such data from such sources to the extent required. Each “forward-looking statement” (within the meaning of Section 27A of the Securities Act or
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Section 21E of the Exchange Act) contained in the Registration Statement, the Disclosure Package, the Prospectus and the Permitted Free Writing Prospectuses has been made or reaffirmed with a reasonable basis and in good faith.
(y) Except as otherwise disclosed in both the Prospectus and the Disclosure Package or in the Phase I or Phase II Environmental Audits previously delivered to ▇▇▇▇▇ or its counsel (the “Audits”), (i) none of the Partnership, the Company, any of the Subsidiaries nor, to the knowledge of the Partnership and the Company, any other owners of the property at any time or any other party has at any time, handled, stored, treated, transported, manufactured, spilled, leaked, discharged, dumped, transferred or otherwise disposed of or dealt with, Hazardous Materials (as hereinafter defined) on, to or from the Properties, other than by any such action taken in compliance with all applicable Environmental Statutes (as hereinafter defined) and other than any such actions that, individually or in the aggregate, would not have a Material Adverse Effect; (ii) the Partnership and the Company do not intend to use the Properties, or any subsequently acquired properties, for the purpose of handling, storing, treating, transporting, manufacturing, spilling, leaking, discharging, dumping, transferring or otherwise disposing of or dealing with Hazardous Materials other than by any such action taken in compliance with all applicable Environmental Statues; (iii) none of the Partnership, the Company, nor any of the Subsidiaries knows of any material seepage, leak, discharge, release, emission, spill, or dumping of Hazardous Materials into waters on or adjacent to the Properties or any other real property owned or occupied by any such party, or onto lands from which Hazardous Materials might seep, flow or drain into such waters that individually or in the aggregate would have a Material Adverse Effect; (iv) none of the Partnership, the Company, nor any of the Subsidiaries has received any notice of, or has any knowledge of any occurrence or circumstance which, with notice or passage of time or both, would give rise to a material claim under or pursuant to any federal, state or local environmental statute or regulation or under common law, pertaining to Hazardous Materials on or originating from any of the Properties or any assets described in both the Prospectus and the Disclosure Package, or arising out of the conduct of any such party, including without limitation a claim under or pursuant to any Environmental Statute (hereinafter defined the effect of which would result in a Material Adverse Effect); and (v) the Properties are not included or, to the best of the Partnership’s and the Company’s 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 best of the Partnership’s and the Company’s knowledge, proposed for inclusion on any similar list or inventory issued pursuant to any other Environmental Statute or issued by any other Governmental Authority (as hereinafter defined).
As used herein, “Hazardous Material” shall include, without limitation any flammable explosives, radioactive materials, hazardous materials, hazardous wastes, toxic substances, or related materials, asbestos or any hazardous material as defined by any federal, state or local environmental law, ordinance, rule or regulation 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-
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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”) or by any federal, state or local governmental authority having or claiming jurisdiction over the properties and assets described in the Prospectus (a “Governmental Authority”). To the knowledge of the Company, there are no material costs or liabilities associated with the Properties pursuant to 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). To the knowledge of the Company, none of the entities that prepared Phase I or other environmental assessments with respect to any Property, 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 trustees, directors, officers or employees is connected with the Company or any of the Subsidiaries as a promoter, selling agent, officer, director or employee of the Company or the Subsidiaries.
(z) None of the Company, the Partnership or any Subsidiary, with respect to the Properties is in violation of or has received notice of any violation with respect to any U.S. federal or state law relating to discrimination in the hiring, termination, promotion, terms or conditions of employment or pay of employees, nor any applicable U.S. federal or state wages and hours law which could reasonably be expected to have a Material Adverse Effect.
(aa) Any “employee benefit plan” (as defined under the Employee Retirement Income Security Act of 1974, as amended, and the regulations and published interpretations thereunder (collectively, “ERISA”)) established or maintained by the Company, the Subsidiaries or their “ERISA Affiliates” (as defined below) or to which the Company, the Subsidiaries or their ERISA Affiliates contribute or are required to contribute are in compliance in all material respects with ERISA; “ERISA Affiliate” means any trade or business, whether or not incorporated, which with the Company or a Subsidiary is treated as a single employer under Section 414(b), (c), (m) or (o) of the Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder (the “Code”); no such employee benefit plan is subject to Section 412 of the Code, Section 302 of ERISA or Title IV of ERISA; all contributions required to have been made under each such employee benefit plan have been made on a timely basis; there has been no “prohibited transaction” (as defined in Section 4975 of the Code or Section 406 or 407 of ERISA) for which the Company, the Subsidiaries or their ERISA Affiliates have any material liability; and each such employee benefit plan that is intended to be qualified under Section 401(a) of the Code is so qualified and to the knowledge of the Company, nothing has occurred, whether by action or failure to act, which could reasonably be expected to cause the loss of such qualification, in each case, except as disclosed in the Registration Statement, Disclosure Package and the Prospectus.
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(bb) Neither the Company nor any of the Subsidiaries nor, to the knowledge of the Company any officer, director, manager or agent 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 U.S. federal, state, local 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 the Company’s Code of Business Conduct, or (iii) engaged in any transactions, maintained any bank account or used any corporate funds except for transactions, bank accounts and funds which have been and are reflected in the normally maintained books and records of the Company and the Subsidiaries.
(cc) Except as otherwise disclosed in the Registration Statement, Disclosure Package and Prospectus, there are no 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, trustees or directors of the Company or any of the Subsidiaries or any of the members of the families of any of them.
(dd) There is and has been no failure on the part of the Company or any of the Company’s trustees or officers, in their capacities as such, to comply with any provision of the Sarbanes Oxley Act of 2002, as amended, and the rules and regulations promulgated by the Commission thereunder (the “▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act”), including Section 402 related to loans and Sections 302 and 906 related to certifications, to the extent such provisions are applicable to the Company.
(ee) The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the money laundering statutes of all jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, the “Money Laundering Laws”) and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any of its Subsidiaries with respect to the Money Laundering Laws is pending or, to the knowledge of the Company, threatened.
(ff) Neither the Company nor any of its Subsidiaries nor, to the knowledge of the Company, any director, officer, agent, employee or affiliate of the Company or any of its Subsidiaries is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”); and the Company will not directly or indirectly use the proceeds of the offering, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity, for the purpose of financing the activities of any person currently subject to any U.S. sanctions administered by OFAC.
(gg) Except as disclosed in the Registration Statement, Disclosure Package and the Prospectus, the Company (i) does not have any material lending or other relationship with
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any bank or lending affiliate of any Underwriter and (ii) does not intend to use any of the proceeds from the sale of the Shares hereunder to repay any outstanding debt owed to any affiliate of any Underwriter.
(hh) All securities issued by the Company, any of the Subsidiaries or any entity established by the Company or any Subsidiary, have been issued and sold in compliance with (i) all applicable federal and state securities laws, (ii) the laws of the applicable jurisdiction of incorporation or formation of the issuing entity, and (iii) to the extent applicable to the issuing entity, the requirements of the NASDAQ.
(jj) The Company and the Subsidiaries have good and marketable title in fee simple to, or a valid leasehold interest in, all real property and good and marketable title to all personal property owned or leased by them which is material to the business of the Company and the Subsidiaries, and good title to all personal property owned in each case free and clear of all liens, encumbrances, security interests, pledges, charges, encroachments, restrictions, mortgages and other defects except such as are described in the Disclosure Package and the Prospectus and any real property improvements, equipment and personal property held under lease by the Company and any Subsidiary are (or will be) held by them under valid, subsisting and enforceable leases, in each case, with such exceptions as are not material and do not interfere with the use made and proposed to be made of such property and buildings by the Company and any Subsidiary; the Company or a Subsidiary has an owner’s or leasehold title insurance policy, from a title insurance company licensed to issue such policy, on each property described in the Registration Statement, Disclosure Package and Prospectus as being owned or leased, as the case may be, by the Company or a Subsidiary, that insures the Company’s or the Subsidiary’s fee simple or leasehold 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.
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(kk) To the knowledge of the Company, all real property owned or leased by the Company or any Subsidiary, whether owned in fee simple or through a joint venture or other partnership, including the Properties is free of any material structural defects and all building systems contained therein are in reasonable working order in all material respects, subject to ordinary wear and tear or, in each instance, the Company or any Subsidiary, as the case may be, has created an adequate reserve or capital budget to effect reasonably required repairs, maintenance and capital expenditures; to the knowledge of the Company, water, storm water, sanitary sewer, electricity and telephone service are all available at the property lines of each property over duly dedicated streets or perpetual easements of record benefiting such property; except as described in the Disclosure Package and the Prospectus; to the knowledge of the Company, there is no pending or threatened special assessment, tax reduction proceeding or other action that could have a Material Adverse Effect.
(ll) Each of the properties listed in the Disclosure Package and the Prospectus as a property with respect to which the Company or one of the Subsidiaries has a leasehold interest is the subject of a lease that has been entered into by, or assigned to, the Company or a Subsidiary pursuant duly and validly authorized, executed and delivered by or on behalf of the Company and the Partnership, and to the knowledge of the Company, by each of the other parties thereto and each such lease constitutes a valid and binding agreement of the 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.
(mm) To the knowledge of the Company, each of the Properties comply with all applicable zoning laws, ordinances, regulations and deed restrictions or other covenants in all material respects or, if and to the extent there is a failure to comply, such failure does not materially impair the value of any of the Properties and will not result in a forfeiture or reversion of title; to the knowledge of the Company, there is no pending or threatened condemnation, zoning change, or other similar proceeding or action that will in any material respect affect the size of use of, improvements on, construction on or access to any of the Properties, all liens, charges, encumbrances, claims, or restrictions on or affecting the properties and assets (including the Properties) of any of the Subsidiaries that are required by Form S‑3 under the Securities Act to be described in the Disclosure Package and the Prospectus (or the Preliminary Prospectus) are disclosed therein; to the knowledge of the Company, no lessee, licensee, concessionaire or vendor of any portion of any of the Properties is in default under any of the leases or licenses governing such properties and there is no event which, but for the passage of time or the giving of notice or both could constitute a default under any of such leases or licenses, except such defaults that could not reasonably be expected to have a Material Adverse Effect; except as disclosed in the Registration Statement, the Disclosure Package and the Prospectus, no person has an option or right of first refusal to purchase all or any part of any Property or any interest therein.
(nn) Each of the Company and the Subsidiaries, and, to the knowledge of the Company, owns or possesses all inventions, patent applications, patents, trademarks (both registered and unregistered), adequate and sufficient licenses or other rights to use all patents,
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trade names, trade marks, service marks, service names, copyrights, domain names, software and design licenses, approvals, manufacturing processes, trade secrets, other intangible property rights, know-how and other proprietary information (collectively, the “Intellectual Property”) necessary to entitle the Company and each Subsidiary to conduct its business as described in the Registration Statement, the Disclosure Package and the Prospectus, and the Company and the Subsidiaries are unaware of any claim to the contrary or any challenge by any other person to the rights of the Company or any of the Subsidiaries with respect to the Intellectual Property. To the Company’s knowledge, neither the Company nor any of the Subsidiaries has infringed or is infringing the intellectual property of a third party, and neither the Company nor the Subsidiaries nor any of its subsidiaries has received notice of a claim by a third party to the contrary.
(oo) No material labor dispute with the employees of the Company or any of its subsidiaries, exists, except as described in the Disclosure Package and Prospectus, or, to the knowledge of the Company, is imminent; and the Company is not aware of any existing, threatened or imminent labor disturbance by the employees of any of its principal suppliers, manufacturers or contractors that could have a Material Adverse Effect.
(pp) The Company and each of the Subsidiaries is insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which they are engaged; the Company and the Subsidiaries are in compliance with the terms of such policies and instruments in all material respects; and there are no claims by the Company or any of the Subsidiaries under any such policy or instrument as to which any insurance company is denying liability or defending under a reservation of rights clause; neither the Company nor any of the Subsidiaries has been refused any insurance coverage sought or applied for; and neither the Company nor any of the Subsidiaries has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business.
(qq) Each of the Company and the Subsidiaries, has all necessary licenses, permits, authorizations, consents and approvals, possess valid and current certificates, 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 both the Prospectus and the Disclosure Package, 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, individually or in the aggregate, would not have, a Material Adverse Effect; neither the Company nor any of the Subsidiaries, nor any Property is required by any applicable law to obtain accreditation or certification from any governmental agency or authority in order to provide the products and services which it currently provides or which it proposes to provide as set forth in both the Prospectus and the Disclosure Package; neither the Company nor any of the Subsidiaries nor any Property is in violation of, in default under, or has received any notice regarding a possible violation, default or revocation of any such certificate, license, permit, authorization, consent or approval or any federal, state, local or foreign law, regulation or rule or any decree, order or judgment applicable to the Company or
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any of the Subsidiaries or any Property except to the extent any default, violation or revocation would not, individually or in the aggregate, have a Material Adverse Effect and no such license, authorization, consent or approval contains a materially burdensome restriction that is not adequately disclosed in each of the Registration Statement, the Prospectus and the Disclosure Package.
(rr) The Company maintains “internal control over financial reporting” (as defined in Rules 13a‑15 and 15d‑15 under the Exchange Act) in compliance with the requirements of the Exchange Act. The Company’s internal control over financial reporting has been designed by the Company’s principal executive officer and principal financial officer, or under their supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and is effective in performing the functions for which it was established. Except as described in the Disclosure Package and the Prospectus, since the end of the Company’s most recent audited fiscal year, there has been (i) no significant deficiency or material weakness in the design or operation of the Company’s internal control over financial reporting (whether or not remediated) which is reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information, and (ii) no change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
(tt) Neither the Company nor any of the Subsidiaries has sent or received any communication regarding termination of, or intent not to renew, any of the contracts or agreements referred to or described in the Disclosure Package or the Prospectus, or referred to or described in, or filed as an exhibit to, the Registration Statement, and no such termination or non-renewal has been threatened by the Company or any of the Subsidiaries or, to the Company’s knowledge, any other party to any such contract or agreement which termination or non-renewal would have a Material Adverse Effect.
Each of the Company and the Subsidiaries has filed on a timely basis (including in accordance with any applicable extensions) all federal, state, local and foreign tax returns required to be filed through the date hereof or has properly requested extensions thereof and all such returns are true and correct except with respect to the treatment of interest on the Company’s federal income tax
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returns for its 2006 and prior taxable years. Correct treatment of interest for such taxable years would not cause the Company to fail to qualify as a REIT for such taxable years. Each of the Company and the Subsidiaries has paid all taxes shown as due thereon; no material tax deficiency has been asserted against any such entity, nor does any such entity know of any tax deficiency which is likely to be asserted against any such entity; all such tax liabilities are adequately provided for on the respective books of such entities and, since the date of the most recent audited financial statements, neither the Company nor any Subsidiary has incurred any liability for taxes other than in the ordinary course of its business; and there is no tax lien, whether imposed by any federal, state, local, foreign or other taxing authority, outstanding against the assets, properties or business of the Company or any Subsidiary (other than with respect to ad valorem taxes that are not yet due and payable).
(uu) Neither the Company nor any of the Subsidiaries nor, to the knowledge of the Company, any trustee, director, officer, agent, employee or affiliate of the Company or any of the Subsidiaries is aware of or has taken any action, directly or indirectly, that would result in a violation by such persons of the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder; and the Company and the Subsidiaries have instituted and maintain policies and procedures designed to ensure continued compliance therewith, including without limitation a system of internal accounting controls sufficient to provide reasonable assurances that (i) transactions are executed in accordance with management’s general or specific authorization, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain accountability for assets, (iii) access to assets is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.
(vv) Except as described in the Disclosure Package and the Prospectus, the Company has not sold, issued or distributed any Common Shares during the six-month period preceding the date hereof, including any sales pursuant to Rule 144A under, or Regulation D or S of, the Securities Act, other than shares issued pursuant to employee benefit plans, qualified stock option plans or other employee compensation plans or pursuant to outstanding options, rights or warrants.
(ww) Neither the Company nor any of the Subsidiaries nor any of their respective trustees, directors, officers, affiliates or controlling persons has taken, directly or indirectly, any action designed, or which has constituted or might reasonably be expected to cause or result in the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Shares.
(xx) Except as disclosed in the Registration Statement, the Disclosure Package and the Prospectus, there are no transfer taxes or other similar fees or charges under federal law or the laws of any state or any political subdivision thereof, required to be paid in connection with the execution and delivery of this Agreement or the issuance or sale by the Company of the Shares.
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(yy) The Shares have been registered pursuant to Section 12(b) of the Exchange Act and the Shares have been approved for quotation on the NASDAQ, subject only to official notice of issuance.
(zz) Neither the Company nor any of its affiliates (i) is required to register as a “broker” or “dealer” in accordance with the provisions of the Exchange Act, or (ii) directly, or indirectly through one or more intermediaries, controls or has any other association with (within the meaning of Article I of the By‑laws of the Financial Industry Regulatory Authority (the “FINRA”)) any member firm of the FINRA.
(aaa) The Company nor the Partnership has not relied upon the Underwriters or legal counsel for the Underwriters for any legal, tax or accounting advice in connection with the offering and sale of the Shares.
(bbb) The form of certificate used to evidence the Common Shares 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 NASDAQ.
(ccc) The mortgages and deeds of trust encumbering the Properties are not convertible into equity interests in the property nor will the Company or the Partnership hold a participating interest therein and such mortgages and deeds of trust are not cross-defaulted or cross collateralized to any property not to be owned directly or indirectly by the Company or the Partnership.
(ddd) In connection with the offering of the Shares, the Company has not offered and will not offer its Common Shares or any other securities convertible into or exchangeable or exercisable for Common Shares in a manner in violation of the Securities Act.
(eee) No relationship, direct or indirect, exists between or among the Company or any of the Subsidiaries on the one hand, and the trustees, directors, officers, shareholders, partners, customers or suppliers of the Company or any of the Subsidiaries on the other hand, which is required by Form S‑3 under the Securities Act to be described in the Registration Statement, the Disclosure Package or the Prospectus and which is not so described.
(fff) The Company qualified to be taxed as a real estate investment trust pursuant to Sections 856 through 860 of the Internal Revenue Code of 1986, as amended, including the regulations and published interpretations thereunder (the “Code”) for its taxable years ended April 30, 1971 through April 30, 2007, and the current and proposed method of operation of the Company and the Subsidiaries as described in the Disclosure Package and the Prospectus will enable the Company to meet the requirements for qualification and taxation as a real estate investment trust under the Code for its taxable years ending April 30, 2008 and thereafter; the Partnership is treated as a partnership for federal income tax purposes and is not treated as a corporation or association or publicly traded partnership; the Company intends to continue to qualify as a real estate investment trust under the Code for all subsequent years; and
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no event has occurred that could cause the Company to fail to qualify as a real estate investment trust under the Code for the taxable year ending April 30, 2008 or at any time thereafter.
(ggg) The factual description of, and the assumptions and representations regarding, the Company’s organization and current and proposed method of operation set forth in the Disclosure Package and Prospectus under the headings “Additional Federal Income Tax Considerations” and “Certain Tax Considerations” accurately and completely summarize the matters referred to therein.
(hhh) Neither the Company, any of its Subsidiaries, nor any Property has sustained, since the date of the Preliminary Prospectus, any material loss or interference with its business from fire, explosion, flood, hurricane, accident or other calamity, whether or not covered by insurance, or from any labor dispute or arbitrators’ or court or governmental action, order or decree, otherwise than as set forth in the Disclosure Package and Prospectus.
(iii) The Company is eligible to use Free Writing Prospectuses in connection with this offering pursuant to Rules 164 and 433 under the Securities Act Regulations; any Free Writing Prospectus that the Company is required to file pursuant to Rule 433(d) under the Securities Act Regulations has been, or will be, filed with the Commission in accordance with the requirements of the Securities Act and the Securities Act Regulations; and each Free Writing Prospectus that the Company has filed, or is required to file, pursuant to Rule 433(d) under the Securities Act Regulations or that was prepared by or on behalf of or used by the Company complies or will comply in all material respects with the requirements of the Securities Act and the Securities Act Regulations.
(jjj) Any certificate signed by any officer of the Company, the Partnership, or any Subsidiary delivered to the Underwriters or the Underwriters’ counsel pursuant to or in connection with this Agreement shall be deemed a representation and warranty by the Company and the Partnership to each Underwriter as to the matters covered thereby.
2. Agreements to Sell and Purchase. On the basis of the representations and warranties herein contained, and subject to the terms and conditions herein set forth, the Company hereby agrees to issue and sell to each Underwriter, severally and not jointly, and each Underwriter, severally and not jointly, agrees to purchase from the Company at a price of $9.639 per share (the “Purchase Price”), the number of Firm Shares set forth on Schedule I opposite the name of such Underwriter.
Moreover, the Company hereby agrees to issue and sell up to 900,000 Additional Shares to the Underwriters at the Purchase Price, and the Underwriters, upon the basis of the representations and warranties contained herein, but subject to the terms and conditions herein set forth, shall have the right (but not the obligation) to purchase, severally and not jointly, up to 900,000 Additional Shares at the Purchase Price provided, however that the price per share for any Additional Shares shall be reduced by an amount per share equal to any dividends or distributions declared by the Company and payable on the Firm Shares but not payable on such Additional Shares. ▇▇▇▇▇ may exercise this right on behalf of the Underwriters in whole or from
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time to time in part by giving written notice not later than 30 days after the date of this Agreement. Any exercise notice shall specify the number of Additional Shares to be purchased by the Underwriters and the date on which such shares are to be purchased. Each purchase date must be at least one business day after the written notice is given and may not be earlier than the closing date for the Firm Shares or later than ten business days after the date of such notice. Additional Shares may be purchased as provided in Section 4 hereof solely for the purpose of covering over-allotments made in connection with the offering of the Firm Shares. On each day, if any, that Additional Shares are to be purchased (an “Option Closing Date”), each Underwriter, acting severally and not jointly, will purchase that proportion of the total Additional Shares then being purchased which the number of Firm Shares set forth on Schedule I opposite the name of such Underwriter bears to the total number of Firm Shares set forth in Schedule I hereto (subject to such adjustments to eliminate fractional shares as ▇▇▇▇▇ may determine).
3. Terms of Public Offering. The Company is advised by the Underwriters that the Underwriters propose to make a public offering of the Shares as soon after this Agreement has become effective as in the Underwriters’ judgment is advisable. The Company is further advised by the Underwriters that the Shares are to be offered to the public initially at $10.20 per share (the “Public Offering Price”) and to certain dealers selected by the Underwriters at a price that represents a concession not in excess of $0.337 per share under the Public Offering Price, and that the Underwriters may allow, and such dealers may reallow a concession, not in excess of $0.10 per share, to the Underwriters or to certain other dealers.
4. Payment and Delivery. Payment for the Firm Shares to be sold by the Company shall be made to the Company in federal or other funds immediately available in Milwaukee against delivery of such Firm Shares for the account of ▇▇▇▇▇ at 10:00 a.m., Central Time, on October 23, 2007, or at such other time on the same or such other date, not later than October 30, 2007, as shall be designated in writing by ▇▇▇▇▇. The time and date of such payment are hereinafter referred to as the “Closing Date.”
Payment for any Additional Shares shall be made to the Company in federal or other funds immediately available in Milwaukee against delivery of such Additional Shares for the account of ▇▇▇▇▇ at 10:00 a.m., Central Time, on the date specified in the corresponding notice described in Section 2 or at such other time on the same or on such other date, in any event not later than November 16, 2007, as shall be designated in writing by ▇▇▇▇▇.
The Firm Shares and Additional Shares shall be registered in such names and in such denominations as ▇▇▇▇▇ shall request in writing not later than one full business day prior to the Closing Date or the applicable Option Closing Date, as the case may be. The Firm Shares and Additional Shares shall be delivered to ▇▇▇▇▇ on the Closing Date or an Option Closing Date, as the case may be, for the account of ▇▇▇▇▇, with any transfer taxes payable in connection with the transfer of the Shares to ▇▇▇▇▇ duly paid, against payment of the Purchase Price therefor.
5. Conditions to the Underwriter’s Obligations. The obligations of the Underwriters are subject to the condition that all representations and warranties on the part of the Company and the Partnership contained in this Agreement are, on the date hereof, on the Closing Date and
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on each Option Closing Date, if any, true and correct, the condition that the Company has performed its obligations required to be performed prior to the Closing Date and the following further conditions:
(a) Subsequent to the execution and delivery of this Agreement and prior to the Closing Date and each Option Closing Date, if any:
(i) there shall not have occurred any downgrading, nor shall any notice have been given of any intended or potential downgrading or of any review for a possible change that does not indicate the direction of the possible change, in the rating accorded any of the securities of the Company or any of its subsidiaries by any “nationally recognized statistical rating organization,” as such term is defined for purposes of Rule 436(g)(2) under the Securities Act; and
(ii) there shall not have occurred any change, or any development involving a prospective change, in the assets, business, condition (financial or otherwise), management, operations, earnings or prospects of the Company and its subsidiaries, taken as a whole, from that set forth in the Disclosure Package that, in ▇▇▇▇▇’▇ judgment, is material and adverse and that makes it, in ▇▇▇▇▇’▇ judgment, impracticable or inadvisable to offer or sell the Shares on the terms and in the manner contemplated in the Disclosure Package.
(b) The Company will, on the Closing Date and on each Option Closing Date, deliver to the Underwriters a certificate of its Chief Operating Officer and Chief Financial Officer, to the effect that:
(i) the representations and warranties of the Company and the Partnership in this Agreement are true and correct, as if made on and as of the Closing Date or any Option Closing Date, as applicable, and the Company has complied with all the agreements and satisfied all the conditions on its part to be performed or satisfied at or prior to the Closing Date or any Option Closing Date, as applicable;
(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 to the knowledge of the Company threatened under the Securities Act;
(iii) the signers of such certificate have carefully examined the Registration Statement, the Prospectus, the Disclosure Package, any amendment or supplement thereto, and this Agreement, and that when the Registration Statement became effective and at all times subsequent thereto up to the Closing Date or any Option Closing Date, as applicable, the Registration Statement and the Prospectus and the Disclosure Package, and any amendments or supplements thereto contained all material information required to be included therein by the
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Securities Act or the Exchange Act and the applicable rules and regulations of the Commission thereunder, as the case may be, and in all material respects conformed to the requirements of the Securities Act and the Securities Act Regulations; the Registration Statement and any amendments thereto, did not and, as of the Closing Date or any Option Closing Date, as applicable, does not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading and the Prospectus and the Disclosure Package, and any amendments or supplements thereto, did not and as of the Closing Date or any Option Closing Date, as applicable, do not include any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, 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 or the Disclosure Package which has not been so set forth; and
(iv) subsequent to the respective dates as of which information is given in the Registration Statement, the Prospectus and the Disclosure Package, except as described in the Prospectus, there has not been (a) any Material Adverse Change, (b) any transaction that is material to the Company and the Subsidiaries considered as one enterprise, except transactions entered into in the ordinary course of business, (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, except obligations incurred in the ordinary course of business, (d) any change in the shares of beneficial interests of the Company or material changes in the outstanding indebtedness of the Company or any Subsidiary, (e) any dividend or distribution of any kind declared, paid or made on the shares of beneficial interests of the Company or the shares of beneficial interests of the Company, limited liability company membership interests or units of limited partnership interest of any Subsidiary other than a regularly scheduled quarterly dividend declared in the ordinary course of business, or (f) any loss or damage (whether or not insured) to the property of the Company or any Subsidiary which has been sustained which has a Material Adverse Effect.
(c) The Underwriters shall receive, at the First Closing Date and on each Option Closing Date, a certificate of the Secretary of the Company and an officer of the general partner of the Partnership certifying as to (i) the Organizational Documents of the Company and any amendments thereto, (ii) resolutions of the Board of Trustees of the Company authorizing the execution and delivery of this Agreement, the issuance and sale of the Shares and performance of the Company’s and the Partnership’s other obligations under this Agreement and related documents, (iii) the Certificate of Limited Partnership of the Partnership and the Partnership Agreement and any amendments thereto, (iv) correspondence with the Commission, (v) a specimen Common Share certificate, (vi) the number of Common Shares authorized and reserved for issuance by the Company and (vii) the minute books of the Company.
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(d) The Underwriters shall have received on the Closing Date and each Option Closing Date, if any, an opinion of Fulbright & ▇▇▇▇▇▇▇▇, LLP, outside counsel for the Company, dated the Closing Date or such Option Closing Date, as the case may be, substantially in the form set forth in Schedule V attached hereto.
(e) The Underwriters shall have received on the Closing Date and each Option Closing Date, if any, an opinion of ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, P.C., outside counsel for the Company, dated the Closing Date or such Option Closing Date, as the case may be, substantially in the form set forth in Schedule VI attached hereto.
(f) The Underwriters shall have received on the Closing Date and each Option Closing Date, if any, a favorable opinion of Hunton & ▇▇▇▇▇▇▇▇ LLP, counsel for the Underwriters, dated the Closing Date or such Option Closing Date, as the case may be, addressed to the Underwriter and in form and substance satisfactory to ▇▇▇▇▇.
The opinions of Fulbright & ▇▇▇▇▇▇▇▇, LLP and ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, P.C. described in Section 5(d) and Section 5(e) above shall be rendered to the Underwriters at the request of the Company and shall so state therein.
(g) On the date of this Agreement and at the Closing Date and each Option Closing Date (if applicable), the Underwriters shall have received from Deloitte & Touche LLP and ▇▇▇▇▇, ▇▇▇▇▇ & Associates P.C. letters dated the respective dates of delivery thereof and addressed to the Underwriters, in form and substance reasonably satisfactory to the Underwriters, containing statements and information of the type ordinarily included in accountants “comfort letters” to Underwriters with respect to the financial statements and certain financial information contained in the Registration Statement, the Disclosure Package and the Prospectus provided, that the letters delivered at the Closing Date and each Option Closing Date (if applicable) shall use a “cut‑off” date referred to therein for the carrying out of procedures no more than three business days prior to such Closing Date or such Option Closing Date, as the case may be.
(h) No amendment or supplement to the Registration Statement, the Prospectus or any document in the Disclosure Package shall have been filed to which the Underwriters shall have reasonably objected in writing.
(i) No stop order suspending the effectiveness of the Registration Statement or preventing or suspending the use of any Preliminary Prospectus, the Disclosure Package or the Prospectus shall have been issued, and no proceedings for such purpose shall have been instituted or threatened by the Commission, and no suspension for 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, has occurred; no notice of objection of the Commission to the use of the Registration Statement shall have been received; and all requests for additional information on the part of the Commission shall have been complied with to ▇▇▇▇▇’▇ satisfaction; and the Prospectus and the Disclosure Package shall not contain an untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.
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(j) All filings with the Commission required by Rule 424 under the Securities Act Regulations to have been made by the Closing Date shall have been made within the applicable time period prescribed for such filing by such Rule.
(k) Between the time of execution of this Agreement and the Closing Date or the relevant Option Closing Date there shall not have been any Material Adverse Change or event or occurrence which could reasonably be expected to result in a Material Adverse Change, and (ii) no transaction which is material and unfavorable to the Company shall have been entered into by the Company or any of the Subsidiaries, in each case, which in ▇▇▇▇▇’▇ sole judgment, makes it impracticable or inadvisable to proceed with the public offering of the Shares as contemplated by the Registration Statement.
(l) The “lock‑up” agreements, each substantially in the form of Exhibit A hereto, between ▇▇▇▇▇ and certain shareholders, officers and trustees of the Company relating to sales and certain other dispositions of Common Shares or certain other securities, delivered to ▇▇▇▇▇ on or before the date hereof, shall be in full force and effect on the Closing Date.
(m) The Shares shall have been approved for quotation on NASDAQ.
(n) The FINRA shall not have raised any objection with respect to the fairness or reasonableness of the underwriting, or other arrangements of the transactions, contemplated hereby.
The obligations of the Underwriters to purchase Additional Shares hereunder are subject to the delivery to the Underwriters on the applicable Option Closing Date of such documents as the Underwriters may reasonably request, including certificates of officers of the Company, legal opinions and an accountants’ comfort letter, and other matters related to the issuance of such Additional Shares as set forth herein with respect to the Firm Shares.
6. Covenants of the Company. The Company covenants with the Underwriters as follows:
(a) To furnish to ▇▇▇▇▇, without charge, two (2) signed copies of the Registration Statement (including exhibits thereto) and to furnish to the Underwriters in Milwaukee, Wisconsin, without charge, prior to 10:00 a.m. Central Time on the business day next succeeding the date of this Agreement and during the period mentioned in Section 6(f) or 6(g) below, as many copies of the Disclosure Package, the Prospectus and any supplements and amendments thereto or to the Registration Statement as the Underwriters may request.
(b) Before amending or supplementing the Registration Statement, the Disclosure Package or the Prospectus, to furnish to ▇▇▇▇▇ a copy of each such proposed amendment or supplement and not to file any such proposed amendment or supplement to which ▇▇▇▇▇ objects.
(c) To furnish to ▇▇▇▇▇ a copy of each proposed Free Writing Prospectus relating to the offering of the Shares to be prepared by or on behalf of, used by, referred to or filed by the Company and not to use, refer to or
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file any proposed Free Writing Prospectus relating to the offering of the Shares to which ▇▇▇▇▇ objects.
(d) Not to take any action that would result in ▇▇▇▇▇ or the Company being required to file with the Commission pursuant to Rule 433(d) under the Securities Act a free writing prospectus prepared by or on behalf of ▇▇▇▇▇ that ▇▇▇▇▇ otherwise would not have been required to file thereunder.
(e) To advise ▇▇▇▇▇ orally immediately (and, if requested by ▇▇▇▇▇, promptly 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, the Preliminary Prospectus, the Prospectus or any Issuer Free Writing Prospectus, or for additional information with respect thereto, (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, the Prospectus or any Issuer Free Writing 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 reasonably practicable, (iii) any examination pursuant to Section 8(e) of the Securities Act concerning the Registration Statement, or (iv) if the Company becomes subject to a proceeding under Section 8A of the Securities Act in connection with the public offering of Shares contemplated herein; to advise ▇▇▇▇▇ promptly of any proposal to amend or supplement the Registration Statement, the Preliminary Prospectus, the Prospectus or any Issuer Free Writing Prospectus and to file no such amendment or supplement to which ▇▇▇▇▇ shall reasonably object in writing.
(f) To advise ▇▇▇▇▇ promptly of any request by the Commission for amendments or supplements to the Registration Statement, any Preliminary Prospectus, or Prospectus or for additional information with respect thereto, or of notice of institution of proceedings for, or the entry of a stop order, suspending the effectiveness of the Registration Statement or preventing or suspending the use of any Preliminary Prospectus, the Disclosure Package or the Prospectus; and if the Commission should enter such a stop order, to use its best efforts to obtain the lifting or removal of such order as soon as possible.
(g) If the Disclosure Package is being used to solicit offers to buy the Shares at a time when the Prospectus is not yet available to prospective purchasers and any event shall occur or condition exist as a result of which it is necessary to amend or supplement the Disclosure Package in order to make the statements therein, in the light of the circumstances, not misleading, or if any event shall occur or condition exist as a result of which the Disclosure Packages conflicts with the information contained in the Registration Statement then on file, or if, in the opinion of counsel for the Underwriters, it is necessary to amend or supplement the Disclosure Package to comply with applicable law, forthwith to prepare, file with the Commission and furnish, at its own expense, to ▇▇▇▇▇ and to any dealer upon request, either amendments or supplements to the Disclosure Package so that the statements in the Disclosure Package as so amended or supplemented will not, in the light of the circumstances when
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(h) If, during such period after the first date of the public offering of the Shares as in the opinion of counsel for the Underwriters, the Prospectus (or in lieu thereof the notice referred to in Rule 173(a) under the Securities Act) is required by law to be delivered in connection with sales by an Underwriter or a dealer, any event shall occur or condition exist as a result of which it is necessary to amend or supplement the Disclosure Package or Prospectus in order to make the statements therein, in the light of the circumstances when the Prospectus (or in lieu thereof the notice referred to in Rule 173(a) under the Securities Act) is delivered to a purchaser, not misleading, or if, in the opinion of counsel for the Underwriters, it is necessary to amend or supplement the Disclosure Package or Prospectus to comply with applicable law, forthwith to prepare, file with the Commission and furnish, at its own expense, to the Underwriters and to the dealers (whose names and addresses the Underwriters will furnish to the Company) to which Shares may have been sold by an Underwriter and to any other dealers upon request, either amendments or supplements to the Disclosure Package or Prospectus so that the statements in the Disclosure Package or Prospectus as so amended or supplemented will not, in the light of the circumstances when the Prospectus (or in lieu thereof the notice referred to in Rule 173(a) under the Securities Act) is delivered to a purchaser, be misleading or so that the Disclosure Package or Prospectus, as amended or supplemented, will comply with applicable law.
(i) If, at the time this Agreement is executed and delivered, it is necessary or appropriate for a post-effective amendment to the Registration Statement, or a Registration Statement under Rule 462(b) under the Securities Act, to be filed with the Commission and become effective before the Shares may be sold, the Company will use its best efforts to cause such post-effective amendment or such Registration Statement to be filed and become effective, and will pay any applicable fees in accordance with the Securities Act, as soon as possible; and the Company will advise the Underwriters promptly and, if requested by the Underwriters, will confirm such advice in writing when such post-effective amendment or such Registration Statement has become effective.
(j) To prepare the Prospectus in a form 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, and deliver 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 after the effective date of the Registration Statement) in such quantities and at such locations as the Underwriters may reasonably request for the purposes contemplated by the Securities Act Regulations, which Prospectus and any amendments or supplements thereto furnished to the Underwriters will be identical to the version
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transmitted to the Commission for filing via ▇▇▇▇▇, except to the extent permitted by Regulation S‑T; and the Company will advise the Underwriters promptly and, if requested by the Underwriters, will confirm such advice in writing when the Prospectus is filed with the Commission pursuant to Rule 424(b) under the Securities Act.
(k) If, at any time during the period when a prospectus is required by the Securities Act to be delivered (whether physically or through compliance with Rule 172 under the Securities Act or any similar rule) in connection with any sale of Shares, the Registration Statement shall cease to comply with the requirements of the Securities Act with respect to eligibility for the use of the form on which the Registration Statement was filed with the Commission, to (i) promptly notify the Underwriters, (ii) promptly file with the Commission a new registration statement under the Act, relating to the Shares, or a post-effective amendment to the Registration Statement, which new registration statement or post-effective amendment shall comply with the requirements of the Securities Act and shall be in a form satisfactory to the Underwriters, (iii) use its best efforts to cause such new registration statement or post-effective amendment to become effective under the Securities Act as soon as practicable, (iv) promptly notify the Underwriters of such effectiveness and (v) take all other action necessary or appropriate to permit the public offering and sale of the Shares to continue as contemplated in the Prospectus; all references herein to the Registration Statement shall be deemed to include each such new registration statement or post-effective amendment, if any.
(l) To file promptly all reports and any definitive proxy or information statements required to be filed by the Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of the Prospectus and for so long as the delivery of a prospectus (or, in lieu thereof, the notice referred to in Rule 173(a) under the Securities Act) is required in connection with the offering or sale of the Shares.
(m) Promptly to furnish such information or to take such action as the Underwriters may reasonably request and otherwise to qualify the Shares for offer and sale under the securities or “Blue Sky” laws of such jurisdictions as the Underwriters shall reasonably request, and to comply with such laws so as to permit the continuance of sales and dealings therein in such jurisdictions for as long as may be necessary to complete the distribution of the Shares; provided, however, that the Company shall not be required to qualify as a foreign corporation or to file a consent to service of process in any jurisdiction (excluding service of process with respect to the offer and sale of the Shares); and to promptly advise the Underwriters of the receipt by the Company of any notification with respect to the suspension of the qualification of the Shares for offer or sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose.
(n) To make generally available to the Company’s security holders and to the Underwriters as soon as practicable an earning statement covering a period of at least twelve months beginning after the effective date of the Registration Statement (as defined in Rule 158(c) under the Securities Act), which shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder.
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(o) To file promptly with the Commission any amendment or supplement to the Registration Statement, any Preliminary Prospectus, the Prospectus or any Issuer Free Writing Prospectus that may, in the reasonable judgment of the Company or the Underwriter, be required by the Securities Act or requested by the Commission.
(p) To use its best efforts to cause the Shares to be listed for quotation on the NASDAQ and to maintain the listing of the Common Shares, including the Shares, for quotation on the NASDAQ and to file with the NASDAQ all documents and notices required by the NASDAQ of companies that have securities quotations for which are reported by the NASDAQ.
(q) During the period beginning on the date of the Underwriting Agreement and continuing to and including 90 days after the date of the Prospectus, and without the prior written consent of ▇▇▇▇▇ with the authorization to release the lock‑up letter on behalf of ▇▇▇▇▇, not to (i) to issue, offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any Common Shares or any securities convertible into or exercisable or exchangeable for Common Shares, (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Common Shares, whether such transaction described in clause (i) or (ii) above is to be settled by delivery of the Common Shares or such other securities, in cash or otherwise, (iii) file any registration statement with the Commission relating to the offering of any Common Shares or any securities convertible into or exercisable or exchangeable for Common Shares, or (iv) publicly announce an intention to effect any transaction specified in clause (i), (ii) or (iii) above. The restrictions contained in the preceding sentence shall not apply to (i) the Shares to be sold hereunder, (ii) the issuance by the Company of Common Shares upon the exercise of an option or warrant or the conversion of a security outstanding on the date of the Underwriting Agreement of which ▇▇▇▇▇ has been advised in writing or (iii) the issuance by the Company of Common Shares pursuant to the Company’s dividend reinvestment plan and employee 401(k) and profit sharing plan and (iv) the issuance of limited partnership units of the Partnership as consideration for the acquisition of real estate assets. Notwithstanding the foregoing, if (1) during the last 17 days of the 90‑day restricted period the Company issues an earnings release or material news or a material event relating to the Company occurs; or (2) prior to the expiration of the 90‑day restricted period, the Company announces that it will release earnings results during the 16‑day period beginning on the last day of the 90‑day period, the restrictions imposed by this agreement shall continue to apply until the expiration of the 18‑day period beginning on the issuance of the earnings release or the occurrence of the material news or material event. The Company shall promptly notify ▇▇▇▇▇ of any earnings release, news or event that may give rise to an extension of the initial 90‑day restricted period.
(r) To prepare, if the Underwriters so request, a final term sheet relating to the offering of the Shares, containing only information that describes the final terms of the Shares or the offering in a form consented to by the Underwriters, and to file such final term sheet within the period required by Rule 433(d)(5)(ii) under the Securities Act following the date the final terms have been established for the offering of the Shares.
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(s) To comply with Rules 433 and 164 under the Securities Act Regulations (without reliance on Rule 164(b) under the Securities Act Regulations).
(t) Not to, and to use its best efforts to cause its officers, trustees, directors and affiliates not to, (i) take, directly or indirectly prior to the termination of the underwriting syndicate contemplated by this Agreement, any action designed, or which will constitute, or has constituted, or might reasonably be expected to cause or result in the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Shares, (ii) sell, bid for, purchase or pay anyone any compensation for soliciting purchases of the Shares or (iii) pay or agree to pay any person any compensation for soliciting any order to purchase any other securities of the Company.
(u) Not, at any time at or after the execution of this Agreement, to offer or sell any Shares by means of any “prospectus” (within the meaning of the Securities Act) or use any “prospectus” (within the meaning of the Securities Act) in connection with the offer or sale of the Shares, except in each case other than the Prospectus.
(v) To maintain a transfer agent and, if necessary under the jurisdiction of organization of the Company, a registrar for the Common Shares.
(w) To apply the net proceeds to the Company from the sale of the Shares in the manner set forth under the caption “Use of Proceeds” in the Disclosure Package and the Prospectus on substantially the same terms or terms that are more advantageous to the Company and within the same general time periods described in the Registration Statement, the Disclosure Package and the Prospectus.
(x) To comply with all of the provisions of any undertakings in the Registration Statement.
(y) That for so long as the Shares are outstanding, to use its best efforts to take such actions as are necessary or appropriate to qualify the Company as a REIT under the Code for the taxable year ending April 30, 2008 and thereafter and not take any action to revoke or otherwise terminate the Company’s REIT election pursuant to Section 856(g) of the Code, except as otherwise permitted by the Company’s charter and bylaws.
(z) To not 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.
7. Expenses. Whether or not the transactions contemplated in this Agreement are consummated or this Agreement is terminated, the Company agrees to pay or cause to be paid all expenses incident to the performance of its obligations under this Agreement, including: (i)(i) the fees, disbursements and expenses of the Company’s counsel and the Company’s accountants in connection with the registration and delivery of the Shares under the Securities Act and all other fees or expenses in connection with the preparation and filing of the Registration Statement, any
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Preliminary Prospectus, the Disclosure Package, the Prospectus, any free writing prospectus prepared by or on behalf of, used by, or referred to by the Company and amendments and supplements to any of the foregoing, including all printing costs associated therewith, and the mailing and delivering of copies thereof to the Underwriters and dealers, in the quantities hereinabove specified, (ii)(ii) all costs and expenses related to the transfer and delivery of the Shares to the Underwriters, including any transfer or other taxes payable thereon, (iii)(iii) the cost of printing or producing any securities or Blue Sky memorandum in connection with the offer and sale of the Shares under the securities laws of the jurisdictions in which the Shares may be offered or sold and all expenses in connection with the qualification of the Shares for offer and sale under such securities laws as provided in Section 6(l) hereof, including filing fees and the reasonable fees and disbursements of counsel for the Underwriters in connection with such qualification and in connection with the Blue Sky memorandum, (iv)(iv) all filing fees and the reasonable fees and disbursements of counsel to the Underwriters incurred in connection with the review and qualification of the offering of the Shares by the FINRA, (v)(v) all costs and expenses incident to listing the Shares for quotation on the NASDAQ, (vi)(vi) the cost of printing certificates representing the Shares, (vii) the costs and charges of any transfer agent, registrar or depositary, (viii) the costs and expenses of the Company relating to investor presentations on any “road show” undertaken in connection with the marketing of the offering of the Shares, including, without limitation, expenses associated with the preparation or dissemination of any road show, expenses associated with the production of road show slides and graphics, fees and expenses of any consultants engaged in connection with the road show presentations with the prior approval of the Company, travel and lodging expenses of the officers of the Company and any such consultants, fifty percent (50%) of the cost of any aircraft chartered in connection with the road show, (ix)(ix) the document production charges and expenses associated with printing this Agreement, (x) all expenses in connection with any offer and sale of the Shares outside of the United States, including filing fees and the reasonable fees and disbursements of counsel for the Underwriters in connection with offers and sales outside of the United States and (xi) all other costs and expenses incident to the performance of the obligations of the Company hereunder for which provision is not otherwise made in this Section.
On the Closing Date, the Company shall pay ▇▇▇▇▇ the sum of (i) fifty percent (50%) of the cost of any aircraft chartered in connection with the road show and (ii) Fifty Thousand Dollars ($50,000) (the “Expense Reimbursement”), which amount ▇▇▇▇▇ may deduct from the Purchase Price payable to the Company on the Closing Date. The Expense Reimbursement shall be deemed to be full and complete payment to ▇▇▇▇▇ for the reimbursement of all of the Underwriters’ costs and expenses, including fees and disbursements of their counsel, stock transfer taxes payable on resale of any of the Shares by them and any advertising expenses connected with any offers they may make (“Costs”). All such other Costs in excess of the Expense Reimbursement shall be borne by the Underwriters. Notwithstanding the above, if the sale of the Shares provided for herein is not consummated because any condition to the obligations of the Underwriters set forth in Section 5 is not satisfied, because of any termination of this Agreement by the Underwriters pursuant to Section 9 hereof or because of any refusal, inability or failure on the part of the Company to perform any obligation or covenant hereunder or comply with any provision hereof other than by reason of a default by any of the
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Underwriters, the Company will reimburse the Underwriters on demand for all out-of-pocket expenses (including reasonable fees and disbursements of counsel) reasonably incurred by the Underwriters in connection with this Agreement or the offering contemplated hereby.
8. Indemnity and Contribution. (a) The Company agrees to indemnify and hold harmless each Underwriter, each person, if any, who controls any Underwriter within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act, and each affiliate of any Underwriter within the meaning of Rule 405 under the Securities 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) caused by, arising out of or based upon (i) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or any amendment thereof, or 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, or (ii) any untrue statement or alleged untrue statement of a material fact contained in any Preliminary Prospectus, the Disclosure Package, any Issuer Free Writing Prospectus, any issuer information that the Company has filed, or is required to file, pursuant to Rule 433(d) of the Securities Act, any road show not constituting a free writing prospectus, or the Prospectus or any amendment or supplement thereto, or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which there were made, not misleading; provided, however, that the Company shall not be liable under this Section 8(a) to the extent that such losses, claims, damages or liabilities are caused by, arise out of or are based upon any such untrue statement or omission or alleged untrue statement or omission made therein in reliance upon and in conformity with information relating to any Underwriter furnished to the Company in writing by such Underwriter through ▇▇▇▇▇ expressly for use therein.
(b) Each Underwriter agrees, severally and not jointly, to indemnify and hold harmless the Company, the trustees of the Company, the officers of the Company who sign the Registration Statement and each person, if any, who controls the Company 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) caused by, arising from or based upon (i) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or any amendment thereof or 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, or (ii) any untrue statement or alleged untrue statement of a material fact contained in any Preliminary Prospectus, the Disclosure Package, any issuer free writing prospectus as defined in Rule 433(h) under the Securities Act, any Company information that the Company has filed, or is required to file, pursuant to Rule 433(d) of the Securities Act, any road show not constituting a free writing prospectus, or the Prospectus or any amendment or supplement thereto, or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which there were made, not misleading, in each case to the extent, but only to the extent, that such untrue statement or omission or alleged untrue
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statement or omission was made therein in reliance upon and in conformity with information relating to such Underwriter furnished to the Company in writing by such Underwriter through ▇▇▇▇▇ expressly for use therein. The statements set forth in the third paragraph under the caption “Underwriting” in the Prospectus constitute the only information furnished by or on behalf of any underwriter to the Company for purposes hereof.
(c) In case any proceeding (including any governmental investigation) shall be instituted involving any person in respect of which indemnity may be sought pursuant to Section 8(a) or 8(b) such person (the “indemnified party”) shall promptly notify the person against whom such indemnity may be sought (the “indemnifying party”) in writing and the indemnifying party, upon request of the indemnified party, shall retain counsel reasonably satisfactory to the indemnified party to represent the indemnified party and any others the indemnifying party may designate in such proceeding and shall pay the fees and disbursements of such counsel related to such proceeding. In any such proceeding, any indemnified party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such indemnified party unless (i) the indemnifying party and the indemnified party shall have mutually agreed to the retention of such counsel or (ii) the named parties to any such proceeding (including any impleaded parties) include both the indemnifying party and the indemnified party and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. It is understood that the indemnifying party shall not, in respect of the legal expenses of any indemnified party in connection with any proceeding or related proceedings in the same jurisdiction, be liable for (i) the fees and expenses of more than one separate firm (in addition to any local counsel) for all Underwriters and all persons, if any, who control any Underwriter within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act or who are affiliates of any Underwriter within the meaning of Rule 405 under the Securities Act, and (ii) the fees and expenses of more than one separate firm (in addition to any local counsel) for the Company, its trustees or directors, its officers who sign the Registration Statement and each person, if any, who controls the Company within the meaning of either such Section, and that all such fees and expenses shall be reimbursed as they are incurred. In the case of any such separate firm for the Underwriters and such control persons and affiliates of any Underwriter, such firm shall be designated in writing by ▇▇▇▇▇. In the case of any such separate firm for the Company, and such trustees, directors, officers and control persons of the Company, such firm shall be designated in writing by the Company. The indemnifying party shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified party from and against any loss or liability by reason of such settlement or judgment. Notwithstanding the foregoing sentence, if at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel as contemplated by the second and third sentences of this paragraph, the indemnifying party agrees that it shall be liable for any settlement of any proceeding effected without its written consent if (i) such settlement is entered into more than 30 days after receipt by such indemnifying party of the aforesaid request and (ii) such indemnifying party shall not have reimbursed the indemnified party in accordance with such request prior to the date of such settlement. No indemnifying party shall, without the
32
prior written consent of the indemnified party, effect any settlement of any pending or threatened proceeding in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party, unless such settlement includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such proceeding.
(d) To the extent the indemnification provided for in Section 8(a) or 8(b) is unavailable to an indemnified party or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then each indemnifying party under such paragraph, in lieu of indemnifying such indemnified party thereunder, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (i) in such proportion as is appropriate to reflect the relative benefits received by the indemnifying party or parties on the one hand and the indemnified party or parties on the other hand from the offering of the Shares or (ii)(ii) if the allocation provided by clause (i)(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)(i) above but also the relative fault of the indemnifying party or parties on the one hand and of the indemnified party or parties on the other hand in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Underwriters on the other hand in connection with the offering of the Shares shall be deemed to be in the same respective proportions as the net proceeds from the offering of the Shares (before deducting expenses) received by the Company and the total underwriting discounts and commissions received by the Underwriters, in each case as set forth in the table on the cover of the Prospectus, bear to the aggregate Public Offering Price of the Shares. The relative fault of the Company on the one hand and the Underwriters on the other hand shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or by the Underwriters and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Underwriters’ respective obligations to contribute pursuant to this Section 8 are several in proportion to the respective number of Shares they have purchased hereunder, and not joint.
(e) The Company and the Underwriters agree that it would not be just or equitable if contribution pursuant to this Section 8 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 Section 8(d). The amount paid or payable by an indemnified party as a result of the losses, claims, damages and liabilities referred to in Section 8(d) shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 8, no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Shares underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages that such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the
33
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 remedies provided for in this Section 8 are not exclusive and shall not limit any rights or remedies which may otherwise be available to any indemnified party at law or in equity.
(f) The indemnity and contribution provisions contained in this Section 8 shall remain operative and in full force and effect regardless of (i)(i) any termination of this Agreement, (ii)(ii) any investigation made by or on behalf of any Underwriter, any person controlling any Underwriter or any affiliate of any Underwriter, or the Company, its officers, trustees or directors or any person controlling the Company and (iii)(iii) acceptance of and payment for any of the Shares.
9. Termination. The Underwriters may terminate this Agreement by notice given by ▇▇▇▇▇ to the Company, if after the execution and delivery of this Agreement and prior to the Closing Date (a) trading generally shall have been suspended or materially limited or minimum prices shall have been established on, or by, as the case may be, any of the New York Stock Exchange, the American Stock Exchange, or the NASDAQ, (b) trading of any securities of the Company shall have been suspended or materially limited on any exchange or in any over-the-counter market, (c) a material disruption in securities settlement, payment or clearance services in the United States shall have occurred, (d) any moratorium or material limitation on commercial banking activities shall have been declared by Federal, Wisconsin or New York state authorities, (e) there shall have occurred any outbreak or escalation of hostilities, act of terrorism involving the United States or declaration by the United States of a national emergency or war, or (f) any other calamity or crisis or any change in financial, political or economic conditions in the United States or elsewhere, if the effect of any such event specified in clause (e) or (f), in ▇▇▇▇▇’▇ judgment, is material and adverse and makes it, in ▇▇▇▇▇’▇ judgment, impracticable or inadvisable to proceed with the offer, sale or delivery of the Shares on the terms and in the manner contemplated in the Disclosure Package or the Prospectus (exclusive of any supplement thereto).
10. Effectiveness; Defaulting Underwriter. This Agreement shall become effective upon the execution and delivery hereof by the parties hereto.
If, on the Closing Date or an Option Closing Date, as the case may be, any one or more of the Underwriters shall fail or refuse to purchase Shares that it has or they have agreed to purchase hereunder on such date, and the aggregate number of Shares which such defaulting Underwriter or Underwriters agreed but failed or refused to purchase is not more than one‑tenth of the aggregate number of the Shares to be purchased on such date, the other Underwriters shall be obligated severally in the proportions that the number of Firm Shares set forth opposite their respective names in Schedule I bears to the aggregate number of Firm Shares set forth opposite the names of all such non‑defaulting Underwriters, or in such other proportions as ▇▇▇▇▇ may specify, to purchase the Shares which such defaulting Underwriter or Underwriters agreed but failed or refused to purchase on such date; provided that in no event shall the number of Shares that any Underwriter has agreed to purchase pursuant to this Agreement be increased pursuant to this Section 10 by an amount in excess of one-ninth of such number of Shares without the
34
written consent of such Underwriter. If, on the Closing Date, any Underwriter or Underwriters shall fail or refuse to purchase Firm Shares and the aggregate number of Firm Shares with respect to which such default occurs is more than one-tenth of the aggregate number of Firm Shares to be purchased on such date, and arrangements satisfactory to ▇▇▇▇▇ and the Company for the purchase of such Firm Shares are not made within 36 hours after such default, this Agreement shall terminate without liability on the part of any non-defaulting Underwriter or the Company. In any such case either ▇▇▇▇▇ or the Company shall have the right to postpone the Closing Date, but in no event for longer than seven days, in order that the required changes, if any, in the Registration Statement, in the Disclosure Package, in the Prospectus or in any other documents or arrangements may be effected. If, on an Option Closing Date, any Underwriter or Underwriters shall fail or refuse to purchase Additional Shares and the aggregate number of Additional Shares with respect to which such default occurs is more than one-tenth of the aggregate number of Additional Shares to be purchased on such Option Closing Date, the non-defaulting Underwriters shall have the option to (i)(i) terminate their obligation hereunder to purchase the Additional Shares to be sold on such Option Closing Date or (ii)(ii) purchase not less than the number of Additional Shares that such non-defaulting Underwriter would have been obligated to purchase in the absence of such default. Any action taken under this paragraph shall not relieve any defaulting Underwriter from liability in respect of any default of such Underwriter under this Agreement.
11. Representations and Indemnities to Survive. The respective agreements, representations, warranties, indemnities and other statements of the Company, the Partnership and the Underwriters set forth or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation made by or on behalf of any Underwriter or the Company or any of the officers, trustees, directors, employees, agents or controlling persons referred to in Section 8 hereof, and will survive delivery of and payment for the Shares. The provisions of Sections 7 and 8 hereof shall survive the termination or cancellation of this Agreement.
12. Entire Agreement. (a)(a) This Agreement, together with any contemporaneous written agreements and any prior written agreements (to the extent not superseded by this Agreement) that relate to the offering of the Shares, represents the entire agreement between the Company, on the one hand, and the Underwriters, on the other, with respect to the preparation of any Preliminary Prospectus, the Disclosure Package, the Prospectus, the conduct of the offering, and the purchase and sale of the Shares.
(b) The Company acknowledges that in connection with the offering of the Shares: (i)(i) the Underwriters have acted at arm’s length, are not agents of, and owe no fiduciary duties to, the Company or any other person; (ii)(ii) the Underwriters owe the Company only those duties and obligations set forth in this Agreement and prior written agreements (to the extent not superseded by this Agreement), if any; and (iii)(iii) the Underwriters may have interests that differ from those of the Company. The Company waives to the full extent permitted by applicable law any claims it may have against the Underwriters arising from an alleged breach of fiduciary duty in connection with the offering of the Shares.
35
13. Counterparts. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.
14. Applicable Law. This Agreement shall be governed by and construed in accordance with the internal laws of the State of Illinois.
15. Headings. The headings of the sections of this Agreement have been inserted for convenience of reference only and shall not be deemed a part of this Agreement.
16. Notices. All communications hereunder shall be in writing and effective only upon receipt mailed or sent to Baird at ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co. Incorporated, Regus Business Center, Tysons Galleria, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Fax: (703) 821‑5759, Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇., with a copy to the Legal Department, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co. Incorporated, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Fax: (414) 298‑7800; and if to the Company shall be delivered, mailed or sent to ▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, Fax: (701) 838 ‑ 7785, with a copy to 2100 IDS Center, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Fax: (612) 321‑2288.
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| Very truly yours, | |
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By: /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ |
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ |
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Senior Vice President & Chief Operating Officer |
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IRET PROPERTIES |
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By: /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ |
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ |
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Senior Vice President & Chief Operating Officer |
Accepted as of the date hereof
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & CO. INCORPORATED
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co. Incorporated
By:/s/▇▇▇▇ ▇▇▇▇▇▇▇
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
For itself and as Representative of the other
Underwriters named on Schedule I hereto.
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|
Underwriter |
Number of Firm Shares |
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co. Incorporated............................................................................................................................................... |
3,300,000 |
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▇.▇. ▇▇▇▇▇▇▇▇ & Co........................................................................................................................................................................ |
2,100,000 |
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J.J.B. ▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇, Inc......................................................................................................................................................... |
600,000 |
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Total:.......................................................................................................................................................................................... |
6,000,000 |
SCHEDULE II
Issuer Free Writing Prospectuses
None.
SCHEDULE III
Free Writing Prospectuses
None.
SCHEDULE IV
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Number of Shares to be Sold: |
6,000,000 |
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Offering size: |
$61,200,000 |
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Estimated net proceeds to the Company (after underwriting discounts and commissions and offering expenses): |
$57,600,000 |
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Price per share: |
$10.20 |
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Underwriting discount and commissions per share: |
$0.561 |
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Trade date: |
October 17, 2007 |
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Closing date: |
October 23, 2007 |
SCHEDULE V
Form of Opinion of Fulbright & ▇▇▇▇▇▇▇▇, LLP
The Company has the requisite power and authority to execute and to perform its obligations under the Underwriting Agreement.
Each of the Company and the Partnership is duly qualified or licensed to do business and is in good standing as a foreign corporation in the jurisdictions set forth opposite its name on Exhibit A hereto. Each Subsidiary is duly qualified to do business and is in good standing as a foreign corporation in the jurisdictions set forth opposite its name on Exhibit A hereto.
The form of certificate representing the Company’s Common Shares complies in all material respects with any applicable requirements of NASDAQ Marketplace Rules.
The execution, delivery and performance of the Underwriting Agreement by the Company and the transactions contemplated in the Underwriting Agreement (including the issuance by the Company of the Common Shares and the use of proceeds from the sale of the Common Shares as described in the Disclosure Package and the Prospectus under the caption “Use of Proceeds”): (a) do not require any consent, approval, authorization, license or exemption by, or order of or filing by the Company or the Partnership with, any governmental authority, except such as has been made or obtained under the Securities Act, and except as may be required under the securities or Blue Sky laws of any foreign jurisdiction or of any state or other jurisdiction of the United States, as to which such counsel need express no opinion; (b) will not violate (i) the provisions of the Organizational Documents of the Company, (ii) the provisions of the Certificate of Limited Partnership or the Partnership Agreement of the Partnership or (iii) the provisions of the Organizational Documents of any Subsidiary; (c) to such counsel’s knowledge will not violate any applicable law, statute or regulation, or any judgment, decree or order known to such counsel of any court, governmental or regulatory agency or body or arbitrator having jurisdiction over the Company or any Subsidiary or any of their respective properties or assets; and (d) to such counsel’s knowledge, will not result in a breach of, or default under, any contract, agreement or instrument to which the Company, the Partnership or any Subsidiary is a party.
To such counsel’s knowledge, the Company is not in default under any of its Organizational Documents.
The Underwriting Agreement has been duly authorized, executed and delivered by the Company.
The Registration Statement has been declared effective under the Securities Act. Any required filing of the Prospectus pursuant to Rule 424(b) has been made in the manner and within the time period required by Rule 424(b); any required filing of each Issuer Free Writing Prospectus pursuant to Rule 433 has been made in the manner and within the time period required by Rule 433(d). To such counsel’s knowledge, (i) no stop order suspending the effectiveness of the Registration Statement has been issued under the Securities Act and (ii) no proceedings for that purpose have been instituted or are pending or threatened by the Commission.
The Common Shares have been approved for listing, pursuant to the filing with NASDAQ of a “Notification Form: Listing of Additional Shares,” on the NASDAQ Global Select Market.
The statements set forth under the headings captioned “Description of Common Shares,” “Description of Preferred Shares,” “Risk Factors - Certain Provisions of our Articles of Amendment and Third Restated Declaration of Trust may limit a change in control and deter a takeover,” “— We may issue additional classes or series of our shares of beneficial interest with the rights and preferences that are superior to the rights and preferences of our common shares,” (contained in the Form 10-K filed on July 16, 2007) “Item 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year,” (contained in the Form 8-K filed on May 16, 2007) and “Item 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year” (contained in the Form 8-K filed on September 19, 2007) in the Disclosure Package and the Prospectus, insofar as such statements contain description of laws, rules or regulations, and insofar as they describe the terms of agreements or the Organizational Documents, have been reviewed by such counsel and fairly present the information called for with respect to such legal matters and documents in all material respects.
The Company is not, and after giving effect to the issuance of the Common Shares and the application of the proceeds thereof as described in the Disclosure Package and the Prospectus will not be, an “investment company” as such term is defined in the Investment Company Act of 1940, as amended.
To such counsel’s knowledge, (i) there are no legal or governmental proceedings pending or threatened to which the Company, the Partnership or any of the Subsidiaries is a party or to which any of the properties of the Company or any of its Subsidiaries is subject that are required to be described in the Registration Statement, Disclosure Package or the Prospectus that have not been so described; and (ii) there are no statutes, regulations, contracts or other documents that are required to be described in the Registration Statement, the Disclosure Package or the Prospectus or to be filed as exhibits to the Registration Statement that have not been so described or filed as required.
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To such counsel’s knowledge, there are no business relationships or related-party transactions involving the Company or any Subsidiary that are required to be described in the Disclosure Package or Prospectus that have not been so described.
The Registration Statement, including without limitation the Rule 430B Information, the Disclosure Package and the Prospectus, excluding the documents incorporated by reference therein, and each amendment or supplement to the Registration Statement and the Disclosure Package, excluding the documents incorporated by reference therein, as of their respective effective or issue dates (including without limitation each deemed effective date with respect to the Underwriters pursuant to Rule 430B(f)(2) of the Securities Act Regulations), (other than financial statements and notes and supporting schedules included therein or omitted therefrom, as to which counsel expresses no opinion) appear on their face to comply as to form in all material respects with the applicable requirements of the Securities Act and the rules and regulations of the Commission thereunder.
The documents incorporated by reference in the Disclosure Package and the Prospectus (other than the financial statements, notes and supporting schedules and other information of a financial, statistical or accounting nature included or incorporated by reference therein, included therein or omitted therefrom, as to which counsel expresses no opinion), when they became effective or were filed with the Commission, as the case may be, each appear on their face to comply as to form in all material respects with the applicable requirements of the Exchange Act and the rules and regulations of the Commission thereunder.
A statement of fact (but not an opinion), which may be set forth in a separate letter, that, on the basis of information obtained as a result of discussions and meetings with officers and employees of the Company, Baird and the independent public accountants for the Company in connection with the preparation and review of the Registration Statement and Prospectus, and the examination of other information and documents requested by such counsel, nothing has come to the attention of such counsel that causes such counsel to believe that (i) the Registration Statement (except for financial statements, notes and schedules and other financial and accounting data included or incorporated by reference therein or omitted therefrom, as to which counsel makes no statement), at the time such Registration Statement became effective, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading; or that the Registration Statement, including the Rule 430B Information (except for financial statements, notes and schedules and other financial and accounting data included or incorporated by reference therein or omitted therefrom, as to which counsel makes no statement), at each deemed effective date with respect to the Underwriters pursuant to Rule 430B(f)(2) of the Securities Act Regulations, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading; (ii) as of the Time of Sale, the Disclosure Package (except for financial statements and schedules and other financial and accounting data included or incorporated by reference therein or omitted therefrom, as to which counsel makes no statement) contained an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; or (iii) the Prospectus (except for
3
financial statements and schedules and other financial data included or incorporated by reference therein or omitted therefrom, as to which counsel makes no statement), at the time the Prospectus was issued or at the Closing Date, included or includes an untrue statement of a material fact or omitted or omits to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.
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SCHEDULE VI
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, P.C.
The Company has been duly organized and is validly existing and in good standing as a real estate investment trust under the laws of the State of North Dakota.
The Partnership has been duly formed and is validly existing as a partnership and in good standing under the laws of the State of North Dakota.
Each of the Company and the Partnership has the requisite power and authority to conduct its business and to own, lease and operate its properties as such business and properties are described in the Disclosure Package and the Prospectus.
Each of the entities listed on Exhibit A attached hereto (each such entity, a “Subsidiary” and all such entities, the “Subsidiaries”) is validly existing as a corporation, limited liability company, or limited partnership, and in good standing under the laws of its jurisdiction of organization as set forth opposite its name on Exhibit A attached hereto.
Each of the Subsidiaries has the corporate, limited partnership power or limited liability company power and authority, as the case may be, to conduct its business and to own, lease and operate its properties as such business and properties are described in the Disclosure Package and the Prospectus.
The issued and outstanding units of partnership interest or membership interests, as applicable, of the Partnership and each Subsidiary have been duly authorized and validly issued and, to such counsel’s knowledge, are fully paid and nonassessable. Except as set forth on Exhibit B, all of such ownership interests are owned, directly or indirectly, by the Company and are, to such counsel’s knowledge, free and clear of any security interests, liens, encumbrances or claims.
The form of certificate representing the Company’s Common Shares complies in all material respects with the applicable requirements of the North Dakota Business Corporation Act.
The Underwriting Agreement has been duly authorized by all necessary acts of the Company. The Common Shares to be issued and sold by the Company pursuant to the Underwriting Agreement have been duly authorized and, when issued in accordance with the Underwriting Agreement against payment of the consideration set forth therein, will be validly issued, fully paid and non-assessable, and will not be subject to any preemptive right, co-sale right, right of first refusal, registration rights or similar contractual right known to such counsel.
The execution, delivery and performance of the Underwriting Agreement by the Company and the transactions contemplated in the Underwriting Agreement (including the issuance by the
5
Company of the Common Shares and the use of proceeds from the sale of the Common Shares as described in the Prospectus under the caption “Use of Proceeds”): (a) will not violate (i) the provisions of the Organizational Documents of the Company, (ii) the provisions of the Certificate of Limited Partnership or the Partnership Agreement of the Partnership, or (iii) the provisions of the Organizational Documents of any Subsidiary; (b) to such counsel’s knowledge will not violate any applicable law, statute or regulation, or any judgment, decree or order known to such counsel of any court, governmental or regulatory agency or body or arbitrator having jurisdiction over the Company or any Subsidiary or any of their respective properties or assets; and (c) to such counsel’s knowledge, will not result in a breach of, or default under, any contract, agreement or instrument to which the Company, the Partnership or any Subsidiary is a party.
The descriptions of law and the legal conclusions contained in the Disclosure Package and the Prospectus under the headings captioned “Additional Federal Income Tax Considerations” and “Certain Tax Considerations” are correct in all material respects, and the discussions thereunder fairly summarize the United States federal income tax considerations that are likely to be material to a holder of the Common Shares.
Commencing with the Company’s taxable year ended April 30, 2000 through April 30, 2007, the Company has been organized and has operated in conformity with the requirements for qualification and taxation as a “real estate investment trust” under the Code, and its organization and current and proposed method of operation (as represented in the Officer’s Certificate) will enable it to continue to so qualify for its taxable year ending April 30, 2008 and thereafter.
The Partnership has, since its formation in 1997, been taxed as a partnership for federal income tax purposes, and not as an association or a publicly traded partnership taxable as a corporation, and will continue to be taxed as a partnership, and not as an association or publicly traded partnership taxable as a corporation, for its taxable year ending April 30, 2008 and thereafter.
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EXHIBIT A
FORM OF LOCK-UP LETTER
TO BE SIGNED BY
OFFICERS, TRUSTEES AND CERTAIN SHAREHOLDERS
____________, 2007
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & CO. INCORPORATED
_______________________________________
_______________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co. Incorporated
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
The undersigned understands that ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co. Incorporated (“Baird”), as manager and representative of a group of Underwriters, proposes to enter into an Underwriting Agreement (the “Underwriting Agreement”) with Investors Real Estate Trust, a North Dakota real estate investment trust (the “Company”), providing for the public offering (the “Public Offering”) by Baird, as the representative of the several underwriters listed on Schedule I of the Underwriting Agreement (the “Underwriters”), of ___ common shares (the “Shares”) of beneficial interest, no par value per share, of the Company (the “Common Shares”).
To induce the Underwriters to participate in the Public Offering and to continue their efforts in connection with the Public Offering, the undersigned hereby agrees that, without the prior written consent of Baird, it will not, during the period commencing on the date hereof and ending 90 days after the date of the final prospectus relating to the Public Offering (the “Restricted Period”), (1) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any Common Shares or any securities convertible into or exercisable or exchangeable for Common Shares, (2) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Common Shares whether any such transaction described in clause (1) or (2) above is to be settled by delivery of Common Shares or such other securities, in cash or otherwise, (3) file any registration statement with the Commission relating to the offering of any Common Shares or any securities convertible into or exercisable or exchangeable for Common Shares, or (4) publicly announce an intention to effect any transaction specified in clause (1), (2) or (3). The foregoing sentence shall not apply to (a) transactions relating to Common Shares or other securities acquired in open market transactions after the completion of the Public Offering, provided that no filing under Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) shall be required or shall be voluntarily made in
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connection with subsequent sales of Common Shares or other securities acquired in such open market transactions, (b) transfers of Common Shares or any security convertible into Common Shares as a bona fide gift, or (c) distributions of Common Shares or any security convertible into Common Shares to limited partners or stockholders of the undersigned; provided that in the case of any transfer or distribution pursuant to clause (b) or (c), (i) each donee or distributee shall sign and deliver a lock‑up letter substantially in the form of this letter and (ii) no filing under Section 16(a) of the Exchange Act, reporting a reduction in beneficial ownership of Common Shares, shall be required or shall be voluntarily made during the restricted period referred to in the foregoing sentence. In addition, the undersigned agrees that, without the prior written consent of Baird, it will not, during the Restricted Period, make any demand for or exercise any right with respect to, the registration of any Common Shares or any security convertible into or exercisable or exchangeable for Common Shares. The undersigned also agrees and consents to the entry of stop transfer instructions with the Company’s transfer agent and registrar against the transfer of the undersigned’s Common Shares, except in compliance with the foregoing restrictions.
If:
(1) during the last 17 days of the Restricted Period, the Company issues an earnings release or material news or a material event relating to the Company occurs; or
(2) prior to the expiration of the Restricted Period, the Company announces that it will release earnings results during the 16‑day period beginning on the last day of the restricted period;
then the restrictions imposed by this agreement shall continue to apply until the expiration of the 18‑day period beginning on the issuance of the earnings release or the occurrence of the material news or material event.
The undersigned shall not engage in any transaction that may be restricted by this agreement during the 34‑day period beginning on the last day of the Restricted Period unless the undersigned requests and receives prior written confirmation from the Company or Baird that the restrictions imposed by this agreement have expired.
The undersigned understands that the Company and the Underwriters are relying upon this agreement in proceeding toward consummation of the Public Offering. The undersigned further understands that this agreement is irrevocable and shall be binding upon the undersigned’s heirs, legal representatives, successors and assigns.
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Whether or not the Public Offering actually occurs depends on a number of factors, including market conditions. Any Public Offering will only be made pursuant to an Underwriting Agreement, the terms of which are subject to negotiation between the Company and the Underwriters.
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