5,200,000 Shares Essex Property Trust, Inc. Series G Cumulative Convertible Preferred Stock Underwriting Agreement dated July 21, 2006
EXHIBIT
1.1
5,200,000
Shares
Essex
Property Trust, Inc.
Series
G Cumulative Convertible Preferred Stock
dated
July 21, 2006
Table
of
Contents
|
Section
1. Representations and Warranties of the Company
|
2
|
|
(a)
Compliance with Registration Requirements
|
2
|
|
(b)
Disclosure Package
|
3
|
|
(c)
Company Not Ineligible Issuer
|
3
|
|
(d)
Issuer Free Writing Prospectuses
|
3
|
|
(e)
Offering Materials Furnished to Underwriter
|
3
|
|
(f)
Distribution of Offering Material By the Company
|
3
|
|
(g)
The Underwriting Agreement
|
4
|
|
(h)
Authorization of the Preferred Shares
|
4
|
|
(i)
Authorization of the Conversion Shares
|
4
|
|
(j)
No Applicable Registration or Other Similar Rights
|
4
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|
(k)
No Material Adverse Change
|
4
|
|
(l)
Independent Accountants
|
4
|
|
(m)
Preparation of the Financial Statements
|
5
|
|
(n)
Incorporation and Good Standing of the Company and its
Subsidiaries
|
5
|
|
(o)
Capital Stock Matters
|
5
|
|
(p)
Non-Contravention of Existing Instruments; No Further Authorizations
or
Approvals Required
|
6
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|
(q)
No Material Actions or Proceedings
|
6
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|
(r)
All Necessary Permits, etc
|
7
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|
(s)
Tax Law Compliance
|
7
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|
(t)
Company is a REIT
|
7
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|
(u)
Company Not an “Investment Company"
|
7
|
|
(v)
Insurance
|
7
|
|
(w)
No Price Stabilization or Manipulation
|
7
|
|
(x)
Related Party Transactions
|
8
|
|
(y)
Exchange Act Compliance
|
8
|
|
(z)
Earnings Statement
|
8
|
|
(aa)
No Unlawful Contributions or Other Payments
|
8
|
|
(bb)
Internal Controls and Procedures
|
8
|
|
(cc)
No Material Weakness in Internal Controls
|
8
|
|
(dd)
Disclosure Controls
|
8
|
|
(ee)
Title to Properties
|
9
|
|
(ff)
Title Insurance
|
9
|
|
(gg)
No Convertible Mortgages
|
9
|
|
(hh)
Valid Partnerships
|
9
|
|
(ii)
Hazardous Materials
|
10
|
|
(jj)
Compliance with Environmental Laws
|
10
|
|
(kk)
Periodic Review of Costs of Environmental Compliance
|
11
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|
(ll)
Brokers
|
11
|
|
(mm)
No Outstanding Loans or Other Indebtedness
|
11
|
|
(nn)
Compliance with Laws
|
11
|
|
Section
2. Purchase, Sale and Delivery of the Preferred
Shares
|
11
|
|
|
Section
3. Additional Covenants of the Company
|
13
|
|
|
(a)
Underwriter’s Review of Proposed Amendments and
Supplements
|
13
|
|
|
(b)
Securities Act Compliance
|
13
|
|
|
(c)
Exchange Act Compliance
|
13
|
|
i
|
(d)
Amendments and Supplements to the Prospectus and Other Securities
Act
Matters
|
13
|
|
|
(e)
Permitted Free Writing Prospectuses
|
14
|
|
|
(f)
Copies of any Amendments and Supplements to the Prospectus
|
14
|
|
|
(g)
Blue Sky Compliance
|
14
|
|
|
(h)
Use of Proceeds
|
14
|
|
|
(i)
Available Conversion Shares
|
15
|
|
|
(j)
Conversion Price
|
15
|
|
|
(k)
Transfer Agent
|
15
|
|
|
(l)
Earnings Statement
|
15
|
|
|
(m)
Periodic Reporting Obligations
|
15
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|
|
(n)
Listing
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15
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|
|
(o)
Company to Provide Interim Financial Statements
|
15
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|
|
(p)
Agreement Not to Offer or Sell Additional Securities
|
15
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|
|
(q)
Future Reports to the Underwriter
|
15
|
|
|
(r)
Investment Limitation
|
16
|
|
|
(s)
No Manipulation of Price
|
16
|
|
|
(t)
Existing Lock-Up Agreement
|
16
|
|
|
(u)
Exchange Act Compliance
|
16
|
|
|
Section
4. Payment of Expenses
|
14
|
|
|
Section
5. Conditions of the Obligations of the
Underwriter
|
17
|
|
|
(a)
Accountants’ Comfort Letter
|
17
|
|
|
(b)
Compliance with Registration Requirements; No Stop Order; No
Objection
from NASD
|
17
|
|
|
(c)
No Material Adverse Change or Ratings Agency Change
|
17
|
|
|
(d)
Opinion of Counsel for the Company
|
18
|
|
|
(e)
Opinion of Counsel for the Underwriter
|
18
|
|
|
(f)
Officers’ Certificate
|
18
|
|
|
(g)
Bring-down Comfort Letter
|
18
|
|
|
(h)
Lock-Up Agreement from Certain Securityholders of the
Company
|
18
|
|
|
(i)
Additional Documents
|
19
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|
|
Section
6. Reimbursement of Underwriter’s Expenses.
|
19
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|
Section
7. [Intentionally Left Blank].
|
19
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Section
8. Indemnification.
|
19
|
|
(a)
Indemnification of the Underwriter.
|
19
|
|
(b)
Indemnification of the Company, its Directors and
Officers.
|
20
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|
(c)
Notifications and Other Indemnification Procedures.
|
21
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|
(d)
Settlements.
|
21
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|
Section
9. Contribution.
|
22
|
|
Section
10. [Intentionally Left Blank].
|
23
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|
Section
11. Termination of this Agreement.
|
23
|
|
Section
12. No Advisory or Fiduciary Responsibility.
|
23
|
|
Section
13. Representations and Indemnities to Survive
Delivery.
|
24
|
|
Section
14. Notices.
|
24
|
|
Section
15. Successors.
|
25
|
ii
|
Section
16. Partial Unenforceability.
|
25
|
|
Section
17. Governing Law Provisions.
|
25
|
|
(a)
Governing Law.
|
25
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|
(b)
Consent to Jurisdiction.
|
25
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|
(c)
Waiver of Immunity.
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25
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|
Section
18. General Provisions.
|
25
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iii
July
21,
▇▇▇▇
▇▇▇▇
▇▇
▇▇▇▇▇▇▇ SECURITIES LLC
▇
▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies
and Gentlemen:
Essex
Property Trust, Inc., a Maryland corporation (the “Company), proposes to issue
and sell to Banc of America Securities LLC (“BAS”) (the “Underwriter”) an
aggregate of 5,200,000 shares (the “Firm Preferred Shares”) of its 4.875% Series
G Cumulative Convertible Preferred Stock (the “Preferred Stock”). In addition,
the Company has granted to the Underwriter an option to purchase up to an
additional 780,000 shares (the “Optional Preferred Shares”) of Preferred Stock,
as provided in Section 2. The Firm Preferred Shares and, if and to the
extent such option is exercised, the Optional Preferred Shares are collectively
called the “Preferred Shares.”
The
Preferred Shares will be convertible on the terms, and subject to the conditions
set forth in the certificate of designation, into shares of common stock, par
value $0.0001 per share, of the Company (the “Common Stock”). As used herein,
“Conversion Shares” means the Common Stock to be received by the holders of the
Preferred Shares upon conversion of the Preferred Shares pursuant to the terms
of the Preferred Shares.
The
Company has prepared and filed with the Securities and Exchange Commission
(the
“Commission”) a registration statement on Form S-3
(File
No.333-108336), which contains a base prospectus (the “Base Prospectus”) to be
used in connection with the public offering and sale of the Preferred Shares.
Such registration statement, as amended, including the financial statements,
exhibits and schedules thereto, in the form in which it was declared effective
by the Commission including
any required information deemed to be a part thereof at the time of
effectiveness pursuant to Rule 430B under the Securities Act of 1933, and the
rules and regulations promulgated thereunder (collectively, the “Securities
Act”), or the Securities Exchange Act of 1934 and the rules and regulations
promulgated thereunder (collectively, the “Exchange Act”), is called the
“Registration Statement.” Any registration statement filed by the Company
pursuant to Rule 462(b) under the Securities Act is called the “Rule 462(b)
Registration Statement”, and from and after the date and time of filing of the
Rule 462(b) Registration Statement the term “Registration Statement” shall
include the Rule 462(b) Registration Statement. Any preliminary prospectus
supplement to the Base Prospectus that describes the Preferred Shares and the
offering thereof and is used prior to filing of the final Prospectus is called,
together with the Base Prospectus, a “preliminary prospectus.” The term
“Prospectus” shall mean the final prospectus relating to the Preferred Shares
that is first filed pursuant to Rule 424(b) after the date and time that this
Agreement is executed and delivered by the parties hereto (the “Execution
Time”). Any reference herein to the Registration Statement, any preliminary
prospectus or the Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the Securities Act; any reference to any amendment or supplement to any
preliminary prospectus or the Prospectus shall be deemed to refer to and include
any documents filed after the date of such preliminary prospectus or
Prospectus,
as the case may be, under the Exchange Act, and incorporated by reference in
such preliminary prospectus or Prospectus, as the case may be; and any reference
to any amendment to the Registration Statement shall be deemed to refer to
and
include any annual report of the Company filed pursuant to Section 13(a) or
15(d) of the Exchange Act after the effective date of the Registration Statement
that is incorporated by reference in the Registration Statement. All references
in this Agreement to the Registration Statement, the Rule 462(b) Registration
Statement, a preliminary prospectus, the Prospectus or any amendments or
supplements to any of the foregoing, shall include any copy thereof filed with
the Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval
System (“▇▇▇▇▇”). All references in the Agreement to financial statements and
schedules and other information which is “contained,” “included” or “stated” in
the Registration Statement or Prospectus (and all other references of like
import) shall be deemed to mean and include all such financial statements and
schedules and other information which is or is deemed to be incorporated by
reference in the Registration Statement, any preliminary prospectus or the
Prospectus, as the case may be.
Section
1. Representations
and Warranties of
the Company.
The
Company hereby represents and warrants to the Underwriter as
follows:
(a)
Compliance
with Registration Requirements. The
Registration Statement and any Rule 462(b) Registration Statement have been
declared effective by the Commission under the Securities Act. The Company
has
complied to the Commission’s satisfaction with all requests of the Commission
for additional or supplemental information. No stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b) Registration
Statement is in effect and no proceedings for such purpose have been instituted
or are pending or, to the best knowledge of the Company, are contemplated or
threatened by the Commission.
Each
preliminary prospectus and the Prospectus when filed complied and, as amended
or
supplemented, if applicable, will comply in all material respects with the
Securities Act and the rules thereunder and, if filed by electronic transmission
pursuant to ▇▇▇▇▇ (except as may be permitted by Regulation S-T under the
Securities Act), was identical to the copy thereof delivered to the Underwriters
for use in connection with the offer and sale of the Preferred Shares. Each
of
the Registration Statement, any Rule 462(b) Registration Statement and any
post-effective amendment thereto, at the time it became effective and at the
date hereof, complied and, as of each of the date hereof, the First Closing
Date
(as defined below) and Second Closing Date (as defined below), if any, will
comply in all material respects with the Securities Act and did not and, as
of
each of the First Closing Date (as defined below) and Second Closing Date (as
defined below), if any, will not contain any untrue statement of a material
fact
or omit to state a material fact required to be stated therein or necessary
in
order to make the statements therein not misleading. The Prospectus,
as
amended or supplemented, as of its date, at the date hereof, at the time of
any
filing pursuant to Rule 424(b), at the First Closing Date (as defined below)
and
Second Closing Date (as defined below), if any, did not and will not contain
any
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances
under
which they were made, not misleading. The representations and warranties set
forth in the two immediately preceding sentences do not apply to statements
in
or omissions from the Registration Statement, any Rule 462(b) Registration
Statement or any post-effective amendment thereto, or the Prospectus, or any
amendments or supplements thereto, made in reliance upon and in conformity
with
information relating to the Underwriter furnished to the Company in writing
by
the Underwriter expressly for use therein, it being understood and agreed that
the only such information furnished by or on behalf of the Underwriter consists
of the information described in Section 8 hereof. There are no contracts
2
(b)
Disclosure
Package. The
term
“Disclosure Package” shall mean (i) the Base Prospectus, and the preliminary
prospectus supplement, as amended or supplemented, (ii) the issuer free writing
prospectuses as defined in Rule 433 of the Securities Act (each, an “Issuer Free
Writing Prospectus”), if any, identified in Schedule A hereto and (iii) any
other free writing prospectus that the parties hereto shall hereafter expressly
agree in writing to treat as part of the Disclosure Package. The Disclosure
Package does 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
the light of the circumstances under which they were made, not misleading.
The
preceding sentence does not apply to statements in or omissions from the
Disclosure Package based upon and in conformity with written information
furnished to the Company by the Underwriter specifically for use therein, it
being understood and agreed that the only such information furnished by or
on
behalf of the Underwriter consists of the information described as such in
Section 8 hereof.
(c)
Company
Not Ineligible Issuer. (i)
At
the earliest time after the filing of the Registration Statement relating to
the
Preferred Shares that the Company or another offering participant made a
bona
fide
offer
(within the meaning of Rule 164(h)(2)) of the Securities Act and (ii) as of
the
date of the execution and delivery of this Agreement (with such date being
used
as the determination date for purposes of this clause (ii)), the Company was
not
and is not an Ineligible Issuer (as defined in Rule 405 of the Securities Act),
without taking account of any determination by the Commission pursuant to Rule
405 of the Securities Act that it is not necessary that the Company be
considered an Ineligible Issuer.
(d)
Issuer
Free Writing Prospectuses. Each
Issuer Free Writing Prospectus, as of its issue date and at all subsequent
times
through the completion of the offering or until any earlier date that the
Company notified or notifies the Underwriter as described in the next sentence,
did not, does not and will not include any information that conflicted,
conflicts or will conflict with the information contained in the Registration
Statement. If at any time following issuance of an Issuer Free Writing
Prospectus there occurred or occurs an event or development as a result of
which
such Issuer Free Writing Prospectus conflicted or would conflict with the
information contained in the Registration Statement, the Company has promptly
notified or will promptly notify the Underwriter and has promptly amended or
will promptly amend or supplement, at its own expense, such Issuer Free Writing
Prospectus to eliminate or correct such conflict. The foregoing two sentences
do
not apply to statements in or omissions from any Issuer Free Writing Prospectus
based upon and in conformity with written information furnished to the Company
by the Underwriter specifically for use therein,
it being
understood and agreed that the only such information furnished by the
Underwriter consists of the information described as such in Section 8
hereof.
(e)
Offering
Materials Furnished to Underwriter. The
Company has delivered to the Underwriter one
complete
copy of the Registration Statement and a copy of each consent and certificate
of
experts filed as a part thereof, and conformed copies of the Registration
Statement (without exhibits), any preliminary prospectus, the Prospectus, any
Issuer Free Writing Prospectus reviewed and consented to by the Underwriter
or
included on Schedule A hereto, each as amended or supplemented, in such
quantities and at such places as the Underwriter has reasonably
requested.
(f)
Distribution
of Offering Material By the Company. The
Company has not distributed and will not distribute, prior to the later of
the
Second Closing Date (as defined below)
3
and
the
completion of the Underwriter’s distribution of the Preferred Shares, any
offering material in connection with the offering and sale of the Preferred
Shares other than a preliminary prospectus, the Prospectus, any Issuer Free
Writing Prospectus reviewed and consented to by the Underwriter or included
in
Schedule A hereto or the Registration Statement.
(g)
The
Underwriting Agreement. This
Agreement has been duly authorized, executed and delivered by, and is a valid
and binding agreement of, the Company, enforceable in accordance with its terms,
except as rights to indemnification hereunder may be limited by applicable
law
and except as the enforcement hereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting the
rights and remedies of creditors or by general equitable
principles.
(h)
Authorization
of the Preferred
Shares. The
Preferred Shares to be purchased by the Underwriter from the Company have been
duly authorized for issuance and sale pursuant to this Agreement and, when
issued and delivered by the Company pursuant to this Agreement, will be validly
issued, fully paid and nonassessable.
(i)
Authorization
of the Conversion
Shares. The
Conversion Shares initially issuable upon conversion of the Preferred Shares
have been duly authorized and reserved and, when issued upon conversion of
the
Preferred Shares in accordance with the terms of the Preferred Shares, will
be
validly issued, fully paid and nonassessable, and the issuance of such shares
will not be subject to any preemptive or similar rights . The rights (the
“Rights”), if any, evidenced by the Conversion Shares to the extent provided in
the Rights Agreement dated as of November 11, 1998, as amended as of December
13, 2000 and February 28, 2002 (the “Rights Agreement”), between the Company and
BankBoston N.A. as rights agent, have been duly authorized and when issued
upon
conversion of the Preferred Shares in accordance with the terms thereof will
be
validly issued..
(j)
No
Applicable Registration or Other Similar Rights. There
are
no persons with registration or other similar rights to have any equity or
debt
securities registered for sale under the Registration Statement or included
in
the offering contemplated by this Agreement, except for such rights as have
been
duly waived.
(k)
No
Material Adverse Change. Except
as
otherwise disclosed in the Disclosure Package and the Prospectus, subsequent
to
the respective dates as of which information is given in the Disclosure Package:
(i) there has been no material adverse change, or any development that
could reasonably be expected to result in a material adverse change, in the
condition, financial or otherwise, or in the earnings, business, operations
or
prospects, whether or not arising from transactions in the ordinary course
of
business, of the Company and its subsidiaries, considered as one entity (any
such change is called a “Material Adverse Change”); (ii) the Company and
its subsidiaries, considered as one entity, have not incurred any material
liability or obligation, indirect, direct or contingent, not in the ordinary
course of business nor entered into any material transaction or agreement not
in
the ordinary course of business; and (iii) there has been no dividend or
distribution of any kind declared, paid or made by the Company, except for
regular quarterly dividends publicly announced by the Company.
(l)
Independent
Accountants. KPMG
LLP,
who have expressed their opinion with respect to the financial statements (which
term as used in this Agreement includes the related notes thereto) and
supporting schedules filed with the Commission or incorporated by reference
as a
part of the Registration Statement and included in the Disclosure Package and
the Prospectus,
4
(m)
Preparation
of the Financial Statements. The
financial statements filed with the Commission as a part of or incorporated
within the Registration Statement and included in the Disclosure Package and
the
Prospectus present fairly the consolidated financial position of the Company
and
its subsidiaries as of and at the dates indicated and the results of their
operations and cash flows for the periods specified. The supporting schedules
included in or incorporated in the Registration Statement present fairly the
information required to be stated therein. Such financial statements and
supporting schedules comply as to form with the applicable accounting
requirements of the Securities Act and have been prepared in conformity with
generally accepted accounting principles as applied in the United States applied
on a consistent basis throughout the periods involved, except as may be
expressly stated in the related notes thereto. No other financial statements
or
supporting schedules are required to be included in or incorporated in the
Registration Statement.
The
financial data set forth or incorporated in each preliminary prospectus and
the
Prospectus under the captions “Ratio of Earnings to Fixed Charges” fairly
present the information set forth therein on a basis consistent with that of
the
audited financial statements contained, incorporated or deemed to be
incorporated in the Registration Statement. The Company’s ratios of earnings to
fixed charges and preferred stock dividends set forth in each preliminary
prospectus and the Prospectus under the caption “Ratio of Earnings to Fixed
Charges” have been calculated in compliance with Item 503(d) of
Regulation S-K under the Securities Act.
(n)
Incorporation
and Good Standing of the Company and its Subsidiaries. The
Company has been duly incorporated and is validly existing as a corporation
in
good standing under the laws of the State of Maryland and is in good standing
with the State Department of Assessments and Taxation of Maryland and has
corporate power and authority to own, lease and operate its properties and
to
conduct its business as described in the Disclosure Package and the Prospectus
and to enter into and perform its obligations under this Agreement. Essex
Portfolio, L.P. is the Company’s only significant subsidiary (as defined in Rule
1-02(w) of Regulation S-X of the Exchange Act) (the “Significant Subsidiary”).
The Significant Subsidiary has been duly organized and is validly existing
as a
partnership in good standing under the laws of the jurisdiction of its
organization and has the requisite power and authority to own, lease and operate
its properties and to conduct its business as described in the Prospectus.
Each
of the Company and the Significant Subsidiary is duly qualified as a foreign
corporation or foreign partnership to transact business and is in good standing
in the State of California and each other jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except for such jurisdictions (other than
the State of California) where the failure to so qualify or to be in good
standing would not, individually or in the aggregate, result in a Material
Adverse Change. All of the issued and outstanding partnership interests of
the
Significant Subsidiary have been duly authorized and validly issued, are fully
paid and nonassessable and the partnership interests owned by the Company are
owned free and clear of any security interest, mortgage, pledge, lien,
encumbrance or claim. The Company does not own or control, directly or
indirectly, any corporation, association or other entity other than the
subsidiaries listed in Exhibit 21.1
to
the Company’s Annual Report on Form 10-K for the fiscal year ended
December 31, 2005 and other than (i) those subsidiaries not required to be
listed on Exhibit 21.1 by Item 601 of Regulation S-K under the
Exchange Act and (ii) those subsidiaries formed since December 31,
2005.
(o)
Capital
Stock Matters. The
capital stock of the Company (including the Common Stock and Preferred Stock)
conform in all material respects to the description thereof contained
5
in
each
of the Disclosure Package and the Prospectus. All of the issued and outstanding
shares of Common Stock and Preferred Stock have been duly authorized and validly
issued, are fully paid and nonassessable and have been issued in compliance
with
federal and state securities laws. None of the outstanding shares of capital
stock of the Company were issued in violation of any preemptive rights, rights
of first refusal or other similar rights to subscribe for or purchase securities
of the Company. There are no authorized or outstanding options, warrants,
preemptive rights, rights of first refusal or other rights to purchase, or
equity or debt securities convertible into or exchangeable or exercisable for,
any capital stock of the Company or any of its subsidiaries other than those
accurately described in all material respects in the Disclosure Package and
the
Prospectus. The description of the Company’s stock option, stock bonus and other
stock plans or arrangements, and the options or other rights granted thereunder,
set forth in each of the Disclosure Package and the Prospectus accurately and
fairly presents in all material respects the information required to be shown
with respect to such plans, arrangements, options and rights.
(p)
Non-Contravention
of Existing Instruments; No Further Authorizations or Approvals
Required. Neither
the Company nor any of its subsidiaries is in violation of its charter or
by-laws or is in default (or, with the giving of notice or lapse of time, would
be in default) (“Default”) under any indenture, mortgage, loan or credit
agreement, note, contract, franchise, lease or other instrument to which the
Company or any of its subsidiaries is a party or by which it or any of them
may
be bound, or to which any of the property or assets of the Company or any of
its
subsidiaries is subject (each, an “Existing Instrument”), except for such
Defaults as would not, individually or in the aggregate, result in a Material
Adverse Change. The Company’s execution, delivery and performance of this
Agreement and consummation of the transactions contemplated hereby, by the
Disclosure Package and by the Prospectus (i) have been duly authorized by
all necessary corporate action and will not result in any violation of the
provisions of the charter or by-laws of the Company or any subsidiary,
(ii) will not conflict with or constitute a breach of, or Default under, or
result in the creation or imposition of any lien, charge or encumbrance upon
any
property or assets of the Company or any of its subsidiaries pursuant to, or
require the consent of any other party to, any Existing Instrument, except
for
such conflicts, breaches, Defaults, liens, charges or encumbrances as would
not,
individually or in the aggregate, result in a Material Adverse Change and
(iii) will not result in any violation of any law, administrative
regulation or administrative or court decree applicable to the Company or any
subsidiary. No consent, approval, authorization or other order of, or
registration or filing with, any court or other governmental or regulatory
authority or agency, is required for the Company’s execution, delivery and
performance of this Agreement and consummation of the transactions contemplated
hereby, by the Disclosure Package and by the Prospectus, except such
as
have been obtained or made by the Company and are in full force and effect
under
the Securities Act, applicable state securities or blue sky laws and from the
NASD.
(q)
No
Material Actions or Proceedings. Except
as
disclosed in the Disclosure Package, there are no legal or governmental actions,
suits or proceedings pending or, to the best of the Company’s knowledge,
threatened (i) against or affecting the Company or any of its subsidiaries,
(ii) which has as the subject thereof any officer or director of, or
property owned or leased by, the Company or any of its subsidiaries or
(iii) relating to environmental or discrimination matters, where in any
such case (A) there is a reasonable possibility that such action, suit or
proceeding might be determined adversely to the Company or such subsidiary
and
(B) any such action, suit or proceeding, if so determined adversely, would
reasonably be expected to result in a Material Adverse Change or adversely
affect the consummation of the transactions contemplated by this Agreement.
Except as disclosed in the Disclosure Package, no material labor dispute with
the
6
(r)
All
Necessary Permits, etc. The
Company and each subsidiary possess such valid and current certificates,
authorizations or permits issued by the appropriate state, federal or foreign
regulatory agencies or bodies necessary to conduct their respective businesses,
other than those the failure to possess or own would not result in a Material
Adverse Change, and neither the Company nor any subsidiary has received any
notice of proceedings relating to the revocation or modification of, or
non-compliance with, any such certificate, authorization or permit which, singly
or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, could result in a Material Adverse Change.
(s)
Tax
Law Compliance. The
Company and its consolidated subsidiaries have filed all necessary federal,
state and foreign income, property and franchise tax returns and have paid
all
taxes required to be paid by any of them and, if due and payable, any related
or
similar assessment, fine or penalty levied against any of them except as may
be
being contested in good faith and by appropriate proceedings. The Company has
made adequate charges, accruals and reserves in the applicable financial
statements referred to in Section 1(m)
above
in respect of all federal, state and foreign income, property and franchise
taxes for all periods as to which the tax liability of the Company or any of
its
consolidated subsidiaries has not been finally determined.
(t)
Company
is
a
REIT. Commencing
with the Company’s taxable year beginning January 1, 1994, the Company has
been organized and has operated in conformity with the requirements for
qualification as a “real estate investment trust,” and its organization and
proposed method of operation will enable it to meet the requirements for the
qualification and taxation as a “real estate investment trust” under the
Internal Revenue Code of 1986, as amended (the “Code”).
(u)
Company
Not an “Investment
Company.”
The
Company has been advised of the rules and requirements under the Investment
Company Act of 1940, as amended (the “Investment Company Act”). The Company
is not, and after receipt of payment for the Preferred Shares will not be,
an
“investment company” within the meaning of the Investment Company Act and will
conduct its business in a manner so that it will not become subject to the
Investment Company Act.
(v)
Insurance. Except
as
otherwise described in the Disclosure Package and the Prospectus, each of the
Company and its subsidiaries are insured by insurers of recognized financial
responsibility with policies in such amounts and with such deductibles and
covering such risks as are generally deemed prudent and customary for the
business which it is engaged, including, but not limited to, policies covering
real and personal property owned or leased by the Company and its subsidiaries
against theft, damage, destruction, acts of vandalism and earthquakes. The
Company has no reason to believe that it or any subsidiary will not be able
(i) to renew its existing insurance coverage as and when such policies
expire or (ii) to obtain comparable coverage from similar institutions as
may be necessary or appropriate to conduct its business as now conducted and
at
a cost that would not result in a Material Adverse Change.
(w)
No
Price Stabilization or Manipulation. The
Company has not taken and will not take, directly or indirectly, any action
designed to or that might be reasonably expected to cause or result in
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Preferred Shares.
7
(x)
Related
Party Transactions. There
are
no business relationships or related-party transactions involving the Company
or
any subsidiary or any other person required to be described in the preliminary
prospectus or the Prospectus that have not been described as
required.
(y)
Exchange
Act Compliance. The
documents incorporated or deemed to be incorporated by reference in the
preliminary prospectus and the Prospectus, at the time they were or hereafter
are filed with the Commission, complied and will, as of the First Closing Date
and Second Closing Date, as the case may be, comply in all material respects
with the requirements of the Exchange Act, and, when read together with the
other information in the preliminary prospectus and the Prospectus, at the
time
the Registration Statement and any amendments thereto become effective and
at
the First Closing Date and the Second Closing Date, as the case may be, will
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 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.
(z)
Earnings
Statement. The
Company agrees with the Underwriter to make generally available to its
stockholders as soon as practicable, but in any event not later than
16 months after the date hereof, an earnings statement covering a period of
at least 12 months beginning after the date hereof and otherwise satisfying
Section 11(a) of the Securities Act.
(aa)
No
Unlawful Contributions or Other Payments. Neither
the Company nor any of its subsidiaries nor, to the best of the Company’s
knowledge, any employee or agent of the Company or any subsidiary, has made
any
contribution or other payment to any official of, or candidate for, any federal,
state or foreign office in violation of any law or of the character required
to
be disclosed in the Disclosure Package and the Prospectus
(bb)
Internal
Controls and Procedures. The
Company maintains (i) effective internal control over financial reporting as
defined in Rule 13a-15 under the Exchange Act and (ii) a system of internal
accounting controls sufficient to provide reasonable assurance that (A)
transactions are executed in accordance with management's general or specific
authorizations; (B) transactions are recorded as necessary to permit preparation
of financial statements in conformity with generally accepted accounting
principles and to maintain asset accountability; (C) access to assets is
permitted only in accordance with management's general or specific
authorization; and (D) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken
with
respect to any differences.
(cc)
No
Material Weakness in Internal Controls. Since
the
end of the Company's most recent audited fiscal year, there has been no material
weakness in the Company's internal control over financial reporting (whether
or
not remediated).
(dd)
Disclosure
Controls. The
Company and its subsidiaries maintain an effective system of "disclosure
controls and procedures" (as defined in Rule 13a-15 of the Exchange Act) that
is
designed to ensure that information required to be disclosed by the Company
in
reports that it files or submits under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the Commission's
rules and forms, including controls and procedures designed to ensure that
such
information is accumulated and communicated to the Company's management as
appropriate to allow timely decisions regarding required disclosure. The Company
and its subsidiaries have carried out evaluations of the effectiveness of their
disclosure controls and procedures as required by Rule 13a-15 of the Exchange
Act.
8
(ee)
Title
to Properties. Except
as
otherwise disclosed in the Disclosure Package and the Prospectus and except
as
would not have a material adverse effect on the condition, financial or
otherwise, or on the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise: (i) all properties
and assets described in the Disclosure Package and the Prospectus are owned
with
good and marketable title by the Company, its subsidiaries and/or a joint
venture or partnership in which any such party is a participant (a “Related
Entity”); (ii) all of the leases under which any of the Company, its
subsidiaries or, to the knowledge of the Company, Related Entities holds or
uses
real properties or assets as a lessee are in full force and effect, and neither
the Company, nor any of its subsidiaries or, to the knowledge of the Company,
Related Entities is in material default in respect of any of the terms or
provisions of any of such leases and no claim has been asserted by anyone
adverse to any such party’s rights as lessee under any of such leases, or
affecting or questioning any such party’s right to the continued possession or
use of the leased property or assets under any such leases; (iii) all liens,
charges, encumbrances, claims or restrictions on or affecting the properties
and
assets of any of the Company, its subsidiaries or Related Entities which are
required to be disclosed in the Disclosure Package and the Prospectus are
disclosed therein; (iv) neither the Company, nor any of its subsidiaries or,
to
the knowledge of the Company, Related Entities nor any lessee of any portion
of
any such party’s properties is in default under any of the leases pursuant to
which any of the Company, its subsidiaries or, to the knowledge of the Company,
Related Entities leases its properties and neither the Company, nor any of
its
subsidiaries or Related Entities knows of any event which, but for the passage
of time or the giving of notice, or both, would constitute a default under
any
of such leases; (v) no tenant under any of the leases pursuant to which any
of
the Company, or its subsidiaries or, to the knowledge of the Company, Related
Entities leases its properties has an option or right of first refusal to
purchase the premises demised under such lease; (vi) each of the properties
of
any of the Company or its subsidiaries or to the knowledge of the Company,
Related Entities complies with all applicable codes and zoning laws and
regulations; and (vii) neither the Company nor any of its subsidiaries has
knowledge of any pending or threatened condemnation, zoning change or other
proceeding or action that will in any manner affect the size of, use of,
improvements on, construction on, or access to the properties of any of the
Company, or its subsidiaries or Related Entities.
(ff)
Title
Insurance. Title
insurance in favor of the mortgagee or the Company, its subsidiaries and/or
their Related Entities is maintained with respect to each property owned by
any
such entity in an amount at least equal to (a) the cost of acquisition of such
property or (b) the cost of construction of such property (measured at the
time
of such construction), except, in each case, where the failure to maintain
such
title insurance would not have a material adverse effect on the condition,
financial or otherwise, or on the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one
enterprise.
(gg)
No
Convertible Mortgages. The
mortgages and deeds of trust encumbering the properties and assets described
in
Disclosure Package and the Prospectus are not convertible nor does any of the
Company, or its subsidiaries hold a participating interest therein.
(hh)
Valid
Partnerships. Each
of
the partnership and joint venture agreements to which the Company or any of
its
subsidiaries is a party, and which relates to real property described in the
Disclosure Package and the Prospectus, has been duly authorized, executed and
delivered by such applicable party and constitutes the valid agreement thereof,
enforceable in accordance with its terms, except as limited by (a) the effect
of
bankruptcy, insolvency, reorganization, moratorium or other similar laws now
or
hereafter in effect relating to or affecting the rights or remedies of creditors
or (b) the effect of general principles of equity, whether enforcement is
considered in a proceeding in equity or at law, and the discretion of the court
before which any
9
proceeding
therefor may be brought, and the execution, delivery and performance of any
of
such agreements did not, at the time of execution and delivery, and does not
constitute a breach of, or default under, the charter or bylaws of such party
or
any material contract, lease or other instrument to which such party is a party
or by which its properties may be bound or any law, administrative regulation
or
administrative or court order or decree, except for such breaches or defaults
that would not result in a Material Adverse Change.
(ii)
Hazardous
Materials. Except
as
otherwise described in the Prospectus, none of the Company, or any of its
subsidiaries has any knowledge of (a) the unlawful presence of any hazardous
substances, hazardous materials, toxic substances or waste materials
(collectively, “Hazardous Materials”) on any of the properties owned by it or
the Related Entities, or (b) any unlawful spills, releases, discharges or
disposal, of Hazardous Materials that have occurred or are presently occurring
off such properties as a result of any construction on or operation and use
of
such properties which presence or occurrence would have a material adverse
effect on the condition, financial or otherwise, or on the earnings, business
affairs or business prospects of the Company and its subsidiaries considered
as
one enterprise; and in connection with the construction on or operation and
use
of the properties owned by the Company, its subsidiaries and Related-Entities,
each of the Company, and its subsidiaries represents that, as of the First
Closing Date and the Second Closing Date, if any, it has no knowledge of any
material failure to comply with all applicable foreign local, state and federal
environmental laws, regulations, ordinances and administrative and judicial
orders relating to the generation, recycling, reuse, sale, storage, handling,
transport and disposal of any Hazardous Materials.
(jj)
Compliance
with Environmental Laws. Except
as
otherwise described in the Disclosure Package and Prospectus, and except as
would not, individually or in the aggregate, result in a Material Adverse Change
(i) neither the Company nor any of its subsidiaries is in violation of any
federal, state, local or foreign law or regulation relating to pollution or
protection of human health or the environment (including, without limitation,
ambient air, surface water, groundwater, land surface or subsurface strata)
or
wildlife, including without limitation, laws and regulations relating to
emissions, discharges, releases or threatened releases of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances, petroleum and
petroleum products (collectively, “Materials of Environmental Concern”), or
otherwise relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Materials of Environment Concern
(collectively, “Environmental Laws”), which violation includes, but is not
limited to, noncompliance with any permits or other governmental authorizations
required for the operation of the business of the Company or its subsidiaries
under applicable Environmental Laws, or noncompliance with the terms and
conditions thereof, nor has the Company or any of its subsidiaries received
any
written communication, whether from a governmental authority, citizens group,
employee or otherwise, that alleges that the Company or any of its subsidiaries
is in violation of any Environmental Law; (ii) there is no claim, action or
cause of action filed with a court or governmental authority, no investigation
with respect to which the Company has received written notice, and no written
notice by any person or entity alleging potential liability for investigatory
costs, cleanup costs, governmental responses costs, natural resources damages,
property damages, personal injuries, attorneys’ fees or penalties arising out
of, based on or resulting from the presence, or release into the environment,
of
any Material of Environmental Concern at any location owned, leased or operated
by the Company or any of its subsidiaries, now or in the past (collectively,
“Environmental Claims”), pending or, to the best of the Company’s knowledge,
threatened against the Company or any of its subsidiaries or any person or
entity whose liability for any Environmental Claim the Company or any of its
subsidiaries has retained or assumed either contractually or by operation of
law; and (iii) to the
10
(kk)
Periodic
Review of Costs of Environmental Compliance. The
description set forth under the caption “Possible environmental liabilities” in
Part IA of the Company’s Annual Report on Form 10-K for the year ended
December 31, 2005 accurately describes the Company’s investigation of the
compliance of its properties with Environmental Laws. On the basis of such
review and the amount of its established reserves, the Company has reasonably
concluded that such associated costs and liabilities would not, individually
or
in the aggregate, result in a Material Adverse Change.
(ll)
Brokers. There
is no broker, finder or other party that is entitled to receive from the Company
any brokerage or finder's fee or other fee or commission as a result of any
transactions contemplated by this Agreement.
(mm)
No
Outstanding Loans or Other Indebtedness. Except
as
described in the Prospectus, there
are
no outstanding loans, advances (except normal advances for business expenses
in
the ordinary course of business) or guarantees or indebtedness by the Company
to
or for the benefit of any of the officers or directors of the Company or any
of
the members of any of them.
(nn)
Compliance
with Laws. The
Company has not been advised, and has no reason to believe, that it and each
of
its subsidiaries are not conducting business in compliance with all applicable
laws, rules and regulations of the jurisdictions in which it is conducting
business, except where failure to be so in compliance would not result in a
Material Adverse Change.
Any
certificate signed by an officer of the Company and delivered to the Underwriter
or to counsel for the Underwriter shall be deemed to be a representation and
warranty by the Company to the Underwriter as to the matters set forth
therein.
The
Company acknowledges that the Underwriter and, for purposes of the opinions
to
be delivered pursuant to Section 5 hereof, counsel to the Company and counsel
to
the Underwriter, will rely upon the accuracy and truthfulness of the foregoing
representations and hereby consents to such reliance.
Section
2. Purchase,
Sale and Delivery of the Preferred
Shares.
The
Firm
Preferred Shares.
The
Company agrees to issue and sell to the Underwriter the Firm Preferred Shares
upon the terms herein set forth. On the basis of the representations, warranties
and agreements herein contained, and upon the terms but subject to the
conditions herein set forth, the Underwriter agrees to purchase from the Company
the Firm Preferred Shares. The purchase price per Firm Preferred Share to be
paid by the Underwriter to the Company shall be $24.40 per share.
The
First Closing Date.
Delivery
of certificates for the Firm Preferred Shares to be purchased by the Underwriter
and payment therefor shall be made at the offices of BAS, ▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (or such other place as may be agreed to by the
11
The
Optional
Preferred Shares; the Second Closing Date.
In
addition, on the basis of the representations, warranties and agreements herein
contained, and upon the terms but subject to the conditions herein set forth,
the Company hereby grants an option to the Underwriter to purchase, severally
and not jointly, up to an aggregate of 780,000 Optional Preferred Shares from
the Company
at the
purchase price per share to be paid by the Underwriter for the Firm Preferred
Shares plus accrued dividends from July 26, 2006. The option granted hereunder
is for use by the Underwriter solely in covering any over-allotments in
connection with the sale and distribution of the Firm Preferred Shares. The
option granted hereunder may be exercised at any time (but not more than once)
upon notice by the Underwriter to the Company which notice may be given at
any
time within 30 days from the date of this Agreement. Such notice shall set
forth (i) the aggregate number of Optional Preferred Shares as to which the
Underwriter is exercising the option, (ii) the names and denominations in
which the certificates for the Optional Preferred Shares are to be registered
and (iii) the time, date and place at which such certificates will be
delivered (which time and date may be simultaneous with, but not earlier than,
the First Closing Date; and in such case the term “First Closing Date” shall
refer to the time and date of delivery of certificates for the Firm Preferred
Shares and the Optional Preferred Shares). Such time and date of delivery,
if
subsequent to the First Closing Date, is called the “Second Closing Date” and
shall be determined by the Underwriter and shall not be earlier than three
nor
later than five full business days after delivery of such notice of exercise.
The Underwriter may cancel the option at any time prior to its expiration by
giving written notice of such cancellation to the Company.
Public
Offering of the Preferred
Shares.
The
Underwriter hereby advises the Company that it intends to offer for sale to
the
public, as described in the Prospectus, the Preferred Shares as soon after
this
Agreement has been executed and the Registration Statement has been declared
effective as the Underwriter, in its sole judgment, has determined is advisable
and practicable.
Payment
for the Preferred
Shares.
Payment
for the Preferred Shares shall be made at the First Closing Date (and, if
applicable, at the Second Closing Date) by wire transfer of immediately
available funds to the order of the Company.
Delivery
of the Preferred
Shares.
The
Company shall deliver, or cause to be delivered, the Firm Preferred Shares
at
the First Closing Date to the Underwriter, against the irrevocable release
of a
wire transfer of immediately available funds for the amount of the purchase
price therefor. The Company shall also deliver, or cause to be delivered, the
Optional Preferred Shares the Underwriter has agreed to purchase at the First
Closing Date or the Second Closing Date, as the case may be, to the Underwriter,
against the irrevocable release of a wire transfer of immediately available
funds for the amount of the purchase price therefor. Delivery of the Firm
Preferred Shares and the Optional Preferred Shares shall be made through the
facilities of The Depositary Trust Company unless the Underwriter shall
otherwise instruct.
12
Section
3. Additional
Covenants
of the Company.
The
Company further covenants and agrees with the Underwriter as
follows:
(a)
Underwriter’s
Review of Proposed Amendments and Supplements. During
the period beginning on the date hereof and ending on the later of the First
Closing Date or such date, as in the opinion of counsel for the Underwriter,
the
Prospectus is no longer required by law to be delivered in connection with
sales
by an Underwriter or dealer, including in circumstances where such requirement
may be satisfied pursuant to Rule 172 (the “Prospectus Delivery Period”), prior
to amending or supplementing the Registration Statement (including any
registration statement filed under Rule 462(b) under the Securities Act), the
Disclosure Package or the Prospectus (including any amendment or supplement
through incorporation by reference of any report filed under the Exchange Act),
the Company shall furnish to the Underwriter for review a copy of each such
proposed amendment or supplement, and the Company shall not file or use any
such
proposed amendment or supplement to which the Underwriter reasonably
objects.
(b)
Securities
Act Compliance. During
the Prospectus Delivery Period, the Company shall promptly advise the
Underwriter in writing (i) of the receipt of any comments of, or requests
for additional or supplemental information from, the Commission, (ii) of
the time and date of any filing of any post-effective amendment to the
Registration Statement or any amendment or supplement to any preliminary
prospectus or the Prospectus, (iii) of the time and date that any
post-effective amendment to the Registration Statement becomes effective and
(iv) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or any post-effective amendment
thereto or of any order or notice preventing or suspending the use of the
Registration Statement, any preliminary prospectus or the Prospectus, or of
any
proceedings to remove, suspend or terminate from listing or quotation the Common
Stock from any securities exchange upon which it is listed for trading or
included or designated for quotation, or of the threatening or initiation of
any
proceedings for any of such purposes. If the Commission shall enter any such
stop order at any time, the Company will use its best efforts to obtain the
lifting of such order at the earliest possible moment. Additionally, the Company
agrees in connection with the transactions contemplated by this Agreement,
that
it shall comply with the provisions of Rules 424(b) and 430B, as
applicable, under the Securities Act, including with respect to the timely
filing of documents thereunder and will use its reasonable efforts to confirm
that any filings made by the Company under such Rule 424(b) were received
in a timely manner by the Commission.
(c)
Exchange
Act Compliance. During
the Prospectus Delivery Period, the Company will file all documents required
to
be filed with the Commission pursuant to Section 13, 14 or 15 of the Exchange
Act in the manner and within the time periods required by the Exchange
Act.
(d)
Amendments
and Supplements to the Prospectus and Other Securities Act
Matters. If,
during the Prospectus Delivery Period, any event or development shall occur
or
condition exist as a result of which the Disclosure Package or the Prospectus
as
then amended or supplemented would include any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein in the light of the circumstances under which they were
made
or then prevailing, as the case may be, not misleading, or if it shall be
necessary to amend or supplement the Disclosure Package or the Prospectus,
or to
file under the Exchange Act any document incorporated by reference in the
Disclosure Package or the prospectus, in order to make the statements therein,
in the light of the circumstances when the Disclosure Package or the Prospectus
is delivered to a purchaser, not misleading, or if in the opinion of the
Underwriter or counsel for the Underwriter it is otherwise necessary to amend
or
13
supplement
the Registration Statement, the Disclosure Package or the Prospectus, or to
file
a new registration statement containing the Prospectus, in order to comply
with
law, including in connection with the delivery of the Prospectus, the Company
agrees to promptly prepare (subject to Section 3(a) hereof), file with the
Commission (and use its best efforts to have any amendment to the Registration
Statement or any new registration statement to be declared effective) and
furnish at its own expense to the Underwriter and to dealers, amendments or
supplements to the Registration Statement, the Disclosure Package or the
Prospectus, or any new registration statement, so that the statements in the
Disclosure Package or the Prospectus as so amended or supplemented will not,
in
the light of the circumstances when the Disclosure Package and the Prospectus
is
delivered to a purchaser, be misleading or so that the Registration Statement,
the Disclosure Package or the Prospectus, as amended or supplemented, will
comply with law.
(e)
Permitted
Free Writing Prospectuses. The
Company represents that it has not made, and agrees that, unless it obtains
the
prior written consent of the Underwriter, it will not make, any offer relating
to the Preferred Shares that would constitute an Issuer Free Writing Prospectus
or that would otherwise constitute a “free writing prospectus” (as defined in
Rule 405 of the Securities Act) required to be filed by the Company with the
Commission or retained by the Company under Rule 433 of the Securities Act;
provided that the prior written consent of the Underwriter hereto shall be
deemed to have been given in respect of the Free Writing Prospectuses included
in Schedule A hereto. Any such free writing prospectus consented to by the
Underwriter is hereinafter referred to as a “Permitted Free Writing Prospectus”.
The Company agrees that (i) it has treated and will treat, as the case may
be,
each Permitted Free Writing Prospectus as an Issuer Free Writing Prospectus,
and
(ii) has complied and will comply, as the case may be, with the requirements
of
Rules 164 and 433 of the Securities Act applicable to any Permitted Free Writing
Prospectus, including in respect of timely filing with the Commission, legending
and record keeping.
(f)
Copies
of any Amendments and Supplements to the Prospectus. The
Company agrees to furnish the Underwriter, without charge, during the Prospectus
Delivery Period, as many copies of each preliminary prospectus, the Disclosure
Package, the Prospectus and any amendments and supplements thereto (including
any documents incorporated or deemed incorporated by reference thereon) as
the
Underwriter may request.
(g)
Blue
Sky Compliance. The
Company shall cooperate with the Underwriter and counsel for the Underwriter
to
qualify or register the Preferred Shares for sale under (or obtain exemptions
from the application of) the state securities or blue sky laws or Canadian
provincial Securities laws of
those
jurisdictions designated by the Underwriter, shall comply with such laws and
shall continue such qualifications, registrations and exemptions in effect
so
long as required for the distribution of the Preferred Shares. The Company
shall
not be required to qualify as a foreign corporation or to take any action that
would subject it to general service of process in any such jurisdiction where
it
is not presently qualified or where it would be subject to taxation as a foreign
corporation. The Company will advise the Underwriter promptly of the suspension
of the qualification or registration of (or any such exemption relating to)
the
Preferred Shares for offering, sale or trading in any jurisdiction or any
initiation or threat of any proceeding for any such purpose, and in the event
of
the issuance of any order suspending such qualification, registration or
exemption, the Company shall use its best efforts to obtain the withdrawal
thereof at the earliest possible moment.
(h)
Use
of Proceeds. The
Company shall apply the net proceeds from the sale of the Preferred Shares
sold
by it in the manner described under the caption “Use of Proceeds” in each of the
Disclosure Package and the Prospectus.
14
(i)
Available
Conversion Shares. The
Company will reserve and keep available at all times, free of pre-emptive
rights, the full number of Conversion Shares.
(j)
Conversion
Price. Between
the date hereof and the later of the First Closing Date and the Second Closing
Date, if any, the Company will not do or authorize any act or thing that would
result in an adjustment of the conversion price of the Preferred
Stock.
(k)
Transfer
Agent. The
Company has engaged and will maintain, at its expense, a registrar and transfer
agent for the Common Stock and the Preferred Stock.
(l)
Earnings
Statement. As
soon
as practicable, the Company will make generally available to its security
holders and to the Underwriter an earnings statement (which need not be audited)
covering the twelve-month period ending September 30, 2007 that satisfies the
provisions of Section 11(a) of the Securities Act.
(m)
Periodic
Reporting Obligations. During
the Prospectus Delivery Period the Company shall file, on a timely basis, with
the Commission and the New York Stock Exchange all reports and documents
required to be filed under the Exchange Act.
(n)
Listing.
Prior
to
any issuance of Conversion Shares, the Company will list, subject to notice
of
issuance, the Conversion Shares on the New York Stock Exchange.
(o)
Company
to Provide Interim Financial Statements. Prior
to
the First Closing Date, the Company will furnish the Underwriter, as soon as
they have been prepared by or are available to the Company, a copy of any
unaudited interim financial statements of the Company for any period subsequent
to the period covered by the most recent financial statements appearing in
the
Registration Statement and the Prospectus.
(p)
Agreement
Not to Offer or Sell Additional Securities. During
the period commencing on the date hereof and ending on the 60th day following
the date of the Prospectus, the Company will not, without the prior written
consent of BAS (which consent may be withheld at the sole discretion of BAS),
directly or indirectly, sell, offer, contract or grant any option to sell,
pledge, transfer or establish an open “put equivalent position” or liquidate or
decrease a “call equivalent position” within the meaning of Rule 16a-1(h) under
the Exchange Act, or otherwise dispose of, transfer or hedge (or enter into
any
transaction which is designed to, or might reasonably be expected to, result
in
the disposition of), or announce the offering of, or file any registration
statement under the Securities Act in respect of, any shares of Common Stock,
options or warrants to acquire shares of the Common Stock or securities
exchangeable or exercisable for or convertible into shares of Common Stock
(other than as contemplated by this Agreement with respect to the Preferred
Shares); provided, however, that the Company may (i) issue shares of its
Common Stock or options to purchase its Common Stock, or Common Stock upon
exercise of options, pursuant to any stock option, stock bonus or other stock
plan or arrangement described in the Disclosure Package, and (ii) issue
securities in connection with an acquisition, merger, or sale or purchase of
assets, but, in the case of (ii), only if the transferees of such securities
agree in writing not to sell, offer, dispose of or otherwise transfer any such
shares or options during such 60 day period without the prior written consent
of
BAS (which consent may be withheld at the sole discretion of the
BAS).
(q)
Future
Reports to the Underwriter. During
the period of five years hereafter, but only to the extent such reports are
not
publicly available on ▇▇▇▇▇, the Company will furnish to the Underwriter at
▇
▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention ▇▇▇▇▇▇▇ ▇. ▇▇
15
(i)
as
soon as practicable after the end of each fiscal year, copies of the Annual
Report of the Company containing the balance sheet of the Company as of the
close of such fiscal year and statements of income, stockholders’ equity
and cash flows for the year then ended and the opinion thereon of the Company’s
independent registered public accountants; (ii) as soon as practicable after
the
filing thereof, copies of each proxy statement, Annual Report on Form 10-K,
Quarterly Report on Form 10-Q, Current Report on Form 8-K or other report filed
by the Company with the Commission, the NASD or any securities exchange; and
(iii) as soon as available, copies of any report or communication of the Company
mailed generally to holders of its capital stock.
(r)
Investment
Limitation. The
Company shall not invest, or otherwise use the proceeds received by the Company
from its sale of the Preferred 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.
(s)
No
Manipulation of Price. The
Company will not take, directly or indirectly, any action designed to cause
or
result in, or that has constituted or might reasonably be expected to
constitute, the stabilization or manipulation of the price of any securities
of
the Company.
(t)
Existing
Lock-Up Agreement. The
Company will enforce all existing agreements between the Company and any of
its
security holders that prohibit the sale, transfer, assignment, pledge or
hypothecation of any of the Company’s securities in connection with this
offering. In addition, the Company will direct the transfer agent to place
stop
transfer restrictions upon any such securities of the Company that are bound
by
such existing “lock-up” agreements for the duration of the periods contemplated
in such agreements.
(u)
Exchange
Act Compliance. During
the Prospectus Delivery Period, the Company will file all documents required
to
be filed with the Commission pursuant to Section 13, 14 or 15 of the Exchange
Act in the manner and within the time periods required by the Exchange
Act.
Section
4. Payment
of Expenses. The
Company agrees to pay fees and expenses incurred in connection with the
performance of its obligations hereunder and in connection with the transactions
contemplated hereby, including without limitation (i) all expenses incident
to the issuance and delivery of the Preferred Shares (including all printing
and
engraving costs), (ii) all fees and expenses of the registrar and transfer
agent of the Preferred Stock, (iii) all necessary issue, transfer and other
stamp taxes in connection with the issuance and sale of the Preferred Shares
to
the Underwriter, (iv) all fees and expenses of the Company’s counsel,
independent registered public accountants and other advisors, (v) all costs
and expenses incurred in connection with the preparation, printing, filing,
shipping and distribution of the Registration Statement (including financial
statements, exhibits, schedules, consents and certificates of experts), each
Issuer Free Writing Prospectus, each preliminary prospectus and the Prospectus,
and all amendments and supplements thereto, and this Agreement, (vi) all
filing fees, attorneys’ fees and expenses incurred by the Company or the
Underwriter in connection with qualifying or registering (or obtaining
exemptions from the qualification or registration of) all or any part of the
Preferred Shares for offer and sale under the state securities or blue sky
laws
or the provincial securities laws of Canada, and, if requested by the
Underwriter, preparing and printing a “Blue Sky Survey” or memorandum, and any
supplements thereto, advising the Underwriter of such qualifications,
registrations and exemptions, (vii) the filing fees incident to, and the
reasonable fees and expenses not to exceed $5,000 of counsel for the Underwriter
in connection with, the NASD’s review and approval of the Underwriter’s
participation in the offering and distribution of the Preferred
Shares,
(viii) the fees and expenses associated with listing
the Conversion Shares on the New York Stock Exchange, and (ix) all other
fees, costs and expenses referred to in
16
Item 14
of Part II of the Registration Statement.
Except
as provided in this Section 4, Section 6, Section 8 and
Section 9 hereof, the Underwriter shall pay its own expenses, including the
fees and disbursements of its counsel.
Section
5. Conditions
of the Obligations of the Underwriter.
The
obligations of the Underwriter to purchase and pay for the Preferred Shares
as
provided herein on the First Closing Date and, with respect to the Optional
Preferred Shares, the Second Closing Date, shall be subject to the accuracy
of
the representations and warranties on the part of the Company set forth in
Section 1 hereof as of the date hereof and as of the First Closing Date as
though then made and, with respect to the Optional Preferred Shares, as of
the
Second Closing Date as though then made, to the timely performance by the
Company of its covenants and other obligations hereunder, and to each of the
following additional conditions:
| (a) |
Accountants’
Comfort Letter. On
the date hereof, the Underwriter shall have received from KPMG LLP,
independent registered public accountants for the Company, a letter
dated
the date hereof addressed to the Underwriter, in form and substance
satisfactory to the Underwriter, containing statements and information
of
the type ordinarily included in accountant’s “comfort letters” to
underwriters, delivered according to Statement of Auditing Standards
No.
72 (or any successor bulletin), with respect to the audited and unaudited
financial statements and certain financial information contained
in, or
incorporated by reference in, the Registration Statement, the Disclosure
Package and the Prospectus.
|
| (b) |
Compliance
with Registration Requirements; No Stop Order; No Objection from
NASD. For
the period from and after effectiveness of this Agreement and prior
to the
First Closing Date and, with respect to the Optional Preferred Shares,
the
Second Closing Date:
|
(i) the
Company shall have filed the Prospectus with the Commission (including the
information required by Rule 430B under the Securities Act) in the manner and
within the time period required by Rule 424(b) under the Securities Act; or
the
Company shall have filed a post-effective amendment to the Registration
Statement containing the information required by such Rule 430B, and such
post-effective amendment shall have become effective;
(ii) no
stop
order suspending the effectiveness of the Registration Statement, any
Rule
462(b) Registration Statement
or any
post-effective amendment to the Registration Statement, shall be in effect
and
no proceedings for such purpose shall have been instituted or threatened by
the
Commission; and
(iii) the
NASD
shall have raised no objection to the fairness and reasonableness of the
underwriting terms and arrangements.
| (c) |
No
Material Adverse Change or Ratings Agency Change. For
the period from and after the date of this Agreement and prior to
the
First Closing Date and, with respect to the Optional Preferred Shares,
the
Second Closing Date:
|
(i) in
the
judgment of the Underwriter there shall not have occurred any Material Adverse
Change; and
(ii) 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
17
change
that does not indicate the direction of the possible change, in the rating
accorded any 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.
| (d) |
Opinion
of Counsel for the Company. (i)
On each of the First Closing Date and the Second Closing Date the
Underwriter shall have received the favorable opinion of ▇▇▇▇▇ &
▇▇▇▇▇▇▇▇, LLP, counsel for the Company, dated as of such Closing
Date, the
form of which is attached as Exhibit A.
(ii) On each of the First Closing Date and the Second Closing Date
the
Underwriter shall have received the favorable opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇,
inside counsel for the Company, dated as of such Closing Date, the
form of
which is attached as Exhibit B.
As to all matters of Maryland law, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP may rely
without independent verification upon an opinion of ▇▇▇▇▇▇▇ LLP;
provided
a copy of the opinion is furnished to the Underwriter and ▇▇▇▇▇ &
▇▇▇▇▇▇▇▇ LLP states that the Underwriter and such counsel are justified
in
relying upon such opinion.
|
(e)
Opinion
of Counsel for the Underwriter. On
each
of the First Closing Date and the Second Closing Date the Underwriter shall
have
received the favorable opinion of ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for
the Underwriter, dated as of such Closing Date, in form and substance reasonably
acceptable to the Underwriter.
(f)
Officers’
Certificate. On
each
of the First Closing Date and the Second Closing Date the Underwriter shall
have
received a written certificate executed by the Chairman of the Board, Chief
Executive Officer or President of the Company and the Chief Financial Officer
or
Chief Accounting Officer of the Company, in their capacity as such, dated as
of
such Closing Date, to the effect set forth in subsections (b)(ii)
and (c)(ii) of this Section 5, and further to the effect
that:
(i) for
the
period from and after the date of this Agreement and prior to such Closing
Date,
there has not occurred any Material Adverse Change;
(ii) the
representations, warranties and covenants of the Company set forth in
Section 1
of this
Agreement are true and correct with the same force and effect as though
expressly made on and as of such Closing Date;
and
(iii) the
Company has complied with all the agreements hereunder and satisfied all the
conditions on its part to be performed or satisfied hereunder at or prior to
such Closing Date.
(g)
Bring-down
Comfort Letter. On
each
of the First Closing Date and the Second Closing Date the Underwriter shall
have
received from KPMG LLP, independent registered public accountants for the
Company, a letter dated such date, in form and substance satisfactory to the
Underwriter, to the effect that they reaffirm the statements made in the letter
furnished by them pursuant to subsection (a) of this Section 5, except
that the specified date referred to therein for the carrying out of procedures
shall be no more than three business days prior to the First Closing Date or
Second Closing Date, as the case may be.
(h)
Lock-Up
Agreement from Certain Securityholders of the Company. On
or
prior to the First Closing Date, the Company shall have furnished to the
Underwriter an agreement, dated as of the date hereof, in the form of
Exhibit C
hereto
from those
officers and directors of the Company identified on Exhibit D
hereto,
and such agreement shall be in full force and effect on each of the First
Closing Date and the Second Closing Date.
18
(i)
Additional
Documents. On
or
before each of the First Closing Date and the Second Closing Date, the
Underwriter and counsel for the Underwriter shall have received such
information, documents and opinions as they may reasonably require for the
purposes of enabling them to pass upon the issuance and sale of the Preferred
Shares as contemplated herein, or in order to evidence the accuracy of any
of
the representations and warranties, or the satisfaction of any of the conditions
or agreements, herein contained.
If
any
condition specified in this Section 5 is not satisfied when and as required
to
be satisfied, this Agreement may be terminated by the Underwriter by notice
to
the Company at any time on or prior to the First Closing Date and, with respect
to the Optional Preferred Shares, at any time prior to the Second Closing Date,
which termination shall be without liability on the part of any party to any
other party, except that Section 4, Section 6, Section 8 and
Section 9 shall at all times be effective and shall survive such
termination.
Section
6. Reimbursement
of Underwriter’s
Expenses.
If
this
Agreement is terminated by the Underwriter pursuant to Section 5 or Section
11, or if the sale to the Underwriter of the Preferred Shares on the First
Closing Date is not consummated because of any refusal, inability or failure
on
the part of the Company to perform any agreement herein or to comply with any
provision hereof, the Company agrees to reimburse the Underwriter upon demand
for reasonable out-of-pocket expenses that shall have been incurred by the
Underwriter in connection with the proposed purchase and the offering and sale
of the Preferred Shares, including but not limited to fees and disbursements
of
counsel, printing expenses, travel expenses, postage, facsimile and telephone
charges.
Section
7. [Intentionally
Left Blank].
Section
8. Indemnification.
(a)
Indemnification
of the Underwriter. The
Company agrees to indemnify and hold harmless the Underwriter, its officers
and
employees, and each person, if any, who controls the Underwriter within the
meaning of the Securities Act and the Exchange Act against any loss, claim,
damage, liability or expense, as incurred, to which the Underwriter or such
controlling person may become subject, under the Securities Act, the Exchange
Act or other federal or state statutory law or regulation, or
at
common law or otherwise (including in settlement of any litigation, if such
settlement is effected with the written consent of the Company), insofar as
such
loss, claim, damage, liability or expense (or actions in respect thereof as
contemplated below) arises out of or is based (i) upon
any untrue statement or alleged untrue statement of a material fact contained
or
incorporated or deemed incorporated in the Registration Statement, or any
amendment thereto, including any information deemed to be a part thereof
pursuant to Rule 430B or Rule 430C under the Securities Act or
pursuant to the Exchange Act, or the omission or alleged omission therefrom
of a
material fact required to be stated therein or necessary to make the statements
therein not misleading; or (ii) upon any untrue statement or alleged untrue
statement of a material fact contained or incorporated or deemed incorporated
in
any Issuer Free Writing Prospectus, any preliminary prospectus or the Prospectus
(or any amendment or supplement thereto),
or the
omission or alleged omission therefrom of a material fact necessary in order
to
make the statements therein, in the light of the circumstances under which
they
were made, not misleading; or (iii) in whole or in part upon any inaccuracy
in the representations and warranties of the Company contained herein; or
(iv) in whole or in part upon any failure of the Company to perform its
obligations hereunder or under law; or (v) any act or failure to act or any
alleged act or failure to act by the Underwriter in connection with, or relating
in any manner
19
to,
the
Preferred Stock or the offering contemplated hereby, and which is included
as
part of or referred to in any loss, claim, damage, liability or action arising
out of or based upon any matter covered by clause (i) or (ii) above, provided
that the Company shall not be liable under this clause (v) to the extent that
a
court of competent jurisdiction shall have determined by a final judgment that
such loss, claim, damage, liability or action resulted directly from any such
acts or failures to act undertaken or omitted to be taken by the Underwriter
through its bad faith or willful misconduct and
to
reimburse the Underwriter and each such controlling person for any and all
expenses (including the fees and disbursements of counsel chosen by BAS) as
such
expenses are reasonably incurred by the Underwriter or such controlling person
in connection with investigating, defending, settling, compromising or paying
any such loss, claim, damage, liability, expense or action; provided, however,
that the foregoing indemnity agreement shall not apply to any loss, claim,
damage, liability or expense to the extent, but only to the extent, arising
out
of or based upon any untrue statement or alleged untrue statement or omission
or
alleged omission made in reliance upon and in conformity with written
information furnished to the Company by the Underwriter expressly for use in
the
Registration Statement, any Issuer Free Writing Prospectus, any preliminary
prospectus or the Prospectus (or any amendment or supplement
thereto).
The
indemnity agreement set forth in this Section 8(a) shall be in addition to
any liabilities that the Company may otherwise have.
(b)
Indemnification
of the Company, its Directors and Officers. The
Underwriter agrees to indemnify and hold harmless the Company, each of its
directors, each of its officers who signed the Registration Statement and each
person, if any, who controls the Company within the meaning of the Securities
Act or the Exchange Act, against any loss, claim, damage, liability or expense,
as incurred, to which the Company, or any such director, officer or controlling
person may become subject, under the Securities Act, the Exchange Act, or other
federal or state statutory law or regulation, or at common law or otherwise
(including in settlement of any litigation, if such settlement is effected
with
the written consent of the Underwriter), insofar as such loss, claim, damage,
liability or expense (or actions in respect thereof as contemplated below)
arises out of or is based upon any untrue or alleged untrue statement of a
material fact contained in the Registration Statement, any Issuer Free Writing
Prospectus, any preliminary prospectus or the Prospectus (or any amendment
or
supplement thereto), or arises out of or is based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in the Registration
Statement, any Issuer Free Writing Prospectus, any preliminary prospectus,
the
Prospectus (or any amendment or supplement thereto), in reliance upon and in
conformity with written information furnished to the Company by the Underwriter
expressly for use therein; and to reimburse the Company, or any such director,
officer or controlling person for any legal and other expense reasonably
incurred by the Company, or any such director, officer or controlling person
in
connection with investigating, defending, settling, compromising or paying
any
such loss, claim, damage, liability, expense or action. The Company hereby
acknowledges that the only information that the Underwriter has furnished to
the
Company expressly for use in the Registration Statement, any Issuer Free Writing
Prospectus, any preliminary prospectus or the Prospectus (or any amendment
or
supplement thereto) are the statements set forth (1) in the third paragraph
under the caption “Underwriting” in the Disclosure Package and the Prospectus
and (2) under the caption “Underwriting-Stabilization” in the Disclosure Package
and the Prospectus; and the Underwriter confirms that such statements are
correct. The indemnity agreement set forth in this Section 8(b) shall be in
addition to any liabilities that the Underwriter may otherwise
have.
20
(c)
Notifications
and Other Indemnification Procedures. Promptly
after receipt by an indemnified party under this Section 8 of notice of the
commencement of any action, such indemnified party will, if a claim in respect
thereof is to be made against an indemnifying party under this Section 8,
notify the indemnifying party in writing of the commencement thereof, but the
omission so to notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party for contribution or
otherwise than under the indemnity agreement contained in this Section 8 or
to the extent it is not prejudiced as a proximate result of such failure. In
case any such action is brought against any indemnified party and such
indemnified party seeks or intends to seek indemnity from an indemnifying party,
the indemnifying party will be entitled to participate in, and, to the extent
that it shall elect, jointly with all other indemnifying parties similarly
notified, by written notice delivered to the indemnified party promptly after
receiving the aforesaid notice from such indemnified party, to assume the
defense thereof with counsel reasonably satisfactory to such indemnified party;
provided, however, if the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that a conflict may arise between the positions of
the
indemnifying party and the indemnified party in conducting the defense of any
such action or that there may be legal defenses available to it and/or other
indemnified parties which are different from or additional to those available
to
the indemnifying party, the indemnified party or parties shall have the right
to
select separate counsel to assume such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified party
or
parties. Upon receipt of notice from the indemnifying party to such indemnified
party of such indemnifying party’s election so to assume the defense of such
action and approval by the indemnified party of counsel, the indemnifying party
will not be liable to such indemnified party under this Section 8 for any
legal or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof unless (i) the indemnified party shall
have employed separate counsel in accordance with the proviso to the next
preceding sentence (it being understood, however, that the indemnifying party
shall not be liable for the expenses of more than one separate counsel (together
with local counsel), approved by the indemnifying party (BAS in the case of
Section 8(b) and Section 9), representing the indemnified parties who
are parties to such action) or (ii) the indemnifying party shall not have
employed counsel satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of commencement of
the
action, in each of which cases the fees and expenses of counsel shall be at
the
expense of the indemnifying party.
(d)
Settlements. The
indemnifying party under this Section 8 shall not be liable for any
settlement of any proceeding effected without its written consent, but if
settled with such consent or if there be a final judgment for the plaintiff,
the
indemnifying party agrees to indemnify the indemnified party against any loss,
claim, damage, liability or expense by reason of such settlement or judgment.
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 Section 8(c) hereof,
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 prior written
consent of the indemnified party, effect any settlement, compromise or consent
to the entry of judgment in any pending or threatened action, suit or proceeding
in respect of which any indemnified party is or could have been a party and
indemnity was or could have been sought hereunder by such indemnified party,
unless such settlement, compromise or consent includes an unconditional release
of such indemnified party from all liability on claims that are the subject
matter of such action, suit or proceeding.
21
Section
9. Contribution.
If
the
indemnification provided for in Section 8 is for any reason held to be
unavailable to or otherwise insufficient to hold harmless an indemnified party
in respect of any losses, claims, damages, liabilities or expenses referred
to
therein, then each indemnifying party shall contribute to the aggregate amount
paid or payable by such indemnified party, as incurred, as a result of any
losses, claims, damages, liabilities or expenses referred to therein (i) in
such proportion as is appropriate to reflect the relative benefits received
by
the Company, on the one hand, and the Underwriter, on the other hand, from
the
offering of the Preferred Shares pursuant to this Agreement or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law,
in such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company,
on the one hand, and the Underwriter, on the other hand, in connection with
the
statements or omissions or inaccuracies in the representations and warranties
herein which resulted in such losses, claims, damages, liabilities or expenses,
as well as any other relevant equitable considerations. The relative benefits
received by the Company, on the one hand, and the Underwriter, on the other
hand, in connection with the offering of the Preferred Shares pursuant to this
Agreement shall be deemed to be in the same respective proportions as the total
net proceeds from the offering of the Preferred Shares pursuant to this
Agreement (before deducting expenses) received by the Company, and the total
underwriting discount received by the Underwriter, in each case as set forth
on
the front cover page of the Prospectus bear to the aggregate initial public
offering price of the Preferred Shares as set forth on such cover. The relative
fault of the Company, on the one hand, and the Underwriter, on the other hand,
shall be determined by reference to, among other things, whether any such untrue
or alleged untrue statement of a material fact or omission or alleged omission
to state a material fact or any such inaccurate or alleged inaccurate
representation or warranty relates to information supplied by the Company,
on
the one hand, or the Underwriter, on the other hand, and the parties’ relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
The
amount paid or payable by a party as a result of the losses, claims, damages,
liabilities and expenses referred to above shall be deemed to include, subject
to the limitations set forth in Section 8(c), any legal or other fees or
expenses reasonably incurred by such party in connection with investigating
or
defending any action or claim. The provisions set forth in Section 8(c)
with respect to notice of commencement of any action shall apply if a claim
for
contribution is to be made under this Section 9; provided,
however,
that no
additional notice shall be required with respect to any action for which notice
has been given under Section 8(c) for purposes of
indemnification.
The
Company and the Underwriter agree that it would not be just and equitable if
contribution pursuant to this Section 9 were determined by pro rata
allocation or by any other method of allocation which does not take account
of
the equitable considerations referred to in this Section 9.
Notwithstanding
the provisions of this Section 9, the Underwriter shall not be required to
contribute any amount in excess of the underwriting commissions received by
the
Underwriter in connection with the Preferred Shares underwritten by it and
distributed to the public. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 9, each officer and
employee of the Underwriter and each person, if any, who controls the
Underwriter within the meaning of the Securities Act and the Exchange Act shall
have the same rights to contribution as the Underwriter, and each
22
Section
10. [Intentionally
Left Blank].
Section
11. Termination
of this Agreement.
Prior
to
the First Closing Date this Agreement may be terminated by the Underwriter
by
notice given to the Company if at any time (i) trading or quotation in any
of the Company’s securities shall have been suspended or limited by the
Commission or by the New York Stock Exchange,
or
trading in securities generally on either the Nasdaq Stock Market or the New
York Stock Exchange shall have been suspended or limited, or minimum or maximum
prices shall have been generally established on any of such stock exchanges
by
the Commission or the NASD; (ii) a general banking moratorium shall have
been declared by any of federal, New York, Delaware or California authorities;
(iii) there shall have occurred any outbreak or escalation of national or
international hostilities or any crisis or calamity, or any change in the United
States or international financial markets, or any substantial change or
development involving a prospective substantial change in United States’ or
international political, financial or economic conditions, as in the judgment
of
the Underwriter is material and adverse and makes it impracticable to market
the
Preferred Shares in the manner and on the terms described in the Prospectus
or
to enforce contracts for the sale of securities; (iv) in the judgment of
the Underwriter there shall have occurred any Material Adverse Change; or (v)
the Company shall have sustained a loss by strike, fire, flood, earthquake,
accident or other calamity of such character as in the judgment of the
Underwriter may interfere materially with the conduct of the business and
operations of the Company regardless of whether or not such loss shall have
been
insured. Any termination pursuant to this Section 11 shall be without
liability on the part of (a) the Company to the Underwriter, except that
the Company shall be obligated to reimburse the expenses of the Underwriter
pursuant to Sections 4 and 6 hereof, (b) the Underwriter to the
Company, or (c) of any party hereto to any other party except that the
provisions of Section 8 and Section 9 shall at all times be effective
and shall survive such termination.
Section
12. No
Advisory or Fiduciary Responsibility.
The
Company acknowledges and agrees that: (i) the purchase and sale of the Preferred
Shares pursuant to this Agreement, including the determination of the offering
price of the Preferred Shares and any related discounts and commissions, is
an
arm’s-length commercial transaction between the Company, on the one hand, and
the Underwriter, on the other hand, and the Company is capable of evaluating
and
understanding and understands and accepts the terms, risks and conditions of
the
transactions contemplated by this Agreement; (ii) in connection with each
transaction contemplated hereby and the process leading to such transaction
the
Underwriter is and has been acting solely as a principal and is not the
financial advisor, agent or fiduciary of the Company or its affiliates,
stockholders, creditors or employees or any other party; (iii) the Underwriter
has not assumed or will not assume an advisory, agency or fiduciary
responsibility in favor of the Company with respect to any of the transactions
contemplated hereby or the process leading thereto (irrespective of whether
the
Underwriter has advised or is currently advising the Company on other matters)
and no Underwriter has any obligation to the Company with respect to the
offering contemplated hereby except the obligations expressly set forth in
this
Agreement; (iv) the Underwriter and its affiliates may be engaged in a broad
range of transactions that involve interests that differ from those of the
Company and that the Underwriter has no obligation to disclose any of such
interests by virtue of any advisory, agency or fiduciary relationship; and
(v)
23
This
Agreement supersedes all prior agreements and understandings (whether written
or
oral) between the Company and the Underwriter, with respect to the subject
matter hereof. The Company hereby waives and releases, to the fullest extent
permitted by law, any claims that the Company may have against the Underwriter
with respect to any breach or alleged breach of agency or fiduciary
duty.
Section
13. Representations
and Indemnities to Survive Delivery.
The
respective indemnities, agreements, representations, warranties and other
statements of the Company, of its officers and of the Underwriter set forth
in
or made pursuant to this Agreement will remain in full force and effect,
regardless of any investigation made by or on behalf of the Underwriter or
the
Company or any of its or their partners, officers or directors or any
controlling person, as the case may be, and will survive delivery of and payment
for the Preferred Shares sold hereunder and any termination of this
Agreement.
Section
14. Notices.
All
communications hereunder shall be in writing and shall be mailed, hand delivered
or telecopied and confirmed to the parties hereto as follows:
If
to the
Underwriter:
Banc
of
America Securities LLC
▇
▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile:
▇▇▇-▇▇▇-▇▇▇▇
Attention:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
with
a copy
to:
Banc
of
America Securities LLC
▇
▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
Attention:
▇▇▇▇▇▇▇ ▇. ▇▇
If
to the
Company:
Essex
Property Trust, Inc.
▇▇▇
▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
Attention:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Any
party
hereto may change the address for receipt of communications by giving written
notice to the others.
24
Section
15. Successors.
This
Agreement will inure to the benefit of and be binding upon the parties hereto,
and to the benefit of the employees, officers and directors and controlling
persons referred to in Section 8 and Section 9, and in each case their
respective successors, and no other person will have any right or obligation
hereunder. The term “successors” shall not include any purchaser of the
Preferred Shares as such from the Underwriter merely by reason of such
purchase.
Section
16. Partial
Unenforceability.
The
invalidity or unenforceability of any Section, paragraph or provision of this
Agreement shall not affect the validity or enforceability of any other Section,
paragraph or provision hereof. If any Section, paragraph or provision of this
Agreement is for any reason determined to be invalid or unenforceable, there
shall be deemed to be made such minor changes (and only such minor changes)
as
are necessary to make it valid and enforceable.
Section
17. Governing
Law Provisions.
(a)
Governing
Law.
This
Agreement shall be governed by and construed in accordance with the internal
laws of the State of New York applicable to agreements made and to be performed
in such state.
(b)
Consent
to Jurisdiction.
Any
legal
suit, action or proceeding arising out of or based upon this Agreement or the
transactions contemplated hereby (“Related Proceedings”) may be instituted in
the federal courts of the United States of America located in the City and
County of San Francisco or the courts of the State of California in each case
located in the City and County of San Francisco (collectively, the “Specified
Courts”), and each party irrevocably submits to the exclusive jurisdiction
(except for proceedings instituted in regard to the enforcement of a judgment
of
any such court (a “Related Judgment”), as to which such jurisdiction is
non-exclusive) of such courts in any such suit, action or proceeding. Service
of
any process, summons, notice or document by mail to such party’s address set
forth above shall be effective service of process for any suit, action or other
proceeding brought in any such court. The parties irrevocably and
unconditionally waive any objection to the laying of venue of any suit, action
or other proceeding in the Specified Courts and irrevocably and unconditionally
waive and agree not to plead or claim in any such court that any such suit,
action or other proceeding brought in any such court has been brought in an
inconvenient forum.
(c)
Waiver
of Immunity.
With
respect to any Related Proceeding, each party irrevocably waives, to the fullest
extent permitted by applicable law, all immunity (whether on the basis of
sovereignty or otherwise) from jurisdiction, service of process, attachment
(both before and after judgment) and execution to which it might otherwise
be
entitled in the Specified Courts, and with respect to any Related Judgment,
each
party waives any such immunity in the Specified Courts or any other court of
competent jurisdiction, and will not raise or claim or cause to be pleaded
any
such immunity at or in respect of any such Related Proceeding or Related
Judgment, including, without limitation, any immunity pursuant to the United
States Foreign Sovereign Immunities Act of 1976, as amended.
Section
18. General
Provisions.
This
Agreement constitutes the entire agreement of the parties to this Agreement
and
supersedes all prior written or oral and all contemporaneous oral agreements,
understandings and
25
negotiations
with respect to the subject matter hereof. This Agreement may be executed in
two
or more counterparts, each one of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement may not be amended or modified unless in writing by all of the
parties hereto, and no condition herein (express or implied) may be waived
unless waived in writing by each party whom the condition is meant to benefit.
The Table of Contents and the Section headings herein are for the convenience
of
the parties only and shall not affect the construction or interpretation of
this
Agreement.
Each
of
the parties hereto acknowledges that it is a sophisticated business person
who
was adequately represented by counsel during negotiations regarding the
provisions hereof, including, without limitation, the indemnification provisions
of Section 8 and the contribution provisions of Section 9, and is
fully informed regarding said provisions. Each of the parties hereto further
acknowledges that the provisions of Sections 8 and 9 hereto fairly
allocate the risks in light of the ability of the parties to investigate the
Company, its affairs and its business in order to assure that adequate
disclosure has been made in the Registration Statement, any preliminary
prospectus and the Prospectus (and any amendments and supplements thereto),
as
required by the Securities Act and the Exchange Act.
The
respective indemnities, contribution agreements, representations, warranties
and
other statements of the Company and the Underwriter set forth in or made
pursuant to this Agreement shall remain operative and in full force and effect,
regardless of (i) any investigation, or statement as to the results thereof,
made by or on behalf of the Underwriter, the officers or employees of the
Underwriter, any person controlling the Underwriter, the Company, the officers
or employees of the Company, or any person controlling the Company, (ii)
acceptance of the Shares and payment for them hereunder and (iii) termination
of
this Agreement.
Except
as
otherwise provided, this Agreement has been and is made solely for the benefit
of and shall be binding upon the Company, the Underwriter, the Underwriter’s
officers and employees, any controlling persons referred to herein, the
Company’s directors and the Company’s officers who sign the Registration
Statement and their respective successors and assigns, all as and to the extent
provided in this Agreement, and no other person shall acquire or have any right
under or by virtue of this Agreement. The term “successors and assigns” shall
not include a purchaser of any of the Shares from the Underwriter merely because
of such purchase.
26
If
the
foregoing is in accordance with your understanding of our agreement, kindly
sign
and return to the Company the enclosed copies hereof, whereupon this instrument,
along with all counterparts hereof, shall become a binding agreement in
accordance with its terms.
Very
truly yours,
Essex
Property Trust, Inc.
By:
/s/ ▇▇▇▇▇▇▇ Dance
Name:
▇▇▇▇▇▇▇ Dance
Title:
Executive Vice President and Chief Financial Officer
The
foregoing Underwriting Agreement is hereby confirmed and accepted by the
Underwriter in San Francisco, California as of the date first above
written.
BANC
OF AMERICA SECURITIES LLC
By:
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
Name:▇▇▇▇▇
▇▇▇▇▇▇
Title:
Managing Director
Schedule
of Free Writing Prospectuses included in the Disclosure Package
Term
Sheet dated July 21, 2006
EXHIBIT
A
Opinion
of outside counsel for the Company to be delivered pursuant to
Section 5(d)(i) of the Underwriting Agreement.
References
to the Prospectus in this Exhibit A
include
any supplements thereto at the Closing Date.
(i) As
of
March 31, 2006, the Company had an authorized capitalization as set forth in
its
statements of financial condition included in the Company’s Quarterly Report on
Form 10-Q for the quarter ended March 31, 2006. All of the outstanding shares
of
Common Stock and Preferred Stock conform, in all material respects, to the
description thereof contained in the Disclosure Package and the Prospectus.
(ii) The
Company is a corporation duly incorporated and existing under and by virtue
of
the laws of the State of Maryland and is in good standing with the State
Department of Assessments and Taxation of Maryland. The Company has the
corporate power to own, lease and operate its properties and conduct its
business in all material respects as described under the headings “Item 1
Business” and “Item 2 Properties” in the Company’s Annual Report on Form 10-K
for the year ended December 31, 2005. Essex Portfolio, L.P. a California limited
partnership (the “Operating Partnership”), is validly existing as a limited
partnership in good standing under the laws of the jurisdiction of its
organization with the power to own, lease and operate its properties and conduct
its business in all material respects as described under the headings “Item 1
Business” and “Item 2 Properties” in the Company’s Annual Report on Form 10-K
for the year ended December 31, 2005.
(iii) To
our
knowledge, each of the Company and the Operating Partnership, as to which the
Company is the general partner, is duly qualified or registered to transact
business in each jurisdiction set forth on Schedule 1 hereto in which the
failure, individually or in the aggregate, to be so qualified could reasonably
be expected to result in a Material Adverse Change. To our knowledge, other
than
the Company’s interests in the Subsidiaries set forth in Exhibit 21.1 to the
Company’s Annual Report on Form 10-K for the year ended December 31, 2005, and
subsidiaries formed since December 31, 2005, the Company does not own, directly
or indirectly, any capital stock or other equity securities of any other
corporation or any ownership interest in any limited liability company,
partnership, joint venture or other association.
(iv) The
execution, delivery and performance of the Underwriting Agreement by the Company
and the transactions contemplated thereby do not conflict with, or result in
any
breach of, or constitute a default under (nor constitute an event that with
notice, lapse of time or both would constitute a breach of or default under),
(i) the charter or bylaws of the Company, (ii) any of the agreements listed
as
Exhibits 10.1 through 10.37 to the Company’s Annual Report on Form 10-K for the
year ended December 31, 2005 or (iii) to our knowledge, any Applicable Law
or
any decree, judgment or order applicable to the Company (other than state and
foreign securities or blue sky laws, as to which we express no opinion), except
in the case of clauses (ii) and (iii) for such conflicts, breaches or defaults,
which individually or in the aggregate could not be reasonably expected to
have
a Material Adverse Change.
(v) The
Company has the corporate power to execute and deliver the Agreement and to
issue, sell and deliver the Preferred Shares as contemplated in this Agreement.
This Agreement has been duly authorized, executed and, so far as is known to
us,
delivered by the Company.
A-1
(vi) No
approval, authorization, consent or order of, or filing with, any federal or
state governmental or regulatory commission, board, body, authority or agency
is
required under Applicable Law in connection with the execution, delivery and
performance of the Underwriting Agreement, or the consummation of the
transactions contemplated thereby, by the Company, other than such as have
been
obtained or made under the Securities Act or the Securities Exchange Act of
1934, as amended; provided, however, that we do not express any opinion as
to
any necessary qualification under the securities or blue sky laws of the various
jurisdictions in which the Preferred Shares are being offered by Underwriter
or
any approval of the underwriting terms and arrangements relating to the offering
of the Preferred Shares by the NASD.
(vii) The
Preferred Shares, when issued and delivered by the Company pursuant to the
resolutions of the Company’s Board of Directors approving such issuance and the
Underwriting Agreement against payment of the consideration set forth therein,
will be duly authorized, validly issued, fully paid and
nonassessable.
(viii) The
issuance and sale of the Preferred Shares by the Company is not subject to
preemptive or other similar rights arising by operation of the Maryland General
Corporation Law, under the charter or bylaws of the Company or under any
agreement known to us to which the Company is a party.
(ix) The
Conversion Shares initially issuable upon conversion of the Preferred Shares
have been duly authorized and reserved and, when issued and delivered by the
Company in accordance with the terms of the Preferred Shares, will be validly
issued, fully paid and nonassessable.
(x) To
our
knowledge, except as otherwise described in the Registration Statement, the
Disclosure Package, the Prospectus, the documents incorporated therein by
reference or the exhibits filed in connection therewith, there are no persons
with registration or other similar rights to have any securities registered
pursuant to the Registration Statement.
(xi) At
the
time the Registration Statement became effective and as of the date of the
Underwriting Agreement, the Registration Statement and, as of the date of the
Underwriting Agreement and the First Closing Date, the Prospectus (in each
case,
other than the financial statements, financial schedules and other financial
and
statistical data included or incorporated by reference in, or excluded from,
the
Registration Statement and the Prospectus, as to which we express no opinion)
complied as to form in all material respects with the requirements of the
Securities Act and the rules and regulations promulgated
thereunder.
(xii) The
statements under the caption “Description of Preferred Stock” in each of the
Disclosure Package and the Prospectus, insofar as such statements constitute
a
summary of the legal matters referred to therein, constitute accurate summaries
thereof in all material respects as of the date of such statements.
(xiii) To
our
knowledge, there are no actions, suits or proceedings or inquiries or
investigations, pending or threatened, against the Company or any of its
officers and directors or to which the Company’s assets (excluding the Company’s
direct or indirect interests in the Subsidiaries) are subject, at law or in
equity, before or by any federal, state, local or foreign governmental or
regulatory commission, board, body, authority, arbitration panel or agency
that
are required to be described in the Prospectus or the documents incorporated
therein by reference but are not so described.
A-2
(xiv) The
Company is not an “investment company” required to register under the Investment
Company Act of 1940, as amended, (the “1940 Act”) or a company “controlled” by
an “investment company” within the meaning of the 1940 Act.
(xv) Commencing
with its taxable year ended December 31, 1994 through its taxable year ended
December 31, 2005, the Company has been organized and has operated in conformity
with the requirements for qualification and taxation as a REIT under the Code
and its organization and proposed method of operation will enable it to continue
to meet the requirements for qualification and taxation as a REIT;
and
(xvi) The
statements contained in the Disclosure Package and the Prospectus Supplement
under the caption “Certain Material U.S. Federal Income Tax Considerations”
insofar as such statements constitute matters of law, summaries of legal
matters, or legal conclusions, have been reviewed by us and fairly present
and
summarize, in all material respects, the matters referred to
therein.
The
Registration Statement became effective under the Securities Act on September
8,
2003 and, to our knowledge, no stop order suspending the effectiveness of the
Registration Statement has been issued under the Securities Act or proceedings
therefor initiated or threatened by the Commission.
In
addition, we have reviewed the Registration Statement, the Disclosure Package
and the Prospectus and participated in conferences with officers and other
representatives of the Company, representatives of independent public
accountants for the Company at which the contents of the Registration Statement,
the Disclosure Package and the Prospectus and related matters were discussed,
although we are not passing upon, and do not assume any responsibility for,
the
accuracy, completeness or fairness of the statements contained or incorporated
by reference in the Registration Statement, the Disclosure Package and the
Prospectus and have not made any independent check or verification thereof,
during the course of such participation, nothing has come to our attention
that
leads us to believe that (i) the Registration Statement, at the time such
Registration Statement became effective or the date of the Underwriting
Agreement, 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) that the Disclosure Package, as of the
date of the Underwriting Agreement or the First Closing Date or the Second
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 the light of the circumstances under which they were
made, not misleading or (iii) that the Prospectus, as of its date or at the
First Closing Date or the Second 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 the light of the
circumstances under which they were made, not misleading (it being understood
that we express no belief with respect to the financial statements, financial
schedules and other financial or statistical data included or incorporated
by
reference in, or excluded from, the Registration Statement, the Disclosure
Package or the Prospectus).
The
limitations inherent in the independent verification of factual matters and
the
character of determinations involved in the preparation of a disclosure document
are such, however, that we do not assume any responsibility, except as otherwise
stated in opinion (xiii) and (xvi) above, for the accuracy, completeness or
fairness of the statements contained in the Registration Statement, the
Disclosure Package or Prospectus or any amendments or supplements thereto
(including any of the documents incorporated by reference therein).
A-3
EXHIBIT
B
Opinion
of inside counsel for the Company to be delivered pursuant to
Section 5(d)(ii) of the Underwriting Agreement.
References
to the Prospectus in this Exhibit B
include
any supplements thereto at the Closing Date.
(i)
All
of the issued and outstanding partnership interests of Essex Portfolio L.P.
have
been duly authorized and issued in accordance with the partnership
agreement.
(ii)
To
the best knowledge of such counsel, neither the Company nor any subsidiary
is in
violation of its charter or by-laws or any law, administrative regulation or
administrative or court decree applicable to the Company or any subsidiary
or is
in default in the performance or observance of any obligation, agreement,
covenant or condition contained in any material existing instrument, except
in
each such case for such violations or defaults as would not, individually or
in
the aggregate, result in a Material Adverse Change.
(iii)
Each of the partnership and joint venture agreements to which the Company or
any
of its subsidiaries is a party, and which relates to real property described
in
the Prospectus, has been duly authorized, executed and delivered by such
applicable party and constitutes the valid agreement thereof, enforceable in
accordance with its terms, except as limited by bankruptcy and general equitable
principles and except as would not, individually or in the aggregate, result
in
a Material Adverse Change; and the execution, delivery and performance of any
of
such agreements did not, at the time of execution and delivery, and does not
constitute a breach of, or default under, the charter or bylaws of such party
or
any material contract, lease or other instrument to which such party is a party
or by which its properties may be bound or any law, administrative regulation
or
administrative or court order or decree, except for such breaches or defaults
as
would
not, individually or in the aggregate, result in a Material Adverse
Change.
B-1
EXHIBIT
C
July
21,
▇▇▇▇
▇▇▇▇
▇▇
▇▇▇▇▇▇▇ Securities LLC
▇
▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
RE: Essex
Property Trust, Inc. (the “Company”)
Ladies
& Gentlemen:
The
undersigned is an owner of record or beneficially of certain shares of Common
Stock of the Company, (“Common Stock”) or securities convertible into or
exchangeable or exercisable for Common Stock. The Company proposes to carry
out
a public offering of Preferred Stock (the “Offering”) for which you will act as
the underwriter. The undersigned recognizes that the Offering will be of benefit
to the undersigned and will benefit the Company by,
among
other things, raising additional capital for its operations.
The
undersigned acknowledges that you are relying on the representations and
agreements of the undersigned contained in this letter in carrying out the
Offering and in entering into underwriting arrangements with the Company with
respect to the Offering.
In
consideration of the foregoing, the undersigned hereby agrees that the
undersigned will not, (and will cause any spouse or immediate family member
of
the spouse or the undersigned living in the undersigned’s household not to),
without the prior written consent of Banc of America Securities LLC (which
consent may be withheld in its sole discretion), directly or indirectly, sell,
offer, contract or grant any option to sell (including without limitation any
short sale), pledge, transfer, establish an open “put equivalent position” or
liquidate or decrease a “call equivalent position” within the meaning of Rule
16a-1(h) under the Securities Exchange Act of 1934, as amended, or otherwise
dispose of,transfer or hedge (or enter into any transaction which is designed
to, or might reasonably be expected to, result in the disposition of) including
the filing of a registration statement with the Securities and Exchange
Commission in respect of any shares of Common Stock, options or warrants to
acquire shares of Common Stock, or securities exchangeable or exercisable for
or
convertible into shares of Common Stock currently or hereafter owned either
of
record or beneficially (as defined in Rule 13d-3 under the Securities Exchange
Act of 1934, as amended) by the undersigned (or such spouse or family member),
or publicly announce an intention to do any of the foregoing, for a period
commencing on the date hereof and continuing through the close of trading on
the
date 60 days after the date of the Prospectus. The
foregoing sentence shall not apply to sales of Common Stock (whether in
connection with the exercise of stock options or otherwise) pursuant to a Rule
10b5-1 selling plan entered into by the undersigned prior to the date hereof.
The undersigned also agrees and consents to the entry of stop transfer
instructions with the Company’s transfer agent and registrar against the
transfer of shares of Common Stock or securities convertible into or
exchangeable or exercisable for Common Stock held by the undersigned except
in
compliance with the foregoing restrictions.
With
respect to the Offering only, the undersigned waives any registration rights
relating to registration under the Securities Act of any Common Stock owned
either of record or beneficially by the undersigned, including any rights to
receive notice of the Offering.
This
agreement is irrevocable and will be binding on the undersigned and the
respective successors, heirs, personal representatives, and assigns of the
undersigned.
C-1
By:
Signature
(and
indicate capacity of person signing if
signing
as custodian, trustee, or on behalf
of
an
entity)
C-2
EXHIBIT
D
Officers
▇▇▇▇▇
▇.
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇
▇. Dance
▇▇▇▇▇
▇.
▇▇▇▇▇▇▇▇▇
▇▇▇▇
▇.
▇▇▇▇
Directors
▇▇▇▇▇▇
▇.
▇▇▇▇▇▇
▇▇▇▇▇
▇.
▇▇▇▇▇
▇▇▇▇▇▇
▇.
▇▇▇▇▇▇
▇▇▇▇
▇.
▇▇▇▇▇▇
▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇
▇.
▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇
▇.
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
▇. ▇▇▇▇▇
D-1