CAPLEASE, INC. Shares of 8.125% Series A Cumulative Redeemable Preferred Stock UNDERWRITING AGREEMENT
Execution
Copy
Shares
of 8.125% Series A Cumulative Redeemable Preferred Stock
March 26,
2010
▇▇▇▇▇
FARGO SECURITIES, LLC
▇▇▇▇▇▇▇,
SACHS & CO.
as
Representatives of the several Underwriters
c/▇ ▇▇▇▇▇
Fargo Securities, LLC
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
c/o
Goldman, Sachs & Co.
▇▇▇ ▇▇▇▇
▇▇▇▇▇▇
▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear
Sirs:
CapLease, Inc., a Maryland corporation (the “Company”), confirms
its agreement with each of the Underwriters listed on Schedule I hereto
(collectively, the “Underwriters”), for
whom ▇▇▇▇▇ Fargo Securities, LLC and ▇▇▇▇▇▇▇, Sachs & Co. are acting as
Representatives (in such capacity, the “Representatives”),
with respect to (a) the sale by the Company of 1,800,000 shares (the “Initial Shares”) of
8.125% Series A Cumulative Redeemable Preferred Stock (liquidation preference
$25.00 per share), par value $0.01 per share, of the Company (the “Series A Preferred
Stock”), and the purchase by the Underwriters, acting severally and not
jointly, of the respective number of shares of Series A Preferred Stock set
forth opposite the names of the Underwriters in Schedule I hereto, and (b) the
grant of the option described in Section 1(b) hereof to purchase all or any part
of 270,000 additional shares of
Series A Preferred Stock to cover over-allotments (the “Option Shares”), if
any, from the Company to the Underwriters, acting severally and not
jointly. The 1,800,000 Initial Shares and all or any part of the
270,000 Option Shares are hereinafter called, collectively, the “Shares.” The
Company previously issued and sold 1,400,600 shares of Series A Preferred Stock
beginning on October 12, 2005, which shares were registered with the U.S.
Securities and Exchange Commission (the “Existing Series A Preferred
Stock”), all of which Existing Series A Preferred Stock are outstanding
as of the date hereof. The Shares will have identical terms and
conditions, other than issue date, issue price, and the date from which
dividends payable on the Shares will begin to accrue, as the Existing Series A
Preferred Stock, and will constitute an additional issuance of and form a single
series with, the Existing Series A Preferred Stock.
The
Company understands that the Underwriters propose to make a public offering of
the Shares as soon as the Underwriters deem advisable after this Underwriting
Agreement (this “Agreement”) has been
executed and delivered.
The
Company has filed with the Securities and Exchange Commission (the “Commission”), a
registration statement on Form S-3 (No. 333-148653), including a related
prospectus, for the registration of securities, including the Shares, under the
Securities Act of 1933, as amended (the “Securities Act”), and
the rules and regulations thereunder (the “Securities Act
Regulations”). The Company has prepared and filed such
amendments to the registration statement and such amendments or supplements to
the related prospectus as may have been required to the date hereof, and will
file such additional amendments or supplements as may hereafter be
required. The registration statement has been declared effective
under the Securities Act by the Commission. The registration
statement, as amended at the time it was declared effective by the Commission
(and, if the Company files a post-effective amendment to such registration
statement which becomes effective prior to the Initial Closing Time (as defined
below), such registration statement as so amended) and including all information
deemed to be a part of the registration statement pursuant to incorporation by
reference or Rule 430B of the Securities Act Regulations is hereinafter called
the “Registration
Statement.” Any registration statement filed pursuant to Rule
462(b) of the Securities Act Regulations is hereinafter called the “Rule 462(b) Registration
Statement,” and after such filing the term “Registration
Statement” shall include the 462(b) Registration
Statement. The term “Base Prospectus”
means the prospectus dated January 25, 2008 included in the Registration
Statement, including all information incorporated by reference
therein. The term “Prospectus
Supplement” means the prospectus supplement specifically relating to the
Shares in the form first filed with the Commission pursuant to Rule 424 of the
Securities Act Regulations, including all information incorporated by reference
therein. The term “Prospectus” means the
Base Prospectus together with the Prospectus Supplement. The term
“Preliminary
Prospectus” means any preliminary form of the Prospectus in the form
filed with the Commission pursuant to Rule 424 of the Securities Act
Regulations.
The
Commission has not issued any order preventing or suspending the use of any
Preliminary Prospectus.
The term
“Disclosure
Package” means (a) the Base Prospectus, the Preliminary Prospectus, as
most recently amended or supplemented immediately prior to the Initial Sale Time
(as defined herein), (b) the Issuer Free Writing Prospectuses (as defined
below), if any, identified in Schedule IIA, (c) the
information contained on Schedule IIB and (d) any other
Free Writing Prospectus (as defined below) that the parties hereto shall
hereafter expressly agree to treat as part of the Disclosure
Package.
The term
“Issuer Free Writing
Prospectus” means any issuer free writing prospectus, as defined in Rule
433 of the Securities Act Regulations. The term “Free Writing
Prospectus” means any free writing prospectus, as defined in Rule 405 of
the Securities Act Regulations.
All
references in this Agreement to financial statements and schedules and other
information which is “contained,” “included” or “stated” in the Registration
Statement, the Disclosure Package, the Preliminary Prospectus or the Prospectus
shall be deemed to mean and include all such financial statements and schedules
and other information that is incorporated by reference in or otherwise deemed
by Securities Act Regulations to be a part of or included in the Registration
Statement, the Disclosure Package, the Preliminary Prospectus or the Prospectus,
as the case may be; and all references in this Agreement to amendments or
supplements to the Registration Statement, the Disclosure Package, the
Preliminary Prospectus or the Prospectus shall be deemed to mean and include the
filing of any document under the Securities Exchange Act of 1934 (the “Exchange Act”) that
is incorporated by reference in or otherwise deemed by Securities Act
Regulations to be a part of or included in the Registration Statement, the
Disclosure Package, the Preliminary Prospectus or the Prospectus, as the case
may be.
The
Company and the Underwriters agree as follows:
1. Sale and
Purchase:
(a) Initial Shares. Upon the basis of the
warranties and representations and other terms and conditions herein set forth,
at the purchase price per share of $22.334, the Company agrees to sell to the
Underwriters the Initial Shares, and each Underwriter agrees, severally and not
jointly, to purchase from the Company the number of Initial Shares set forth in
Schedule I opposite such
Underwriter’s name, plus any additional number of Initial Shares that such
Underwriter may become obligated to purchase pursuant to the provisions of
Section 8 hereof, subject in each case, to such adjustments among the
Underwriters as the Representative in its sole discretion shall make to
eliminate any sales or purchases of fractional shares.
(b) Option Shares. In
addition, upon the basis of the warranties and representations and other terms
and conditions herein set forth, at the purchase price per share set forth in
paragraph (a), less an amount per share equal to any dividends or distributions
declared by the Company and payable on the Initial Shares but not payable on the
Option Shares, the Company hereby grants an option to the Underwriters, acting
severally and not jointly, to purchase from the Company, all or any part of the
Option Shares, plus any additional number of Option Shares that such Underwriter
may become obligated to purchase pursuant to the provisions of Section 8
hereof. The option hereby granted will expire 30 days after the date
hereof and may be exercised in whole or in part from time to time only for the
purpose of covering over-allotments which may be made in connection with the
offering and distribution of the Initial Shares upon notice by the
Representatives to the Company setting forth the number of Option Shares as to
which the several Underwriters are then exercising the option and the time and
date of payment and delivery for such Option Shares. Any such time
and date of delivery (an “Option Closing Time”)
shall be determined by the Representatives, but shall not be later than five
full business days after the exercise of such option, nor in any event prior to
the Initial Closing Time (as hereinafter defined). If the option is
exercised as to all or any portion of the Option Shares, the Company will sell
that number of Option Shares then being purchased, and each of the Underwriters,
acting severally and not jointly, will purchase that proportion of the total
number of Option Shares then being purchased which the number of Initial Shares
set forth in Schedule I
opposite the name of such Underwriter bears to the total number of Initial
Shares, subject in each case to such adjustments among the Underwriters as the
Representatives in their sole discretion shall make to eliminate any sales or
purchases of fractional shares.
2. Payment and
Delivery
(a) Initial
Shares. The Initial Shares to be purchased by each Underwriter
hereunder, in definitive form, and in such authorized denominations and
registered in such names as the Representatives may request upon at least 48
hours’ prior notice to the Company shall be delivered by or on behalf of the
Company to the Representatives, including, at the option of the Representatives,
through the facilities of The Depository Trust Company (“DTC”) for the account
of such Underwriter, against payment by or on behalf of such Underwriter of the
purchase price therefor by wire transfer of Federal (same-day) funds to the
account specified in writing to the Representatives by the Company upon at least
48 hours’ prior notice. Upon request of the Representatives, the
Company will cause the certificates representing the Initial Shares to be made
available for checking and packaging at least 24 hours prior to the Initial
Closing Time with respect thereto at the office of ▇▇▇▇▇ Fargo Securities, LLC,
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at the office of
DTC or its designated custodian, as the case may be (the “Designated
Office”). The time and date of such delivery and payment shall
be 9:30 a.m., New York City time, on the third (fourth, if pricing occurs after
4:00 p.m., New York City time) business day after the date hereof (unless
another time and date shall be agreed to by the Representatives and the
Company). The time at which such payment and delivery are actually
made is hereinafter sometimes called the “Initial Closing
Time.”
(b) Option Shares. Any
Option Shares to be purchased by each Underwriter hereunder, in definitive form,
and in such authorized denominations and registered in such names as the
Representatives may request upon at least 48 hours’ prior notice to the Company
shall be delivered by or on behalf of the Company to the Representatives,
including, at the option of the Representatives, through the facilities of DTC
for the account of such Underwriter, against payment by or on behalf of such
Underwriter of the purchase price therefor by wire transfer of Federal
(same-day) funds to the account specified in writing to the Representatives by
the Company upon at least 48 hours’ prior notice. Upon request of the
Representatives, the Company will cause the certificates representing the Option
Shares to be made available for checking and packaging at least 24 hours prior
to the Option Closing Time with respect thereto at the Designated
Office. The time and date of such delivery and payment shall be 9:30
a.m., New York City time, on the date specified by the Representatives in the
notice given by the Representatives to the Company of the Underwriters’ election
to purchase such Option Shares or on such other time and date as the Company and
the Representatives may agree upon in writing.
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3. Representations and
Warranties of the Company: The Company represents and warrants
to the Underwriters that:
(a) the
authorized, issued and outstanding shares of capital stock of the Company as of
December 31, 2009 are as set forth in the column entitled “Historical” in the
“Capitalization” section of the Disclosure Package and the Prospectus (except
for subsequent issuances thereof, if any, contemplated by this Agreement or
pursuant to the Company’s dividend reinvestment and stock purchase plan, “at the
market offering” program and employee benefit plans referred to in the
Disclosure Package and the Prospectus or as otherwise disclosed in the
Disclosure Package and the Prospectus); the outstanding shares of stock or, as
applicable, partnership, membership or other equity interests, of the Company
and each of the subsidiaries of the Company (each, a “Subsidiary” and
collectively, the “Subsidiaries”), have
been duly authorized and validly issued and are fully paid and, with respect to
shares of capital stock, limited partnership interests and membership interests,
non-assessable (except to the extent such non-assessability may be affected by
Section 17-607 of the Delaware Revised Uniform Limited Partnership Act or
Section 18-607 of the Delaware Limited Liability Company Act), and, except as
disclosed in the Disclosure Package and the Prospectus, all of the outstanding
shares of capital stock or partnership, membership or other equity interests of
the Subsidiaries are directly or indirectly owned of record and beneficially by
the Company, free and clear of any pledge, lien, encumbrance, security interest
or other claim and other than a pledge of the membership interest in the owner
of the EPA building to Caplease Debt Funding, LP, created to facilitate
mezzanine financing on such property, and, except as disclosed in the Disclosure
Package and the Prospectus and as otherwise set forth below, there are no
outstanding (i) securities or obligations of the Company or any of the
Subsidiaries convertible into or exchangeable or redeemable for any capital
stock or other equity interests of the Company or any Subsidiary,
(ii) warrants, rights or options to subscribe for or purchase from the
Company or any Subsidiary any such capital stock or other equity interests or
any such convertible or exchangeable securities or obligations (except for
warrants, rights or options issued under incentive, benefit or share purchase
plans of the Company referred to in the Disclosure Package and the Prospectus
for officers, employees and others performing or providing similar services), or
(iii) obligations of the Company or any Subsidiary to issue any shares of
capital stock or other equity interests, any such convertible or exchangeable or
redeemable securities or obligations, or any such warrants, rights or
options;
(b) each of the
Company and the Subsidiaries (all of which Subsidiaries are named on Schedule III, except for those
Subsidiaries that, considered in the aggregate as a single subsidiary, do not
constitute a “significant subsidiary” as defined in Rule 1-02 of Regulation S-X
promulgated by the Commission) has been duly incorporated or organized and is
validly existing as a corporation, limited partnership, limited liability
company or business or other trust, as applicable, in good standing (where
applicable) under the laws of its respective jurisdiction of incorporation or
organization with full corporate or other power and authority to own its
respective assets and to conduct its respective businesses as described in the
Disclosure Package and the Prospectus and, in the case of the Company, to
execute and deliver this Agreement and to consummate the transactions
contemplated herein;
(c) each of the
Company and the Subsidiaries is duly qualified and is in good standing in each
jurisdiction in which the nature or conduct of its business requires such
qualification and in which the failure, individually or in the aggregate, to be
so qualified could reasonably be expected to have a material adverse effect on
the assets, business, operations, earnings or financial condition of the Company
and the Subsidiaries taken as a whole (a “Material Adverse
Effect”); except as disclosed in the Disclosure Package and the
Prospectus, no Subsidiary is prohibited or restricted, directly or indirectly,
from paying dividends to the Company or from making any other distribution with
respect to such Subsidiary’s capital stock or other equity interests (other than
customary restrictions on dividends or other distributions in the Company’s
short-term borrowing facilities) from repaying to the Company or any other
Subsidiary any amounts that may from time to time become due under any loans or
advances to such Subsidiary from the Company or such other Subsidiary (other
than customary prepayment restrictions included in Subsidiary mortgage financing
agreements);
(d) the Company
and the Subsidiaries are in compliance in all material respects with all
applicable federal, state, local or foreign laws, regulations, rules, decrees,
judgments and orders, including those relating to transactions with affiliates,
except where any failures to be in compliance could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse
Effect;
(e) none of the
Company and the Subsidiaries is in breach of or in default under (nor has any
event occurred which with notice, lapse of time, or both would constitute a
breach thereof, or default thereunder by the Company or the Subsidiaries) its
respective organizational documents, or in the performance or observance of any
obligation, agreement, covenant or condition contained in any license,
indenture, mortgage, deed of trust, loan or credit agreement or other agreement
or instrument to which the Company or any of the Subsidiaries is a party or by
which any of them or their respective properties is bound, except for such
breaches or defaults that, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect;
(f) the
execution, delivery and performance of this Agreement and consummation of the
transactions contemplated herein will not (i) conflict with, or result in any
breach of, or constitute a default under (nor constitute any event which with
notice, lapse of time, or both would constitute a breach of, or default under),
(A) any provision of the organizational documents of the Company or any
Subsidiary, or (B) any provision of any license, indenture, mortgage, deed of
trust, loan or credit agreement or other agreement or instrument to which the
Company or any Subsidiary is a party or by which any of them or their respective
assets may be bound or affected, or under any federal, state, local or foreign
law, regulation or rule or any decree, judgment or order applicable to the
Company or any Subsidiary, except in the case of this clause (B) for such
conflicts, breaches or defaults that, individually or in the aggregate, could
not reasonably be expected to have a Material Adverse Effect; or (ii) result in
the creation or imposition of any lien, charge, claim or encumbrance upon any
asset of the Company or any Subsidiary that, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect;
(g) this
Agreement has been duly authorized, executed and delivered by the Company and is
a legal, valid and binding agreement of the Company enforceable in accordance
with its terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors’ rights generally
and by general equitable principles (collectively, the “Exceptions”), and
except to the extent that the indemnification and contribution provisions of
Section 9 hereof may be limited by federal or state securities laws
and public policy considerations in respect thereof; articles supplementary to
the Company’s charter establishing the terms of the Series A Preferred Stock and
authorizing the proper number of Shares (the “Articles
Supplementary”) will be, by the Initial Closing Time, duly authorized,
executed and filed by the Company with the Maryland State Department of
Assessments and Taxation;
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(h) no approval,
authorization, consent or order of or filing with any federal, state, local or
foreign governmental or regulatory commission, board, body, authority or agency
or any other third party is required in connection with the Company’s execution,
delivery and performance of this Agreement, its consummation of the transactions
contemplated herein or the Company’s sale and delivery of the Shares, other than
(i) such as have been obtained, or will have been obtained at the Initial
Closing Time or the relevant Option Closing Time, as the case may be, under the
Securities Act and the Exchange Act, (ii) such approvals as will be obtained
prior to the Initial Closing Time in connection with the approval of the listing
of the Shares on the New York Stock Exchange, (iii) any necessary qualification
under the securities or blue sky laws of the various jurisdictions in which the
Shares are being offered by the Underwriters, (iv) filings with and approvals by
the Financial Industry Regulatory Authority (“FINRA”) and (v) such
approvals, authorizations, consents or orders or filings, the absence of which,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect;
(i) each of the
Company and the Subsidiaries has all necessary licenses, authorizations,
consents and approvals and has made all necessary filings required under any
federal, state, local or foreign law, regulation or rule, and has obtained all
necessary authorizations, consents and approvals from other persons, required in
order to conduct the business described in the Disclosure Package and the
Prospectus, except to the extent that any failure to have any such licenses,
authorizations, consents or approvals, to make any such filings or to obtain any
such authorizations, consents or approvals could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect; none of the
Company and the Subsidiaries is in violation of, in default under, or has
received any notice regarding a possible violation, default or revocation of any
such license, authorization, consent or approval or any federal, state, local or
foreign law, regulation or rule or any decree, judgment or order applicable to
the Company or any of the Subsidiaries, the effect of which could reasonably be
expected to result in a Material Adverse Effect; and no such license,
authorization, consent or approval contains a materially burdensome restriction
that is not adequately disclosed in the Disclosure Package and the
Prospectus;
(j) the Company
and the transactions contemplated by this Agreement meet the requirements for
the use of Form S-3 under the Securities Act; each of the Registration Statement
and any Rule 462(b) Registration Statement has become effective under the
Securities Act and no stop order suspending the effectiveness of the
Registration Statement or any Rule 462(b) Registration Statement has been
issued under the Securities Act and no proceedings for that purpose have been
instituted or are pending or, to the Company’s knowledge, are threatened by the
Commission, and, to the Company’s knowledge, the Company has complied with any
request on the part of the Commission for additional information;
(k) the
Preliminary Prospectus when filed and the Registration Statement as of its
initial effective date, the filing date of the Company’s Annual Report on Form
10-K for year ended December 31, 2009, any subsequent effective date in
connection with the Shares and as of the date hereof complied or will comply,
and the Prospectus and any further amendments or supplements to the Registration
Statement, the Preliminary Prospectus or the Prospectus filed in connection with
the Shares will, when they become effective or are filed with the Commission, as
the case may be, comply, in all material respects with the requirements of the
Securities Act and the Securities Act Regulations;
(l) the
Registration Statement, as of its initial effective date, the filing date of the
Company’s Annual Report on Form 10-K for year ended December 31, 2009 and as of
the date hereof, did not, does not and 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 statements therein not misleading; and the Preliminary
Prospectus does not, and the Prospectus or any amendment or supplement thereto
will not, as of the applicable filing date, the date hereof and at the Initial
Closing Time and at the Option Closing Time (if any), contain an untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that the Company makes no warranty or
representation with respect to any statement contained in or omitted from the
Registration Statement, the Preliminary Prospectus or the Prospectus in reliance
upon and in conformity with the information concerning the Underwriters and
furnished in writing by or on behalf of the Underwriters through the
Representatives to the Company expressly for use therein (that information being
limited to that described in Schedule IV);
(m) the Company
is not an Ineligible Issuer (as defined in Rule 405 of the Securities Act
Regulations), without taking into account any determination by the Commission
pursuant to such Rule 405 that it is not necessary that the Company be
considered an Ineligible Issuer; each document incorporated by reference in the
Prospectus or the Disclosure Package, when it was filed with the Commission,
conformed in all material respects to the requirements of the Securities Act and
the Securities Act Regulations, or the Exchange Act and the rules and
regulations promulgated under the Exchange Act (the “Exchange Act
Regulations”), as applicable, and none of such documents contained an
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading; and,
until the completion of the public offer and sale of the Shares, any further
documents so filed and incorporated by reference in the Prospectus or the
Disclosure Package or any further amendment or supplement thereto, when such
documents are filed with the Commission, will conform in all material respects
to the requirements of the Securities Act and the Securities Act Regulations, or
the Exchange Act and the Exchange Act Regulations, as applicable, and will not
include an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading;
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(n) as of 1:25
p.m. (Eastern time) on March 26, 2010 (the “Initial Sale Time”),
the Disclosure Package did not, and at the Initial Closing Time and any Option
Closing Time, the Disclosure Package will not, contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; as of its issue date or date of first use and at all
subsequent times through the Initial Sale Time, each Issuer Free Writing
Prospectus did not, and at the Initial Closing Time and any Option Closing Time,
each such Issuer Free Writing Prospectus will not, contain any untrue statement
of a material fact or omit to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that the Company makes no warranty or
representation with respect to any statement contained in or omitted from the
Disclosure Package in reliance upon and in conformity with the information
concerning the Underwriters and furnished in writing by or on behalf of the
Underwriters through the Representatives to the Company expressly for use
therein (that information being limited to that described in the last sentence
of Schedule
IV);
(o) each Issuer
Free Writing Prospectus, as of its issue date and at all subsequent times
through the completion of the public offer and sale of the Shares or until any
earlier date that the Company notifies the Representatives in writing did not,
does not and will not include any information that conflicted, conflicts or will
conflict with the information contained in the Registration Statement, including
any document incorporated by reference therein that has not been superseded or
modified;
(p) the Company
is eligible to use Free Writing Prospectuses in connection with this offering
pursuant to Rules 164 and 433 of the Securities Act Regulations; any Free
Writing Prospectus that the Company is required to file pursuant to Rule 433(d)
of the Securities Act Regulations has been, or will be, filed with the
Commission in accordance with the requirements of the Securities Act and the
Securities Act Regulations; and each Free Writing Prospectus that the Company
has filed, or is required to file, pursuant to Rule 433(d) of the Securities Act
Regulations or that was prepared by or on behalf of or used by the Company
complies or will comply in all material respects with the requirements of the
Securities Act and the Securities Act Regulations;
(q) except for
the Issuer Free Writing Prospectuses identified in Schedule IIA hereto, and any
electronic road show relating to the public offering of the Shares contemplated
herein, the Company has not prepared, used or referred to, and will not, without
the prior consent of the Representatives, prepare, use or refer to, any Free
Writing Prospectus;
(r) the
Preliminary Prospectus, the Prospectus and any Issuer Free Writing Prospectuses
(to the extent any such Issuer Free Writing Prospectus was required to be filed
with the Commission) delivered to the Underwriters for use in connection with
the public offering of the Shares contemplated herein have been and will be
identical to the versions of such documents transmitted to the Commission for
filing via the Electronic Data Gathering Analysis and Retrieval System (“▇▇▇▇▇”), except to
the extent permitted by Regulation S-T;
(s) the Company
filed the Registration Statement with the Commission before using any Issuer
Free Writing Prospectus (it being hereby acknowledged that, subject to the other
representations, warranties and covenants in this Agreement, documents
incorporated by reference may be filed after using any Issuer Free Writing
Prospectus);
(t) the financial
statements, including the related supporting schedules and notes, included in
(or incorporated by reference into) the Disclosure Package and the Prospectus
present fairly the consolidated financial position of the entities to which such
financial statements relate (the “Covered Entities”) as
of the dates indicated and the consolidated results of operations and changes in
financial position and cash flows of the Covered Entities for the periods
specified; such financial statements have been prepared in conformity with
generally accepted accounting principles as applied in the United States and on
a consistent basis during the periods involved (except as may be expressly
stated in the related notes thereto) and in accordance with Regulation S-X
promulgated by the Commission; the financial data in the Disclosure Package and
the Prospectus fairly presents the information shown therein and has been
compiled on a basis consistent with the financial statements included in the
Disclosure Package and the Prospectus; no other financial statements or
supporting schedules are required to be included in the Disclosure Package or
the Prospectus; the unaudited pro forma financial information (including the
related notes) included in the Disclosure Package and the Prospectus complies as
to form in all material respects with the applicable accounting requirements of
the Securities Act and the Securities Act Regulations and the Exchange Act and
Exchange Act Regulations, as applicable, and management of the Company believes
that the assumptions underlying the pro forma adjustments are reasonable; such
pro forma adjustments have been properly applied to the historical amounts in
the compilation of the information; no other pro forma financial information is
required to be included in the Disclosure Package or the
Prospectus;
(u) McGladrey
& ▇▇▇▇▇▇, LLP, whose reports on the consolidated financial statements of the
Company and the Subsidiaries and the Company’s predecessor are filed with the
Commission as part of the Disclosure Package and the Prospectus or are
incorporated by reference therein, were during the periods covered by their
reports independent registered public accountants as required by the Securities
Act, the Securities Act Regulations, the Exchange Act and the Exchange Act
Regulations;
(v) subsequent to
the respective dates as of which information is given in the Disclosure Package
and the Prospectus, and except as may be otherwise stated in the Disclosure
Package and the Prospectus, there has not been (i) any Material Adverse Effect
or any change or event that reasonably could be expected to have a Material
Adverse Effect, whether or not arising in the ordinary course of business, (ii)
any obligation, contingent or otherwise, directly or indirectly incurred by the
Company or any of the Subsidiaries that reasonably could be expected to result
in a Material Adverse Effect or (iii) except for regular quarterly dividends on
the Company’s common stock, par value $0.01 per share, and the Company’s Series
A Preferred Stock, described in the Disclosure Package and the Prospectus, any
dividend or distribution of any kind declared, paid or made by the Company on
any class of its capital stock;
5
(w) the Shares
conform in all material respects to the description thereof contained in the
Disclosure Package and the Prospectus, and such descriptions conform to the
rights set forth in the Article Supplementary;
(x) the Shares
have been duly authorized and, when issued and duly delivered against payment
therefor as contemplated by this Agreement, will be validly issued, fully paid
and non-assessable, free and clear of any pledge, lien, encumbrance, security
interest or other claim created by or known to the Company, and the issuance and
sale of the Shares by the Company is not subject to preemptive or other similar
rights arising by operation of law, under the organizational documents of the
Company or under any agreement to which the Company or any Subsidiary is a party
or otherwise;
(y) at or before
the Initial Closing Time, the Shares will have been registered under Section
12(b) of the Exchange Act;
(z) all
securities issued by the Company or any of the Subsidiaries prior to the date
hereof have been issued and sold in compliance with (i) all applicable federal
and state securities laws, and (ii) to the extent applicable to the issuing
entity, the requirements of the New York Stock Exchange;
(aa) the Company
has not taken, and will not take, directly or indirectly, any action that is
designed to or that has constituted or that might reasonably be expected to
cause or result in stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of the Shares;
(bb) in connection
with the offering of the Shares, the Company has not offered and will not offer
its Series A Preferred Stock or any other securities convertible into or
exchangeable or exercisable or redeemable for Series A Preferred Stock in a
manner in violation of the Securities Act; and the Company has not distributed
and will not distribute any offering material in connection with the offer and
sale of the Shares except for the Preliminary Prospectus, the Prospectus, any
Issuer Free Writing Prospectus permitted by Section 3(q) and the Registration
Statement;
(cc) neither the
Company nor any of its affiliates (i) is required to register as a “broker” or
“dealer” in accordance with the provisions of the Exchange Act, or the Exchange
Act Regulations, or (ii) directly, or indirectly through one or more
intermediaries, controls or has any other association with (within the meaning
of Article I of the Bylaws of FINRA) any member firm
of FINRA;
(dd) the Company
has not relied upon the Representatives or legal counsel for the Representatives
for any legal, tax or accounting advice in connection with the offering and sale
of the Shares;
(ee) there are no
actions, suits, proceedings, inquiries or investigations pending or, to the
Company’s knowledge, threatened against the Company or any of the Subsidiaries
or any of their respective officers and directors or to which the assets of any
such entity are subject, at law or in equity, before or by any federal, state,
local or foreign governmental or regulatory commission, board, body, authority,
arbitral panel or agency, that could reasonably be expected to result in a
judgment, decree, award or order which would have a Material Adverse
Effect;
(ff) the
descriptions in the Disclosure Package and the Prospectus of the legal or
governmental proceedings, contracts, leases and other legal documents therein
described present fairly in all material respects the information required to be
disclosed, and there are no legal or governmental proceedings, contracts,
leases, or other documents of a character required to be described in the
Disclosure Package or the Prospectus or to be filed as exhibits to the
Registration Statement that are not described or filed as required; all
agreements between the Company or any of the Subsidiaries and third parties
expressly referenced in the Disclosure Package or the Prospectus are legal,
valid and binding obligations of the Company or one or more of the Subsidiaries,
enforceable in accordance with their respective terms, except to the extent
enforceability may be limited by the Exceptions and, to the Company’s knowledge,
no party is in breach or default under any such agreements that could reasonably
be expected to have a Material Adverse Effect;
(gg) the Company
and the Subsidiaries own or possess adequate licenses or other rights to use all
patents, trademarks, service marks, trade names, copyrights, software and design
licenses, trade secrets, manufacturing processes, other intangible property
rights and know-how (collectively “Intangibles”)
necessary to entitle the Company and the Subsidiaries to conduct their business
as described in the Disclosure Package and the Prospectus, and none of the
Company and the Subsidiaries has received notice of infringement of or conflict
with (and the Company knows of no such infringement of or conflict with)
asserted rights of others with respect to any Intangibles that, individually or
in the aggregate, could reasonably be expected to have a Material Adverse
Effect;
(hh) the Company
and the Subsidiaries have established and maintain disclosure controls and
procedures (as such term is defined in Rule 13a-15 and 15d-15 of the Exchange
Act Regulations); such disclosure controls and procedures are designed to ensure
that material information relating to the Company and its Subsidiaries is made
known to the Company's Chief Executive Officer and its Chief Financial Officer
by others within those entities, and such disclosure controls and procedures are
effective to perform the functions for which they were established; the Company
and the Subsidiaries have established and maintain internal control over
financial reporting (as such term is defined in Rule 13a-15 and 15d-15 of the
Exchange Act Regulations); such internal control over financial reporting is
designed to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles, including providing
reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use or disposition of the Company’s assets that could have a
material effect on the financial statements; the Company's auditors and the
audit committee of the board of directors have been advised of: (i) any
significant deficiencies and material weaknesses in the design or operation of
internal controls which are reasonably likely to adversely affect the Company's
ability to record, process, summarize and report financial data; and (ii) any
fraud, whether or not material, that involves management or other employees who
have a material role in the Company’s internal controls; since the date of the
most recent evaluation of such disclosure controls and procedures, there have
been no changes in internal control over financial reporting that has materially
affected, or is reasonably likely to materially affect, the Company’s internal
control over financial reporting;
6
(ii) each of the
Company and the Subsidiaries has filed on a timely basis (including in
accordance with any applicable extensions) all necessary federal, state, local
and foreign income and franchise tax returns required to be filed through the
date hereof or have properly requested extensions thereof, and have paid all
taxes shown as due thereon, and if due and payable, any related or similar
assessment, fine or penalty levied against the Company or any of the
Subsidiaries, except for any failure to file that, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect;
no tax deficiency has been asserted against any such entity, and the Company
does not know of any tax deficiency that is likely to be asserted against the
Company or any of the Subsidiaries that, individually or in the aggregate, if
determined adversely to any such entity, could reasonably be expected to have a
Material Adverse Effect; all tax liabilities are adequately provided for on the
respective books of the Company and the Subsidiaries;
(jj) commencing
with the taxable year ended December 31, 2004, the Company has been organized
and operated in conformity with the requirements for qualification as a real
estate investment trust (“REIT”) under the
Internal Revenue Code of 1986, as amended, including the regulations and
published interpretations thereunder (“Code”), and the
current and proposed method of operation of the Company and the Subsidiaries as
described in the Disclosure Package and the Prospectus will enable the Company
to continue to meet the requirements for qualification and taxation as a REIT
under the Code; the Company intends to continue to qualify as a REIT under the
Code for all subsequent years, and the Company does not know of any event that
could reasonably be expected to cause the Company to fail to qualify as a REIT
under the Code at any time;
(kk) the Company
and the Subsidiaries maintain, and, to the Company’s knowledge, their borrowers
maintain, insurance (issued by insurers of recognized financial responsibility)
of the types and in the amounts generally deemed adequate for the business of
the Company and the Subsidiaries;
(ll) each of the
Company and the Subsidiaries is in compliance in all material respects with all
presently applicable provisions of the Employee Retirement Income Security Act
of 1974, as amended, including the regulations and published interpretations
thereunder (“ERISA”); no
“reportable event” (as defined in ERISA) has occurred with respect to any
“pension plan” (as defined in ERISA) for which the Company or any of the
Subsidiaries would have any material liability; none of the Company and the
Subsidiaries has incurred or expects to incur material liability under (i) Title
IV of ERISA with respect to the termination of, or withdrawal from, any “pension
plan” (as defined in ERISA and subject to Title IV of ERISA) or (ii) Section 412
or 4971 of the Code; and each “pension plan” for which the Company or any of the
Subsidiaries would have any material liability and that is intended to be
qualified under Section 401(a) of the Code is so qualified in all material
respects and nothing has occurred, whether by action or by failure to act, that
would cause the loss of such qualification;
(mm) none of the
Company and the Subsidiaries, or, to the Company’s knowledge, any officer or
director purporting to act on behalf of the Company or any of the Subsidiaries
has at any time (i) made any payment outside the ordinary course of
business to any investment officer or loan broker or person charged with similar
duties of any entity to which the Company or any of the Subsidiaries sells or
from which the Company or any of the Subsidiaries buys loans or servicing
arrangements for the purpose of influencing such agent, officer, broker or
person to buy loans or servicing arrangements from or sell loans or servicing
arrangements to the Company or any of the Subsidiaries, (ii) engaged in any
transactions, maintained any bank account or used any corporate funds except for
transactions, bank accounts and funds that have been and are reflected in the
normally maintained books and records of the Company and the Subsidiaries; or
(iii) made any other payment of funds of the Company or any of the Subsidiaries
or received or retained any funds in violation of any law, rule or regulation or
of a character required to be disclosed in the Disclosure Package or the
Prospectus;
(nn) except as
otherwise disclosed in the Disclosure Package and the Prospectus, there are no
outstanding loans or advances or guarantees of indebtedness by the Company or
any of the Subsidiaries to or for the benefit of any of the officers or
directors of the Company or of any of the Subsidiaries or any of the members of
the families of any of them; except as otherwise disclosed in the Disclosure
Package and the Prospectus, no other relationship, direct or indirect, exists
between or among the Company or any of the Subsidiaries on the one hand, and the
directors, officers, stockholders, customers or suppliers of the Company or any
of the Subsidiaries on the other hand, that is required by the Securities Act
and the Securities Act Regulations to be described in the Disclosure Package or
the Prospectus and that is not so described;
(oo) except as
disclosed in the Disclosure Package and the Prospectus or payable to the
Representatives or their affiliates, none of the Company and the Subsidiaries
has incurred any liability for any finder’s fees or similar payments in
connection with the transactions herein contemplated;
(pp) none of the
Company and the Subsidiaries is and, after giving effect to the offering and
sale of the Shares, will be an “investment company” or an entity “controlled” by
an “investment company”, as such terms are defined in the Investment Company Act
of 1940, as amended (the “Investment Company
Act”);
(qq) any
statistical and market-related data included in the Prospectus and the
Disclosure Package are based on or derived from sources that the Company
believes to be reliable and accurate;
7
(rr) there are no
persons with registration or other similar rights to have any equity or debt
securities, including securities that are convertible into or exchangeable or
redeemable for equity securities, registered pursuant to the Registration
Statement or otherwise registered by the Company under the Securities Act except
for those registration or similar rights that have been waived or that are
inapplicable with respect to the offering contemplated by this
Agreement;
(ss) except as
disclosed in the Disclosure Package and the Prospectus: (i) the Company and the
Subsidiaries have good title to (and are the sole legal, beneficial and
equitable owner of) all loan assets and other personal property described in the
Disclosure Package or the Prospectus or shown on the financial statements
included in the Disclosure Package and the Prospectus, and own fee simple title
to or have a valid leasehold interest or estate for years in, as applicable, all
real property (other than real property not purported to be owned or leased by
the Company or the Subsidiaries) described in the Disclosure Package or the
Prospectus or shown on the financial statements included in the Disclosure
Package and the Prospectus, in each case free and clear of all liens, security
interests, pledges, charges, encumbrances, encroachments, restrictions,
mortgages and defects, except as do not materially and adversely affect the
value of such property or interfere with the use made or proposed to be made of
such property by the Company and the Subsidiaries; and (ii) any real property
improvements, equipment and personal property held under lease by the Company or
any of the Subsidiaries are held under valid, existing and enforceable leases,
with such exceptions as are not material and do not interfere with the use made
or proposed to be made of such real property improvements, equipment and
personal property by the Company or such Subsidiary;
(tt) other than
with respect to development loans or loans to Yum Brands, Inc. franchise
lenders, the Company or a Subsidiary has obtained, from a title insurance
company licensed to issue such policy, a lender’s title insurance policy on any
real property in respect of which the Company or any of the Subsidiaries has a
loan in its portfolio as of the date hereof, the Initial Closing Time or the
Option Closing Time secured thereby that insures the lien of its mortgage on the
real property with coverage equal to the maximum aggregate principal amount of
any indebtedness held by the Company or a Subsidiary and so secured by the real
property; the Company or a Subsidiary has obtained, from a title insurance
company licensed to issue such policy, an owner’s or leasehold title insurance
policy on any real property owned in fee or leased, as the case may be, by the
Company or any of the Subsidiaries as of the date hereof, the Initial Closing
Time or the Option Closing Time that insures its fee simple title or leasehold
interest with coverage in an amount at least equal to the amount generally
deemed in the Company’s industry to be commercially reasonable in the market
where the property is located;
(uu) there are no
real property interests or loans in respect of real property that any of the
Company and the Subsidiaries directly or indirectly intends to acquire, lease,
originate or underwrite or any contracts, letters of intent, term sheets,
agreements, arrangements or understandings with respect to the direct or
indirect acquisition, disposition, origination or underwriting by the Company or
the Subsidiaries of interests in real property or loans in respect of real
property that are required to be described in the Disclosure Package or the
Prospectus and are not so described;
(vv) except as set
forth in the Disclosure Package and the Prospectus, the mortgages and deeds of
trust encumbering any real property owned in fee or leased by the Company or a
Subsidiary (i) are not convertible (in the absence of foreclosure) into an
equity interest in such real property or in the Company or any Subsidiary, (ii)
are not and will not be cross-defaulted to any indebtedness other than
indebtedness of the Company or any of the Subsidiaries, and (iii) are not and
will not be cross-collateralized to any property not owned by the Company or any
of the Subsidiaries;
(ww) except as
otherwise disclosed in the Disclosure Package and the Prospectus, (i) none of
the Company and the Subsidiaries has at any time, handled, stored, treated,
transported, manufactured, spilled, leaked, discharged, dumped,
transferred or otherwise disposed of Hazardous Materials (as hereinafter
defined) on, in, under, to or from any of the Real Property (as hereinafter
defined), except as could not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect; (ii) the Company has not received
any notice of any seepage, leak, discharge, release, emission, spill, or dumping
of Hazardous Materials into waters on or adjacent to any of the Real Property,
except as could not reasonably be expected, individually or in the aggregate, to
have a Material Adverse Effect; (iii) none of the Company and the Subsidiaries
has received any notice of any occurrence or circumstance that, with notice or
passage of time or both, would give rise to a claim under or pursuant to any
federal, state or local environmental statute, regulation or rule under common
law, pertaining to Hazardous Materials on or originating from any of the Real
Property or any assets described in the Disclosure Package or the Prospectus or
arising out of the conduct of any of the Company and the Subsidiaries, including
without limitation a claim under or pursuant to any Environmental Statute (as
hereinafter defined), except for claims that, individually or in the aggregate,
could not reasonably be expected to have a Material Adverse Effect; (iv) none of
the Real Property is included or, to the Company’s knowledge, proposed for
inclusion on the National Priorities List issued pursuant to CERCLA (as
hereinafter defined) by the United States Environmental Protection Agency or, to
the Company’s knowledge, proposed for inclusion on any similar list or inventory
issued pursuant to any other Environmental Statute or issued by any other
governmental authority; and (v) in the operation of the Company’s and its
predecessor’s businesses, the Company or its predecessor has acquired, before
the acquisition or origination of any loan in respect of real property or the
acquisition of any real property, an environmental assessment of the real
property and, to the extent that any condition was revealed that could
reasonably have been expected to result in material liability associated with
the presence or release of a Hazardous Material, or any violation or potential
violation of any Environmental Statute, the Company or its predecessor took, or
required its borrower to take, all commercially reasonable action necessary or
advisable (including any capital improvements) for clean-up, closure or other
compliance with such Environmental Statute;
as used
herein, “Real
Property” means collectively any real property underlying any loan held
by the Company or any of the Subsidiaries or any real property leased or owned
by any of them;
as used
herein, “Hazardous
Material” means, without limitation, any flammable explosives,
radioactive materials, hazardous substances, hazardous wastes, toxic substances,
asbestos or any hazardous material as defined by any applicable federal, state
or local environmental law, regulation or rule, including, without limitation,
the Comprehensive Environmental Response, Compensation, and Liability Act of
1980, as amended, 42 U.S.C. Sections 9601-9675 (“CERCLA”), the
Hazardous Materials Transportation Act, as amended, 49 U.S.C. Sections
1801-1819, the Resource Conservation and Recovery Act, as amended, 42 U.S.C.
Sections 6901-6992K, the Emergency Planning and Community Right-to-Know Act of
1986, 42 U.S.C. Sections 11001-11050, the Toxic Substances Control Act, 15
U.S.C. Sections 2601-2671, the Federal Insecticide, Fungicide and Rodenticide
Act, 7 U.S.C. Sections 136-136y, the Clean Air Act, 42 U.S.C. Sections
7401-7642, the Clean Water Act (Federal Water Pollution Control Act), 33 U.S.C.
Sections 1251-1387, the Safe Drinking Water Act, 42 U.S.C. Sections
300f-300j-26, and the Occupational Safety and Health Act, 29 U.S.C. Sections
651-678, as any of the above statutes may be amended from time to time, and in
the regulations promulgated pursuant to each of the foregoing (individually, an
“Environmental
Statute” and collectively the “Environmental
Statutes”) or by any federal, state or local governmental authority
having or claiming jurisdiction over the properties described in the Disclosure
Package or the Prospectus;
8
(xx) to the
Company’s knowledge, there are no costs or liabilities associated with any of
the Real Property arising under any Environmental Statute (including, without
limitation, any capital or operating expenditures required for clean-up, closure
of properties or compliance with any Environmental Statute or any permit,
license or approval, any related constraints on operating activities and any
potential liabilities to third parties) that, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect;
(yy) none of the
entities that prepared Phase I or other environmental assessments with respect
to the Real Property was employed for such purpose on a contingent basis or has
any substantial profit or equity interest in the Company or any of the
Subsidiaries, and none of their directors, officers or employees is connected
with the Company or any of the Subsidiaries as a promoter, selling agent,
trustee, officer, director, employee or significant shareholder;
(zz) except as
disclosed in the Disclosure Package and the Prospectus, (i) the Company does not
know of any violation of any municipal, state or federal law, rule or regulation
concerning the Real Property or any part thereof that, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect; (ii)
to the Company’s knowledge, the Real Property complies with all applicable
zoning laws, ordinances, regulations and deed restrictions or other covenants in
all material respects and, if and to the extent there is a failure to comply,
such failure does not materially impair the value of any of the Real Property
and will not result in a forfeiture or reversion of title; (iii) the Company has
not received any written notice of any condemnation of or zoning change
affecting the Real Property or any part thereof, and the Company does not know
of any such condemnation or zoning change that is threatened and that,
individually or in the aggregate, if consummated could reasonably be expected to
have a Material Adverse Effect; (iv) to the Company’s knowledge, all
improvements constituting a part of the Real Property are free of material
structural defects and all building systems contained therein are in good
working order in all material respects, subject to ordinary wear and tear,
except as could not reasonably be expected to have Material Adverse Effect, (v)
all liens, charges, encumbrances, claims, or restrictions on or affecting the
assets of the Company or any of the Subsidiaries that are required to be
described in the Disclosure Package or the Prospectus are disclosed therein;
(vi) all leases of any of the Real Property constitute the legal, valid and
binding agreements of each party thereto (subject to the Exceptions), to the
Company’s knowledge no tenant under any of such leases is in default thereunder
and there is no event that, but for the passage of time or the giving of notice
or both would constitute a default thereunder, except for such defaults that,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect; (vii) all notes and other loan agreements, mortgages,
assignments of leases and rents, subordination agreements and other security
agreements in favor of the Company and the Subsidiaries with respect to any of
the Real Property constitute the legal, valid and binding agreements of each
party thereto (subject to the Exceptions), except for such failures to be legal,
valid and binding that, individually or in the aggregate, could not reasonably
be expected to have a Material Adverse Effect, and to the Company’s knowledge no
party to any such agreement is in default thereunder and there is no event that,
but for the passage of time or the giving of notice or both would constitute a
default thereunder, except for such defaults that, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect
and (viii) no tenant under any lease pursuant to which any of the Real Property
is leased has an option or right of first refusal to purchase the premises
leased thereunder or the building of which such premises are a part, except for
such options or rights of first refusal that, individually or in the aggregate,
if exercised, could not reasonably be expected to have a Material Adverse
Effect;
(aaa) neither the
Company nor, to the knowledge of the Company, any director, officer, agent,
employee, affiliate or other person acting on behalf of the Company or any of
its subsidiaries is aware of or has taken any action, directly or indirectly,
that would result in a violation by such persons of the Foreign Corrupt
Practices Act of 1977, as amended, and the rules and regulations thereunder (the
“FCPA”),
including without limitation, making use of the mails or any means or
instrumentality of interstate commerce corruptly in the furtherance of an offer,
payment, promise to pay or authorization of the payment of any money, or other
property, gift, promise to give, or authorization of the giving of anything of
value to any “foreign official” (as such term is defined in the FCPA) or any
foreign political party or official thereof or any candidate for foreign
political office, in contravention of the FCPA and the Company and to the
knowledge of the Company, its affiliates have conducted their businesses in
compliance with the FCPA and have instituted and maintain policies and
procedures designed to ensure and which are reasonable expected to continue to
ensure, continued compliance therewith.
(bbb) the
operations of the Company are and have been conducted at all times in material
compliance with applicable financial recordkeeping and reporting requirements of
the Currency and Foreign Transactions Reporting Act of 1970, as amended, the
money laundering statutes of all jurisdictions, the rules and regulations
thereunder and any related or similar rules, regulations or guidelines, issued,
administered or enforced by any governmental agency (collectively, the “Money Laundering
Laws”) and no action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the Company
with respect to the Money Laundering Laws is pending or, to the knowledge of the
Company, threatened.
9
(ccc) neither the
Company nor, to the knowledge of the Company, any director, officer, agent,
employee, affiliate or person acting on behalf of the Company is currently
subject to any U.S. sanctions administered by the Office of Foreign Assets
Control of the U.S. Treasury Department (“OFAC”); and the
Company will not directly or indirectly use the proceeds from the sale of the
Shares, or lend, contribute or otherwise make available such proceeds to any
subsidiary, joint venture partner or other person or entity, for the purpose of
financing the activities of any person currently subject to any U.S. sanctions
administered by OFAC.
(ddd) any
certificate signed by any officer of the Company delivered to the
Representatives or to counsel for the Underwriters pursuant to or in connection
with this Agreement shall be deemed a representation and warranty by the Company
to each Underwriter as to the matters covered thereby.
4. Certain
Covenants:
The
Company hereby agrees with each Underwriter:
(a) to
furnish such information as may be required and otherwise to cooperate in
qualifying the Shares for offering and sale under the securities or blue sky
laws of such jurisdictions (both domestic and foreign) as the Representatives
may designate and to maintain such qualifications in effect as long as requested
by the Representatives for the distribution of the Shares; provided that 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;
(b) if,
at the time this Agreement is executed and delivered, it is necessary for a
post-effective amendment to the Registration Statement to be declared effective
before the offering of the Shares may commence, the Company will endeavor to
cause such post-effective amendment to become effective as soon as
possible;
(c) to
prepare the Prospectus in a form reasonably approved by the Underwriters and
file such Prospectus with the Commission pursuant to Rule 424(b) not
later than 10:00 a.m. (New York City time), on the second day following the
execution and delivery of this Agreement or on such other day as the parties may
mutually agree and to furnish promptly (and with respect to the initial delivery
of such Prospectus, not later than 10:00 a.m. (New York City time) on the second
day following the execution and delivery of this Agreement, or on such other day
as the parties may mutually agree) to the Underwriters copies of the Prospectus
(or of the Prospectus as amended or supplemented if the Company shall have made
any amendments or supplements thereto) in such quantities and at such locations
as the Underwriters may reasonably request for the purposes contemplated by the
Securities Act Regulations, which Prospectus and any amendments or supplements
thereto furnished to the Underwriters will be identical to the version created
to be transmitted to the Commission for filing via ▇▇▇▇▇, except to the extent
permitted by Regulation S-T;
(d) during
the time in which a prospectus relating to the Shares is required to be
delivered under the Securities Act or the Securities Act Regulations (or in lieu
thereof the notice referred to in Rule 173(a) of the Securities Act
Regulations), to advise the Representatives promptly and, if requested by the
Representatives, to confirm such advice in writing, when any post-effective
amendment to the Registration Statement becomes effective under the Securities
Act Regulations;
(e) to
furnish a copy of each proposed Free Writing Prospectus to the Representatives
and counsel for the Underwriters and obtain the consent of the Representatives
prior to referring to, using or filing with the Commission any Free Writing
Prospectus pursuant to Rule 433(d) of the Securities Act Regulations, other than
the Issuer Free Writing Prospectuses, if any, identified in Schedule IIA;
(f) to
comply with the requirements of Rules 164 and 433 of the Securities Act
Regulations applicable to any Issuer Free Writing Prospectus, including timely
filing with the Commission, legending and record keeping, as
applicable;
(g) during
the time in which a prospectus relating to the Shares is required to be
delivered under the Securities Act or the Securities Act Regulations (or in lieu
thereof the notice referred to in Rule 173(a) of the Securities Act
Regulations), to advise the Representatives immediately, and, if requested by
the Representatives, confirming such advice in writing, of (i) the receipt of
any comments from, or any request by, the Commission for amendments or
supplements to the Registration Statement, the Preliminary Prospectus, the
Prospectus or any Issuer Free Writing Prospectus or for additional information
with respect thereto, or (ii) the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or cease-and-desist
order in connection with the public offering of the Shares or of any order
preventing or suspending the use of the Preliminary Prospectus, the Prospectus
or any Issuer Free Writing Prospectus, or of the suspension of the qualification
of the Shares for offering or sale in any jurisdiction, or of the initiation or
threatening of any proceedings for any of such purposes and, if the Commission
or any other government agency or authority should issue any such order, to make
every reasonable effort to obtain the lifting or removal of such order as soon
as possible; and to advise the Representatives promptly of any proposal to amend
or supplement the Registration Statement, the Preliminary Prospectus, the
Prospectus or any Issuer Free Writing Prospectus and to file no such amendment
or supplement to which the Representatives shall reasonably object in writing
(unless required to do so by law);
(h) to
advise the Underwriters promptly of the happening of any event known to the
Company within the time during which a prospectus relating to the Shares is
required to be delivered under the Securities Act or the Securities Act
Regulations (or in lieu thereof the notice referred to in Rule 173(a) of the
Securities Act Regulations) that, in the judgment of the Company or in the
reasonable opinion of the Representatives or counsel for the Underwriters, (i)
would require the making of any change in the Prospectus or the Disclosure
Package so that the Prospectus or the Disclosure Package would not include an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading, (ii) as a result
of which any Issuer Free Writing Prospectus conflicted or would conflict with
the information contained in the Registration Statement, or (iii) if it is
necessary to amend or supplement the Prospectus to comply with the Securities
Act and the Securities Act Regulations and, during such time, to prepare and
furnish promptly to the Underwriters copies of the proposed amendment or
supplement before filing any such amendment or supplement with the Commission
and thereafter promptly furnish at the Company’s own expense to the Underwriters
and to dealers, copies in such quantities and at such locations as the
Representatives may from time to time reasonably request of an appropriate
amendment to the Registration Statement or supplement to the Prospectus or the
Disclosure Package so that the Prospectus or the Disclosure Package as so
amended or supplemented will not, in the light of the circumstances when it (or
in lieu thereof the notice referred to in Rule 173(a) of the Securities Act
Regulations) is so delivered, be misleading, or, in the case of any Issuer Free
Writing Prospectus, conflict with the information contained in the Registration
Statement, or so that the Prospectus or the Disclosure Package will comply with
the Securities Act and the Securities Act Regulations;
10
(i) during the
time in which a prospectus relating to the Shares is required to be delivered
under the Securities Act or the Securities Act Regulations (or in lieu thereof
the notice referred to in Rule 173(a) of the Securities Act Regulations), to
file promptly with the Commission any amendment to the Registration Statement or
the Prospectus or any supplement to the Prospectus that may, in the judgment of
the Company or the Representatives, be required by the Securities Act or
requested by the Commission;
(j) prior to
filing with the Commission any amendment to the Registration Statement or
supplement to the Prospectus, the Preliminary Prospectus or any Issuer Free
Writing Prospectus relating to the Shares, to furnish for review a copy thereof
to the Representatives and counsel for the Underwriters and not to file any such
proposed amendment or supplement to which the Representatives reasonably object
(unless required to do so by law);
(k) to furnish
promptly to the Representatives, upon request, such number of conformed copies
of the Registration Statement, as initially filed with the Commission, and of
all amendments or supplements thereto relating to the Shares (including all
exhibits filed therewith or incorporated by reference therein) as the
Representatives may reasonably request;
(l) to furnish to
the Representatives, not less than one business day before filing with the
Commission subsequent to the date of the Prospectus and during the period in
which a prospectus relating to the Shares is required to be delivered under the
Securities Act or the Securities Act Regulations (or in lieu thereof the notice
referred to in Rule 173(a) of the Securities Act Regulations), a copy of any
document proposed to be filed with the Commission pursuant to Section 13, 14, or
15(d) of the Exchange Act and during such period to file all such documents in
the manner and within the time periods required by the Exchange Act and the
Exchange Act Regulations;
(m) to apply the
net proceeds of the sale of the Shares in accordance with its statements under
the caption “Use of Proceeds” in the Disclosure Package and the
Prospectus;
(n) to make
generally available to its security holders as soon as practicable, but in any
event not later than 45 days after the end of the fiscal quarter first occurring
after the first anniversary of the effective date of the Registration Statement
(or later than 90 days, if such fiscal quarter is the last fiscal quarter of the
Company’s fiscal year) an earnings statement satisfying the provisions of
Section 11(a) of the Securities Act (in such form, at the option of the Company,
as complies with Rule 158 under the Securities Act Regulations) covering a
period of 12 months beginning after the effective date of the Registration
Statement;
(o) to use its
commercially reasonable efforts to effect and maintain the listing of the
Existing Series A Preferred Stock and the Shares on the New York Stock
Exchange;
(p) to engage and
maintain, at its expense, a registrar and transfer agent for the
Shares;
(q) from the date
of this Agreement through, and including, the 30th day after the Initial
Closing Time, not to offer, sell, contract to sell or otherwise dispose of,
except as provided hereunder, any preferred securities of the Company that are
substantially similar to the Shares, including but not limited to the Existing
Series A Preferred Stock or any securities that are convertible into or
exchangeable for, or that represent the right to receive, any such substantially
similar securities without the prior written consent of the Representatives,
other than (i) the Shares and (ii) sales or offers in private
placement transactions or in direct public placements to sellers relating to
acquisition of real property or interests therein, including mortgage or
leasehold interests, or in conjunction with any joint venture transaction, made
to any seller of such real property or such joint venture interest;
(r) not to, and
to use its best efforts to cause its officers and directors not to, (i) take,
directly or indirectly, prior to termination of the underwriting syndicate
contemplated by this Agreement, any action designed to stabilize or manipulate
the price of any security of the Company, or which may cause or result in, or
which might in the future reasonably be expected to cause or result in, the
stabilization or manipulation of the price of any security of the Company, to
facilitate the sale or resale of any of the Shares, (ii) sell, bid for, purchase
or pay anyone any compensation for soliciting purchases of the Shares or (iii)
pay or agree to pay to any person any compensation for soliciting any order to
purchase any other securities of the Company;
(s) to use its
best efforts to meet the requirements to qualify as a REIT under the Code,
unless it is determined by the Company’s board of directors to be in the best
interest of the Company for the Company to no longer so qualify;
and
11
(t) to use its
best efforts not to invest, or otherwise use the proceeds received by the
Company from its sale of the Shares in such a manner as would require the
Company or any of its Subsidiaries to register as an investment company under
the Investment Company Act.
5. Payment of
Expenses:
(a) The
Company agrees to pay all costs and expenses incident to the performance of its
obligations under this Agreement, whether or not the transactions contemplated
hereunder are consummated or this Agreement is terminated, including expenses
and fees in connection with: (i) the preparation and filing of the
Registration Statement, the Preliminary Prospectus, the Prospectus, any Issuer
Free Writing Prospectus and any amendments or supplements thereto, and the
printing and furnishing of copies of each thereof to the Underwriters and to
dealers (including costs of mailing and shipment); (ii) the preparation,
issuance and delivery of the certificates for the Shares to the Underwriters,
including any stock or other transfer taxes or duties payable upon the sale of
the Shares to the Underwriters (other than transfer taxes on resales by the
Underwriters); (iii) the qualification of the Shares for offering and sale under
state laws that the Company and the Representatives have mutually agreed are
appropriate and the determination of their eligibility for investment under
state law as aforesaid, and the printing and furnishing of copies of any blue
sky surveys or legal investment surveys to the Underwriters and to dealers; (iv)
filing for review of the public offering of the Shares by FINRA; (v) the fees
and expenses of any transfer agent or registrar for the Shares and miscellaneous
expenses referred to in the Registration Statement; (vi) the fees and expenses
incurred in connection with the inclusion of the Shares in the New York Stock
Exchange; (vii) all costs and expenses incident to the travel and accommodation
of employees of the Company in making road show presentations with respect to
the offering of the Shares (including but not more than 50% of the expense of
charter jet flights shared with representatives of the Underwriters); (viii)
costs and expenses of any internet road show; (ix) preparing and distributing
three copies of bound volumes of transaction documents for the Representatives
and their legal counsel; and (x) the performance of the Company’s other
obligations hereunder; provided that, except as provided in this Section 5 or in
Section 9, the Underwriters shall pay their own costs and expenses.
(b) If
this Agreement shall be terminated by the Representatives pursuant to clause (a)
of Section 7, the Company will reimburse the Underwriters for all out-of-pocket
expenses (such as printing, facsimile, courier service, direct computer
expenses, accommodations and travel, including the fees and expenses of DLA
Piper LLP (US)) reasonably incurred by such Underwriters in connection with this
Agreement or the transactions contemplated herein, up to a maximum amount set
forth on Schedule
V.
6. Conditions of the
Underwriters’ Obligations:
The
obligations of the Underwriters hereunder to purchase Shares at the Initial
Closing Time or at the Option Closing Time, as applicable, are subject to the
accuracy of the representations and warranties on the part of the Company
hereunder on the date hereof and at the Initial Closing Time and at the Option
Closing Time, as applicable, the performance by the Company of its obligations
hereunder and the satisfaction (or waiver by the Representatives) of the
following further conditions at the Initial Closing Time or at the Option
Closing Time, as applicable:
(a) The
Company shall furnish to the Representatives at the Initial Closing Time and at
the Option Closing Time opinions of Hunton & ▇▇▇▇▇▇▇▇ LLP, counsel for the
Company and the Subsidiaries, addressed to the Representatives and dated the
Initial Closing Time and Option Closing Time, as set forth on Schedule VI.
(b) The
Company shall furnish to the Representatives at the Initial Closing Time and at
the Option Closing Time an opinion of the Company’s Vice President, General
Counsel and Corporate Secretary, addressed to the Representatives, dated the
Initial Closing Time and Option Closing Time and otherwise in form and substance
satisfactory to DLA Piper LLP (US), counsel for the Underwriters, stating as set
forth on Schedule
VII.
(c) [Intentionally
omitted.]
Counsel
may call attention to the fact that, in connection with the delivery of its
opinion, counsel has not ordered or reviewed judgment, lien or any other
searches of public or private records of the Company or its
properties.
(d) The
Representatives shall have received from McGladrey & ▇▇▇▇▇▇, LLP letters
dated, as of the date of this Agreement, the Initial Closing Time and the Option
Closing Time, as the case may be, addressed to the Representatives, in form and
substance satisfactory to the Representatives, relating to the financial
statements, including pro forma financial statements, of the Company, and such
other matters customarily covered by comfort letters issued in connection with
registered public offerings.
(e) The
Representatives shall have received at the Initial Closing Time and the Option
Closing Time the favorable opinion of DLA Piper LLP (US), dated the Initial
Closing Time and Option Closing Time, addressed to the Representatives and in
form and substance satisfactory to the Representatives.
(f) No
amendment or supplement to the Registration Statement, the Disclosure Package or
the Prospectus shall have been filed to which the Underwriters shall have
reasonably objected in writing.
(g) Prior
to the Initial Closing Time and the Option Closing Time (i) no stop order
suspending the effectiveness of the Registration Statement or cease-and-desist
order in connection with the public offering of the Shares or any order
preventing or suspending the use of the Prospectus or any document in the
Disclosure Package shall have been issued, and no proceedings for such purpose
shall have been initiated or threatened, by the Commission, and no suspension of
the qualification of the Shares for offering or sale in any jurisdiction, or the
initiation or threatening of any proceedings for any of such purposes, shall
have occurred; (ii) all requests for additional information on the part of the
Commission shall have been complied with to the reasonable satisfaction of the
Representatives; and (iii) none of the Registration Statement, the Disclosure
Package and the Prospectus shall contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.
12
(h) All
filings with the Commission required by Rule 424 of the Securities Act
Regulations to have been filed by the Initial Closing Time shall have been made
within the applicable time period prescribed for such filing by such rule
(without reliance on Rule 424(b)(8) of the Securities Act
Regulations).
(i)
FINRA shall not have raised any objection with respect to the fairness and
reasonableness of the underwriting terms and arrangements.
(j)
[Intentionally
omitted.]
(k) The
Representatives shall have received at or before the Initial Closing Time and at
the Option Closing Time, a certificate of the Company’s Chief Executive Officer
or Chief Financial Officer, in each case on behalf of the Company and not
individually, to the effect that:
(i) the
representations and warranties of the Company in this Agreement that are not
qualified by materiality or Material Adverse Effect are true and correct in all
material respects and those representations and warranties of the Company in
this Agreement that are qualified by materiality or Material Adverse Effect are
true and correct in all respects, as if made on and as of such date, and the
Company has complied with all the agreements in all material respects and all
the conditions on its part to be performed or satisfied at or prior to the date
of such certificate;
(ii) no
stop order suspending the effectiveness of the Registration Statement or any
post-effective amendment thereto has been issued and no proceedings for that
purpose have been instituted or are pending or, to such officer’s knowledge,
threatened under the Securities Act; and
(iii) the
Registration Statement, at its initial effective date, the filing date of the
Company’s Annual Report on Form 10-K for the year ended December 31, 2009, and
any subsequent effective date in connection with the Shares did not, the
Disclosure Package, as of the Initial Sale Time and the date of such
certificate, did not and does not, and the Prospectus, as of its date and the
date of such certificate, did not and does not include any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
7. Termination:
The
obligations of the several Underwriters hereunder shall be subject to
termination in the absolute discretion of the Representatives, at any time prior
to the Initial Closing Time or the Option Closing Time, (a) if any of the
conditions specified in Section 6 shall not have been fulfilled when and as
required by this Agreement to be fulfilled, or (b) if there has been since the
respective dates as of which information is given in the Registration Statement,
any change or event that has had, or reasonably could be expected to have, a
Material Adverse Effect, whether or not arising in the ordinary course of
business, or (c) if a downgrading shall have occurred in the rating accorded the
Company’s debt securities by any “nationally recognized statistical rating
organization”, as that term is defined by the Commission for purposes of Rule
436(g)(2) under the Act, or such organization shall have publicly announced that
it has under surveillance or review, with possible negative implications, its
rating of any of the Company’s debt securities, or (d) if there has occurred any
outbreak or escalation of hostilities or other national or international
calamity or crisis or change in economic, political or other conditions, the
effect of which on the financial markets of the United States is such as to make
it, in the judgment of the Representatives, impracticable to market the Shares
or enforce contracts for the sale of the Shares, or (e) if trading in any
securities of the Company has been suspended by the Commission or by the New
York Stock Exchange, or if trading generally on the New York Stock Exchange has
been suspended (including an automatic halt in trading pursuant to
market-decline triggers, other than those in which solely program trading is
temporarily halted), or limitations on prices for trading (other than
limitations on hours or numbers of days of trading) have been fixed, or maximum
ranges for prices for securities have been required, by such exchange or by
order of the Commission or any other governmental authority or (f) a general
banking moratorium shall have been declared by any federal, Maryland or New York
authorities, or (g) any major disruption of settlements of securities, payment,
or clearance services in the United States or any other country where such
securities are listed, or (h) any federal or state statute, regulation, rule or
order of any court or other governmental authority has been enacted, published,
decreed or otherwise promulgated that, in the reasonable opinion of the
Representatives, will have a Material Adverse Effect.
If the
Representatives elect to terminate this Agreement as provided in this Section 7,
the Company and the Underwriters shall be notified promptly by telephone,
promptly confirmed by facsimile.
If the
purchase by the Underwriters of the Shares, as contemplated by this Agreement,
is not consummated by the Underwriters for any reason permitted under this
Agreement or if such sale is not consummated because the Company shall be unable
to comply in all material respects with any of the terms of this Agreement, the
Company shall not be under any obligation or liability under this Agreement
(except to the extent provided in Sections 5 and 9 hereof) and the Underwriters
shall be under no obligation or liability to the Company under this Agreement
(except to the extent provided in Section 9 hereof) or to one another
hereunder.
13
8. Increase in Underwriters’
Commitments:
If any
Underwriter shall default at the Initial Closing Time or at an Option Closing
Time in its obligation to take up and pay for the Shares to be purchased by it
under this Agreement on such date, the Representatives shall have the right,
within 48 hours after such default, to make arrangements for one or more of the
non-defaulting Underwriters, or any other underwriters, to purchase all, but not
less than all, of the Shares which such Underwriter shall have agreed but failed
to take up and pay for (the “Defaulted
Shares”). Absent the completion of such arrangements within
such 48-hour period, (a) if the total number of Defaulted Shares does not exceed
10% of the total number of Shares to be purchased on such date, each
non-defaulting Underwriter shall take up and pay for (in addition to the number
of Shares which it is otherwise obligated to purchase on such date pursuant to
this Agreement) the portion of the total number of Shares agreed to be purchased
by the defaulting Underwriter on such date in the proportion that its
underwriting obligations hereunder bear to the underwriting obligations of all
non-defaulting Underwriters; and (b) if the total number of Defaulted Shares
exceeds 10% of such total, the Representatives may terminate this Agreement by
notice to the Company, without liability of any party to any other party (other
than the defaulting Underwriter), except that the provisions of Sections 5 and 9
hereof shall at all times be effective and shall survive such
termination.
If a new
Underwriter or Underwriters are substituted for a defaulting Underwriter in
accordance with the foregoing provision, the Company or the non-defaulting
Underwriters shall have the right to postpone the Initial Closing Time or
relevant Option Closing Time for a period not exceeding five business days in
order that any necessary changes in the Registration Statement and Prospectus
and other documents may be effected.
The term
“Underwriter”
as used in this Agreement shall refer to and include any Underwriter substituted
under this Section 8 with the same effect as if such substituted Underwriter had
originally been named in this Agreement. Nothing in this Section 8
shall relieve a defaulting Underwriter from liability for its
default.
9. Indemnity and Contribution
by the Company and the Underwriters:
(a) The
Company agrees to indemnify, defend and hold harmless each Underwriter and any
person who controls any Underwriter within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, from and against any loss,
expense, liability, damage or claim (including the reasonable cost of
investigation) that, jointly or severally, any such Underwriter or controlling
person may incur under the Securities Act, the Exchange Act or otherwise,
insofar as such loss, expense, liability, damage or claim arises out of or is
based upon (i) any failure on the part of the Company to comply with any
applicable law, rule or regulation relating to the offering of securities being
made pursuant to the Prospectus (the term Prospectus for the purpose of this
Section 9 being deemed to include any preliminary prospectus, the Prospectus and
any amendment or supplement thereto and any prospectus wrapper material), (ii)
any untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement, any Issuer Free Writing Prospectus or the
Prospectus, or (iii) any omission or alleged omission to state a material fact
required to be stated in the Registration Statement, any Issuer Free Writing
Prospectus or the Prospectus or necessary to make the statements made therein,
in the light of the circumstances under which they were made, not misleading;
except insofar as any such loss, expense, liability, damage or claim arises out
of or is based upon any untrue statement or alleged untrue statement or omission
or alleged omission of a material fact contained in and in conformity with
information furnished in writing by the Underwriters through the Representatives
to the Company expressly for use in the Registration Statement, any Issuer Free
Writing Prospectus or the Prospectus. The indemnity agreement set
forth in this Section 9(a) shall be in addition to any liabilities that the
Company may otherwise have.
If any
action is brought against an Underwriter or controlling person in respect of
which indemnity may be sought against the Company pursuant to the foregoing
paragraph, such Underwriter shall promptly notify the Company in writing of the
institution of such action, and the Company shall assume the defense of such
action, including the employment of counsel and payment of expenses; provided,
however, that any failure or delay to so notify the Company will not relieve the
Company of any obligation hereunder, except to the extent that its ability to
defend is actually impaired by such failure or delay. Such
Underwriter or controlling person shall have the right to employ its or their
own counsel in any such case, but the fees and expenses of such counsel shall be
at the expense of such Underwriter or such controlling person unless the
employment of such counsel shall have been authorized in writing by the Company
in connection with the defense of such action, or the Company shall not have
employed counsel to have charge of the defense of such action within a
reasonable time or such indemnified party or parties shall have reasonably
concluded (based on the advice of counsel) that there may be defenses available
to it or them which are different from or additional to those available to the
Company (in which case the Company shall not have the right to direct
the defense of such action on behalf of the indemnified party or parties), in
any of which events such fees and expenses shall be borne by the Company and
paid as incurred (it being understood, however, that the Company shall not be
liable for the expenses of more than one separate firm of attorneys for the
Underwriters or controlling persons in any one action or series of related
actions in the same jurisdiction (other than local counsel in any such
jurisdiction) representing the indemnified parties who are parties to such
action).
(b) Each
Underwriter agrees, severally and not jointly, to indemnify, defend and hold
harmless the Company, the Company’s directors, the Company’s officers that
signed the Registration Statement and any person who controls the Company within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act, from and against any loss, expense, liability, damage or claim (including
the reasonable cost of investigation) that, jointly or severally, the Company or
any such person may incur under the Securities Act, the Exchange Act or
otherwise, but only insofar as such loss, expense, liability, damage or claim
arises out of or is based upon (i) any untrue statement or alleged untrue
statement of a material fact contained in and in conformity with information
furnished in writing by such Underwriter through the Representatives to the
Company expressly for use in the Registration Statement, any Issuer Free Writing
Prospectus or the Prospectus, or (ii) any omission or alleged omission to state
a material fact in connection with such information required to be stated in the
Registration Statement, any Issuer Free Writing Prospectus or the Prospectus or
necessary to make such information, in the light of the circumstances under
which made, not misleading; provided, however, that the statements identified in
Schedule IV attached
hereto constitute the only information furnished by or on behalf of any
Underwriter through the Representatives to the Company for purposes of this
Section 9. The indemnity agreement set forth in this Section 9(b)
shall be in addition to any liabilities that such Underwriter may otherwise
have.
14
If any
action is brought against the Company or any such person in respect of which
indemnity may be sought against any Underwriter pursuant to the foregoing
paragraph, the Company or such person shall promptly notify the Representatives
in writing of the institution of such action and the Representatives, on behalf
of the Underwriters, shall assume the defense of such action, including the
employment of counsel and payment of expenses; provided, however, that any
failure or delay to so notify the Representatives will not relieve the
Underwriters of any obligation hereunder, except to the extent that their
ability to defend is actually impaired by such failure or delay. The
Company or such person shall have the right to employ its own counsel in any
such case, but the fees and expenses of such counsel shall be at the expense of
the Company or such person unless the employment of such counsel shall have been
authorized in writing by the Representatives in connection with the defense of
such action or the Representatives shall not have employed counsel to have
charge of the defense of such action within a reasonable time or such
indemnified party or parties shall have reasonably concluded (based on the
advice of counsel) that there may be defenses available to it or them that are
different from or additional to those available to the Underwriters (in which
case the Representatives shall not have the right to direct the defense of such
action on behalf of the indemnified party or parties), in any of which events
such fees and expenses shall be borne by the Underwriters and paid as incurred
(it being understood, however, that the Underwriters shall not be liable for the
expenses of more than one separate firm of attorneys in any one action or series
of related actions in the same jurisdiction (other than local counsel in any
such jurisdiction) representing the indemnified parties who are parties to such
action).
(c) The
indemnifying party under this Section 9 shall not be liable for any settlement
of any proceeding effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify (to the extent provided in this Section 9) the
indemnified party against any loss, expense, liability, damage or claim by
reason of such settlement or judgment. No indemnifying party shall,
without the prior written consent of the indemnified party, 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 and does not include a statement as to, or an admission of, fault,
culpability or a failure to act by or on behalf of any indemnified
party.
(d) If
the indemnification provided for in this Section 9 is unavailable or
insufficient to hold harmless an indemnified party under subsections (a), (b)
and (c) of this Section 9 in respect of any losses, expenses, liabilities,
damages or claims referred to therein, then each applicable indemnifying party,
in lieu of indemnifying such indemnified party, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, expenses,
liabilities, damages or claims (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company and by the Underwriters
from the offering of the Shares or (ii) if (but only if) the allocation provided
by clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above, but also the relative fault of the Company and of the Underwriters in
connection with the statements or omissions that resulted in such losses,
expenses, liabilities, damages or claims, as well as any other relevant
equitable considerations. The relative benefits received by the
Company and by the Underwriters shall be deemed to be in the same proportion as
the total proceeds from the sale of the Shares (net of underwriting discounts
and commissions but before deducting expenses) received by the Company bear to
the underwriting discounts and commissions received by the
Underwriters. The relative fault of the Company and of the
Underwriters shall be determined by reference to, among other things, whether
the untrue statement or alleged untrue statement of a material fact or omission
or alleged omission relates to information supplied by the Company or by the
Underwriters and the parties’ relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The
amount paid or payable by a party as a result of the losses, claims, damages and
liabilities referred to above shall be deemed to include any legal or other fees
or expenses reasonably incurred by such party in connection with investigating
or defending any claim or action.
(e) The
Company and the Underwriters agree that it would not be just and equitable if
contribution pursuant to this Section 9 were determined by pro rata allocation
(even if the Underwriters were treated as one entity for such purpose) or by any
other method of allocation that does not take account of the equitable
considerations referred to in clause (i) and, if applicable clause (ii), of
subsection (d) above. Notwithstanding the provisions of this Section
9, no Underwriter shall be required to contribute any amount in excess of the
underwriting discounts and commissions applicable to the Shares purchased by
such Underwriter. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters’ obligations to contribute
pursuant to this Section 9 are several in proportion to their respective
underwriting commitments and not joint. For purposes of this Section
9, each officer and director of an Underwriter and each person, if any, who
controls an Underwriter within the meaning of the Section 15 of the Securities
Act and Section 20 of the Exchange Act shall have the same rights to
contribution as such Underwriter, and each director of the Company, each officer
of the Company who signed the Registration Statement, and each person, if any,
who controls the Company within the meaning of Section 15 of the Securities Act
and Section 20 of the Exchange Act shall have the same rights to contribution as
the Company.
10. Survival:
The
indemnity and contribution agreements contained in Section 9 and the covenants,
warranties and representations of the Company contained in Sections 3, 4 and 5
of this Agreement shall remain in full force and effect regardless of any
investigation made by or on behalf of any Underwriter, or any person who
controls any Underwriter within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act, or by or on behalf of the Company, its
directors and officers or any person who controls the Company within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act, and shall
survive any termination of this Agreement or the sale and delivery of the
Shares. The Company and each Underwriter agree promptly to notify the
others of the commencement of any litigation or proceeding against it and, in
the case of the Company, against any of the Company’s officers and directors, in
connection with the sale and delivery of the Shares, or in connection with the
Registration Statement or Prospectus.
15
11. Notices:
Except as
otherwise herein provided, all statements, requests, notices and agreements
shall be in writing or by telegram and, if to the Underwriters, shall be
sufficient in all respects if delivered to ▇▇▇▇▇ Fargo Securities, LLC, ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Transaction
Management Department, if to ▇▇▇▇▇▇▇, Sachs & Co., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Registration Department, or if to the Company
shall be sufficient in all respects if delivered to the Company at the offices
of the Company at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: General Counsel.
12. Governing Law;
Headings:
THIS
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES. The section headings in this Agreement have been inserted
as a matter of convenience of reference and are not a part of this
Agreement.
13. Duties:
Nothing
in this Agreement shall be deemed to create a partnership, joint venture or
agency relationship between the parties. The Underwriters undertake to
perform such duties and obligations only as expressly set forth herein.
Such duties and obligations of the Underwriters with respect to the Shares
shall be determined solely by the express provisions of this Agreement, and the
Underwriters shall not be liable except for the performance of such duties
and obligations with respect to the Shares as are specifically set forth in this
Agreement. The Company acknowledges and agrees that: (a) the purchase and
sale of the Shares pursuant to this Agreement, including the determination of
the public offering price of the Shares and any related discounts and
commissions, is an arm’s-length commercial transaction between the Company, on
the one hand, and the several Underwriters, 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;
(b) in connection with each transaction contemplated hereby and the process
leading to such transaction each 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; (c) no
Underwriter has assumed or will 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 such
Underwriter has advised or is currently advising the Company on other matters);
and (d) the several Underwriters and their respective affiliates may be engaged
in a broad range of transactions that involve interests that differ from those
of the Company and that the several Underwriters have no obligation to disclose
any of such interests. The Company acknowledges that the Underwriters
disclaim any implied duties (including any fiduciary duty), covenants or
obligations arising from the Underwriters’ performance of the duties and
obligations expressly set forth herein. The Company hereby waives and
releases, to the fullest extent permitted by law, any claims that the Company
may have against the several Underwriters with respect to any breach or alleged
breach of agency or fiduciary duty.
14. Parties at
Interest:
The
Agreement herein set forth has been and is made solely for the benefit of the
Underwriters, the Company and the controlling persons, directors and officers
referred to in Sections 9 and 10 hereof, and their respective successors,
assigns, executors and administrators. No other person, partnership,
association or corporation (including a purchaser, as such purchaser, from any
of the Underwriters) shall acquire or have any right under or by virtue of this
Agreement.
15. Counterparts and Facsimile
Signatures:
This
Agreement may be signed by the parties in counterparts, which together shall
constitute one and the same agreement among the parties. A facsimile
signature shall constitute an original signature for all purposes.
16. U.S.A. Patriot Act
Notification:
The
Company acknowledges that federal law, to help fight the funding of terrorism
and money laundering activities, requires the Underwriters to obtain, verify and
record vital information that identifies each person or entity that opens an
account and/or enters into a business relationship with such financial
institutions.
[Signature
page follows.]
16
Execution Copy
If the
foregoing correctly sets forth the understanding among the Company and the
Underwriters, please so indicate in the space provided below for the purpose,
whereupon this Agreement shall constitute a binding agreement among the Company and the Underwriters.
|
Very
truly yours,
|
|||
|
|
By:
|
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ | |
| Name: | ▇▇▇▇▇ ▇. ▇▇▇▇▇ | ||
| Title: | Senior Vice President | ||
Accepted
and agreed to as
of the
date first above written:
▇▇▇▇▇
FARGO SECURITIES, LLC
▇▇▇▇▇▇▇,
SACHS & CO.
By: ▇▇▇▇▇
Fargo Securities, LLC
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇
Title:
Director
By: ▇▇▇▇▇▇▇,
Sachs & Co.
By: /s/ ▇▇▇▇▇▇▇, ▇▇▇▇▇ &
Co.
(▇▇▇▇▇▇▇, Sachs &
Co.)
For
themselves and as the Representatives of the other
Underwriters
named on Schedule I
hereto.