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Exhibit 99.1
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CABOT INDUSTRIAL TRUST
(a Maryland real estate investment trust)
2,000,000 Common Shares of Beneficial Interest
PURCHASE AGREEMENT
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Dated: December 18, 2000
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Table Of Contents Pages
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SECTION 1. Representations and Warranties..................................................................... 2
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(a) Representations and Warranties by the Company and the Operating Partnership..................... 2
(i) Compliance with Registration Requirements................................................ 2
(ii) Incorporated Documents................................................................... 3
(iii) Independent Accountants.................................................................. 3
(iv) Financial Statements..................................................................... 4
(v) No Material Adverse Change in Business................................................... 4
(vi) Good Standing of the Company............................................................. 4
(vii) Good Standing of the Operating Partnership............................................... 5
(viii) Good Standing of Significant Subsidiaries................................................ 5
(ix) Authorization of Agreement............................................................... 5
(x) Authorization and Description of Securities.............................................. 5
(xi) Absence of Defaults and Conflicts........................................................ 6
(xii) Absence of Labor Disputes................................................................ 6
(xiii) Absence of Proceedings................................................................... 6
(xiv) Accuracy of Exhibits..................................................................... 7
(xv) Possession of Intellectual Property...................................................... 7
(xvi) Absence of Further Requirements.......................................................... 7
(xvii) Possession of Licenses and Permits....................................................... 7
(xviii)Title to Property........................................................................ 8
(xix) Compliance with Cuba Act................................................................. 9
(xx) Investment Company Act................................................................... 9
(xxi) Environmental Laws....................................................................... 9
(xxii) Insurance................................................................................ 10
(b) Representations and Warranties by the Selling Shareholder....................................... 10
(i) Accurate Disclosure...................................................................... 10
(ii) Authorization of Agreements.............................................................. 10
(iii) Good and Marketable Title................................................................ 11
(iv) Due Execution of Power of Attorney and Custody Agreement................................. 11
(v) Absence of Manipulation.................................................................. 12
(vi) Absence of Further Requirements.......................................................... 12
(vii) Restriction on Sale of Securities........................................................ 12
(viii) No Association with NASD................................................................. 13
(c) Officer's Certificates.......................................................................... 13
SECTION 2. Sale and Delivery to Underwriters; Closing......................................................... 13
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(a) Initial Securities.............................................................................. 13
(b) Option Securities............................................................................... 13
(c) Payment......................................................................................... 13
(d) Denominations; Registration..................................................................... 14
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SECTION 3. Covenants of the Company.......................................................................... 14
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(a) Compliance with Securities Regulations and Commission Requests................................. 14
(b) Filing of Amendments........................................................................... 15
(c) Delivery of Registration Statements............................................................ 15
(d) Delivery of Prospectuses....................................................................... 15
(e) Continued Compliance with Securities Laws...................................................... 15
(f) Blue Sky Qualifications........................................................................ 16
(g) Rule 158....................................................................................... 16
(h) Listing........................................................................................ 16
(i) Restriction on Sale of Securities.............................................................. 16
(j) Reporting Requirements......................................................................... 16
SECTION 4. Payment of Expenses............................................................................... 17
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(a) Expenses....................................................................................... 17
(b) Expenses of the Selling Shareholder(s)......................................................... 17
(c) Termination of Agreement....................................................................... 17
(d) Allocation of Expenses......................................................................... 17
SECTION 5. Conditions of Underwriters' Obligations........................................................... 17
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(a) Effectiveness of Registration Statement........................................................ 18
(b) Opinion of Counsel for Company................................................................. 18
(c) Opinion of Counsel for the Selling Shareholder................................................. 18
(d) Opinion of Counsel for Underwriter............................................................. 18
(e) Officers' Certificate.......................................................................... 18
(f) Certificate of Selling Shareholder(s).......................................................... 19
(g) Accountant's Comfort Letter.................................................................... 19
(h) Bring-down Comfort Letter...................................................................... 19
(i) No Objection................................................................................... 19
(j) Lock-up Agreements............................................................................. 19
(k) Conditions to Purchase of Option Securities.................................................... 19
(i) Officers' Certificate................................................................... 19
(ii) Certificate of Selling Shareholder...................................................... 20
(iii) Opinion of Counsel for Company.......................................................... 20
(iv) Opinion of Counsel for the Selling Shareholder.......................................... 20
(v) Opinion of Counsel for Underwriters..................................................... 20
(vi) Bring-down Comfort Letter............................................................... 20
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(l) Additional Documents........................................................................... 20
(m) Termination of Agreement....................................................................... 20
SECTION 6. Indemnification................................................................................... 21
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(a) Indemnification of the Underwriter by the Company and the Operating Partnership................ 21
(b) Indemnification of the Underwriter by the Selling Shareholder.................................. 22
(c) Indemnification of Company, the Operating Partnership, Directors and
Officers and Selling Shareholder............................................................... 22
(d) Actions against Parties; Notification.......................................................... 22
(e) Settlement without Consent if Failure to Reimburse............................................. 23
(f) Other Agreements with Respect to Indemnification............................................... 23
SECTION 7. Contribution...................................................................................... 23
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SECTION 8. Representations, Warranties and Agreements to Survive Delivery.................................... 24
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SECTION 9. Termination of Agreement.......................................................................... 25
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(a) Termination; General........................................................................... 25
(b) Liabilities.................................................................................... 25
SECTION 10. Default by the Selling Shareholder............................................................... 25
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SECTION 11. Notices.......................................................................................... 25
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SECTION 12. Parties.......................................................................................... 26
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SECTION 13. Governing Law And Time........................................................................... 26
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SECTION 14. Effect of Headings............................................................................... 26
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SECTION 15. Limitation of Liability of Shareholders, Trustees and Officers of the Company.................... 26
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Table of Contents
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SCHEDULES
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Schedule A - Pricing Information............................................................ Sch A-1
Schedule B - List of Subsidiaries........................................................... Sch B-1
EXHIBITS
Exhibit A - Form of Opinion of Company's Counsel.............................................. A-1
Exhibit B - Form of Opinion for the Selling Shareholders(s)................................... B-1
Exhibit C - Form of Lock-up Letter............................................................ C-1
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CABOT INDUSTRIAL TRUST
(a Maryland real estate investment trust)
2,000,000 Common Shares of Beneficial Interest
(Par Value $0.01 Per Share)
PURCHASE AGREEMENT
December 18, 2000
MERRILL LYNCH & CO.
North Tower
World Financial Center
New York, New York 10281-1209
Ladies and Gentlemen:
Cabot Industrial Trust, a Maryland real estate investment trust (the
"Company"), and its principal subsidiary, Cabot Industrial Properties, L.P., a
Delaware limited partnership (the "Operating Partnership"), and IBM Personal
Pension Plan Trust, a New York trust (the "Selling Shareholder"), confirm their
respective agreements with Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner &
Smith Incorporated ("Merrill Lynch" and in its capacity as underwriter under
this Agreement, "Underwriter") with respect to (i) the sale by the Selling
Shareholder and the purchase by the Underwriter of 2,000,000 Common Shares of
Beneficial Interest, par value $0.01 per share, of the Company ("Common Shares")
and (ii) the grant by the Selling Shareholder to the Underwriter of the option
described in Section 2(b) hereof to purchase all or any part of 300,000
additional Common Shares to cover over-allotments, if any. The aforesaid
2,000,000 Common Shares (the "Initial Securities") to be purchased by the
Underwriter and all or any part of the 300,000 Common Shares subject to the
option described in Section 2(b) hereof (the "Option Securities") are
hereinafter called, collectively, the "Securities".
The Company and the Selling Shareholder understand that the Underwriter
proposes to make a public offering of the Securities as soon as the Underwriter
deems advisable after this Purchase Agreement (the "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. 333-71565) covering the
registration of the Securities under the Securities Act of 1933, as amended (the
"1933 Act"), including the related preliminary prospectus or prospectuses.
Promptly after execution and delivery of this Agreement, the Company will
prepare and file a prospectus in accordance with the provisions of
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Rule 430A ("Rule 430A") of the rules and regulations of the Commission under the
1933 Act (the "1933 Act Regulations") and paragraph (b) of Rule 424 ("Rule
424(b)") of the 1933 Act Regulations. The information, included in such
prospectus, that was omitted from such registration statement at the time it
became effective, but that is deemed to be part of such registration statement
at the time it became effective pursuant to paragraph (b) of Rule 430A, is
referred to as "Rule 430A Information." Each prospectus used before such
registration statement became effective, and any prospectus that omitted the
Rule 430A Information that was used after such effectiveness and prior to the
execution and delivery of this Agreement, is herein called a "preliminary
prospectus." Such registration statement, including the exhibits thereto,
schedules thereto, if any, and the documents incorporated by reference therein
pursuant to Item 12 of Form S-3 under the 1933 Act, at the time it became
effective and including the Rule 430A Information, is herein called the
"Registration Statement." Any registration statement filed pursuant to Rule
462(b) of the 1933 Act Regulations is herein referred to as the "Rule 462(b)
Registration Statement," and after such filing the term "Registration Statement"
shall include the Rule 462(b) Registration Statement. The final prospectus,
including the documents incorporated by reference therein pursuant to Item 12 of
Form S-3 under the 1933 Act, in the form first furnished to the Underwriter for
use in connection with the offering of the Securities is herein called the
"Prospectus." For purposes of this Agreement, all references to the Registration
Statement, any preliminary prospectus, the Prospectus or any amendment or
supplement to any of the foregoing shall be deemed to include the copy filed
with the Commission pursuant to its Electronic Data Gathering, Analysis and
Retrieval system ("EDGAR").
All references in this Agreement to financial statements and schedules
and other information which is "contained," "included" or "stated" in the
Registration Statement, any preliminary prospectus or the Prospectus (or other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Registration Statement, any preliminary prospectus or the
Prospectus, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement, any 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 "1934 Act") which is
incorporated by reference in the Registration Statement, such preliminary
prospectus or the Prospectus, as the case may be.
SECTION 1. Representations and Warranties
------------------------------
(a) Representations and Warranties by the Company and the
Operating Partnership. The Company and the Operating Partnership jointly and
severally represent and warrant to the Underwriter as of the date hereof, as of
the Closing Time referred to in Section 2(c) hereof, and as of each Date of
Delivery (if any) referred to in Section 2(b) hereof, and agrees with the
Underwriter, as follows:
(i) Compliance with Registration Requirements. The
-----------------------------------------
Company meets the requirements for use of Form S-3 under the 1933 Act. Each of
the Registration Statement and any Rule 462(b) Registration Statement has become
effective under the 1933 Act and no stop order suspending the effectiveness of
the Registration Statement or any Rule 462(b) Registration Statement has been
issued under the 1933 Act and no proceedings for that purpose have been
instituted or are pending or, to the knowledge of the Company are contemplated
by
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the Commission, and any request on the part of the Commission for additional
information has been complied with.
At the respective times the Registration Statement, any Rule 462(b) Registration
Statement and any post-effective amendments thereto (including the filing of the
Company's most recent Annual Report on Form 10-K with the Commission) became
effective and at the Closing Time (and, if any Option Securities are purchased,
at the Date of Delivery), the Registration Statement, the Rule 462(b)
Registration Statement and any amendments and supplements thereto complied and
will comply in all material respects with the requirements of the 1933 Act and
the 1933 Act Regulations and did 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. Neither the
Prospectus nor any amendments or supplements thereto, at the date hereof, at the
time the Prospectus or any such amendment or supplement was issued, at the
Closing Time (and, if any Option Securities are purchased, at the Date of
Delivery), included or will include an untrue statement of a material fact or
omitted or will omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. The representations and warranties in this subsection
shall not apply to statements in or omissions from the Registration Statement or
Prospectus made in reliance upon and in conformity with information furnished to
the Company in writing by the Underwriter expressly for use in the Registration
Statement or Prospectus.
Each preliminary prospectus and the prospectus filed or to be filed as part of
the Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the 1933 Act, complied or will
comply when so filed in all material respects with the 1933 Act Regulations, and
each preliminary prospectus and the Prospectus delivered to the Underwriter for
use in connection with this offering was or will be identical to the
electronically transmitted copies thereof filed with the Commission pursuant to
EDGAR, except to the extent permitted by Regulation S-T.
(ii) Incorporated Documents. The documents incorporated or
----------------------
deemed to be incorporated by reference in the Registration Statement and the
Prospectus, when they became effective or at the time they were or hereafter are
filed with the Commission, complied and will comply in all material respects
with the requirements of the 1933 Act and the 1933 Act Regulations or the 1934
Act and the rules and regulations of the Commission thereunder (the "1934 Act
Regulations"), as applicable, and, when read together with the other information
in the Prospectus, at the date hereof, at the time the Registration Statement
became effective, at the time the Prospectus was issued, at the Closing Time
(and, if any Option Securities are purchased, at the Date of Delivery), did 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, in the light of the circumstances under which they were made, not
misleading.
(iii) Independent Accountants. The accountants who certified the
-----------------------
financial statements and any supporting schedules thereto included in the
Registration Statement and the Prospectus are independent public accountants as
required by the 1933 Act and the 1933 Act Regulations.
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(iv) Financial Statements. The consolidated financial
--------------------
statements of the Company and the Operating Partnership included in the
Registration Statement and the Prospectus, together with the related schedules
and notes, as well as those financial statements, schedules and notes of any
other entity included in the Registration Statement and the Prospectus, present
fairly the consolidated financial position of the Company, the Operating
Partnership and their respective subsidiaries or such other entity, as the case
may be, at the dates indicated and the consolidated statement of operations,
stockholders'/partners' equity and cash flows of the Company, the Operating
Partnership and their respective subsidiaries, or such other entity, as the case
may be, for the periods specified; said financial statements have been prepared
in conformity with generally accepted accounting principles ("GAAP") applied on
a consistent basis throughout the periods involved. The supporting schedules, if
any, included in the Registration Statement and the Prospectus present fairly in
accordance with GAAP the information required to be stated therein. The selected
financial data and the summary financial information included in the
Registration Statement and the Prospectus present fairly the information shown
therein and have been compiled on a basis consistent with that of the audited
financial statements included in the Registration Statement and the Prospectus.
Any pro forma consolidated financial statements of the Company, the Operating
Partnership and their respective subsidiaries and the related notes thereto
included in the Registration Statement and the Prospectus present fairly the
information shown therein, have been prepared in accordance with the
Commission's rules and guidelines with respect to pro forma financial statements
and have been properly compiled on the bases described therein, and the
assumptions used in the preparation thereof are reasonable and the adjustments
used therein are appropriate to give effect to the transactions and
circumstances referred to therein.
(v) No Material Adverse Change in Business. Since the
--------------------------------------
respective dates as of which information is given in the Registration Statement
and the Prospectus, except as otherwise stated therein, (A) there has been no
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business (a "Material Adverse Effect"), (B) there have been
no transactions entered into by the Company, the Operating Partnership or their
respective subsidiaries, other than those in the ordinary course of business,
which are material with respect to the Company, the Operating Partnership and
their respective subsidiaries considered as one enterprise.
(vi) Good Standing of the Company. The Company has been duly
----------------------------
organized and is validly existing as a real estate investment trust in good
standing under the laws of Maryland with the trust power and authority to own,
lease and operate its properties and to conduct its business as described in the
Prospectus and to enter into this Agreement and consummate the transactions
contemplated by this Agreement; the Company is duly qualified to transact
business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure to so qualify or
be in good standing would not reasonably be expected to result in a Material
Adverse Effect; all of the issued and outstanding shares of beneficial interest
of the Company, including the securities to be purchased from the Selling
Shareholder, have been duly authorized and are validly issued, fully paid and
non-assessable; none of the outstanding shares of beneficial interest of the
Company were issued in violation of preemptive or other similar rights of any
securityholder of the Company; and with respect to all tax periods
4
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since the Company's first taxable year ended December 31, 1998, the Company has
met the requirements for qualification as a real estate investment trust under
Sections 856 through 860 of the Internal Revenue Code of 1986, as amended, and
the Company's present contemplated operations, assets and income continue to
meet such requirements.
(vii) Good Standing of the Operating Partnership. The Operating
------------------------------------------
Partnership has been duly formed and is validly existing as a limited
partnership in good standing under the laws of Delaware with the partnership
power and authority to own, lease and operate its properties and to conduct its
business as described in the Prospectus and to enter into this Agreement and
consummate the transactions contemplated by this Agreement; the Operating
Partnership is duly qualified or registered as a limited partnership and is in
good standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify or be in good standing would
not reasonably be expected to result in a Material Adverse Effect; the Company
is the sole general partner of the Operating Partnership and is the holder of a
general partnership interest in the Operating Partnership constituting as of the
date hereof approximately 93% of all general and limited partnership interests;
the Second Amended and Restated Agreement of Limited Partnership, dated February
4, 1998, as amended, substantially in the form filed as an exhibit to the
Registration Statement has been duly and validly authorized, is in full force
and effect and is a valid and binding agreement of the parties thereto,
enforceable in accordance with its terms; and the Operating Partnership is
properly treated as a partnership for federal income tax purposes and not as a
"publicly traded partnership".
(viii) Good Standing of Significant Subsidiaries. Each
-----------------------------------------
significant subsidiary (as such term is defined in Rule 1-02 of Regulation S-X
promulgated under the 1933 Act), if any, (each, a "Significant Subsidiary") (a)
has been duly organized and is validly existing under the laws of its
jurisdiction of organization, with power and authority (corporate, partnership
or otherwise) to own, lease and operate its properties and conduct its business
as described in the Prospectus and (b) has been duly qualified to do business
and is in good standing under the laws of the jurisdiction of its incorporation
and each other jurisdiction in which it owns, leases or operates properties, or
conducts other business, so as to require such qualification, except where the
failure to so qualify or be in good standing would not reasonably be expected to
result in a Material Adverse Effect; except as stated in the Prospectus, all of
the issued and outstanding shares of capital stock or other partnership or
membership interests of each Significant Subsidiary has been duly authorized and
is validly issued, fully paid and non-assessable and is owned by the Company,
directly or through subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity; and none of the
outstanding shares of capital stock or other partnership or membership interests
of any Significant Subsidiary was issued in violation of preemptive or other
similar rights of any securityholder of such Significant Subsidiary.
(ix) Authorization of Agreement. This Agreement has been duly
--------------------------
authorized, executed and delivered by the Company and the Operating Partnership.
(x) Authorization and Description of Securities. The Common
-------------------------------------------
Shares conform in all material respects to all statements relating thereto
contained in the Prospectus and such description conforms to the rights set
forth in the instruments defining the same; no holder
5
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of the Securities will be subject to personal liability by reason of being such
a holder; and the issuance of the Securities is not subject to the preemptive or
other similar rights of any securityholder of the Company.
(xi) Absence of Defaults and Conflicts. Neither the Company,
---------------------------------
the Operating Partnership nor any of their respective subsidiaries is in
violation of the provisions of its partnership agreement, declaration of trust,
certificate of incorporation, by-laws or other charter documents or in default
in the performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, deed of trust, loan or
credit agreement, note, lease or other agreement or instrument to which the
Company, the Operating Partnership or any of their respective subsidiaries is a
party or by which it or any of them may be bound, or to which any of the
property or assets of the Company, the Operating Partnership or any of their
respective subsidiaries is subject (collectively, "Agreements and Instruments")
except for such violations or defaults that would not reasonably be expected to
result in a Material Adverse Effect; and the execution, delivery and performance
of this Agreement and the consummation of the transactions contemplated herein
and in the Registration Statement and the Prospectus and compliance by the
Company, the Operating Partnership with their respective obligations hereunder
have been duly authorized by all necessary corporate action and do not and will
not, whether with or without the giving of notice or passage of time or both,
conflict with or constitute a breach of, or default or Repayment Event (as
defined below) under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property, asset or operation of the Company, the
Operating Partnership or any of their respective subsidiaries pursuant to, the
Agreements and Instruments (except for such conflicts, breaches or defaults or
liens, charges or encumbrances that would not result in a Material Adverse
Effect), nor will such action result in any violation of the provisions of
partnership agreement, declaration of trust, certificate of incorporation, by-
laws or other charter documents of the Company, the Operating Partnership or any
of their respective subsidiaries or any applicable law, statute, rule,
regulation, judgment, order, writ or decree of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over the
Company, the Operating Partnership or any of their respective subsidiaries or
any of their assets, properties or operations, except for such violations of
law, statutes, rules regulations, judgments, orders, writs or decrees that would
not reasonably be expected to result in a Material Adverse effect. As used
herein, a "Repayment Event" means any event or condition which gives the holder
of any note, debenture or other evidence of indebtedness (or any person acting
on such holder's behalf) the right to require the repurchase, redemption or
repayment of all or a portion of such indebtedness by the Company, the Operating
Partnership or any of their respective subsidiaries.
(xii) Absence of Labor Disputes. No labor dispute with the
-------------------------
employees of the Company or any subsidiary exists or, to the knowledge of the
Company, is imminent, and the Company is not aware of any existing or imminent
labor disturbance by the employees of any of its or any subsidiary's principal
suppliers, manufacturers, customers or contractors, which, in either case, may
reasonably be expected to result in a Material Adverse Effect.
(xiii) Absence of Proceedings. There is no action, suit,
----------------------
proceeding, inquiry or investigation before or brought by any court or
governmental agency or body, domestic or foreign, now pending, or, to the
knowledge of the Company and/or the Operating Partnership, threatened, against
or affecting the Company, the Operating Partnership or any of
6
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their respective subsidiaries, which is required to be disclosed in the
Registration Statement and the Prospectus (other than as disclosed therein), or
which might reasonably be expected to result in a Material Adverse Effect, or
which might reasonably be expected to materially and adversely affect the
properties or assets thereof or the consummation of the transactions
contemplated in this Agreement or the performance by the Company and the
Operating Partnership of their respective obligations hereunder; the aggregate
of all pending legal or governmental proceedings to which the Company, the
Operating Partnership or any of their respective subsidiaries is a party or of
which any of their respective properties, assets or operations is the subject
which are not described in the Registration Statement and the Prospectus,
including ordinary routine litigation incidental to the business, may not
reasonably be expected to result in a Material Adverse Effect.
(xiv) Accuracy of Exhibits. There are no contracts or documents
--------------------
which are required to be described in the Registration Statement, the Prospectus
or the documents incorporated by reference therein or to be filed as exhibits
thereto which have not been so described and filed as required.
(xv) Possession of Intellectual Property. The Company, the
-----------------------------------
Operating Partnership and their respective subsidiaries own or possess, or can
acquire on reasonable terms, adequate patents, patent rights, licenses,
inventions, copyrights, know-how (including trade secrets and other unpatented
and/or unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks, trade names or other intellectual
property (collectively, "Intellectual Property") necessary to carry on the
business now operated by them, and neither the Company, the Operating
Partnership nor any of their respective subsidiaries has received any notice or
is otherwise aware of any infringement of or conflict with asserted rights of
others with respect to any Intellectual Property or of any facts or
circumstances which would render any Intellectual Property invalid or inadequate
to protect the interest of the Company, the Operating Partnership or any of
their respective subsidiaries therein, and which infringement or conflict (if
the subject of any unfavorable decision, ruling or finding) or invalidity or
inadequacy, singly or in the aggregate, would reasonably be expected to have a
Material Adverse Effect.
(xvi) Absence of Further Requirements. No filing with, or
-------------------------------
authorization, approval, consent, license, order, registration, qualification or
decree of, any court or governmental authority or agency, domestic or foreign,
is necessary or required for the performance by the Company and/or the Operating
Partnership of their respective obligations hereunder, in connection with the
offering, issuance or sale of the Securities hereunder or the consummation of
the transactions contemplated by this Agreement, except such as have been
already obtained or rendered, as the case by be.
(xvii) Possession of Licenses and Permits. The Company, the
----------------------------------
Operating Partnership and their respective subsidiaries possess such permits,
licenses, approvals, consents and other authorizations (collectively,
"Governmental Licenses") issued by the appropriate federal, state, local or
foreign regulatory agencies or bodies necessary to conduct the business now
operated by them; the Company, the Operating Partnership and their respective
subsidiaries are in compliance with the terms and conditions of all such
Governmental Licenses, except where the failure so to comply would not, singly
or in the aggregate, reasonably be expected to result in a Material Adverse
Effect; all of the Governmental Licenses are valid and in full force and effect,
except where the invalidity of such Governmental Licenses or the failure of such
7
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Governmental Licenses to be in full force and effect would not reasonably be
expected to result in a Material Adverse Effect; and neither the Company, the
Operating Partnership nor any of their respective subsidiaries has received any
notice of proceedings relating to the revocation or modification of any such
Governmental Licenses which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would reasonably be expected to result
in a Material Adverse Effect.
(xviii) Title to Property. The Company, the Operating
-----------------
Partnership and their respective subsidiaries have good and marketable title to
all real property owned by the Company, the Operating Partnership and their
respective subsidiaries and good title to all other properties owned by them, in
each case, free and clear of all mortgages, pledges, liens, security interests,
claims, restrictions or encumbrances of any kind (collectively, "Liens"), except
(A) as otherwise stated in the Registration Statement and the Prospectus (B)
utility easements serving such real properties, (C) Liens for taxes not due and
payable, (D) zoning and similar governmental land use matters affecting such
real properties that are consistent with the current uses of such properties,
(E) matters of title not adversely affecting the use, value or marketability of
title to such real properties, (F) other statutory liens not due and payable or
(G) those which do not, singly or in the aggregate, materially affect the value
of such property and do not interfere with the use made and proposed to be made
of such property by the Company, the Operating Partnership or any of their
respective subsidiaries; all Liens that are required to be disclosed in the
Registration Statement and the Prospectus are disclosed therein; none of the
Company, the Operating Partnership nor any of their respective subsidiaries or,
to the knowledge of the Company and the Operating Partnership, any other party
to any lease relating to any such real property is in default under any such
lease and neither the Company nor the Operating Partnership is aware of any
event that, with the giving of notice or the passage of time, or both, would
constitute a default under any such lease, except in each case such defaults
that would not, individually or in the aggregate, reasonably be expected to have
a Material Adverse Effect; each of the leases pursuant to which all or any
portion of such real property is demised is in full force and effect in all
material respects and, except as set forth in the Registration Statement or the
Prospectus, no material tenant thereunder has any right of first refusal to
purchase the demised premises thereunder; neither the Company, the Operating
Partnership nor any of their respective subsidiaries party to any mortgages or
other security documents or other agreements encumbering or otherwise recorded
against any such real property is in default thereunder and neither the Company
nor the Operating Partnership is aware of any event that, with the giving of
notice or the passage of time, or both, would constitute a default under any
such mortgage, document or agreement, except in each case such defaults that
would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect; each of such real properties is in compliance with all
applicable codes, laws and regulations (including without limitation, building
and zoning codes, laws and regulations), except for failures to comply that
would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect; neither the Company nor the Operating Partnership has
any knowledge of any pending or threatened condemnation, zoning change or other
proceeding or action that will in any manner affect the size of, use of,
improvements on, construction on or access to the applicable real properties,
except such proceedings or actions that would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect; and any
such real property and buildings held under lease by the Company, the Operating
Partnership or any of their respective subsidiaries and described in the
Prospectus are held by them under valid, subsisting and
8
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enforceable leases with such exceptions as are not material and do not interfere
in any material respect with the use made and proposed to be made of such real
property and buildings by the Company, the Operating Partnership or their
respective subsidiaries, as the case may be.
(xix) Compliance with Cuba Act. The Company has complied with,
------------------------
and is and will be in compliance with, the provisions of that certain Florida
act relating to disclosure of doing business with Cuba, codified as Section
517.075 of the Florida statutes, and the rules and regulations thereunder
(collectively, the "Cuba Act") or is exempt therefrom.
(xx) Investment Company Act. The Company and the Operating
----------------------
Partnership are not, and upon the issuance and sale of the Securities as herein
contemplated, will not 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 "1940 Act").
(xxi) Environmental Laws. Except as otherwise stated in the
------------------
Registration Statement and the Prospectus and except as would not, singly or in
the aggregate, reasonably be expected to result in a Material Adverse Effect,
(A) neither the Company, the Operating Partnership nor any of their respective
subsidiaries is in violation of any federal, state, local or foreign statute,
law, rule, regulation, ordinance, code, policy or rule of common law or any
judicial or administrative interpretation thereof including any judicial or
administrative order, consent, decree or judgment, relating to pollution or
protection of human health, the environment (including, without limitation,
ambient air, surface water, groundwater, land surface or subsurface strata) or
wildlife, including, without limitation, laws and regulations relating to the
release or threatened release of chemicals, pollutants, contaminants, wastes,
toxic substances, hazardous substances, petroleum or petroleum products
(collectively, "Hazardous Materials") or to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Materials (collectively, "Environmental Laws"), (B) the Company, the
Operating Partnership and their respective subsidiaries have all permits,
authorizations and approvals required under any applicable Environmental Laws,
(C) neither the Company, the Operating Partnership, nor their respective
subsidiaries has received any notice of, and neither the Company nor the
Operating Partnership has any knowledge of, any pending or threatened
administrative, regulatory or judicial actions, suits, demands, demand letters,
claims, liens, notices of noncompliance or violation, investigation or
proceedings relating to any Environmental Law against or affecting the Company,
the Operating Partnership or any of their respective subsidiaries, (D) neither
the Company, the Operating Partnership nor their respective subsidiaries has
received any notice of, and neither the Company nor the Operating Partnership
has any knowledge of, any occurrence or circumstance that would reasonably be
expected to give rise to a claim or liability under or pursuant to any
Environmental Law, (E) the Company, the Operating Partnership and their
respective subsidiaries have not used, and have not permitted the use of, any of
their respective real properties or any other real property operated by any of
them for activities or operations that involve the handling, use, processing,
manufacturing, generating, producing, storing, refining, recycling,
transporting, spilling, pumping, pouring, emitting, emptying, discharging,
injecting, burying, leaching, dumping, disposing of or releasing into the
environment or otherwise dealing with Hazardous Material, except for Hazardous
Materials utilized in the ordinary course of maintaining such real properties,
provided such use would not, in the ordinary course of business, reasonably be
expected to give rise to liability under any Environmental Laws, (F) except as
disclosed in the Registration Statement and
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Prospectus, neither the Company, the Operating Partnership nor their respective
subsidiaries have any knowledge of any seepage, leaking, escaping, leaching,
discharging, injection, release, emission, spill, pumping, pouring, emptying,
dumping or other release of Hazardous Materials into the environment relating to
activities or operations at or from any such real properties, including, without
limitation, any land or water on, at, under or adjacent to any such real
properties, or on, at, under or from land or water from which Hazardous
Materials might seep, flow or drain into such land or water, and (G) no such
real property is included or, to the knowledge of the Company or the Operating
Partnership, proposed for inclusion on the National Priorities List issued by
the United States Environmental Protection Agency ("EPA") pursuant to applicable
Environmental Laws, or on the Comprehensive Environmental Response, Compensation
and Liability Information System list, and no such real property has been
identified by the EPA as a potential CERCLA site or to the knowledge of the
Company or the Operating Partnership included, or proposed for inclusion, on any
list or inventory issued pursuant to any other Environmental Law or issued by
any other governmental authority having or claiming jurisdiction under
Environmental Laws or with respect to such real property.
(xxii) Insurance. The Company and/or the Operating Partnership
---------
has and will maintain property and casualty insurance in favor of the Company,
the Operating Partnership and their respective subsidiaries (as the case may be)
with respect to each of their respective real properties, in an amount and on
such terms as is reasonable and customary for businesses of the type conducted
and proposed to be conducted by the Company, the Operating Partnership and their
respective subsidiaries; neither the Company, the Operating Partnership nor
their respective subsidiaries have received from any insurance company written
notice of any material defects or deficiencies affecting the insurability of any
such real properties.
(b) Representations and Warranties by the Selling Shareholder. The
Selling Shareholder represents and warrants to the Underwriter as of the date
hereof, as of the Closing Time, and, if the Selling Shareholder is selling
Option Securities on a Date of Delivery, as of each such Date of Delivery, and
agrees with the Underwriter, as follows:
(i) Accurate Disclosure. The information pertaining to the
-------------------
Selling Shareholder under the caption "Selling Shareholders" in the Prospectus
is complete and accurate in all material respects; the Registration Statement
and the Prospectus (as amended or supplemented), as they relate to such Selling
Shareholder, did not and will not, as of the applicable effective date of the
Registration Statement and any amendment thereto, as of the date of the
Prospectus and any amendment or supplement thereto, and as of the Closing Date
and, if any Option Securities are purchased, as of the Date of Delivery, contain
any untrue statement of a material fact or omit to state any 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; the
Selling Shareholder is not prompted to sell the Securities to be sold by the
Selling Shareholder hereunder by any information concerning the Company or any
subsidiary of the Company which is not set forth in the Prospectus.
(ii) Authorization of Agreements. All consents, approvals,
---------------------------
authorizations and orders necessary for the execution and delivery by the
Selling Shareholder of this Agreement and the Power of Attorney (the "Power of
Attorney") and the Custody Agreement (the "Custody Agreement") hereinafter
referred to, and for the sale and delivery of
10
<PAGE>
the Securities to be sold by the Selling Shareholder hereunder, have been
obtained; and such Selling Shareholder has full right, power and authority to
enter into this Agreement, the Power of Attorney and the Custody Agreement, and
to sell, assign, transfer and deliver the Securities to be sold by the Selling
Shareholder hereunder; this Agreement, the Power of Attorney and the Custody
Agreement, have each been duly authorized, executed and delivered by the Selling
Shareholder; and the Selling Shareholder is duly organized, validly existing and
in good standing in its jurisdiction of organization; the sale of the Securities
to be sold by such Selling Shareholder hereunder and the compliance by such
Selling Shareholder with all of the provisions of this Agreement, the Power of
Attorney and the Custody Agreement and the consummation of the transactions
herein and therein contemplated will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default under or
result in the creation or imposition of any tax, lien, charge or encumbrance
upon the Securities to be sold by the Selling Shareholder or any property or
assets of the Selling Shareholder pursuant to any statute, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which such Selling Shareholder is a party or by which such Selling Shareholder
is bound or to which any of the property or assets of such Selling Shareholder
is subject, nor will such action result in any violation of the provisions of
the Certificate of Incorporation or By-laws of the Selling Shareholder if such
Selling Shareholder is a corporation, the Partnership Agreement of the Selling
Shareholder if such Selling Shareholder is a partnership, or any statute or any
order, rule or regulation of any court or governmental agency or body having
jurisdiction over such Selling Shareholder or the property of the Selling
Shareholder.
(iii) Good and Marketable Title. The Selling Shareholder has
-------------------------
good and valid title to the Securities as of the date hereof and will have good
and valid title to such Securities sold at Closing Time and, if any Option
Securities are purchased, on the Date of Delivery, free and clear of all
mortgages, pledges, security interests, liens, claims, encumbrances or equities,
and upon payment for the Securities to be sold by the Selling Shareholder as
provided herein, delivery of such Securities, as directed by the Underwriter, to
Cede & Co. or such other nominee as may be designated by the Depository Trust
Company ("DTC"), registration of such Securities in the name of Cede & Co. or
such other nominee and the crediting of such Securities on the books of DTC to
securities accounts of the Underwriter, (A) DTC shall be a "protected purchaser"
of such Securities within the meaning of 8-303 of the Uniform Commercial Code as
in effect in the State of New York (the "UCC"), (B) under Section 8-501 of the
UCC, the Underwriter will acquire a valid security entitlement in respect of
such Securities and (C) no action based on any "adverse claim" (as defined in
Section 8-102 of the UCC) (other than any adverse claim arising through the
Underwriter) to such Securities may be asserted against the Underwriter with
respect to such security entitlement (it being understood that for the purpose
of this representation and warranty, the Selling Shareholder may assume that
when such payment, delivery and crediting occur, (i) such Securities will have
been registered in the name of Cede & Co. or another nominee designated by DTC,
in each case on the Company's share registry in accordance with its Declaration
of Trust, By-Laws and applicable law; (ii) DTC will be registered as a "clearing
corporation" within the meaning of Section 8-102 of the UCC, and (iii)
appropriate entries to the accounts of the Underwriter on the records of DTC
will have been made pursuant to the UCC).
(iv) Due Execution of Power of Attorney and Custody Agreement.
--------------------------------------------------------
The Selling Shareholder has duly executed and delivered the Power of Attorney,
in the form
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<PAGE>
heretofore furnished to the Underwriter, appointing the person or persons
indicated in such Power of Attorney, and each of them, as the Selling
Shareholder's Attorneys-in-fact (the "Attorneys-in Fact" or any one of them the
"Attorney-in Fact") with authority to execute and deliver this Agreement on
behalf of the Selling Shareholder, to determine the purchase price to be paid by
the Underwriter to the Selling Shareholder as provided herein, to authorize the
delivery of the Securities to be sold by the Selling Shareholder hereunder, and
otherwise to act on behalf of the Selling Shareholder in connection with the
transactions contemplated by this Agreement and the Custody Agreement;
certificates in negotiable form representing all of the Securities to be sold by
the Selling Shareholder hereunder have been placed in custody under a Custody
Agreement relating to such Securities, and the Selling Shareholder represents
that the Custody Agreement is in the form heretofore furnished to the
Underwriter, duly executed and delivered by the Selling Shareholder to Kyle
Escherich, as custodian (the "Custodian"); the Selling Shareholder specifically
---------
agrees that the Securities, represented by the certificates held in custody for
the Selling Shareholder under the Custody Agreement, are subject to the
interests of the Underwriter hereunder, and that the arrangements made by the
Selling Shareholder for such custody, and the appointment by the Selling
Shareholder of the Attorneys-in-Fact by the Power of Attorney, are to that
extent irrevocable. The Selling Shareholder specifically agrees that the
obligations of the Selling Shareholder hereunder shall not be terminated by
operation of law, whether by the death or incapacity of any individual person,
or, in the case of a trust, by the death or incapacity of any executor or
trustee or the termination of such trust, or in the case of a partnership or
corporation, by the dissolution of such partnership or corporation, or by the
occurrence of any other event. If any such executor or trustee should die or
become incapacitated, or if any such trust should be terminated, or if any such
partnership or corporation should be dissolved, or if any other such event
should occur, before the delivery of the Securities by it hereunder,
certificates representing such Securities shall be delivered by or on behalf of
the Selling Shareholder in accordance with the terms and conditions of this
Agreement, and the Custody Agreement, and actions taken by the Attorneys-in-Fact
pursuant to the Power of Attorney shall be as valid as if such death,
incapacity, termination, dissolution or other event had not occurred, regardless
of whether or not the Custodian, the Attorneys-in-Fact, or any of them, shall
have received notice of such death, incapacity, termination, dissolution or
other event.
(v) Absence of Manipulation. The Selling Shareholder has not
-----------------------
taken, and will not take, directly or indirectly, any action which is designed
to or which has constituted or which 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 Securities.
(vi) Absence of Further Requirements. No filing with, or
-------------------------------
consent, approval, authorization, order, registration, qualification or decree
of, any court or governmental authority or agency, domestic or foreign, is
necessary or required for the performance by the Selling Shareholder of its
obligations hereunder or in the Power of Attorney and Custody Agreement, or in
connection with the sale and delivery of the Securities hereunder or the
consummation of the transactions contemplated by this Agreement, except such as
may have previously been made or obtained or as may be required under the 1933
Act or the 1933 Act Regulations or state securities.
(vii) Restriction on Sale of Securities. During a period of 30
---------------------------------
days from the date of the Prospectus, the Selling Shareholder will not, without
the prior written consent of
12
<PAGE>
Merrill Lynch, (i) offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase or otherwise transfer or dispose of, directly or
indirectly, any Common Shares or any securities convertible into or exercisable
or exchangeable for Common Shares or file any registration statement under the
1933 Act with respect to any of the foregoing or (ii) enter into any swap or any
other agreement or any transaction that transfers, in whole or in part, directly
or indirectly, the economic consequence of ownership of the Common Shares,
whether any such swap or transaction described in clause (i) or (ii) above is to
be settled by delivery of Common Shares or such other securities, in cash or
otherwise. The foregoing sentence shall not apply to the Securities to be sold
hereunder.
(viii) No Association with NASD. Neither the Selling
------------------------
Stockholder nor any of its affiliates directly, or indirectly through one or
more intermediaries, controls, or is controlled by, or is under common control
with, or has any other association with (within the meaning of Article I,
Section 1(m) of the By-laws of the National Association of Securities Dealers,
Inc.), any member firm of the National Association of Securities Dealers, Inc.
(c) Officer's Certificates. Any certificate signed by any officer of
the Company, the Operating Partnership or any of their respective subsidiaries
delivered to the Underwriter or to counsel for the Underwriter shall be deemed a
representation and warranty by the Company to the Underwriter as to the matters
covered thereby; and any certificate signed by or on behalf of the Selling
Shareholder as such and delivered to the Underwriter or to counsel for the
Underwriter pursuant to the terms of this Agreement shall be deemed a
representation and warranty by the Selling Shareholder to the Underwriter as to
the matters covered thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) Initial Securities. On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Selling Shareholder, agrees to sell to the Underwriter, and the
Underwriter agrees to purchase from the Selling Shareholder, at the price per
share set forth in Schedule A, 2,000,000 Common Shares.
(b) Option Securities. In addition, on the basis of the
representations and warranties herein contained and subject to the terms and
conditions herein set forth, the Selling Shareholder hereby grants an option to
the Underwriter to purchase up to an additional 300,000 Common Shares, at the
price per share set forth in Schedule A. 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 Securities upon
notice by the Underwriter to the Selling Shareholder setting forth the number of
Option Securities as to which the Underwriter is then exercising the option and
the time and date of payment and delivery for such Option Securities. Any such
time and date of delivery (a "Date of Delivery") shall be determined by the
Underwriter but shall not be later than seven full business days after the
exercise of said option, nor in any event prior to the Closing Time, as
hereinafter defined.
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of
Goodwin, Procter & Hoar, LLP, 599
13
<PAGE>
Lexington Avenue, 40th Floor, New York, New York, 10022, or at such other place
as shall be agreed upon by the Underwriter and the Company and the Selling
Shareholder, at 9:00 A.M. (Eastern time) on the third business day after the
date hereof (unless postponed in accordance with the provisions of Section 10),
or such other time not later than ten business days after such date as shall be
agreed upon by the Underwriter and the Company and the Selling Shareholder (such
time and date of payment and delivery being herein called "Closing Time").
In addition, in the event that any or all of the Option Securities are
purchased by the Underwriter, payment of the purchase price for, and delivery of
certificates for, such Option Securities shall be made at the above-mentioned
office, or at such other place as shall be agreed upon by the Underwriter and
the Company and the Selling Shareholder, on each Date of Delivery as specified
in the notice from the Underwriter to the Company and the Selling Shareholder.
Payment shall be made to the Selling Shareholder by wire transfer of
immediately available funds to a bank account designated by the Custodian
pursuant to the Selling Shareholder's Power of Attorney and Custody Agreement
against delivery to the Underwriter for its account of certificates for the
Securities to be purchased by the Underwriter.
(d) Denominations; Registration. Certificates for the Initial
Securities and the Option Securities, if any, shall be in such denominations and
registered in such names as the Underwriter may request in writing at least two
full business days before the Closing Time or the relevant Date of Delivery, as
the case may be. The certificates for the Initial Securities and the Option
Securities, if any, will be made available for examination and packaging by the
Underwriter in The City of New York not later than 10:00 A.M. (Eastern time) on
the business day prior to the Closing Time or the relevant Date of Delivery, as
the case may be.
SECTION 3. Covenants of the Company. The Company covenants with the
------------------------
Underwriter as follows:
(a) Compliance with Securities Regulations and Commission Requests.
The Company, subject to Section 3(b), will comply with the requirements of Rule
430A or Rule 434, as applicable, and will notify the Underwriter immediately,
and confirm the notice in writing, (i) when any post-effective amendment to the
Registration Statement shall become effective, or any supplement to the
Prospectus or any amended Prospectus shall have been filed, (ii) of the receipt
of any comments from the Commission, (iii) of any request by the Commission for
any amendment to the Registration Statement or any amendment or supplement to
the Prospectus or for additional information, and (iv) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or of any order preventing or suspending the use of any preliminary
prospectus, or of the suspension of the qualification of the Securities for
offering or sale in any jurisdiction, or of the initiation or threatening of any
proceedings for any of such purposes. The Company will promptly effect the
filings necessary pursuant to Rule 424(b) and will take such steps as it deems
necessary to ascertain promptly whether the form of prospectus transmitted for
filing under Rule 424(b) was received for filing by the Commission and, in the
event that it was not, it will promptly file such prospectus. The Company will
make every reasonable effort to prevent the issuance of any stop order and, if
any stop order is issued, to obtain the lifting thereof at the earliest possible
moment.
14
<PAGE>
(b) Filing of Amendments. The Company will give the Underwriter
notice of its intention to file or prepare any amendment to the Registration
Statement (including any filing under Rule 462(b)), any Term Sheet or any
amendment, supplement or revision to either the prospectus included in the
Registration Statement at the time it became effective or to the Prospectus,
whether pursuant to the 1933 Act, the 1934 Act or otherwise, will furnish the
Underwriter with copies of any such documents a reasonable amount of time prior
to such proposed filing or use, as the case may be, and will not file or use any
such document to which the Underwriter or counsel for the Underwriter shall
object.
(c) Delivery of Registration Statements. The Company has furnished or
will deliver to the Underwriter and counsel for the Underwriter, without charge,
signed copies of the Registration Statement as originally filed and of each
amendment thereto (including exhibits filed therewith or incorporated by
reference therein and documents incorporated or deemed to be incorporated by
reference therein) and signed copies of all consents and certificates of
experts. The copies of the Registration Statement and each amendment thereto
furnished to the Underwriter will be identical to the electronically transmitted
copies thereof filed with the Commission pursuant to EDGAR, except to the extent
permitted by Regulation S-T.
(d) Delivery of Prospectuses. The Company has delivered to the
Underwriter, without charge, as many copies of each preliminary prospectus as
the Underwriter reasonably requested, and the Company hereby consents to the use
of such copies for purposes permitted by the 1933 Act. The Company will furnish
to the Underwriter, without charge, during the period when the Prospectus is
required to be delivered under the 1933 Act or the 1934 Act, such number of
copies of the Prospectus (as amended or supplemented) as the Underwriter may
reasonably request. The Prospectus and any amendments or supplements thereto
furnished to the Underwriter will be identical to the electronically transmitted
copies thereof filed with the Commission pursuant to EDGAR, except to the extent
permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company will
comply with the 1933 Act and the 1933 Act Regulations and the 1934 Act and the
1934 Act Regulations so as to permit the completion of the distribution of the
Securities as contemplated in this Agreement and in the Prospectus. If at any
time when a prospectus is required by the 1933 Act to be delivered in connection
with sales of the Securities, any event shall occur or condition shall exist as
a result of which it is necessary, in the reasonable opinion of counsel for the
Underwriter or for the Company, to amend the Registration Statement or amend or
supplement the Prospectus in order that the Prospectus will not include any
untrue statements of a material fact or omit to state a material fact necessary
in order to make the statements therein not misleading in the light of the
circumstances existing at the time it is delivered to a purchaser, or if it
shall be necessary, in the opinion of such counsel, at any such time to amend
the Registration Statement or amend or supplement the Prospectus in order to
comply with the requirements of the 1933 Act or the 1933 Act Regulations, the
Company will promptly prepare and file with the Commission, subject to Section
3(b), such amendment or supplement as may be necessary to correct such statement
or omission or to make the Registration Statement or the Prospectus comply with
such requirements, and the Company will furnish to the Underwriter such number
of copies of such amendment or supplement as the Underwriter may reasonably
request.
15
<PAGE>
(f) Blue Sky Qualifications. The Company will use its best efforts,
in cooperation with the Underwriter, to qualify the Securities for offering and
sale under the applicable securities laws of such states and other jurisdictions
(domestic or foreign) as the Underwriter may designate and to maintain such
qualifications in effect for a period of not less than one year from the later
of the effective date of the Registration Statement and any Rule 462(b)
Registration Statement; provided, however, that the Company shall not be
obligated to file any general consent to service of process or to qualify as a
foreign corporation or as a dealer in securities in any jurisdiction in which it
is not so qualified or to subject itself to taxation in respect of doing
business in any jurisdiction in which it is not otherwise so subject. In each
jurisdiction in which the Securities have been so qualified, the Company will
file such statements and reports as may be required by the laws of such
jurisdiction to continue such qualification in effect for a period of not less
than one year from the effective date of the Registration Statement and any Rule
462(b) Registration Statement.
(g) Rule 158. The Company will timely file such reports pursuant to
the 1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earning statement for the purposes of,
and to provide the benefits contemplated by, the last paragraph of Section 11(a)
of the 1933 Act.
(h) Listing. The Company will use its best efforts to maintain the
listing of the Securities on the New York Stock Exchange.
(i) Restriction on Sale of Securities. During a period of 30 days
from the date of the Prospectus, the Company will not, without the prior written
consent of Merrill Lynch, (i) directly or indirectly, offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase or otherwise
transfer or dispose of any Common Shares or any securities convertible into or
exercisable or exchangeable for Common Shares or file any registration statement
under the 1933 Act with respect to any of the foregoing or (ii) enter into any
swap or any other agreement or any transaction that transfers, in whole or in
part, directly or indirectly, the economic consequence of ownership of the
Common Shares, whether any such swap or transaction described in clause (i) or
(ii) above is to be settled by delivery of Common Shares or such other
securities, in cash or otherwise. The foregoing sentence shall not apply to (A)
the Securities to be sold hereunder, (B) any Common Shares issued by the Company
upon the exercise of an option or warrant or the conversion of a security
outstanding on the date hereof and referred to in the Prospectus, (C) any Common
Shares issued or options to purchase Common Shares granted pursuant to existing
employee benefit plans of the Company referred to in the Prospectus, (D) any
Common Shares issued pursuant to any non-employee director stock plan or
dividend reinvestment plan, (E) Common Shares issued upon conversion of units of
the Operating Partnership (the "Units"), (F) Common Shares or Units issued by
the Company as consideration for the acquisition of real property or a business
similar or complementary to the Company or (G) Common Shares issued pursuant to
the Company's dividend reinvestment and share purchase plan.
(j) Reporting Requirements. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, will
file all documents
16
<PAGE>
required to be filed with the Commission pursuant to the 1934 Act within the
time periods required by the 1934 Act and the 1934 Act Regulations.
SECTION 4 Payment of Expenses.
-------------------
(a) Expenses. The Company and the Selling Shareholder will pay or
cause to be paid all expenses incident to the performance of their obligations
under this Agreement, including (i) the preparation, printing and filing of the
Registration Statement (including financial statements and exhibits) as
originally filed and of each amendment thereto, (ii) the preparation, printing
and delivery to the Underwriter of this Agreement and such other documents as
may be required in connection with the offering, purchase, sale, issuance or
delivery of the Securities, (iii) the preparation, issuance and delivery of the
certificates for the Securities to the Underwriter, including any stock or other
transfer taxes and any stamp or other duties payable upon the sale, issuance or
delivery of the Securities to the Underwriter, (iv) the fees and disbursements
of the Company's counsel, accountants and other advisors, (v) the qualification
of the Securities under securities laws in accordance with the provisions of
Section 3(f) hereof, including filing fees and the reasonable fees and
disbursements of counsel for the Underwriter in connection therewith and in
connection with the preparation of the Blue Sky Survey and any supplement
thereto, (vi) the printing and delivery to the Underwriter of copies of each
preliminary prospectus, any Term Sheets and of the Prospectus and any amendments
or supplements thereto, (vii) the preparation, printing and delivery to the
Underwriter of copies of the Blue Sky Survey and any supplement thereto, (viii)
the fees and expenses of any transfer agent or registrar for the Securities and
(ix) the filing fees incident to, and the reasonable fees and disbursements of
counsel to the Underwriter in connection with, the review by the National
Association of Securities Dealers, Inc. (the "NASD") of the terms of the sale of
the Securities.
(b) Expenses of the Selling Shareholder(s). The Selling Shareholder
will pay all expenses incident to the performance of its obligations under, and
the consummation of the transactions contemplated by this Agreement, including
(i) any stamp duties, capital duties and stock transfer taxes, if any, payable
upon the sale of the Securities to the Underwriter and (ii) the fees and
disbursements of its counsel and accountants.
(c) Termination of Agreement. If this Agreement is terminated by the
Underwriter in accordance with the provisions of Section 5 (other than Sections
5(c), 5(f), 5(k)(ii) or 5(k)(iv)) or Section 9(a)(i) hereof, the Company shall
reimburse the Underwriter for all of their reasonable out-of-pocket expenses,
including the reasonable fees and disbursements of counsel for the Underwriter.
If this Agreement is terminated by the Underwriter in accordance with the
provisions of Sections 5(c), 5(f), 5(k)(ii) or 5(k)(iv) or Section 10 hereof,
the Selling Shareholder shall reimburse the Underwriter for all of their
reasonable out-of-pocket expenses, including reasonable fees and disbursements
of counsel for the Underwriter.
(d) Allocation of Expenses. The provisions of this Section shall not
affect any agreement that the Company and the Selling Shareholder may make for
the sharing of such costs and expenses.
SECTION 5 Conditions of Underwriters' Obligations. The obligations of
---------------------------------------
the Underwriter hereunder are subject to the accuracy of the representations and
warranties of the
17
<PAGE>
Company and the Selling Shareholder contained in Section 1 hereof or in
certificates of any officer of the Company or any subsidiary of the Company or
on behalf of the Selling Shareholder delivered pursuant to the provisions
hereof, to the performance by the Company of its covenants and other obligations
hereunder, and to the following further conditions:
(a) Effectiveness of Registration Statement. The Registration
Statement, including any Rule 462(b) Registration Statement, has become
effective and at Closing Time no stop order suspending the effectiveness of the
Registration Statement shall have been issued under the 1933 Act or proceedings
therefor initiated or threatened by the Commission, and any request on the part
of the Commission for additional information shall have been complied with to
the reasonable satisfaction of counsel to the Underwriter. A prospectus
containing the Rule 430A Information shall have been filed with the Commission
in accordance with Rule 424(b) (or a post-effective amendment providing such
information shall have been filed and declared effective in accordance with the
requirements of Rule 430A).
(b) Opinion of Counsel for Company. At Closing Time, the Underwriter
shall have received the favorable opinion, dated as of Closing Time, of Mayer,
Brown & Platt, counsel for the Company, in form and substance reasonably
satisfactory to counsel for the Underwriter. In giving such opinion, such
counsel may rely, as to matters governed by the laws of the state of Maryland,
upon the opinion of Ballard Spahr Andrews & Ingersoll, LLP. Such counsel may
also state that insofar as such opinion involves factual matters, they have
relied, to the extent they deem proper, upon certificates of officers of the
Company and its subsidiaries and certificates of public officials.
(c) Opinion of Counsel for the Selling Shareholder. At Closing Time,
the Underwriter shall have received the favorable opinion, dated as of Closing
Time, of William H. Blair, Esq., counsel for the Selling Shareholder, in form
and substance reasonably satisfactory to counsel for the Underwriter.
(d) Opinion of Counsel for Underwriter. At Closing Time, the
Underwriter shall have received the favorable opinion, dated as of Closing Time,
of Goodwin, Procter & Hoar LLP, counsel for the Underwriter. In giving such
opinion, such counsel may rely, as to all matters governed by the laws of
jurisdictions other than the law of the State of New York and the federal law of
the United States and the General Corporation Law of the State of Delaware, upon
the opinions of counsel reasonably satisfactory to the Underwriter. Such counsel
may also state that, insofar as such opinion involves factual matters, they have
relied, to the extent they deem proper, upon certificates of officers of the
Company and its subsidiaries and certificates of public officials.
(e) Officers' Certificate. At Closing Time, there shall not have
been, since the date hereof or since the respective dates as of which
information is given in the Prospectus, any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, and the
Underwriter shall have received a certificate of the President or a Vice
President of the Company and of the chief financial or chief accounting officer
of the Company, dated as of Closing Time, to the effect that (i) there has been
no such material adverse change, (ii) the representations and warranties in
Section 1(a)
18
<PAGE>
hereof are true and correct with the same force and effect as though expressly
made at and as of Closing Time, (iii) the Company has complied with all
agreements and satisfied all conditions on its part to be performed or satisfied
at or prior to Closing Time, and (iv) no stop order suspending the effectiveness
of the Registration Statement has been issued and no proceedings for that
purpose have been instituted or are pending or are contemplated by the
Commission.
(f) Certificate of Selling Shareholder(s). At Closing Time, the
Underwriter shall have received a certificate of an Attorney-in-Fact on behalf
of the Selling Shareholder, dated as of Closing Time, to the effect that (i) the
representations and warranties of the Selling Shareholder contained in Section 1
(b) hereof are true and correct in all respects with the same force and effect
as though expressly made at and as of Closing Time and (ii) the Selling
Shareholder has complied in all material respects with all agreements and all
conditions on its part to be performed under this Agreement at or prior to
Closing Time.
(g) Accountant's Comfort Letter. At the time of the execution of this
Agreement, the Underwriter shall have received from Arthur Andersen LLP a letter
dated such date, in form and substance satisfactory to the Underwriter,
containing statements and information of the type ordinarily included in
accountants' "comfort letters" to underwriters with respect to the financial
statements and certain financial information contained in the Registration
Statement and the Prospectus.
(h) Bring-down Comfort Letter. At Closing Time, the Underwriter shall
have received from Arthur Andersen LLP a letter, dated as of Closing Time, to
the effect that they reaffirm the statements made in the letter furnished
pursuant to subsection (g) of this Section, except that the specified date
referred to shall be a date not more than three business days prior to Closing
Time.
(i) No Objection. The NASD has confirmed that it has not raised any
objection with respect to the fairness and reasonableness of the underwriting
terms and arrangements.
(j) Lock-up Agreements. At the date of this Agreement, the
Underwriter shall have received an agreement substantially in the form of
Exhibit C hereto signed by the persons listed on Schedule E hereto.
(k) Conditions to Purchase of Option Securities. In the event that
the Underwriter exercises its option provided in Section 2(b) hereof to purchase
all or any portion of the Option Securities, the representations and warranties
of the Company and the Selling Shareholder contained herein and the statements
in any certificates furnished by the Company, any subsidiary of the Company and
the Selling Shareholder hereunder shall be true and correct as of each Date of
Delivery and, at the relevant Date of Delivery, the Underwriter shall have
received:
(i) Officers' Certificate. A certificate, dated such Date of
---------------------
Delivery, of the President or a Vice President of the Company and of the chief
financial or chief accounting officer of the Company confirming that the
certificate delivered at the Closing Time pursuant to Section 5(e) hereof
remains true and correct as of such Date of Delivery.
19
<PAGE>
(ii) Certificate of Selling Shareholder. A certificate, dated
----------------------------------
such Date of Delivery, of an Attorney-in-Fact on behalf of the Selling
Shareholder confirming that the certificate delivered at Closing Time pursuant
to Section 5(f) remains true and correct as of such Date of Delivery.
(iii) Opinion of Counsel for Company. The favorable opinion of
------------------------------
Mayer, Brown & Platt, counsel for the Company, in form and substance
satisfactory to counsel for the Underwriter, dated such Date of Delivery,
relating to the Option Securities to be purchased on such Date of Delivery and
otherwise to the same effect as the opinion required by Section 5(b) hereof.
(iv) Opinion of Counsel for the Selling Shareholder. The
----------------------------------------------
favorable opinion of [13], counsel for the Selling Shareholder, in form and
substance satisfactory to counsel for the Underwriter, dated such Date of
Delivery, relating to the Option Securities to be purchased on such Date of
Delivery and otherwise to the same effect as the opinion required by Section
5(c) hereof.
(v) Opinion of Counsel for Underwriters. The favorable opinion
-----------------------------------
of Goodwin, Procter & Hoar LLP, counsel for the Underwriter, dated such Date of
Delivery, relating to the Option Securities to be purchased on such Date of
Delivery and otherwise to the same effect as the opinion required by Section
5(d) hereof.
(vi) Bring-down Comfort Letter. A letter from Arthur Andersen
-------------------------
LLP, in form and substance satisfactory to the Underwriter and dated such Date
of Delivery, substantially in the same form and substance as the letter
furnished to the Underwriter pursuant to Section 5(g) hereof, except that the
"specified date" in the letter furnished pursuant to this paragraph shall be a
date not more than five days prior to such Date of Delivery.
(l) Additional Documents. At Closing Time and at each Date of
Delivery, counsel for the Underwriter shall have been furnished with such
documents and opinions as they may reasonably require for the purpose of
enabling them to pass upon the sale of the Securities as herein contemplated, or
in order to evidence the accuracy of any of the representations or warranties,
or the fulfillment of any of the conditions, herein contained; and all
proceedings taken by the Company and the Selling Shareholder in connection with
the sale of the Securities as herein contemplated shall be reasonably
satisfactory in form and substance to the Underwriter and counsel for the
Underwriter.
(m) Termination of Agreement. If any condition specified in this
Section shall not have been fulfilled when and as required to be fulfilled, this
Agreement, or, in the case of any condition to the purchase of Option
Securities, on a Date of Delivery which is after the Closing Time, the
obligations of the Underwriter to purchase the relevant Option Securities, may
be terminated by the Underwriter by notice to the Company at any time at or
prior to Closing Time or such Date of Delivery, as the case may be, and such
termination shall be without liability of any party to any other party except as
provided in Section 4 and except that Sections 1, 6, 7 and 8 shall survive any
such termination and remain in full force and effect.
20
<PAGE>
SECTION 6 Indemnification.
---------------
(a) Indemnification of the Underwriter by the Company and the
Operating Partnership. The Company and the Operating Partnership agree, jointly
and severally, to indemnify and hold harmless the Underwriter and each person,
if any, who controls the Underwriter within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act to the extent and in the manner set forth
in clauses (i), (ii) and (iii) below as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement
or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), including the Rule
430A Information and the Rule 434 Information, if applicable, or the
omission or alleged omission therefrom of a material fact required to
be stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged untrue
statement of a material fact included in any preliminary prospectus or
the Prospectus (or any amendment or supplement thereto), or the
omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or
omission; provided that (subject to Section 6(e) below) any such
settlement is effected with the written consent of the Company and/or
the Operating Partnership; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by Merrill
Lynch), reasonably incurred in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission to the extent that any such
expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
-------- -------
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company and/or
the Operating Partnership by the Underwriter, or to the Company, the Operating
Partnership or the Underwriter by the Selling Shareholder, expressly for use in
the Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, or any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto).
21
<PAGE>
(b) Indemnification of the Underwriter by the Selling Shareholder. The
Selling Shareholder agrees to indemnify and hold harmless the Underwriter, its
officers and directors and each person, if any, who controls the Underwriter
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act
from and against any and all loss, liability, claim, damage and expense
(including, without limitation, the reasonable legal fees and other expenses
incurred in connection with any suit, action or proceeding or any claim
asserted), as incurred, caused by any untrue statements, or omissions, or allege
untrue statements or omissions, made in the Registration Statement (or any
amendment thereto), including the Rule 430A Information and the Rule 434
Information, if applicable, or any preliminary prospectus or the Prospectus (or
any amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Company or the Underwriter by the Selling
Shareholder expressly for use in the Registration Statement (or any amendment
thereto) or such preliminary prospectus or the Prospectus (or any amendment or
supplement thereto).
(c) Indemnification of Company, the Operating Partnership, Directors
and Officers and Selling Shareholder. The Underwriter agrees to indemnify and
hold harmless the Company, the Operating Partnership, the trustees of the
Company, each of their respective officers who signed the Registration
Statement, and each person, if any, who controls the Company and/or the
Operating Partnership within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act, and the Selling Shareholder and each person, if any,
who controls the Selling Shareholder within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act against any and all loss, liability,
claim, damage and expense, as incurred, but only with respect to untrue
statements or omissions, or alleged untrue statements or omissions, made in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, or any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto) in
reliance upon and in conformity with written information furnished to the
Company and/or the Operating Partnership by the Underwriter expressly for use in
the Registration Statement (or any amendment thereto) or such preliminary
prospectus or the Prospectus (or any amendment or supplement thereto).
(d) Actions against Parties; Notification. Each indemnified party
shall give notice as promptly as reasonably practicable to each indemnifying
party of any action commenced against it in respect of which indemnity may be
sought hereunder, but failure to so notify an indemnifying party shall not
relieve such indemnifying party from any liability hereunder to the extent it is
not materially prejudiced as a result thereof and in any event shall not relieve
it from any liability which it may have otherwise than on account of this
indemnity agreement. In the case of parties indemnified pursuant to Sections
6(a) and 6(b) above, counsel to the indemnified parties shall be selected by
Merrill Lynch, and, in the case of parties indemnified pursuant to Section 6(c)
above, counsel to the indemnified parties shall be selected by the Company, the
Operating Partnership and/or the Selling Shareholder. An indemnifying party may
participate at its own expense in the defense of any such action; provided,
however, that counsel to the indemnifying party shall not (except with the
consent of the indemnified party) also be counsel to the indemnified party. In
no event shall the indemnifying parties be liable for fees and expenses of more
than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the
22
<PAGE>
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be sought
under this Section 6 or Section 7 hereof (whether or not the indemnified parties
are actual or potential parties thereto), unless such settlement, compromise or
consent (i) includes an unconditional release of each indemnified party from all
liability arising out of such litigation, investigation, proceeding or claim and
(ii) 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.
(e) Settlement without Consent if Failure to Reimburse. If at any
time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel, such
indemnifying party agrees that it shall be liable for any settlement of the
nature contemplated by Section (6)(a)(ii) effected without its written consent
if (i) such settlement is entered into more than 45 days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party shall
have received notice of the terms of such settlement at least 30 days prior to
such settlement being entered into, (iii) such indemnifying party shall not have
reimbursed such indemnified party in accordance with such request prior to the
date of such settlement and (iv) such indemnified party shall not have
previously received written notice that such indemnifying party is contesting,
in good faith, the amount of such reimbursement for fees and expenses of counsel
as unreasonable, provided, that such notice shall be effective pursuant to this
clause (iv) only if the indemnifying party also gives a reasonable explanation
of the grounds for objection and pays the portion of the fees and expenses of
counsel that is not being contested.
(f) Other Agreements with Respect to Indemnification. The provisions
of this Section shall not affect any agreement among the Company, the Operating
Partnership and the Selling Shareholder with respect to indemnification.
SECTION 7. Contribution. If the indemnification provided for in Section
------------
(6) hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Selling Shareholder on the one hand and the Underwriter on the other hand from
the offering of the Securities pursuant to this Agreement or (ii) if the
allocation provided by clause (i) is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company and the
Selling Shareholder on the one hand and of the Underwriter on the other hand in
connection with the statements or omissions which resulted in such losses,
liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
The relative benefits received by the Company and the Selling Shareholder
on the one hand and the Underwriter on the other hand in connection with the
offering of the Securities pursuant to this Agreement shall be deemed to be in
the same respective proportions as the total net proceeds from the offering of
the Securities pursuant to this Agreement (before deducting
23
<PAGE>
expenses) received by the Company and the Selling Shareholder and the total
underwriting discount received by the Underwriter, in each case as set forth on
the cover of the Prospectus, or, if Rule 434 is used, the corresponding location
on the Term Sheet bear to the aggregate initial public offering price of the
Securities as set forth on such cover.
The relative fault of the Company and the Selling Shareholder on the
one hand and the Underwriter on the other hand shall be determined by reference
to, among other things, whether any such untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Company or the Selling Shareholder or by the
Underwriter and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
The Company, the Selling Shareholder and the Underwriter agree that it
would not be just and equitable if contribution pursuant to this Section 7 were
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to above in this
Section 7. The aggregate amount of losses, liabilities, claims, damages and
expenses incurred by an indemnified party and referred to above in this Section
7 shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, the Underwriter
shall not be required to contribute any amount in excess of the amount by which
the total price at which the Securities underwritten by it and distributed to
the public were offered to the public exceeds the amount of any damages which
the Underwriter has otherwise been required to pay by reason of any such untrue
or alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the 1933 Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls the
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as the 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 or the
Selling Shareholder within the meaning of Section 15 of the 1933 Act or Section
20 of the 1934 Act shall have the same rights to contribution as the Company or
the Selling Shareholder, as the case may be.
The provisions of this Section shall not affect any agreement among
the Company and the Selling Shareholder with respect to contribution.
SECTION 8. Representations, Warranties and Agreements to Survive Delivery. All
--------------------------------------------------------------
representations, warranties and agreements contained in this Agreement or in
certificates of officers of the Company or any of its subsidiaries or the
Selling Shareholder submitted pursuant
24
<PAGE>
hereto, shall remain operative and in full force and effect, regardless of any
investigation made by or on behalf of the Underwriter or controlling person, or
by or on behalf of the Company or the Selling Shareholder, and shall survive
delivery of the Securities to the Underwriter.
SECTION 9. Termination of Agreement.
------------------------
(a) Termination; General. The Underwriters may terminate this
Agreement, by notice to the Company and the Selling Shareholder, at any time at
or prior to Closing Time (i) if there has been, since the time of execution of
this Agreement or since the respective dates as of which information is given in
the Prospectus, any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, or (ii) if there has occurred any
material adverse change in the financial markets in the United States or the
international financial markets, any outbreak of hostilities or escalation
thereof or other calamity or crisis or any change or development involving a
prospective change in national or international political, financial or economic
conditions, in each case the effect of which is such as to make it, in the
judgment of the Underwriter, impracticable to market the Securities or to
enforce contracts for the sale of the Securities, or (iii) if trading in any
securities of the Company has been suspended or materially limited by the
Commission or New York Stock Exchange, or if trading generally on the American
Stock Exchange or the New York Stock Exchange or in the Nasdaq National Market
has been suspended or materially limited, or minimum or maximum prices for
trading have been fixed, or maximum ranges for prices have been required, by any
of said exchanges or by such system or by order of the Commission, the National
Association of Securities Dealers, Inc. or any other governmental authority, or
(iv) if a banking moratorium has been declared by either Federal or New York
authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
1, 6, 7 and 8 shall survive such termination and remain in full force and
effect.
SECTION 10. Default by the Selling Shareholder. If the Selling
----------------------------------
Shareholder shall fail at Closing Time or at a Date of Delivery to sell and
deliver the number of Securities which the Selling Shareholder is obligated to
sell hereunder, then the Underwriter may, at its option, by notice from the
Underwriter to the Company, terminate this Agreement without any liability on
the fault of any non-defaulting party except that the provisions of Sections, 1,
4, 6, 7 and 8 shall remain in full force and effect. No action taken pursuant to
this Section 10 shall relieve the Selling Shareholder from liability, if any, in
respect of such default.
In the event of a default by the Selling Shareholder as referred to in
this Section 10, each of the Underwriter and the Company shall have the right to
postpone Closing Time or Date of Delivery for a period not exceeding seven days
in order to effect any required change in the Registration Statement or
Prospectus or in any other documents or arrangements.
SECTION 11. Notices. All notices and other communications hereunder
-------
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriter shall be directed to Merrill Lynch & Co.
25
<PAGE>
at North Tower, World Financial Center, New York, New York, 10281-1201,
attention of John C. Brady; notices to the Company and the Operating Partnership
shall be directed to Cabot Industrial Trust, Two Center Plaza, Suite 200,
Boston, MA, 02108, attention of Franz Colloredo-Mansfeld; and notices to the
Selling Shareholder shall be directed to IBM Personal Pension Plan Trust, 3001
Summer Street, Stamford, CT, 06905, attention of Kyle Escherich.
SECTION 12. Parties. This Agreement shall each inure to the benefit of
-------
and be binding upon the Underwriter, the Company, the Operating Partnership and
the Selling Shareholder and their respective successors. Nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any
person, firm or corporation, other than the Underwriter, the Company, the
Operating Partnership and the Selling Shareholder and their respective
successors and the controlling persons and officers and directors referred to in
Sections 6 and 7 and their heirs and legal representatives, any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision herein contained. This Agreement and all conditions and provisions
hereof are intended to be for the sole and exclusive benefit of the Underwriter,
the Company, the Operating Partnership and the Selling Shareholder and their
respective successors, and said controlling persons and officers and directors
and their heirs and legal representatives, and for the benefit of no other
person, firm or corporation. No purchaser of Securities from any Underwriter
shall be deemed to be a successor by reason merely of such purchase.
SECTION 13. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY
----------------------
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SPECIFIED
TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 14. Effect of Headings. The Article and Section headings herein
------------------
and the Table of Contents are for convenience only and shall not affect the
construction hereof.
SECTION 15. Limitation of Liability of Shareholders, Trustees and
-----------------------------------------------------
Officers of the Company. No obligations or liabilities of the Company which may
-----------------------
arise at any time under this Agreement or any obligation or liability which may
be incurred by it pursuant to any other instrument, transaction or undertaking
contemplated hereby or thereby shall be personally binding upon, nor shall
resort for the enforcement thereof be had to, the property of any of the
Company's shareholders, trustees, officers, employees or agents solely as a
result of their status, and solely in their capacities as, shareholders,
trustees, officers, employees or agents, as the case may be, regardless of
whether such obligation or liability is in the nature of contact, tort or
otherwise. Nothing contained herein shall act to limit the liability of the
Company's trustees, officers, employees or agents to the Company or limit the
ability of any shareholder of the Company to bring a derivative action on behalf
of the Company against its trustees, officers, employees or agents.
26
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company, the Operating Partnership and
the Attorney-in-Fact for the Selling Shareholder a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
among the Underwriter, the Company, the Operating Partnership and the Selling
Shareholder in accordance with its terms.
Very truly yours,
CABOT INDUSTRIAL TRUST
By:/s/ Franz Colloredo-Mansfield
-----------------------------
Name: Franz Colloredo-Mansfield
Title: Chief Financial Officer
CABOT INDUSTRIAL PROPERTIES, L.P.
By: Cabot Industrial Trust,
its general partner
By: ________________________
Name:
Title:
KYLE ESCHERICH
/s/ Kyle Escherich
--------------------------------
(As Attorney-in-Fact acting on
behalf of the Selling
Shareholder)
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: /s/ John C. Brady
-----------------------------------
Authorized Signatory
27
<PAGE>
SCHEDULE A
CABOT INDUSTRIAL TRUST
2,300,000 Common Shares of Beneficial Interest
(Par Value $.01 Per Share)
1. The initial public offering price per share for the
Securities, determined as provided in said Section 2, shall be
$19.5625.
2. The purchase price per share for the Securities to be
paid by the Underwriter shall be $18.5625, being an amount equal to the
initial public offering price set forth above less $1.0000 per share;
provided that the purchase price per share for any Option Securities
purchased upon the exercise of the over-allotment option described in
Section 2(b) shall be reduced by an amount per share equal to any
dividends or distributions declared by the Company and payable on the
Initial Securities but not payable on the Option Securities.
1
