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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): MARCH 24, 1998
COMMERCIAL NET LEASE REALTY, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
<TABLE>
<S> <C> <C>
MARYLAND 0-12989 56-1431377
(STATE OR OTHER JURISDICTION (COMMISSION FILE NUMBER) (IRS EMPLOYER IDENTIFICATION NO.)
OF INCORPORATION)
</TABLE>
<TABLE>
<S> <C>
400 EAST SOUTH STREET, SUITE 500 32801
ORLANDO, FLORIDA (ZIP CODE)
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
</TABLE>
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (407) 423-7348
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ITEM 1. CHANGES IN CONTROL OF REGISTRANT.
Not Applicable.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
Not Applicable.
ITEM 3. BANKRUPTCY OR RECEIVERSHIP.
Not Applicable.
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT.
Not Applicable.
ITEM 5. OTHER EVENTS.
Concurrently with the filing of this Current Report on Form 8-K, the
Registrant filed a Prospectus Supplement to the Registration Statement on Form
S-3, File No. 333-24773 (the "Registration Statement"), with respect to the
offering by the Registrant of 200,000 shares of Common Stock, $0.01 par value.
The Registration Statement was declared effective by the Securities and Exchange
Commission on April 22, 1997.
ITEM 6. RESIGNATION OF REGISTRANT'S DIRECTORS.
Not Applicable.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a)-(b) Not Applicable.
(c) Exhibits.
Exhibit No. Description
1.2 Form of Underwriting Agreement, which is being filed pursuant to
Regulation S-K, Item 601(b)(1) in lieu of filing the otherwise
required exhibit to the Registration Statement, under the
Securities Act of 1933, as amended (the "Securities Act"), and
which, since this Form 8-K filing is incorporated by reference
in such Registration Statement, is set forth in full in such
Registration Statement. (Filed herewith.)
5 Opinion of Shaw Pittman Potts & Trowbridge, which is being filed
pursuant to Regulation S-K, Item 601(b)(5) in lieu of filing the
otherwise required exhibit to the Registration Statement under
the Securities Act, and which, since this Form 8-K filing is
incorporated by reference in such Registration Statement, is set
forth in full in such Registration Statement. (Filed herewith.)
8 Opinion of Shaw Pittman Potts & Trowbridge, which is being filed
pursuant to Regulation S-K, Item 601(b)(8) in lieu of filing the
otherwise required exhibit to the Registration Statement under
the Securities Act, and which, since this Form 8-K filing is
incorporated by reference in such Registration Statement, is set
forth in full in such Registration Statement. (Filed herewith.)
23.1 Consents of Shaw Pittman Potts & Trowbridge (contained in the
opinions filed as Exhibits 5 and 8 hereto), which are being
filed pursuant to Regulation S-K, Item 601(b)(23) in lieu of
filing the otherwise required exhibit to the Registration
Statement under the Securities Act, and which, since this Form
8-K filing is incorporated by reference in such Registration
Statement, is set forth in full in such Registration Statement.
(Filed herewith.)
ITEM 8. CHANGE IN FISCAL YEAR.
Not Applicable.
2
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be filed on its behalf by
the undersigned thereunto duly authorized.
COMMERCIAL NET LEASE REALTY, INC.
Dated: March 25, 1998 By: Kevin B. Habicht
-----------------------------
Kevin B. Habicht, Chief Financial Officer
3
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EXHIBIT INDEX
Exhibit No. Description
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1.2 Form of Underwriting Agreement, which is being filed pursuant to
Regulation S-K, Item 601(b)(1) in lieu of filing the otherwise
required exhibit to the Registration Statement on Form S-3 (the
"Registration Statement"), File No. 333-24773, under the
Securities Act of 1933, as amended (the "Securities Act"), and
which, since this Form 8-K filing is incorporated by reference
in such Registration Statement, is set forth in full in such
Registration Statement. (Filed herewith.)
5 Opinion of Shaw Pittman Potts & Trowbridge, which is being filed
pursuant to Regulation S-K, Item 601(b)(5) in lieu of filing the
otherwise required exhibit to the Registration Statement under
the Securities Act, and which, since this Form 8-K filing is
incorporated by reference in such Registration Statement, is set
forth in full in such Registration Statement. (Filed herewith.)
8 Opinion of Shaw Pittman Potts & Trowbridge, which is being filed
pursuant to Regulation S-K, Item 601(b)(8) in lieu of filing the
otherwise required exhibit to the Registration Statement under
the Securities Act, and which, since this Form 8-K filing is
incorporated by reference in such Registration Statement, is set
forth in full in such Registration Statement. (Filed herewith.)
23.1 Consents of Shaw Pittman Potts & Trowbridge (contained in the
opinions filed as Exhibits 5 and 8 hereto), which are being
filed pursuant to Regulation S-K, Item 601(b)(23) in lieu of
filing the otherwise required exhibit to the Registration
Statement under the Securities Act, and which, since this Form
8-K filing is incorporated by reference in such Registration
Statement, is set forth in full in such Registration Statement.
(Filed herewith.)
4
<PAGE> 1
________ Shares
[NAME OF THE REIT]
Common Stock
UNDERWRITING AGREEMENT
March 24, 1998
Wheat First Securities, Inc.
Riverfront Plaza
901 East Byrd Street
Richmond, Virginia 23219
Ladies and Gentlemen:
[Name of REIT], a _________________ (the "Company"), proposes to issue
and sell _________ shares of common stock of the Company, par value $___ per
share (the "Shares"), to Wheat First Securities, Inc. (you or the
"Underwriter"). The shares of common stock, par value $___ per share, of the
Company to be outstanding after giving effect to the sale contemplated hereby
are hereinafter referred to as shares of the "Common Stock."
1. Registration Statement and Prospectus. The Company has prepared and filed
with the Securities and Exchange Commission (the "Commission") in accordance
with the provisions of the Securities Act of 1933, as amended, and the rules and
regulations of the Commission thereunder (collectively called the "Act"), a
registration statement on Form S-3 (Registration No. 333-______) including a
preliminary prospectus relating to the registration of the Shares and such other
securities which may be offered from time to time by the Company in accordance
with Rule 415 under the Act. Such registration statement (as amended, if
applicable) has been declared effective by the Commission on _________, 199_.
Such registration statement (as amended, if applicable), on the one hand, and
the prospectus constituting a part thereof and the prospectus supplement
relating to the offering of the Shares provided to the Underwriter by the
Company for use (whether or not such prospectus supplement is required to be
filed with the Commission by the Company pursuant to the Act) (the "Prospectus
Supplement"), on the other hand, including all documents incorporated therein by
reference, as from time to time amended or supplemented pursuant to the
Securities Exchange Act of 1934, as amended, and the rules and regulations of
the Commission thereunder (collectively called the "Exchange Act") and the Act
are referred to herein as the "Registration Statement" and the "Prospectus,"
respectively; provided, however, that a prospectus supplement shall be deemed to
have supplemented the Prospectus only with respect to the offering of the Shares
to which it relates. Any registration
<PAGE> 2
statement (including any amendment or supplement thereto or information which is
deemed part thereof) filed by the Company under Rule 462(b) of the Act (a "Rule
462(b) Registration Statement") shall be deemed to be part of the "Registration
Statement" as defined herein and any prospectus or any term sheet as
contemplated by Rule 434 of the Act (a "Term Sheet") (including any amendment or
supplement thereto or information which is deemed part thereof) included in such
registration statement shall be deemed to be part of the "Prospectus," as
defined herein. All references in this Agreement to financial statements and
schedules and other information which is "contained," "included," "described" or
"stated" in the Registration Statement or the Prospectus (and all other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is or is deemed
to be incorporated by reference in the Registration Statement or Prospectus, as
the case may be; and all references in this Agreement to amendments or
supplements to the Registration Statement or the Prospectus shall be deemed to
mean and include, without limitation, even though not specifically stated, any
document filed under the Exchange Act which is or is deemed to be incorporated
by reference in the Registration Statement or the Prospectus, as the case may
be. Capitalized terms used but not otherwise defined herein shall have the
meanings given to those terms in the Prospectus.
2. Agreements to Sell and Purchase. On the basis of the representations and
warranties contained in this Agreement, and subject to its terms and conditions,
the Company agrees to issue and sell the Shares and the Underwriter agrees to
purchase from the Company at a price per share of $_________ (the "Purchase
Price"), the Shares.
3. Terms of the Offering. The Company is advised by the Underwriter that it
proposes (i) to deposit the Shares directly with the Trustee of the Wheat First
Union REIT Income & Growth Trust, Series 1 (the "Trust"), a registered unit
investment trust under the Investment Company Act of 1940, as amended (the
"Offering"), as soon after the execution and delivery hereof as in its judgment
is advisable and (ii) initially to offer the Shares upon the terms set forth in
the Prospectus. The Company further acknowledges that the Underwriter is the
sponsor of the Trust and therefore is considered an affiliate of the Trust.
4. Delivery and Payment. Delivery to the Underwriter of certificates for, and
payment of the Purchase Price for the Shares shall be made, subject to Section
9, at 10:00 A.M., New York City time, on March 2, 1998, or such other time not
later than ten business days after such date as shall be agreed upon by the
Underwriter and the Company (such time and date of payment and delivery being
herein called the "Closing Date") at such place as you shall designate. The
Closing Date and the location of, delivery of and the form of payment for the
Shares may be varied by agreement between you and the Company.
Certificates for the Shares shall be registered in such names
and issued in such denominations as you shall request in writing not later than
two full business days prior to the Closing Date. Such certificates shall be
made available to you for inspection not later than 9:30 A.M., New York City
time, on the business day next preceding the Closing Date. Certificates in
definitive form evidencing the Shares shall be delivered to you on the Closing
Date, with any transfer taxes thereon duly paid by the Company, for the account
of the Underwriter, against
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payment of the Purchase Price therefor by intra-bank transfer or wire transfer
of same day funds to such account as may be designated by the Company at least
two business days prior to the Closing Date.
5. Agreements of the Transaction Entities. The Company [and], the Operating
Partnership [and the General Partner] (collectively, the "Transaction Entities")
jointly and severally agree with you as follows:
(a) In respect of the offering of Shares, the Company will (i) prepare
a Prospectus Supplement setting forth the number of Shares covered thereby and
their terms not otherwise specified in the Prospectus pursuant to which the
Shares are being issued, the name of the Underwriter and the number of Shares
which the Underwriter has agreed to purchase, the price at which the Shares are
to be purchased by the Underwriter from the Company, the initial offering price,
and such other information as the Underwriter and the Company deem appropriate
in connection with the offering of the Shares, and (ii) file the Prospectus in a
form approved by you pursuant to Rule 424(b) under the Act no later than the
Commission's close of business on the second business day following the date of
the determination of the offering price of the Shares The Company will furnish
to the Underwriter and to such dealers as you shall specify as many copies of
the Prospectus as the Underwriter shall reasonably request for the purposes
contemplated by the Act or the Exchange Act.
(b) At any time when the Prospectus is required to be delivered under
the Act or the Exchange Act in connection with sales of Shares, the Transaction
Entities will advise you promptly and, if requested by you, confirm such advice
in writing, of (i) the effectiveness of any amendment to the Registration
Statement, (ii) the transmittal to the Commission for filing of any Prospectus
or other supplement or amendment to the Prospectus to be filed pursuant to the
Act, (iii) the receipt of any comments from the Commission relating to the
Registration Statement, any preliminary prospectus, the Prospectus or any of the
transactions contemplated by this Agreement, (iv) any request by the Commission
for post-effective amendments to the Registration Statement or amendments or
supplements to the Prospectus or for additional information, (v) the issuance by
the Commission of any stop order suspending the effectiveness of the
Registration Statement or of the suspension of qualification of the Shares for
offering or sale in any jurisdiction, or the initiation of any proceeding for
such purposes, and (vi) the happening of any event as a result of which the
Prospectus as then amended or supplemented would include an untrue statement of
a material fact or omit to state any material fact necessary in order to make
the statements therein, in the light of the circumstances when the Prospectus is
delivered to a purchaser, not misleading. Each of the Transaction Entities will
make every reasonable effort to prevent the issuance of any stop order, and if
at any time the Commission shall issue any stop order suspending the
effectiveness of the Registration Statement, each of the Transaction Entities
will make every reasonable effort to obtain the withdrawal or lifting of such
order at the earliest possible time.
(c) The Company will furnish to you without charge, one signed copy of
the Registration Statement as first filed with the Commission and of each
amendment to it, including all exhibits, and furnish to you such number of
conformed copies of the Registration
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Statement as so filed and of each amendment to it as you may reasonably request.
If applicable, 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) At any time when the Prospectus is required to be delivered under
the Act or the Exchange Act in connection with sales of Shares, the Transaction
Entities will not file any amendment to the Registration Statement or any Rule
462(b) Registration Statement or make any amendment or supplement to the
Prospectus or any Term Sheet, if applicable, of which you shall not previously
have been advised or to which you or your counsel shall reasonably object; and
the Company will prepare and file with the Commission, promptly upon your
reasonable request, any amendment to the Registration Statement, Rule 462(b)
Registration Statement, Term Sheet, or amendment or supplement to the Prospectus
which, in the opinion of your counsel, may be necessary in connection with the
distribution of the Shares by you, and will use its best efforts to cause the
same to become promptly effective. If applicable, 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) If, at any time when the Prospectus is required to be delivered
under the Act or the Exchange Act in connection with sales of Shares, any event
shall occur as a result of which, in the opinion of counsel for the Underwriter,
it becomes necessary to amend or supplement the Prospectus in order to make the
statements therein, in the light of the circumstances existing when the
Prospectus is delivered to a purchaser, not misleading, or if it is necessary to
amend or supplement the Prospectus to comply with any law, the Company will
forthwith prepare and file with the Commission an appropriate amendment or
supplement to the Prospectus (in form and substance reasonably satisfactory to
counsel for the Underwriter) so that the statements in the Prospectus, as so
amended or supplemented, will not contain an untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances existing when it is so delivered, not
misleading, or so that the Prospectus will comply with any law, and to furnish
to the Underwriter and to such dealers as you shall specify, such number of
copies thereof as the Underwriter or dealers may reasonably request.
(f) Each of the Transaction Entities will use its best efforts, in
cooperation with the Underwriter, to qualify, register or perfect exemptions for
the Shares for offer and sale by the Underwriter under the applicable state
securities or Blue Sky laws and real estate syndication laws of such
jurisdictions as you may reasonably request; provided, however, none of the
Transaction Entities will be required to qualify as a foreign corporation, file
a general consent to service of process in any such jurisdiction, subject itself
to taxation in respect of doing business in any jurisdiction in which it is not
otherwise so subject, or provide any undertaking or make any change in its
charter or by-laws that the Board of Directors of the Company reasonably
determines to be contrary to the best interests of the Company and its
stockholders. In each jurisdiction in which the Shares have been so qualified or
registered, the Transaction Entities will use all reasonable efforts to file
such statements, reports and other documents as may be
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required by the laws of such jurisdiction, to continue such qualification or
registration in effect for so long a period as the Underwriter may reasonably
request for the distribution of the Shares.
(g) To make generally available to the Company's stockholders as soon
as reasonably practicable but not later than sixty (60) days after the close of
the period covered thereby (ninety (90) days in the event the close of such
period is the close of the Company's fiscal year), an earnings statement (in
form complying with the provisions of Rule 158 of the Act) covering a period of
at least twelve months after the effective date of the Registration Statement
(but in no event commencing later than ninety (90) days after such date) which
shall satisfy the provisions of Section 11(a) of the Act, and, if required by
Rule 158 of the Act, to file such statement as an exhibit to the next periodic
report required to be filed by the Company under the Exchange Act covering the
period when such earnings statement is released.
(h) During the period of five years after the date of this Agreement,
to furnish to you as soon as available a copy of each regular and periodic
report, financial statement or other publicly available information of the
Transaction Entities and any of their subsidiaries mailed to the holders of the
Shares or filed with the Commission or any securities exchange, and any such
publicly available information concerning the Transaction Entities or any of
their subsidiaries as you may reasonably request.
(i) During the period when the Prospectus is required to be delivered
under the Act or the Exchange Act in connection with sales of the Shares, to
file all documents required to be filed by it with the Commission pursuant to
Section 13, 14 or 15 of the Exchange Act within the time periods required by the
Exchange Act.
(j) To pay all costs, expenses, fees and taxes incident to (i) the
preparation, printing, filing and distribution under the Act of the Registration
Statement and any amendment thereto (including financial statements and
exhibits), each preliminary prospectus, the Prospectus and all amendments and
supplements to any of them prior to or during the period specified in Section
5(b), (ii) the printing and delivery of this Agreement and the Blue Sky
Memorandum (including the reasonable disbursements of counsel for the
Underwriter relating to the printing and delivery of the Blue Sky Memorandum),
(iii) the qualification of registration of the Shares for offer and sale under
the securities, Blue Sky laws or real estate syndication laws of the several
states in accordance with Section 5(f) hereof, (iv) the fee of and the filings
and clearance, if any, with the National Association of Securities Dealers, Inc.
(the "NASD") in connection with the Offering, (v) the fee of and the listing of
the Shares on the [New York Stock Exchange, Inc. ("NYSE")], (vi) furnishing such
copies of the Registration Statement, the Prospectus and all amendments and
supplements thereto as may be requested for use in connection with the offering
or sale of the Shares by the Underwriter, (vii) the preparation, issuance and
delivery of certificates for the Shares to the Underwriter, (viii) the costs and
charges of any transfer agent or registrar, (ix) any transfer taxes imposed on
the sale by the Company of the Shares to the Underwriter and (x) the fees and
disbursements of the Company's counsel and accountants.
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(k) The Transaction Entities will use their best efforts to maintain
the listing of the Shares on the [NYSE] for a period of three years after the
Closing Date and thereafter unless the Company's Board of Directors determines
that it is no longer in the best interests of the Company for the Shares to
continue to be so listed.
(l) The Transaction Entities will use their best efforts to do and
perform all things required to be done and performed under this Agreement by the
Transaction Entities prior to the Closing Date and to satisfy all conditions
precedent to the delivery of the Shares.
(m) The Company will use the net proceeds received by it from the sale
of the Shares in the manner specified in the Prospectus Supplement under "Use of
Proceeds."
(n) The Company will prepare and file or transmit for filing with the
Commission in accordance with Rule 424(b) of the Act copies of the Prospectus.
(o) The Transaction Entities will use their best efforts to ensure that
the Company continues to qualify as a "real estate investment trust" ("REIT")
under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended
(the "Code"), for a period of three years after the date of this Agreement
unless the Company's Board of Directors determines that it is no longer in the
best interest of the Company to be so qualified.
(p) The Transaction Entities will not at any time, directly or
indirectly, take any action intended, or which might reasonably be expected, to
cause or result in, or which will constitute, stabilization of the price of the
Shares to facilitate the sale or resale of any Shares in violation of the Act.
6. Representations and Warranties of the Transaction Entities. Each of the
Transaction Entities jointly and severally represents and warrants to the
Underwriter as of the date hereof and the Closing Date that:
(a) The Registration Statement became effective on _________, 199_. No
stop order suspending the effectiveness of the Registration Statement or any
part thereof has been issued and no proceeding for that purpose has been
instituted or, to the knowledge of the Transaction Entities, threatened by the
Commission or by the state securities authority of any jurisdiction. No order
preventing or suspending the use of the Prospectus has been issued and no
proceeding for that purpose has been instituted or, to the knowledge of the
Transaction Entities, threatened by the Commission or by the state securities
authority of any jurisdiction.
(b) The Registration Statement and the Prospectus, including the
financial statements, schedules and related notes included in the Prospectus or
incorporated therein by reference and, if applicable, any Term Sheet to the
Prospectus, as of the date hereof and at the time the Registration Statement
became effective, and when any post-effective amendment to the Registration
Statement or Rule 462(b) Registration Statement becomes effective or any
amendment or supplement to the Prospectus is filed with the Commission, did or
will comply in all material respects with all applicable provisions of the Act
and will contain all statements required to be stated therein in accordance with
the Act. The Prospectus, including the financial
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statements, schedules and related notes included in the Prospectus or
incorporated therein by reference, and if applicable, any Term Sheet to the
Prospectus, as of the date hereof and at the time the Registration Statement
became effective, and at the Closing Date, and when any post-effective amendment
to the Registration Statement or Rule 462(b) Registration Statement becomes
effective or any amendment or supplement to the Prospectus is filed with the
Commission, did or will comply in all material respects with all applicable
provisions of the Act and will contain all statements required to be stated
therein in accordance with the Act. On the date the Registration Statement was
declared effective, on the date hereof, on the date of filing of any Rule 462(b)
Registration Statement and on the Closing Date, no part of the Registration
Statement or any amendment did or will contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
in order to make the statements therein not misleading. On the date the
Registration Statement was declared effective, on the date hereof, as of its
date, on the date of filing of any Rule 462(b) Registration Statement and at the
Closing Date, the Prospectus and the Prospectus Supplement did not or will not
contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. If a Rule 462(b) Registration Statement is
filed in connection with the offering and sale of the Shares, the Company will
have complied or will comply with the requirements of Rule 111 under the Act
relating to the payment of filing fees therefor. The foregoing representations
and warranties in this Section 6(b) do not apply to any statements or omissions
made in reliance on and in conformity with information relating to the
Underwriter furnished in writing to the Company by the Underwriter specifically
for inclusion in the Registration Statement or Prospectus or any amendment or
supplement thereto. The Transaction Entities have not distributed any offering
material in connection with the offering or sale of the Shares other than the
Registration Statement, the Prospectus or any other materials, if any, permitted
by the Act (which were disclosed to the Underwriter and Underwriter's counsel).
(c) Each 462(b) Registration Statement, if any, complied or will comply
when so filed in all material respects with all applicable provisions of the
Act; did not or 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; and the Prospectus delivered to the Underwriter for use in
connection with the offering of the Shares will, at the time of such delivery,
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) The documents incorporated or deemed to be incorporated by
reference in the Prospectus pursuant to Item 12 of Form S-3 under the Act, 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 Exchange Act,
and, when read together with other information in and incorporated by reference
in the Prospectus, at the time the Registration Statement became effective, and
as of the Closing Date, or during the period specified in Section 5(b) did not
and will not include an untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. The foregoing
representations and warranties in this Section 6(d) do not apply to
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<PAGE> 8
any statements or omissions made in reliance on and in conformity with
information relating to the Underwriter furnished in writing to the Company by
the Underwriter specifically for inclusion in the Registration Statement or
Prospectus or any amendment or supplement thereto.
(e) The historical financial statements and the related notes thereto,
included or incorporated by reference in the Registration Statement and the
Prospectus, comply in all material respects with the requirements of the Act and
the Exchange Act, as applicable, and present fairly the consolidated financial
position of the Transaction Entities and their consolidated subsidiaries as of
the dates indicated and the results of their operations and the changes in their
cash flows for the periods specified; the financial statements with respect to
[the Properties (as defined in the Prospectus) acquired by the Transaction
Entities], together with related notes, incorporated by reference in the
Registration Statement or the Prospectus, present fairly a summary of gross
income and direct operating expenses or a summary of gross income, as the case
may be, of such Properties for the indicated periods; the foregoing financial
statements have been prepared in conformity with generally accepted accounting
principles applied on a consistent basis, and the supporting schedules included
or incorporated by reference in the Registration Statement present fairly the
information required to be stated therein; the pro forma financial information,
and the related notes thereto, included or incorporated by reference in the
Registration Statement and the Prospectus comply in all material respects with
the applicable requirements of the Act and the Exchange Act, as applicable; the
assumptions used in preparing such pro forma information are reasonable and the
adjustments used therein are appropriate to give effect to the transactions
referred to therein; and the other financial and statistical information and
data set forth in the Registration Statement and the Prospectus are accurately
presented in all material respects and prepared on a basis consistent with the
books and records of the Transaction Entities and their consolidated
subsidiaries.
(f) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, (i) there has not been any material
adverse change, or any development involving a prospective material adverse
change, in or affecting the condition (financial or otherwise), business,
prospects, properties, net worth or results of operations of the Transaction
Entities and their subsidiaries, taken as a whole, otherwise than as set forth
or contemplated in the Prospectus; and (ii) except as set forth or contemplated
in the Prospectus, neither the Transaction Entities nor any of their
subsidiaries has entered into any transaction or agreement (whether or not in
the ordinary course of business) material to the Transaction Entities and their,
taken as a whole.
(g) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the state of ___________, with
corporate power and authority to own or lease its properties and to conduct its
business as described in the Prospectus, and is duly qualified as a foreign
corporation for the transaction of business and is in good standing under the
laws of each other jurisdiction in which it owns or leases properties, or
conducts any business, so as to require such qualification, other than where the
failure to be so qualified or in good standing would not (1) have a material
adverse effect on the condition (financial or otherwise), business, prospects,
properties, net worth or results of operations of the
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<PAGE> 9
Transaction Entities and their subsidiaries, taken as a whole, (2) adversely
affect the issuance or validity of the Shares or (3) adversely affect the
consummation of any of the transactions contemplated by this Agreement (each of
(1), (2) and (3) above, a "Material Adverse Effect"); except for investments in
their subsidiaries, in short-term investment securities and in other securities
as described in the Registration Statement or Prospectus, the Company has no
direct or indirect equity or other interest in any corporation, partnership,
trust or other entity; each of the subsidiaries of the Transaction Entities is
defined on Schedule I hereto and has been duly organized and is validly existing
as a corporation or limited partnership, as the case may be, in good standing
under the laws of its jurisdiction of organization with corporate or partnership
power and authority, as the case may be, to own or lease its properties and
conduct its business as presently conducted and as described in the Prospectus,
and has been duly qualified as a foreign corporation or foreign limited
partnership, as the case may be, for the transaction of business and is in good
standing under the laws of each other jurisdiction in which it owns or leases
properties, or conducts any business, so as to require such qualification, other
than where the failure to be so qualified or in good standing would not have a
Material Adverse Effect; all the outstanding shares of capital stock of each
subsidiary have been duly authorized and validly issued and are fully paid and
nonassessable; except as disclosed in Schedule I hereto, all the outstanding
shares of capital stock and all partnership interests of each subsidiary are
owned by the Transaction Entities, directly or indirectly, free and clear of all
liens, encumbrances, security interests and claims.
(h) The Operating Partnership has been duly formed and is validly
existing as a limited partnership in good standing under the laws of the State
of ________, is duly qualified to do business as a foreign limited partnership
in each jurisdiction in which its ownership or lease of property or the conduct
of its business requires such qualification (except where the failure to be so
qualified would not have a Material Adverse Effect on the earnings, assets or
business affairs of the Transaction Entities and their subsidiaries considered
as a single enterprise), and has all partnership power and authority necessary
to own or hold its properties, to conduct the business in which it is engaged
and to enter into and perform its obligations under this Agreement. The General
Partner is the sole general partner of the Operating Partnership. The Agreement
of Limited Partnership of the Operating Partnership (the "Operating Partnership
Agreement") is in full force and effect, and the aggregate percentage interests
of the Company, the General Partner and the limited partners in the Operating
Partnership are as set forth in the Prospectus.
(i) The General Partner has been duly formed and is validly existing as
a corporation in good standing under the laws of the State of ________, is duly
qualified to do business and is in good standing in each jurisdiction in which
its ownership or lease of property or the conduct of its business requires such
qualification (except where the failure to be so qualified would not have a
Material Adverse Effect on the earnings, assets or business affairs of the
Transaction Entities and their subsidiaries considered as a single enterprise),
and has all corporate power and authority necessary to own or hold its
properties, to conduct the business in which it is engaged and to enter into and
perform its obligations under this Agreement. All of the issued and outstanding
capital stock of the General Partner has been duly authorized and validly issued
and
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is fully paid and non-assessable, is owned by the Company free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim, restriction or
equities and has been offered and sold in compliance with all applicable laws
(including, without limitation, federal or state securities laws). No shares of
capital stock of the General Partner are reserved for any purpose, and there are
no outstanding securities convertible into or exchangeable for any capital stock
of the General Partner, and no outstanding options, rights (preemptive or
otherwise) or warrants to purchase or to subscribe for shares of such capital
stock or any other securities of the General Partner.
(j) This Agreement has been duly authorized, executed and delivered by
the Transaction Entities.
(k) The Shares have been duly authorized and, when issued and delivered
to the Underwriter against payment therefor in accordance with the terms hereof,
will be validly issued, fully paid and nonassessable. Application has been made
to list the Shares on the [NYSE]. The form of certificate for the Shares will
comply with all applicable legal and [NYSE] requirements. The holders of
outstanding shares of capital stock of the Company are not entitled to
preemptive or other rights to subscribe for the Shares. The capital stock of the
Company conforms to the description thereof in the Registration Statement and
the Prospectus.
(l) Neither the Transaction Entities nor any of their subsidiaries is,
or with the giving of notice or lapse of time or both would be, in violation of
or in default under (1) its Articles of Incorporation, Certificate of
Incorporation or partnership agreement, as the case may be (in each case as
amended to the date of this Agreement), (2) its Bylaws (as amended to the date
of this Agreement) or (3) any indenture, mortgage, deed of trust, loan
agreement, partnership agreement or other agreement or instrument or obligation
to which such Transaction Entity or any of it subsidiaries is a party or by
which it or any of its properties is bound, except, with respect to clauses (2)
and (3), for violations and defaults which individually or in the aggregate
would not have a Material Adverse Effect; the issue and sale of the Shares and
the performance by each of the Transaction Entities of all of the obligations
under this Agreement and the consummation of the transactions herein
contemplated will not conflict with or result in a breach of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed of
trust, loan agreement, partnership agreement or other material agreement or
instrument to which any of the Transaction Entities or any of its subsidiaries
is a party or by which any of the Transaction Entities or of its subsidiaries is
bound or to which any of the property or assets of the Transaction Entities or
any of its subsidiaries is subject, except for such conflicts, breaches,
defaults or violations which individually or in the aggregate would not have a
Material Adverse Effect, nor will any such action result in any violation of the
provisions of the Articles of Incorporation or the ByLaws of the Company or any
applicable law or statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over any of the Transaction
Entities or any of their properties, except for such violations which
individually or in the aggregate would not have a Material Adverse Effect; and
no consent, approval, authorization, order, registration or qualification of or
with any such court or governmental agency or body is required for the issue and
sale of the Shares or the consummation by the Transaction Entities of the
transactions contemplated by this Agreement,
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<PAGE> 11
except such consents, approvals, authorizations, orders, registrations or
qualifications (x) as have been obtained under the Act and the Exchange Act, (y)
as may be required under state securities or Blue Sky laws or Sections 2710 and
2720 of the Conduct Rules of the NASD in connection with the purchase and
distribution of the Shares by the Underwriter or (z) the failure to obtain which
would not have a Material Adverse Effect.
(m) Other than as set forth or contemplated in the Prospectus, there
are no legal or governmental proceedings pending or, to the knowledge of any of
the Transaction Entities, threatened to which any of the Transaction Entities or
their subsidiaries is or may be a party or to which any property of any of the
Transaction Entities or their subsidiaries is or may be the subject which, if
determined adversely to the Transaction Entities, could individually or in the
aggregate reasonably be expected to have a Material Adverse Effect; there are no
contracts or other documents of a character required to be filed as an exhibit
to the Registration Statement or required to be described in the Registration
Statement or the Prospectus which are not filed or described as required; and
the descriptions of the terms of all such contracts and documents contained or
incorporated by reference in the Registration Statement or Prospectus are
complete and correct in all material respects.
(n) The authorized capital stock of the Company consists of ___ million
shares of Common Stock, $___ par value per share, and ___ million shares of
preferred stock, $___ par value per share. All of the issued shares of capital
stock of the Company have been duly and validly authorized and issued and are
fully paid and nonassessable.
(o) One of the Transaction Entities or their subsidiaries has good and
marketable title to each Property, in each case free of any lien, mortgage,
pledge, charge or encumbrance of any kind except those (i) described in the
Prospectus or (ii) which do not materially affect or detract from the value of
such Property or interfere with the use made and proposed to be made of such
Property by the Transaction Entities and their subsidiaries and which
individually and in the aggregate are in an amount which is not material to the
Transaction Entities.
(p) Except as disclosed in the Prospectus, each entity identified in
the Prospectus as a tenant of any Property, or a subtenant thereof, has entered
into a lease or a sublease, if applicable, for the possession of such Property;
except as disclosed in the Prospectus, each such lease is in full force and
effect and neither the Transaction Entities nor any of their subsidiaries has
notice of any defense to the obligations of the tenant thereunder or any claim
asserted or threatened by any person or entity, which claim, if sustained, would
have a Material Adverse Effect; and except as disclosed in the Prospectus, the
lessor under each lease has complied with its obligations under such lease in
all material respects and neither the Transaction Entities nor any of their
subsidiaries has notice of any default by the tenant under such lease which,
individually or in the aggregate with other such defaults, would have a Material
Adverse Effect.
(q) The mortgages and deeds of trust encumbering the Properties are not
(i) cross-defaulted to any indebtedness other than indebtedness of the
Transaction Entities or any of their subsidiaries or (ii) cross-collateralized
to any property not owned by any of the Transaction Entities or their
subsidiaries.
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<PAGE> 12
(r) Each of the Transaction Entities and their subsidiaries are insured
by insurers of recognized financial responsibility against such losses and risks
and in such amounts as are customary in the business in which they are engaged
and such insurance is adequate for the value of their properties; all policies
of insurance insuring the Transaction Entities or their subsidiaries or their
respective businesses, assets, employees, officers, trustees and directors, as
the case may be, are in full force and effect; each of the Transaction Entities
and their subsidiaries is in compliance with the terms of such policies in all
material respects and there are no claims by any of the Transaction Entities or
by their subsidiaries under any such policy as to which any insurance company is
denying liability or defending under a reservation of rights clause, other than
claims which individually or in the aggregate would not have a Material Adverse
Effect.
(s) Each of the Transaction Entities has filed all federal, state and
foreign income tax returns which have been required to be filed and have paid
all taxes indicated by said returns and all assessments received by it to the
extent that such taxes have become due and are not being contested in good
faith.
(t) Each of the Transaction Entities and each of their subsidiaries
owns, possesses and has obtained all material licenses, permits, certificates,
consents, orders, approvals and other authorizations from, and has made all
material declarations and filings with, all federal, state, local and other
governmental authorities, all self-regulatory organizations and all courts and
other tribunals necessary to own or lease, as the case may be, and to operate
its properties and to carry on its business as conducted as of the date hereof,
except in each case where the failure to obtain licenses, permits, certificates,
consents, orders, approvals and other authorizations, or to make all
declarations and filings, would not have a Material Adverse Effect, and none of
the Transaction Entities or any of its subsidiaries has received any notice of
any proceeding relating to revocation or modification of any such license,
permit, certificate, consent, order, approval or other authorization, except as
described in the Prospectus and except, in each case, where such revocation or
modification would not have a Material Adverse Effect; and the Transaction
Entities and each of their subsidiaries are in compliance with all laws, rules
and regulations relating to the conduct of their respective businesses as
conducted as of the date hereof, except where noncompliance with such laws,
rules or regulations would not have a Material Adverse Effect.
(u) To the knowledge of the Transaction Entities, their independent
accountants who have certified certain of the financial statements filed with
the Commission as part of, or incorporated by reference in, the Registration
Statement or the Prospectus, are independent public accountants as required by
the Act.
(v) To the knowledge of the Transaction Entities, no relationship,
direct or indirect, exists between or among any of the Transaction Entities or
their subsidiaries on the one hand, and the directors, trustees, officers,
stockholders, customers or suppliers of any of the Transaction Entities or their
subsidiaries on the other hand, which is required by the Act to be described in
the Registration Statement and the Prospectus which is not so described.
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<PAGE> 13
(w) Each of the Transaction Entities has never been, is not now, and
immediately after giving effect to the sale of the Shares under this Agreement
will not be, an "investment company" or entity "controlled" by an "investment
company," within the meaning of the Investment Company Act of 1940, as amended
(the "Investment Company Act").
(x) With respect to all tax periods regarding which the Internal
Revenue Service is or will be entitled to assert any claim against any of the
Transaction Entities, the Company has met the requirements for qualification as
a REIT under Sections 856 through 860 of the Code, and the present and
contemplated operations, assets and income of the Transaction Entities and their
subsidiaries, taken as a whole, continue to meet such requirements.
(y) The conditions for the use by the Company of a registration
statement on Form S-3 set forth in the General Instructions to Form S-3 have
been satisfied and the Company is entitled to use such form for the transactions
contemplated herein.
(z) Other than as disclosed in the Prospectus, the Transaction Entities
have no knowledge of (a) the unlawful presence of any hazardous substances,
hazardous materials, toxic substances or waste materials (collectively,
"Hazardous Materials") on any of the Properties or (b) any unlawful spills,
releases, discharges or disposals of Hazardous Materials that have occurred or
are presently occurring on or from the Properties, which presence or occurrence
would individually or in the aggregate have a Material Adverse Effect.
(aa) Other than as disclosed in the Prospectus, the Transaction
Entities and their subsidiaries (i) are in compliance with any and all
applicable federal, state and local laws and regulations relating to the
protection of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants ("Environmental Laws"), (ii)
each Transaction Entity has received all permits, licenses or other approvals
required of them under applicable Environmental Laws to conduct their respective
businesses and (iii) are in compliance with all terms and conditions of any such
permit, license or approval, except where such noncompliance with Environmental
Laws, failure to receive required permits, licenses or other approvals or
failure to comply with the terms and conditions of such permits, licenses or
approvals would not individually or in the aggregate have a Material Adverse
Effect.
(bb) In the ordinary course of business, the Transaction Entities
engage environmental consultants and other experts to conduct reviews of the
effect of Environmental Laws on the business, operations and properties of the
Transaction Entities and their subsidiaries, in the course of which the
Transaction Entities identify and evaluate associated costs and liabilities
(including, without limitation, any capital or operating expenditures required
for cleanup, closure of properties or compliance with Environmental Laws or any
permit, license or approval, any related constraints on operating activities and
any potential liabilities to third parties). On the basis of such reviews and
other than as described in the Prospectus, the Transaction Entities have
reasonably concluded that such associated costs and liabilities would not,
individually or in the aggregate, have a Material Adverse Effect.
(cc) Subsequent to the respective dates as of which information is
given in the Prospectus, (i) the Company has not purchased any of its
outstanding shares of capital stock, or
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<PAGE> 14
declared, paid or otherwise made any dividend or distribution of any kind on its
shares of capital stock other than regular periodic dividends on such shares;
and (ii) there has not been any material change in the shares of capital stock
of the Company or any material change in the short-term debt or long-term debt
of the Transaction Entities and their subsidiaries on a consolidated basis,
except as described in or contemplated by the Prospectus. Other than as
described in or contemplated by the Prospectus, including documents incorporated
therein by reference, there are no outstanding warrants or options to purchase
or rights to acquire any shares of capital stock of the Company and there are no
restrictions upon the voting or transfer of, or the declaration or payment of
any dividend or distribution on, any shares of capital stock of the Company
pursuant to the Company's Articles of Incorporation or Bylaws, any agreement or
other instrument to which the Transaction Entities is a party or by which the
Transaction Entities is bound, or any order, law, rule, regulation or
determination of any court, governmental agency or body (including, without
limitation, any banking or insurance regulatory agency or body), or arbitrator
having jurisdiction over any of the Transaction Entities. No holders of
securities of the Company or of securities convertible into or exchangeable for
securities of the Company have rights to the registration of such securities of
the Company under the Registration Statement.
(dd) The Transaction Entities and their subsidiaries and affiliates
have not taken and will not take, directly or indirectly, any action designed
to, or that might be reasonably expected to, cause or result in stabilization or
manipulation of the price of the Shares, and the Transaction Entities and their
subsidiaries and affiliates have not distributed and agree not to distribute any
prospectus or other offering material in connection with the offering and sale
of the Shares other than the Prospectus or other material permitted by the Act.
(ee) Each of the Transaction Entities maintains a system of internal
accounting controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general or specific
authorization; (ii) transactions are recorded as necessary to permit preparation
of financial statements in conformity with generally accepted accounting
principles and to maintain accountability for assets; (iii) access to assets is
permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(ff) There is (i) no significant unfair labor practice complaint
pending against any of the Transaction Entities or their subsidiaries or, to the
knowledge of the Transaction Entities, threatened against any of them, before
the National Labor Relations Board or any state or local labor relations board,
and no significant grievance or more significant arbitration proceeding arising
out of or under any collective bargaining agreement is so pending against any of
the Transaction Entities or their subsidiaries or, to the knowledge of the
Transaction Entities, threatened against any of them, and (ii) no significant
strike, labor dispute, slowdown or stoppage pending against any of the
Transaction Entities or their subsidiaries or, to the knowledge of the
Transaction Entities, threatened against it or any of their subsidiaries except
for such actions specified in clause (i) or (ii) above which individually or in
the aggregate could not reasonably be expected to have a Material Adverse
Effect.
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<PAGE> 15
(gg) No statement, representation, warranty or covenant made by any of
the Transaction Entities in this Agreement or made in any certificate or
document required by this Agreement to be delivered to the Underwriter is, or
will be, when made, inaccurate, untrue or incorrect in any material respect; it
being understood that no representation is made under this Section 6(gg) with
respect to the Registration Statement or the Prospectus which are the subject of
representations contained in other paragraphs in this Section 6.
(hh) Any certificate or other document signed by any officer or
authorized representative of any of the Transaction Entities or any of their
subsidiaries, and delivered to the Underwriter or to counsel for the Underwriter
in connection with the sale of the Shares shall be deemed a representation and
warranty by such entity or person, as the case may be, to the Underwriter as to
the matters covered thereby.
7. Indemnification.
(a) Each of the Transaction Entities jointly and severally agrees to
indemnify and hold harmless the Underwriter and each person, if any, who
controls the Underwriter within the meaning of Section 15 of the Act or Section
20 of the Exchange Act, from and against any and all losses, claims, damages,
expenses, liabilities and judgments caused by or resulting from any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto) or any
preliminary prospectus, or caused by or resulting from any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as such
losses, claims, damages, expenses, liabilities or judgments are caused by or
result from any such untrue statement or omission or alleged untrue statement or
omission based upon and in conformity with information relating to the
Underwriter furnished in writing to the Company by or on behalf of the
Underwriter through you expressly for use therein, provided, that this indemnity
agreement with respect to any preliminary prospectus shall not inure to the
benefit of the Underwriter from whom the person asserting any such losses,
liabilities, claims, damages or expenses purchased Shares, or any person
controlling the Underwriter, if a copy of the prospectus (as then amended or
supplemented if the Company shall have furnished any such amendments or
supplements thereto) was not sent or given by or on behalf of the Underwriter to
such person, if such is required by law, at or prior to the written confirmation
of the sale of such Shares to such person and if the Prospectus (as so amended
or supplemented) would have corrected the defect giving rise to such loss,
liability, claim, damage or expense.
(b) In case any action shall be brought against the Underwriter or any
person controlling the Underwriter, based upon any preliminary prospectus, the
Registration Statement or the Prospectus or any amendment or supplement thereto
and with respect to which indemnity may be sought against any of the Transaction
Entities, the Underwriter shall promptly notify the Company in writing and the
Company may, at its election, assume the defense thereof, including the
employment of counsel reasonably satisfactory to such indemnified party and
payment of all fees and expenses. The Underwriter or any such controlling person
shall have the right to employ separate counsel in any such action and
participate in the defense thereof,
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<PAGE> 16
but the fees and expenses of such counsel shall, if any of the Transaction
Entities has assumed the defense as indicated above, be at the expense of the
Underwriter or such controlling person unless (i) the employment of such counsel
shall have been specifically authorized in writing by one of the Transaction
Entities, (ii) one of the Transaction Entities shall have failed to assume the
defense and employ counsel or (iii) the named parties to any such action
(including any impleaded parties) include both the Underwriter or such
controlling person and the Transaction Entities and the Underwriter or such
controlling person shall have been advised by such counsel that there may be one
or more legal defenses available to it which are different from or additional to
those available to the Transaction Entities (in which case the Transaction
Entities shall not have the right to assume the defense of such action on behalf
of the Underwriter or such controlling person, it being understood, however,
that the Transaction Entities shall not, in connection with any one such action
or separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the fees and expenses of more than one separate firm of attorneys (in
addition to any local counsel) for the Underwriter and controlling persons,
which firm shall be designated in writing by the Underwriter and that all such
fees and expenses shall be reimbursed as they are incurred). None of the
Transaction Entities shall be liable for any settlement of any such action
effected without its written consent, but if settled with their written consent,
each of the Transaction Entities agrees to indemnify and hold harmless the
Underwriter and any such controlling person from and against any loss or
liability by reason of such settlement to the extent required by this Section 7.
Notwithstanding the immediately preceding sentence, if in any case where the
fees and expenses of counsel are at the expense of the indemnifying party and an
indemnified party shall have requested the indemnifying party to reimburse the
indemnified party for such fees and expenses of counsel as incurred, such
indemnifying party agrees that it shall be liable for any settlement of any
action effected without its written consent, if (i) such settlement is entered
into more than forty business days after the receipt by such indemnifying party
of the aforesaid request and (ii) such indemnifying party shall have failed to
reimburse the indemnified party in accordance with such request for
reimbursement prior to the date of such settlement; provided, however, that if
it is determined by a final non appealable order of a court of competent
jurisdiction that any of the Transaction Entities has no indemnification
obligation under this Section 7, all fees and expenses paid by any of the
Transaction Entities pursuant to this sentence shall be returned to them upon
demand. No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened proceeding
in respect of which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified party, unless
such settlement includes an unconditional release of such indemnified party from
all liability on claims that are the subject matter of such proceeding.
(c) The Underwriter agrees to indemnify and hold harmless each of the
Transaction Entities and each of their officers and directors who sign the
Registration Statement and any person controlling any of the Transaction
Entities within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, to the same extent as the foregoing indemnity from each of the
Transaction Entities to the Underwriter, but only with reference to and in
conformity with information relating to the Underwriter furnished in writing by
or on behalf of the Underwriter expressly for use in the Registration Statement,
the Prospectus or any preliminary prospectus.
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<PAGE> 17
In case any action shall be brought against any of the Transaction Entities, any
of their officers, directors, or any person controlling any of the Transaction
Entities, based on the Registration Statement, the Prospectus or any preliminary
prospectus and in respect of which indemnity may be sought against the
Underwriter, the Underwriter shall have the rights and duties given to the
Transaction Entities (except that if any of the Transaction Entities shall have
assumed the defense thereof, the Underwriter shall not be required to do so, but
may employ separate counsel therein and participate in the defense thereof but
the fees and expenses of such counsel shall, except as otherwise provided
herein, be at the expense of the Underwriter), and each of the Transaction
Entities, their officers, directors, and any person controlling any of the
Transaction Entities shall have the rights and duties given to the Underwriter,
by Section 7(b) hereof.
(d) If the indemnification provided for in this Section 7 is
unavailable to an indemnified party in respect of any losses, claims, damages,
expenses, liabilities or judgments referred to therein, then each indemnifying
party, in lieu of indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result of such losses,
claims, damages, expenses, liabilities and judgments (i) in such proportion as
is appropriate to reflect the relative benefits received by the Transaction
Entities on the one hand and the Underwriter on the other hand from the offering
of the Shares or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Transaction Entities, on the one hand, and the Underwriter, on the
other hand, in connection with the statements or omissions which resulted in
such losses, claims, damages, expenses, liabilities or judgments, as well as any
other relevant equitable considerations. The relative benefits received by the
Transaction Entities, on the one hand, and the Underwriter, on the other hand,
shall be deemed to be in the same proportion as the total net proceeds from the
Offering (before deducting expenses) received by the Transaction Entities and
the total underwriting discounts and commissions received by the Underwriter,
bear to the total price to the public of the Shares, in each case as set forth
in the table on the cover page of the Prospectus. The relative fault of the
Transaction Entities, on the one hand, and the Underwriter, on the other hand,
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission to state a material
fact relates to information supplied by any of the Transaction Entities or the
Underwriter and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
Each of the Transaction Entities and the Underwriter agree
that it would not be just and equitable if contribution pursuant to this Section
7(d) were determined by pro rata allocation or by any other method of allocation
which does not take account of the equitable considerations referred to in the
immediately preceding paragraph. The amount paid or payable by an indemnified
party as a result of the losses, claims, damages, expenses, liabilities or
judgments referred to in the immediately preceding paragraph shall be deemed to
include, subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 7, the Underwriter shall not be required to contribute any amount in
excess of the amount by which the total price at which the Shares
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<PAGE> 18
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 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 Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
(e) The Underwriter confirms and each Transaction Entity acknowledges
that (i) the statements with respect to the public offering of the Shares by the
Underwriter set forth on the cover page of the Prospectus Supplement, (ii) the
legend concerning overallotments on page 2 of the Prospectus Supplement, (iii)
the first and last sentences of the second paragraph under the caption
"Underwriting" in the Prospectus Supplement are correct and constitute the only
information concerning the Underwriter furnished in writing to the Company by or
on behalf of the Underwriter specifically for inclusion in the Registration
Statement and Prospectus.
8. Conditions of Underwriter's Obligations. The obligations of the Underwriter
to purchase the Shares under this Agreement are subject to the satisfaction of
each of the following conditions:
(a) All the representations and warranties of the Transaction Entities
contained in this Agreement shall be true and correct, in all material respects,
on the Closing Date, with the same force and effect as if made on and as of the
Closing Date.
(b) No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall have
been commenced or shall be pending before or threatened by the Commission to the
knowledge, after due inquiry, of the Company. No stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been commenced or shall be pending
before or threatened by the state securities authority of any jurisdiction, to
the knowledge of the Company.
(c) (i) Since the date of the latest balance sheet included or
incorporated by reference in the Registration Statement and the Prospectus,
there shall not have been any Material Adverse Effect, (ii) other than as set
forth in the Prospectus, no proceedings shall be pending or, to the knowledge of
any of the Transaction Entities, after due inquiry, threatened against any of
the Transaction Entities or any Property before or by any federal, state or
other commission, board or administrative agency, where an unfavorable decision,
ruling or finding could reasonably be expected to result in a Material Adverse
Effect, and on the Closing Date you shall have received a certificate dated the
Closing Date, signed by the Chief Executive Officer and the Chief Financial
Officer of each of the Company and the General Partner, in their capacities as
the Chief Executive Officer and Chief Financial Officer of each entity and on
behalf of each entity, confirming the matters set forth in paragraphs (a), (b)
and (c) of this Section 8.
(d) You shall have received on the Closing Date opinions, dated the
Closing Date of [counsel to Company], counsel for the Company, in the forms
attached hereto as Annex A and Annex B.
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<PAGE> 19
(e) You shall have received on the Closing Date an opinion, dated the
Closing Date, of Hunton & Williams, counsel for the Underwriter, to the effect
that:
(i) the Shares have been duly authorized, and when issued and
delivered to the Underwriter against payment therefor as
provided by this Agreement, will have been validly issued and
will be fully paid and nonassessable, and the issuance of such
Shares is not subject to any preemptive or similar rights;
(ii) the Registration Statement has become effective under the
Act and, to the knowledge of such counsel, no stop order
suspending its effectiveness has been issued and no
proceedings for that purpose are pending before or threatened
by the Commission;
(iii) this Agreement was duly and validly authorized, executed
and delivered by each of the Transaction Entities; and
(iv) the Registration Statement, at the time it became
effective, and the Prospectus, as of the date of the
Prospectus Supplement (in each case, other than documents
incorporated therein by reference and the financial statements
and supporting schedules and other financial and statistical
data included or incorporated by reference therein, as to
which no opinion need be rendered) complied as to form in all
material respects with the requirements of the Act.
In addition, Hunton & Williams shall state that they have
participated in conferences with officers and other representatives of the
Transaction Entities and representatives of the independent public accountants
for the Company and representatives of the Underwriter at which the contents of
the Prospectus and related matters were discussed and, although they are not
passing upon and do not assume any responsibility for the accuracy, completeness
or fairness of the statements contained in the Registration Statement or the
Prospectus or the documents incorporated therein by reference, on the basis of
the foregoing (relying as to materiality to a large extent upon the opinions of
officers and other representatives of the Transaction Entities), no facts have
come to the attention of such counsel which lead them to believe that the
Registration Statement, including the documents incorporated therein by
reference, at the time the Company filed its Annual Report on Form 10-K for the
Year Ended December 31, 1996, or at the date of the Underwriting Agreement,
contained an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading or that the Prospectus, including the documents incorporated
therein by reference, at the time the Prospectus was first provided to the
Underwriter for use in connection with the offering of the Shares or at the date
hereof, contained or contains an untrue statement of a material fact or omitted
or omits to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading (it being understood that such counsel need express no opinion with
respect to the financial statements and schedules and other financial or
statistical data included in the Registration Statement, the Prospectus or the
documents incorporated therein by reference).
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<PAGE> 20
(f) On the date hereof, [accountants to company] shall have furnished
to the Underwriter a letter, dated the date of its delivery, addressed to the
Underwriter and in form and substance satisfactory to the Underwriter (and to
its counsel), confirming that they are independent public accountants with
respect to the Transaction Entities and their subsidiaries as required by the
Act and with respect to the financial and other statistical and numerical
information contained in the Registration Statement. At the Closing Date,
[accountants to company] shall have furnished to the Underwriter a letter, dated
the date of its delivery, which shall confirm, on the basis of a review in
accordance with the procedures set forth in the letter from it, that nothing has
come to its attention during the period from the date of the letter referred to
in the prior sentence to a date (specified in the letter) not more than five
days prior to the Closing Date, which would require any change in its letter
dated the date hereof if it were required to be dated and delivered at the
Closing Date.
(g) At the Closing Date, the Shares shall have been approved for
listing on the [NYSE] upon official notice of issuance.
(h) Each of the Transaction Entities and their subsidiaries shall not
have failed at or prior to the Closing Date, to perform or comply with any of
the agreements pursuant to Section 5 herein contained and required to be
performed or complied with by the Transaction Entities at or prior to the
Closing Date.
(i) At the Closing Date, Hunton & Williams shall have been furnished
with such documents and opinions as they may reasonably require for the purpose
of enabling them to pass upon the issuance and sale of the Shares, as herein
contemplated and related proceedings, 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 each of the
Transaction Entities in connection with the issuance and sale of the Shares as
herein contemplated shall be reasonably satisfactory in form and substance to
the Underwriter and Hunton & Williams.
9. Effective Date of Agreement and Termination. This Agreement shall become
effective upon the execution of this Agreement.
This Agreement may be terminated at any time prior to the
Closing Date by you by written notice to the Company if any of the following has
occurred: (i) since the respective dates as of which information is given in the
Registration Statement and the Prospectus, there has been a Material Adverse
Effect, (ii) any outbreak or escalation of hostilities or other national or
international calamity or crisis or change in economic conditions or in the
financial markets of the United States or elsewhere that, in your judgment, is
material and adverse and would, in your judgment, make it impracticable or
inadvisable (x) to commence or continue the offering of the shares to the public
or (y) to enforce contracts for the sale of the shares, (iii) the suspension or
material limitation of trading in securities on the [NYSE] or the American Stock
Exchange or material limitation on prices for securities on either of such
exchanges, (iv) (a) the downgrading of any of the debt securities of any of the
Transaction Entities or any of their subsidiaries by any "nationally recognized
statistical rating organization" or the announcement by any such
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<PAGE> 21
organization of an initial rating with respect to any such securities that is
below the ratings of other such organizations in effect for such securities on
the date hereof, or (b) the public announcement by any such organization that it
has under surveillance or review, with possible negative implications, its
rating of any of such securities, (v) the enactment, publication, decree or
other promulgation of any federal or state statute, regulation, rule or order of
any court or other governmental authority which in your opinion would result in
a Material Adverse Effect, (vi) the declaration of a banking moratorium by
either federal or New York State authorities or (vii) the taking of any action
by any federal, state or local government or agency in respect of its monetary
or fiscal affairs which in your opinion has a material adverse effect on the
financial markets in the United States.
10. Miscellaneous. Notices given pursuant to any provision of this Agreement
shall be addressed as follows: (a) if to the Company, to [name and address of
Company] and (b) if to you, to Wheat First Securities, Inc., Attention:
Syndicate Department, Riverfront Plaza, 901 East Byrd Street, Richmond, Virginia
23219, or in any case to such other address as the person to be notified may
have requested in writing.
The provisions of Sections 5, 6 and 7 shall remain operative
and in full force and effect, and will survive delivery of and payment for the
Shares, regardless of (i) any investigation, or statement as to the results
thereof, made by or on behalf of the Underwriter or by or on behalf of any of
the Transaction Entities, the officers or directors of any of the Transaction
Entities or any controlling person of any of the Transaction Entities and (ii)
acceptance of the Shares and payment for them hereunder.
In the event of termination of this Agreement, the provisions
of Sections 5(k) and 7 shall remain operative and in full force and effect.
If this Agreement shall be terminated by the Underwriter
because of any failure or refusal on the part of any of the Transaction Entities
to comply with the terms or to fulfill any of the conditions of this Agreement,
each of the Transaction Entities, jointly and severally, agrees to reimburse the
Underwriter for all out-of-pocket expenses (including the fees and documented
disbursements of counsel) reasonably incurred by the Underwriter.
Except as otherwise provided, this Agreement has been and is
made solely for the benefit of and shall be binding upon each of the Transaction
Entities and the Underwriter, any controlling persons referred to herein and
their respective successors and assigns, all as and to the extent provided in
this Agreement, and no other person shall acquire or have any right under or by
virtue of this Agreement. The term "successors and assigns" shall not include a
purchaser of any of the Shares from the Underwriter merely because of such
purchase.
This Agreement shall be governed and construed in accordance
with the laws of the State of New York.
This Agreement may be signed in various counterparts which
together shall constitute one and the same instrument.
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<PAGE> 22
Please confirm that the foregoing correctly sets forth the
agreement among the parties hereto.
Very truly yours,
[NAME OF COMPANY]
By:
-----------------------------------
Name:
Title:
[NAME OF THE OPERATING PARTNERSHIP]
By:
-----------------------------------
Name:
Title:
[NAME OF THE GENERAL PARTNER]
By:
-----------------------------------
Name:
Title:
WHEAT FIRST SECURITIES, INC.
By:
-----------------------------------
Name:
Title:
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<PAGE> 1
EXHIBIT 5
[LETTERHEAD OF SHAW PITTMAN POTTS & TROWBRIDGE]
March 24, 1998
Commercial Net Lease Realty, Inc.
400 East South Street
Suite 500
Orlando, Florida 32801
Ladies and Gentlemen:
We have acted as counsel to Commercial Net Lease Realty, Inc., a
Maryland corporation (the "Company"), in connection with the Registration
Statement on Form S-3, Registration No. 333-24773 (the "Registration
Statement"), filed with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended, and declared
effective by the Commission on April 22, 1997. Pursuant to the Registration
Statement, the Company proposes to issue and sell 200,000 shares of common
stock, par value $0.01 per share (the "Common Stock") to the public through
Wheat First Union pursuant to the terms set forth in the prospectus supplement
dated March 24, 1998 (the "Prospectus Supplement") to the prospectus filed as
part of the Registration Statement.
Based upon our examination of the originals or copies of such
documents, corporate records, certificates of officers of the Company and other
instruments as we have deemed necessary and upon the laws as presently in
effect, we are of the opinion that the Common Stock has been duly authorized for
issuance by the Company, and that upon issuance and delivery in accordance with
the purchase agreement referred to in the Prospectus Supplement, the Common
Stock will be validly issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Prospectus Supplement. We also consent to the reference to Shaw Pittman Potts &
Trowbridge under the caption "Legal Matters" in the Prospectus Supplement.
Very truly yours,
/s/ Shaw Pittman Potts & Trowbridge
SHAW PITTMAN POTTS & TROWBRIDGE
<PAGE> 1
EXHIBIT 8
[LETTERHEAD OF SHAW PITTMAN POTTS & TROWBRIDGE]
March 24, 1998
Commercial Net Lease Realty, Inc.
400 E. South Street
Suite 500
Orlando, Florida 32801
Ladies and Gentlemen:
On April 8, 1997, Commercial Net Lease Realty, Inc. ("CNL Realty")
filed a registration statement on Form S-3, file number 333-24773 (the
"Registration Statement"), with the Securities and Exchange Commission, which
was declared effective on April 22, 1997. In connection with the filing of a
prospectus supplement on March 25, 1998, you have asked us to render an opinion
with respect to the qualification of Commercial Net Lease Realty, Inc. ("CNL
Realty") as a real estate investment trust ("REIT") under sections 856 through
860 of the Internal Revenue Code. (Our references herein to "the Code" are to
the Internal Revenue Code of 1986, as amended, with respect to taxable years
ending on or after January 1, 1987, and to the Internal Revenue Code of 1954, as
amended, with respect to taxable years ending on or before December 31, 1986.)
(1/)
We have served as special counsel for CNL Realty in connection with the
filing of the Prospectus and the Prospectus Supplement and from time to time in
the past have represented CNL Realty on specific matters as requested by CNL
Realty. Specifically for the purpose of this opinion, we have examined and
relied upon the following: copies of CNL Realty's Articles of Incorporation and
any amendments thereto; its Federal Forms 1120 for its taxable years 1984
through 1996 (in which tax returns we observe that CNL Realty has elected to be
treated as a real estate investment trust); the Registration Statement; the
Prospectus; the Prospectus Supplement; copies of executed leases covering real
property owned by CNL Realty; the Form 10-K filed on March 18, 1998; and its
Form S-11 Registration Statement as filed with the Securities and Exchange
Commission on August 15, 1984.
We have not served as general counsel to CNL Realty and have not been
involved in decisions regarding the day-to-day operation of CNL Realty and its
properties. We have, however, discussed the mode of operation of CNL Realty with
its officers with a view to learning information relevant to the opinions
expressed herein and have received and relied upon a certificate from CNL Realty
with respect to certain matters.
We have discussed with management of CNL Realty arrangements relating
to the management of its properties, the relationships of CNL Realty with
tenants of such properties, and certain terms of leases of such properties to
tenants, with a view to assuring that at the close of each quarter of the
taxable years covered by this opinion it met the asset composition requirements
set forth in section 856(c)(5), and with a view to assuring that, with respect
to years covered by this opinion, it satisfied the 95%, 75%, and 30% gross
income tests set forth in section 856. We have further reviewed with management
of CNL Realty the requirements that the beneficial ownership of a REIT be held
by 100 or more persons for at least 335/365ths of each taxable year and that a
REIT must satisfy the diversity of ownership requirements of section 856(h) as
such requirements existed in the years covered by this opinion, and we have
been advised by management that at all times during the years covered by this
opinion (and specifically on each record date for the payment of dividends
during 1984 through the date hereof) CNL Realty has had more than 1,000
shareholders of record, that CNL Realty maintains the records required by
section 1.857-8 of the Treasury Regulations, that no later than January 30 of
each year it sent the demand required by section 1.857-8(d) of the Treasury
Regulations to each shareholder of record owning one percent or
- -------------------------
(1/)All section references herein are to the Code or to the regulations issued
thereunder.
<PAGE> 2
more of the outstanding shares of CNL Realty on the appropriate date required by
said regulation, and that the actual ownership of CNL Realty shares was such
that, to the best knowledge of its management (based upon responses to the
aforesaid demands, any filing of a Schedule 13D under the Securities Exchange
Act of 1934, as amended, or any other sources of information), CNL Realty
satisfied the applicable requirements of section 856(h). Further, we have
examined various property leases and lease supplements relating to the
properties that CNL Realty owns, and although leases relating to certain
properties that CNL Realty owns have not been made available to us, CNL Realty
has represented with respect to such leases that they do conform in all material
respects to a form of lease agreement provided to us. On the basis of
discussions with management of CNL Realty, we are not aware that CNL Realty's
election to be a REIT has been terminated or challenged by the Internal Revenue
Service or any other party, or that CNL Realty has revoked its election to be a
REIT for any such prior year so as to make CNL Realty ineligible to qualify as a
REIT for the years covered by this opinion.
In rendering the opinions set forth herein, we are assuming that copies
of documents examined by us are true copies of originals thereof and that the
information concerning CNL Realty set forth in CNL Realty's Federal income tax
returns, and in the Prospectus Supplement, as well as the information provided
us by CNL Realty's management are true and correct. We have no reason to believe
that such assumptions are not warranted.
Based upon the foregoing, we are of the opinion that: (a) CNL Realty
was a "real estate investment trust" as defined by section 856(a) for its
taxable years ended December 31, 1984 through December 31, 1997, and its
proposed method of operation will enable it to meet the requirements for
qualification and taxation as a REIT for its taxable year ending December 31,
1998 and for all future taxable years, and (b) CNL Realty's wholly owned
subsidiaries, Net Lease Realty I, Inc. and Net Lease Realty II, Inc., were each
"qualified REIT subsidiaries" as defined by section 856(i) for CNL Realty's
taxable year ending December 31, 1997, and their proposed ownership, as well as
the proposed ownership of two additional wholly owned subsidiaries, Net Lease
Realty III, Inc. and Net Lease Realty IV, Inc., will enable them to meet the
requirements for treatment as qualified REIT subsidiaries for CNL Realty's
taxable year ending December 31, 1998 and for all future taxable years. With
respect to the 1998 year and all future years, however, we note that CNL
Realty's status as a real estate investment trust at any time is dependent among
other things upon its meeting the requirements of section 856 throughout the
year and for the year as a whole.
This opinion is based upon the existing provisions of the Code (or
predecessor provisions, as applicable), rules and regulations (including
proposed regulations) promulgated thereunder, and reported administrative and
judicial interpretations thereof, all of which are subject to change, possibly
with retroactive effect. This opinion is limited to the specific matters covered
hereby and should not be interpreted to imply that the undersigned has offered
its opinion on any other matter.
We hereby confirm that the statements set forth in the Prospectus
Supplement under the heading "Federal Income Tax Considerations," to the extent
that they constitute matters of law or legal conclusions with respect thereto,
are correct in all material respects.
We hereby consent to the filing of this opinion as an exhibit to the
Prospectus Supplement. We also consent to the reference to Shaw, Pittman, Potts
& Trowbridge under the captions "Federal Income Tax Considerations" and "Legal
Matters" in the Prospectus Supplement. In giving such consent, we do not
consider that we are "experts," within the meaning of the term used in the Act
or the rules and regulations of the Securities and Exchange Commission
promulgated thereunder, with respect to any part of the Prospectus Supplement,
including this opinion as an exhibit or otherwise.
Very truly yours,
SHAW, PITTMAN, POTTS & TROWBRIDGE
By: /s/ Charles B. Temkin, P.C.
---------------------------
Charles B. Temkin, P.C.
