EXHIBIT 1.1
15,000,000 Shares
U-STORE-IT TRUST
Common Shares of Beneficial Interest
UNDERWRITING AGREEMENT
[ ], 2005
LEHMAN BROTHERS INC.
As Representative of the
several underwriters named in Schedule 1 hereto
c/o Lehman Brothers Inc.
745 Seventh Avenue
New York, NY 10019
Ladies and Gentlemen:
U-Store-It Trust, a Maryland real estate investment trust
(the "REIT") and U-Store-It, L.P., a Delaware limited partnership (the
"Operating Partnership", and together with the REIT, the "Company"), wish to
confirm as follows their agreement with the Underwriters named in Schedule 1
hereto (the "Underwriters," which term shall also include any underwriter
substituted as hereinafter provided in Section 9 of this Agreement) for whom
Lehman Brothers Inc. is acting as representative (the "Representative"), with
respect to the sale by the REIT and the purchase by the Underwriters, acting
severally and not jointly (the "Offering"), of an aggregate of 15,000,000
shares (the "Firm Shares") of the REIT's shares of beneficial interest, par
value $.01 per share (the "Common Shares"). In addition, the REIT proposes to
grant to the Underwriters an option to purchase up to an additional 2,250,000
Common Shares on the terms and for the purposes set forth in Section 2 (the
"Option Shares"). The Firm Shares and the Option Shares, if purchased, are
hereinafter collectively called the "Shares".
Capitalized terms used but not otherwise defined herein shall
have the meanings given to those terms in the Prospectus (as herein defined).
The Company understands that the Underwriters propose to make
a public offering of the Shares as soon as the Representative deems advisable
after the Registration Statement becomes effective and this Agreement has been
executed and delivered.
1. Representations, Warranties and Agreements of the Company.
The Company represents, warrants and agrees that, as of the date hereof:
(a) A registration statement on Form S-11 (No. 333-128261), and any
amendments thereto, with respect to the Shares has (i) been prepared by the
REIT in conformity with the requirements of the Securities Act of 1933, as
amended (the "Securities Act") and the rules and regulations (the "Rules and
Regulations") of the United States Securities and Exchange Commission (the
"Commission") thereunder, (ii) been filed with the Commission under the
Securities Act and (iii) become effective under the Securities Act. Copies of
such registration
statement and any amendments thereto have been delivered by the REIT to you as
the Representative of the Underwriters. As used in this Agreement, "Effective
Time" means the date and the time as of which such registration statement, or
the most recent post-effective amendment thereto, if any, was declared
effective by the Commission; "Effective Date" means the date of the Effective
Time; "Preliminary Prospectus" means each prospectus included in such
registration statement, or amendments thereto, before it became effective under
the Securities Act and any prospectus filed with the Commission by the REIT
with the consent of the Representative pursuant to Rule 424(a) of the Rules and
Regulations; "Registration Statement" means such registration statement, as
amended at the Effective Time, including all information contained in the final
prospectus filed with the Commission pursuant to Rule 424(b) of the Rules and
Regulations and deemed to be a part of the registration statement as of the
Effective Time pursuant to paragraph (b) of Rule 430A of the Rules and
Regulations; and "Prospectus" means such final prospectus, as first filed with
the Commission pursuant to paragraph (1) or (4) of Rule 424(b) of the Rules and
Regulations. Any registration statement (including any amendment or supplement
thereto or information which is deemed to be a part thereof) filed by the REIT
to register additional Common Shares under Rule 462(b) of the Rules and
Regulations ("Rule 462(b) Registration Statement") shall be deemed a part of
the Registration Statement. Any prospectus (including any amendment or
supplement thereto or information which is deemed to be a part thereof)
included in a Rule 462(b) Registration Statement shall be deemed to be part of
the Prospectus. If a Rule 462(b) Registration Statement is filed in connection
with the offering and sale of the Shares, the REIT will have complied or will
comply with the requirements of Rule 111 under the Securities Act relating to
the payment of filing fees therefor. The REIT has not distributed, and prior to
the later of the Closing Date and the completion of the distribution of the
Shares, will not distribute, any offering material in connection with the
offering or sale of the Shares other than the Registration Statement, the
Preliminary Prospectus (as hereinafter defined), the Prospectus or any other
materials, if any, permitted by the Act (and which were disclosed in advance in
writing to the Underwriters and Underwriters' counsel).
(b) Each Preliminary Prospectus included as part of the Registration
Statement as originally filed or as part of any amendment or supplement
thereto, or filed pursuant to Rule 424 under the Securities Act and the Rules
and Regulations, complied when so filed in all material respects with the
provisions of the Securities Act. The Commission has not issued any order
preventing or suspending the use of any Preliminary Prospectus.
(c) The Registration Statement conforms, and the Prospectus and any
further amendments or supplements to the Registration Statement or the
Prospectus will, when they become effective or are filed with the Commission,
as the case may be, conform in all material respects to the requirements of the
Securities Act and the Rules and Regulations and do not and will not, as of the
applicable Effective Date (as to the Registration Statement and any amendment
thereto) and as of the applicable filing date and at the First Delivery Date,
as hereinafter defined, (as to the Prospectus and any amendment or supplement
thereto) 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 (with respect to the Prospectus, in light of the
circumstances under which they were made); provided that no representation or
warranty is made as to information contained in or omitted from the
Registration Statement or the Prospectus in reliance upon and in conformity
with written information furnished to the REIT through the Representative by or
on behalf of any Underwriter specifically for inclusion therein. The
2
Prospectus delivered to the Underwriters for use in connection with the
offering of 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) 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 Company, threatened by
the Commission or by the state securities authority of any jurisdiction. No
order preventing or suspending the use of any Preliminary Prospectus or the
Prospectus has been issued and no proceeding for that purpose has been
instituted or, to the knowledge of the Company, threatened by the Commission or
by the state securities authority of any jurisdiction.
(e) The REIT has been duly formed and is validly existing as a real
estate investment trust in good standing under the laws of the State of
Maryland, is duly qualified to do business and is in good standing as a foreign
corporation in each jurisdiction in which its ownership or lease of property
and other assets or the conduct of its business requires such qualification,
except where the failure to so qualify or be in good standing, individually or
in the aggregate, could not reasonably be expected to have a material adverse
effect on the condition (financial or otherwise), results of operations,
shareholders' equity, properties, business or prospects of the Company and its
subsidiaries taken as a whole (a "Material Adverse Effect"), and has all power
and authority necessary to own or hold its properties and other assets, to
conduct the business in which it is engaged and to enter into and perform its
obligations under this Agreement.
(f) The REIT has an authorized capitalization as set forth in the
Prospectus, and all of the issued Common Shares (other than the Shares) have
been duly and validly authorized and issued, are fully paid and non-assessable,
have been offered and sold in compliance with all applicable laws (including,
without limitation, federal or state securities laws), and conform to the
description thereof contained in the Prospectus. None of the outstanding Common
Shares was issued in violation of the preemptive or other similar rights of any
securityholder of the REIT. Except as disclosed in the Prospectus, (i) no
Common Shares are reserved for any purpose, (ii) except for the units of
limited partner interest in the Operating Partnership (the "Units"), there are
no outstanding securities convertible into or exchangeable for any Common
Shares, and (iii) there are no outstanding options, rights (preemptive or
otherwise) or warrants to purchase or subscribe for Common Shares or any other
securities of the REIT.
(g) Other than the Common Shares issued and outstanding pursuant to
this Agreement, the Company has no issued and outstanding Common Shares except
for those Common Shares that were issued, and are outstanding, pursuant to: (i)
the Agreement and Plan of Merger and Reorganization, dated as of July 30, 2004,
by and between High Tide LLC and the REIT, (ii) the Agreement and Plan of
Merger, dated as of July 30, 2004, by and between Amsdell Partners, Inc. and
the REIT; (iii) the Underwriting Agreement, dated October 21, 2004, among the
REIT, Acquiport/Amsdell I Limited Partnership and Lehman Brothers Inc.; and
(iv) the Company's 2004 Equity Incentive Plan.
(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 Delaware, is duly qualified to do business and is in good standing as a
foreign limited partnership in each jurisdiction in which
3
its ownership or lease of property and other assets or the conduct of its
business requires such qualification, except where the failure to so qualify or
be in good standing, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect, and has all power and authority
necessary to own or hold its properties and other assets, to conduct the
business in which it is engaged and to enter into and perform its obligations
under this Agreement. The aggregate percentage interests of the REIT and the
limited partners in the Operating Partnership is as set forth in the
Prospectus; provided that to the extent any portion of the over-allotment
option described in Section 2 hereof is exercised at the First Delivery Date,
the percentage interest of such partners in the Operating Partnership will be
adjusted accordingly. Additionally, to the extent any portion of such
over-allotment option is exercised subsequent to the First Delivery Date, the
REIT will contribute the proceeds from the sale of the Option Shares to the
Operating Partnership in exchange for a number of Units equal to the number of
Option Shares issued.
(i) The only subsidiaries (as defined in Rule 405 of the Securities
Act) of the Company are those listed on Schedule 2 attached hereto. Each
subsidiary of the REIT has been duly formed or incorporated and is validly
existing as a limited liability company, corporation or limited partnership in
good standing under the laws of its respective jurisdiction of incorporation or
formation, is duly qualified to do business and is in good standing in each
jurisdiction in which its ownership or lease of property and other assets or
the conduct of its business requires such qualification, except where the
failure to so qualify or be in good standing, individually or in the aggregate,
could not reasonably be expected to have a Material Adverse Effect, and has all
power and authority necessary to own or hold its properties and other assets
and to conduct the business in which it is engaged. All of the issued and
outstanding membership interests, shares or limited partner interests of each
such subsidiary have been duly authorized and validly issued, are fully paid
and non-assessable in the case of each corporate subsidiary and each limited
liability company, and have been offered and sold in compliance with all
applicable laws (including, without limitation, federal or state securities
laws).
(j) The Shares have been duly and validly authorized and, when issued
and delivered against payment therefor as provided herein, will be duly and
validly issued, fully paid and non-assessable and free and clear of all liens.
The terms of the Common Shares conform in all material respects to the
descriptions thereof contained in the Prospectus. The form of the certificates
to be used to evidence the Common Shares will, at the First Delivery Date, be
in due and proper form and will comply with all applicable legal requirements,
the requirements of the declaration of trust and bylaws of the REIT and the
requirements of the New York Stock Exchange, Inc. ("NYSE"). The issuance of the
Shares is not subject to any preemptive or other similar rights arising under
the declaration of trust or by-laws of the REIT, the Maryland General
Corporation Law, or any agreement or other instrument to which the REIT is a
party.
(k) All of the issued and outstanding Units have been duly authorized
and validly issued, and have been offered and sold in compliance with all
applicable laws (including, without limitation, federal or state securities
laws). The terms of the Units conform in all material respects to the
descriptions thereof contained in the Prospectus. Except as disclosed in the
Prospectus, (i) no Units are reserved for any purpose, (ii) there are no
outstanding securities convertible into or exchangeable for any Units, and
(iii) there are no outstanding options, rights
4
(preemptive or otherwise) or warrants to purchase or subscribe for Units or any
other securities of the Operating Partnership.
(l) This Agreement has been duly authorized, executed and delivered by
the Company.
(m) At or prior to the date hereof, each of the lock-up letter
agreements entered into by each of the persons identified on Schedule 3 hereto
(collectively, the "Lock-Up Agreements") will have been duly authorized,
executed and delivered by such parties, and will be a valid and binding
agreement of such parties, enforceable against such parties in accordance with
their terms.
(n) The execution, delivery and performance of this Agreement by the
Company, the consummation of the transactions contemplated hereby and thereby
and the application of the net proceeds from the sale of the Shares as
described in the Prospectus under the caption "Use of Proceeds" will not (i)
result in the creation or imposition of a lien upon any property or assets of
the Company or any of its subsidiaries or (ii) conflict with or result in a
breach or violation of any of the terms or provisions of, or constitute (with
or without the giving of notice or the passage of time, or both) a default (or
give rise to any right of termination, cancellation or acceleration) under (x)
any of the terms, conditions or provisions of any note, bond, indenture,
mortgage, deed of trust, lease, license, contract, loan agreement or other
agreement or instrument to which the Company or any of its subsidiaries is a
party or by which the Company or any of its subsidiaries is bound or to which
any of the properties described in the Prospectus as owned or leased by the
Company or its subsidiaries (the "Properties") or other assets of the Company
or any of its subsidiaries is subject, (y) any of the provisions of the
charter, declaration of trust, by-laws, certificate of limited partnership,
agreement of limited partnership or other organizational document of the
Company or any of its subsidiaries, or (z) any statute or any order, writ,
injunction, decree, rule or regulation of any court or governmental agency or
body having jurisdiction over the Company or any of its subsidiaries or any of
its Properties or assets, except for any such breach or violation in the case
of (i) or (ii) above that could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect; and no consent,
approval, authorization or order of, or filing or registration with, any such
court or governmental agency or body is required for the execution, delivery
and performance of this Agreement by the Company and the consummation of the
transactions contemplated hereby, except for (a) such consents, approvals,
authorizations and registrations as have been obtained, (b) the registration
under the Securities Act and the Securities Exchange Act of 1934, as amended
(the "Exchange Act") of the Shares, (c) such consents, approvals,
authorizations and registrations as may be required by the NYSE, the National
Association of Securities Dealers, Inc. ("NASD"), or under state securities or
blue sky laws in connection with the purchase and distribution of the Shares by
the Underwriters and (d) such consents, approvals, authorizations,
registrations or qualifications that would not, individually or in the
aggregate, affect the validity of the Shares, the ability of the Company to
consummate the transactions herein contemplated or reasonably be expected to
have a Material Adverse Effect.
(o) Except as disclosed in the Prospectus, there are no contracts,
agreements or understandings between the REIT and any person granting such
person the right to require the REIT to file a registration statement under the
Securities Act with respect to any securities of the
5
REIT owned or to be owned by such person or to require the REIT to include such
securities in the securities registered pursuant to the Registration Statement
or in any securities being registered pursuant to any other registration
statement filed by the REIT under the Securities Act.
(p) Except as disclosed in the Registration Statement, the Company has
not issued or sold any securities during the six-month period preceding the
date of the Prospectus, including any sales pursuant to Rule 144A under, or
Regulation D or S of, the Securities Act.
(q) Neither the Company nor any subsidiary thereof has sustained, and
the Properties (taken as a whole) have not sustained, since the date of the
latest audited financial statements included in the Prospectus, any loss or
interference with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, other than as set forth or contemplated
in the Prospectus, that, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect; and, except as disclosed in the
Prospectus, since such date, there has not been any change in the capital stock
or long-term debt of the Company or any of its subsidiaries, or any material
adverse change, or any development involving a prospective material adverse
change, in or affecting the Properties (taken as a whole) or the business,
prospects, operations, management, financial position, net worth, shareholders'
equity or results of operations of the Company and its consolidated
subsidiaries considered as one enterprise.
(r) The financial statements (including the related notes and
supporting schedules) filed as part of the Registration Statement or included
in the Prospectus present fairly the financial condition, the results of
operations, the statements of cash flows and the statements of shareholders'
equity and other information purported to be shown thereby of the Company and
its consolidated subsidiaries (and the other assets described therein), at the
dates and for the periods indicated, and have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis
throughout the periods involved and are correct and complete and are in
accordance with the books and records of the Company and its consolidated
subsidiaries (and the other assets described therein). The summary and selected
financial data and other supporting schedules included in the Prospectus
present fairly, in all material respects, the information shown therein as at
the respective dates and for the respective periods specified, and the summary
and selected financial data and other supporting schedules have been presented
on a basis consistent with the financial statements as set forth in the
Prospectus and other financial information. Pro forma financial information
included in the Prospectus has been prepared in accordance with the applicable
requirements of the Securities Act and the Rules and Regulations with respect
to pro forma financial information and includes all adjustments necessary to
present fairly, in all material respects, the pro forma financial position of
the REIT at the respective dates indicated and the results of operations for
the respective periods specified, and the assumptions used in the preparation
thereof are reasonable and provide a reasonable basis for presenting the
significant effects directly attributable to the transactions or events
described therein; and no other financial statements (or schedules) of the
REIT, or any predecessor of the REIT are required by the Securities Act or the
Rules and Regulations to be included in the Registration Statement or the
Prospectus.
(s) Deloitte & Touche LLP who have certified certain financial
statements of the REIT, its consolidated subsidiaries and certain predecessor
entities, whose reports appear in the
6
Prospectus and who have delivered the initial letter referred to in Section
7(g) hereof, are, and during the periods covered by such reports were, an
independent registered public accounting firm within the meaning of the
Securities Act and the Rules and Regulations; Clifton Gunderson LLP, whose
report appears in the Prospectus are, and during the periods covered by such
reports were, an independent registered public accounting firm within the
meaning of the Securities Act and the Rules and Regulations; Grant Thornton
LLP, whose report appears in the Prospectus are, and during the periods covered
by such reports were, an independent registered public accounting firm within
the meaning of the Securities Act and the Rules and Regulations; and The
Schonbraun McCann Group LLC, whose reports appear in the Prospectus are, and
during the periods covered by such reports were, an independent registered
public accounting firm within the meaning of the Securities Act and the Rules
and Regulations.
(t) (1) The Company or its subsidiaries have fee simple title (or, as
disclosed in the Prospectus, a leasehold interest) to all of the Properties, in
each case, free and clear of all liens, encumbrances, claims, security
interests and defects, except such as (i) are disclosed in the Prospectus and
(ii) could not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect; (2) neither the Company nor any subsidiary
thereof has received from any governmental authority any written notice of any
condemnation of, or zoning change affecting any of, the Properties or any part
thereof, and the Company does not know of any such condemnation or zoning
change which is threatened, which if consummated could reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect; (3)
except as otherwise described in the Prospectus, neither the Company nor, to
the best knowledge of the Company, any tenant of any of the Properties is in
default under (i) any space lease (as lessor or lessee, as the case may be)
relating to any of the Properties, or (ii) any of the mortgages or other
security documents or other agreements encumbering or otherwise recorded
against the Properties, and the Company does not know of any event which, but
for the passage of time or the giving of notice, or both, would constitute a
default under any of such documents or agreements except (x) with respect to
(i) immediately above, such tenant defaults as are customary in the
self-storage industry and consistent with the Operating Partnership's past
experience in all material respects and that would not, individually or in the
aggregate, have a Material Adverse Effect, and (y) with respect to (ii)
immediately above, any such default that would not, individually or in the
aggregate, have a Material Adverse Effect; and (4) no tenant under any of the
leases at the Properties has a right of first refusal to purchase the premises
demised under such lease.
(u) To the knowledge of the Company, water, stormwater, sanitary
sewer, electricity and telephone service are all available at the property
lines of each Property over duly dedicated streets or perpetual easements of
record benefiting the applicable Property.
(v) Except as disclosed in the Prospectus, all entitlements necessary
for development and/or renovation of each of the Properties planned for
development, material expansion or renovation as described in the Prospectus as
having been vested or entitled with development rights have been obtained, and
no further governmental or regulatory approvals are necessary for additional
development of such Properties. With respect to any other Property planned for
development, material expansion or renovation and which is not described in the
Prospectus as having received all necessary entitlements, the Company expects
that such entitlements will be issued in normal course.
7
(w) There are no contracts, letters of intent, term sheets,
agreements, arrangements or understandings with respect to the direct or
indirect acquisition or disposition by the Company or any of its subsidiaries
of interests in assets or real property that is required to be described in the
Prospectus and that is not already so described.
(x) Immediately following the application of the net proceeds of the
sale of the Firm Shares in the manner set forth in the Prospectus, the
mortgages or deeds of trust which will encumber the Properties will not be
convertible into equity securities of the entity owning such Property and said
mortgages and deeds of trust will not be cross-defaulted or
cross-collateralized with any property other than other Properties as and to
the extent described in the Prospectus. Neither the Company nor any of its
subsidiaries hold participating interests in such mortgages or deeds of trust.
(y) The Operating Partnership or a subsidiary thereof has obtained
title insurance on the fee interests in each of the Properties, in an amount
that is commercially reasonable for each Property, but at least equal to the
purchase price of each such Property. All such policies of insurance are in
full force and effect.
(z) Except as otherwise disclosed in the Prospectus, (i) to the best
knowledge of the Company, the Company and its subsidiaries and the Properties
have been and are in material compliance with, and neither the Company nor any
of its subsidiaries has any material liability under, applicable Environmental
Laws (as herein defined); (ii) neither the Company nor any of its subsidiaries,
nor, to the best knowledge of the Company, any prior owners or occupants of the
property at any time or any other party, has at any time released (as such term
is defined in Section 101(22) of CERCLA (as herein defined)), disposed of,
generated, stored, transported or otherwise dealt with, Hazardous Materials (as
herein defined) on, to or from the Properties or other assets owned by the
Company or its subsidiaries, except for such releases or other activities as
could not reasonably be expected to cause the Company and its subsidiaries to
incur material liability; (iii) the Company does not intend to use the
Properties or other assets owned by the Company or its subsidiaries, other than
in compliance with applicable Environmental Laws, (iv) neither the Company nor
any of its subsidiaries know of any seepage, leak, discharge, release,
emission, spill, or dumping of Hazardous Materials into waters (including, but
not limited to, groundwater and surface water) on, beneath or adjacent to the
Properties or onto lands or other assets owned by the Company or its
subsidiaries from which Hazardous Materials might seep, flow or drain into such
waters; (v) neither the Company nor any of its subsidiaries has received any
notice of, or have any knowledge of any occurrence, circumstance, act or
conduct which, with notice or passage of time or both, could reasonably be
expected to give rise to a claim under or pursuant to any Environmental Law by
any governmental or quasi-governmental body or any third party with respect to
the Properties or the assets described in the Prospectus, except for such
claims that would not be reasonably likely to cause the Company or its
subsidiaries to incur material liability and that would not require disclosure
pursuant to Environmental Laws or federal or state laws regulating the issuance
of securities; (vi) to the best knowledge of the Company, neither the Company
nor any of its subsidiaries is subject to any claim, enforcement, action,
consent decree, order or indemnity obligation relating to any Environmental
Laws, except for such claims or other actions that, individually or in the
aggregate, could not reasonably be expected to cause the Company or its
subsidiaries to incur material liability or that would not require disclosure
pursuant to any Environmental Law or
8
federal or state laws regulating the issuance of securities; and (vii) none of
the Properties are included or proposed for inclusion on the National
Priorities List issued pursuant to CERCLA by the United States Environmental
Protection Agency (the "EPA") or, to the best knowledge of the Company,
proposed for inclusion on any similar list or inventory issued pursuant to any
other Environmental Law or issued by any other federal, state or local
governmental authority having or claiming jurisdiction over the Properties and
other assets described in the Prospectus. Except as otherwise disclosed in the
Prospectus, to the knowledge of the Company, there have been no and are no (1)
aboveground or underground storage tanks; (2) polychlorinated biphenyls
("PCBs") or PCB-containing equipment; (3) asbestos or asbestos containing
materials; (4) lead based paints; or (5) dry-cleaning facilities in, on, under,
or about any Property owned by the Company or its subsidiaries.
As used herein, "Hazardous Material" shall include, without
limitation, any flammable explosives, radioactive materials, hazardous
materials, hazardous wastes, toxic substances, asbestos or any other material
regulated under any federal, state or local environmental or health and safety
law, ordinance, rule or regulation including, without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
as amended, 42 U.S.C. Sections 9601-9675 ("CERCLA"), the Hazardous Materials
Transportation Act, as amended, 49 U.S.C. Sections 1801-1819, the Resource
Conservation and Recovery Act, as amended, 42 U.S.C. Sections 6901-K, the
Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C. Sections
11001-11050, the Toxic Substances Control Act, 15 U.S.C. Sections 2601-2671,
the Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. Sections
136-136y, the Clean Air Act, 42 U.S.C. Sections 7401-7642, the Clean Water Act
(Federal Water Pollution Control Act), 33 U.S.C. Sections 1251-1387, the Safe
Drinking Water Act, 42 U.S.C. Sections 300f-300j-26, and the Occupational
Health and Safety Act, as any of the above statutes may be amended from time to
time, and in the regulations promulgated pursuant to any of the foregoing
(individually, an "Environmental Law" and collectively "Environmental Laws").
(aa) None of the environmental consultants which prepared
environmental and asbestos inspection reports with respect to any of the
Properties was employed for such purpose on a contingent basis or has any
substantial interest in the Company or any of its subsidiaries, and none of
them nor any of their directors, trustees, officers or employees is connected
with the Company or any of its subsidiaries as a promoter, selling agent,
voting trustee, director, officer or employee.
(bb) Except as disclosed in the Registration Statement, the Company
and its subsidiaries are insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts and covering
such risks as are customary in the businesses in which they are engaged; and
the Company does not have any reason to believe that it will not be able to
renew any such existing insurance coverage as and when such coverage expires or
obtain similar coverage from similar insurers as may be necessary to continue
their business at a cost that would not, individually or in the aggregate, have
a Material Adverse Effect.
(cc) The Company and each of its subsidiaries owns or possesses
adequate rights to use all material patents, patent applications, trademarks,
service marks, trade names, trademark registrations, service mark
registrations, copyrights and licenses necessary for the conduct of its
business and the Company has no reason to believe that the conduct of its
business or that of its
9
subsidiaries conflicts with such rights of others, except for such conflicts as
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
(dd) The Company and each of its subsidiaries possess adequate
certificates, authorities, licenses, consents, approvals, permits and other
authorizations ("Licenses") issued by appropriate governmental agencies or
bodies or third parties necessary to conduct the business now operated by the
Company or any of its subsidiaries, other than any Licenses the absence of
which would not have a Material Adverse Effect, and the Company has not
received any notice of proceedings relating to the revocation or modification
of any such Licenses that, if determined adversely to the Company, or any of
its subsidiaries, could individually or in the aggregate reasonably be expected
to have a Material Adverse Effect. The Company and its subsidiaries are in
material compliance with the terms and conditions of all such Licenses except
as could not reasonably be expected to have a Material Adverse Effect.
(ee) Except as disclosed in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property or assets of the Company or
any of its subsidiaries is the subject which, if determined adversely to the
Company or such subsidiary, could reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect, or could reasonably be expected
to materially and adversely affect the ability of the Company to perform its
obligations under this Agreement; and to the best knowledge of the Company, no
such proceedings are threatened or contemplated by governmental authorities or
threatened by others.
(ff) Each of the Properties is in compliance with all presently
applicable provisions of the Americans with Disabilities Act, except for such
failures to comply as could not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect.
(gg) There are no contracts or other documents which are required to
be described in the Prospectus or filed as exhibits to the Registration
Statement by the Securities Act or by the Rules and Regulations that have not
been described in the Prospectus or filed as exhibits to the Registration
Statement or incorporated therein by reference as permitted by the Rules and
Regulations. Neither the Company nor, to the knowledge of the Company, any
other party is in default in the observance or performance of any term or
obligation to be performed by it under any agreement listed in the exhibits to
the Registration Statement, and no event has occurred which with notice or
lapse of time or both would constitute such a default, in any such case which
default or event would have a Material Adverse Effect. No default exists, and
no event has occurred which with notice or lapse of time or both would
constitute a default, in the due performance and observance of any term,
covenant or condition by the Company or any of its subsidiaries of any other
agreement or instrument to which the Company or any of its subsidiaries is a
party or by which any of them or their respective properties or businesses may
be bound or affected, which default or event would have a Material Adverse
Effect.
(hh) No relationship, direct or indirect, exists between or among the
Company or any of its subsidiaries or other affiliates on the one hand, and the
directors, trustees, officers, shareholders, customers or suppliers of the
Company on the other hand, which is required to be described in the Prospectus
and is not so described.
10
(ii) No labor disturbance by the employees of the Company or any of
its subsidiaries exists or, to the knowledge of the Company, is imminent which
could reasonably be expected to have a Material Adverse Effect.
(jj) The Company is in compliance, in all material respects, with all
presently applicable provisions of the Employee Retirement Income Security Act
of 1974, as amended, including the regulations and published interpretations
thereunder ("ERISA"); no "reportable event" (as defined in ERISA other than an
event for which the notice requirements have been waived by regulations) has
occurred with respect to any "pension plan" (as defined in ERISA) for which the
Company would have any liability; the Company has not incurred or does not
expect to incur liability under (i) Title IV of ERISA with respect to
termination of, or withdrawal from, any "pension plan" or (ii) Section 412 or
4971 of the Internal Revenue Code of 1986, as amended (the "Code"), including
the regulations and published interpretations thereunder; and each "pension
plan" for which the Company would have any liability that is intended to be
qualified under Section 401(a) of the Code has received a favorable
determination letter from the Internal Revenue Service that such plan is so
qualified in all material respects and, to the knowledge of the Company,
nothing has occurred, whether by action or by failure to act, which would cause
the loss of such qualification, except where such non-compliance, reportable
events, liabilities or failure to be so qualified could not reasonably be
expected to have a Material Adverse Effect.
(kk) The assets of the Company and its subsidiaries do not constitute
"plan assets" of an ERISA regulated employee benefit plan.
(ll) The Company and its subsidiaries (including any predecessor
entities) have filed all foreign, federal, state and local tax returns that are
required to be filed or have requested extensions thereof (except in any case
in which the failure so to file could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect) and have paid all
taxes required to be paid by them and any other assessment, fine or penalty
levied against them, to the extent that any of the foregoing is due and
payable, except for any such assessment, fine or penalty that (i) is currently
being contested in good faith, (ii) could not individually or in the aggregate
reasonably be expected to have a Material Adverse Effect or (iii) is described
in, or contemplated by, the Prospectus. No tax deficiency has been determined
adversely to the Company which has had (nor does the Company have any knowledge
of any tax deficiency which, if determined adversely to it might have) a
Material Adverse Effect.
(mm) Except as disclosed in the Prospectus, to the knowledge of the
Company, there is no pending or threatened special assessment, tax reduction
proceeding or other action which could increase or decrease the real property
taxes or assessments of any Property or properties, which, individually or in
the aggregate, could reasonably be expected to have a Material Adverse Effect.
(nn) The REIT has been organized and, commencing with its taxable year
ended December 31, 2004, has operated in conformity with the requirements for
qualification and taxation as a real estate investment trust under the Code and
currently intends to operate in a manner which allows the Company to continue
to meet the requirements for qualification and taxation as a REIT under the
Code.
11
(oo) The description of the REIT's organization and current and
proposed method of operation set forth in the Prospectus under the heading
"Material United States Federal Income Tax Considerations" is an accurate and
fair summary of the matters referred to therein.
(pp) The Operating Partnership has been properly classified either as
a partnership or as an entity disregarded as separate from the REIT for Federal
income tax purposes throughout the period from its formation through the date
hereof.
(qq) Since the date as of which information is given in the Prospectus
through the date hereof, and except as may otherwise be disclosed in the
Prospectus, (i) neither the Company nor any subsidiary thereof has (a) issued
or granted any securities, (b) incurred any liability or obligation, direct or
contingent, other than liabilities and obligations which were incurred in the
ordinary course of business, (c) entered into any transaction not in the
ordinary course of business or (d) declared or paid any dividend on its capital
stock; and (ii) there has been no Material Adverse Effect.
(rr) Neither the Company nor any subsidiary thereof (i) is in
violation of its charter, certificate of incorporation, declaration of trust,
by-laws, certificate of limited partnership, agreement of limited partnership
or other similar organizational document, (ii) is in default, and no event has
occurred which, with notice or lapse of time or both, would constitute a
default, in the performance or observance of any obligation, agreement, term,
covenant or condition contained in a contract, indenture, mortgage, deed of
trust, loan or credit agreement, note, lease (under which the Company or
subsidiary is landlord or otherwise), ground lease or air space lease (under
which the Company or subsidiary is tenant), development agreement, reciprocal
easement agreement, deed restriction, parking management agreements, or other
agreement or instrument to which it is a party or by which it is bound or to
which any of the Properties or any of its other properties or assets is
subject, except for any such default which could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect or (iii) is
in violation of any law, ordinance, governmental rule, regulation or court
decree to which it or the Properties or any of its other properties or assets
may be subject.
(ss) Neither the Company nor any subsidiary thereof, nor any director,
trustee, officer, agent, employee or other person associated with or acting on
behalf of the Company or any of its subsidiaries, has used any corporate funds
for any unlawful contribution, gift, entertainment or other unlawful expense
relating to political activity; made any direct or indirect unlawful payment to
any foreign or domestic government official or employee from corporate funds;
violated or is in violation of any provision of the Foreign Corrupt Practices
Act of 1977; or made any bribe, rebate, payoff, influence payment, kickback or
other unlawful payment.
(tt) Neither the Company nor any subsidiary thereof, is an "investment
company" within the meaning of such term under the Investment Company Act of
1940, as amended, and the rules and regulations of the Commission thereunder.
(uu) Other than this Agreement and as set forth in the Prospectus
under the heading "Underwriting," there are no contracts, agreements or
understandings between the Company and any person that would give rise to a
valid claim against the Company or any Underwriter for a
12
brokerage commission, finder's fee or other like payment with respect to the
consummation of the transactions contemplated by this Agreement.
(vv) Except as stated in this Agreement and in the Prospectus, neither
the Company nor any of its subsidiaries nor any of their respective officers,
directors, trustees, members or controlling persons has taken, or will take,
directly or indirectly, any action designed to or that could reasonably be
expected to result in a violation of Regulation M under the Exchange Act or
cause or result in stabilization or manipulation of the price of the Common
Shares to facilitate the sale or resale of the Shares.
(ww) The Company has established and maintains disclosure controls and
procedures (as such term is defined in Rule 13a-15 and 15d-15 under the
Exchange Act), which (i) are designed to ensure that material information
relating to the Company, including its subsidiaries, is made known to the
REIT's principal executive officer and principal financial officer by others
within those entities; (ii) have been evaluated for effectiveness as of June
30, 2005; and (iii) are effective in all material respects to perform the
functions for which they were established.
(xx) The Company and its subsidiaries (i) make and keep books and
records that are accurate in all material respects and (ii) maintain internal
accounting controls which provide reasonable assurance that (A) transactions
are executed in accordance with management's general and specific
authorizations; (B) transactions are recorded as necessary to permit
preparation of its financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability; (C) access to
assets is permitted only in accordance with management's general or specific
authorization; and (D) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(yy) Except as disclosed in the Registration Statement and Prospectus,
(A) the Company is not aware of (i) any significant deficiency or material
weakness in the design or operation of internal control over financial
reporting which is reasonably likely to adversely affect the ability of the
Company to record, process, summarize and report financial information, or (ii)
any fraud, whether or not material, that involves management or other employees
who have a significant role in internal control over financial reporting, and
(B) there have been no changes in internal control over financial reporting
that have materially affected, or are reasonably likely to materially affect
the Company's internal control over financial reporting, including any
corrective actions with regard to significant deficiencies and material
weaknesses.
(zz) Any statistical and market-related data included in the
Registration Statement and the Prospectus are based on or derived from sources
that the Company believes to be reliable and accurate, and the Company has
obtained the written consent to the use of such data from such sources to the
extent required.
2. Purchase of the Shares by the Underwriters. On the basis of
the representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, the REIT agrees to sell 15,000,000 Firm Shares
to the several Underwriters and each of the Underwriters, severally and not
jointly, agrees to purchase the number of Firm Shares set forth opposite that
Underwriter's name in Schedule 1 hereto. The respective purchase
13
obligations of the Underwriters with respect to the Firm Shares shall be
rounded among the Underwriters to avoid fractional shares, as the
Representative may determine.
In addition, the REIT grants to the Underwriters an option to
purchase up to 2,250,000 Option Shares. Such option is granted solely for the
purpose of covering over-allotments in the sale of Firm Shares and is
exercisable as provided in Section 4 hereof. Option Shares shall be purchased
severally for the account of the Underwriters in proportion to the number of
Firm Shares set forth opposite the name of such Underwriters in Schedule 1
hereto. The respective purchase obligations of each Underwriter with respect to
the Option Shares shall be adjusted by the Representative so that no
Underwriter shall be obligated to purchase Option Shares other than in
100-share amounts. The price of both the Firm Shares and any Option Shares
shall be $[ ] per share.
The REIT shall not be obligated to deliver any of the Shares
to be delivered on the First Delivery Date or the Second Delivery Date (as
hereinafter defined), as the case may be, except upon payment for all of the
Shares to be purchased on such Delivery Date as provided herein.
3. Offering of Shares by the Underwriters. Upon authorization
by the Representative of the release of the Firm Shares, the several
Underwriters propose to offer the Firm Shares for sale upon the terms and
conditions set forth in the Prospectus.
4. Delivery of and Payment for the Shares. Delivery of and
payment for the Firm Shares shall be made at the offices of Sullivan & Cromwell
LLP, 125 Broad Street, New York, NY 10004, or at such other date or place as
shall be determined by agreement between the Representative and the REIT, at
10:00 A.M., New York City time, on the third full business day following the
date of this Agreement or on the fourth full business day if the Agreement is
executed after the daily closing time of the NYSE (unless postponed in
accordance with the provisions of Section 9 hereof). This date and time are
sometimes referred to as the "First Delivery Date." On the First Delivery Date,
the REIT shall deliver or cause to be delivered certificates representing the
Firm Shares to the Representative for the account of each Underwriter against
payment to, or upon the order of, the REIT of the purchase price by wire
transfer of immediately available funds. Time shall be of the essence, and
delivery at the time and place specified pursuant to this Agreement is a
further condition of the obligation of each Underwriter hereunder. Upon
delivery, the Firm Shares shall be registered in such names and in such
denominations as the Representative shall request in writing not less than two
full business days prior to the First Delivery Date. The REIT shall make the
certificates representing the Firm Shares available for inspection by the
Representative in New York, New York, not later than 2:00 P.M., New York City
time, on the business day prior to the First Delivery Date.
At any time on or before the thirtieth day after the date of
this Agreement, the option granted in Section 2 may be exercised, in whole or
in part, from time to time, by prior written notice being given to the REIT by
the Representative. Such notice shall set forth the aggregate number of Option
Shares as to which the option is being exercised, the names in which the Option
Shares are to be registered, the denominations in which the Option Shares are
to be issued and the date and time, as determined by the Representative, when
the Option Shares are to be delivered; provided, however, that this date and
time shall not be earlier than the First
14
Delivery Date, nor earlier than the second business day after the date on which
the option shall have been exercised nor later than the fifth business day
after the date on which the option shall have been exercised. The date and time
the Option Shares are delivered are sometimes referred to as the "Second
Delivery Date" and the First Delivery Date and the Second Delivery Date are
sometimes each referred to as a "Delivery Date."
Delivery of and payment for the Option Shares shall be made
at the place specified in the first sentence of the first paragraph of this
Section 4 (or at such other place as shall be determined by agreement between
the Representative and the REIT) at 10:00 A.M., New York City time, on the
Second Delivery Date. On the Second Delivery Date, the REIT shall deliver or
cause to be delivered the certificates representing the Option Shares to the
Representative for the account of each Underwriter against payment to, or upon
the order of, the REIT of the purchase price by wire transfer of immediately
available funds. Time shall be of the essence, and delivery at the time and
place specified pursuant to this Agreement is a further condition of the
obligation of each Underwriter hereunder. Upon delivery, the Option Shares
shall be registered in such names and in such denominations as the
Representative shall request in the aforesaid written notice. The REIT shall
make the certificates representing the Option Shares available for inspection
by the Representative in New York, New York, not later than 2:00 P.M., New York
City time, on the business day prior to the Second Delivery Date.
5. Further Agreements of the REIT. The REIT agrees:
(a) To prepare the Prospectus in a form approved by the Representative
and to file such Prospectus pursuant to Rule 424(b) under the Securities Act
not later than the Commission's close of business on the second business day
following the execution and delivery of this Agreement or, if applicable, such
earlier time as may be required by Rule 430A(a)(3) under the Securities Act; to
make no further amendment or any supplement to the Registration Statement or to
the Prospectus except as permitted herein; to advise the Representative,
promptly after it receives notice thereof, of the time when any amendment to
the Registration Statement has been filed or becomes effective or any
supplement to the Prospectus or any amended Prospectus has been filed and to
furnish the Representative with copies thereof; to advise the Representative,
promptly after it receives notice thereof, of the issuance by the Commission of
any stop order or of any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus, of the suspension of the
qualification of the Shares for offering or sale in any jurisdiction, of the
initiation or threatening of any proceeding for any such purpose, or of any
request by the Commission for the amending or supplementing of the Registration
Statement or the Prospectus or for additional information; and, in the event of
the issuance of any stop order or of any order preventing or suspending the use
of any Preliminary Prospectus or the Prospectus or suspending any such
qualification, to use promptly its best efforts to obtain the withdrawal of
such order;
(b) To furnish promptly to the Representative and to counsel for the
Underwriters a signed copy of the Registration Statement as originally filed
with the Commission, and each amendment thereto filed with the Commission,
including all consents and exhibits filed therewith;
15
(c) To deliver promptly to the Representative such number of the
following documents as the Representative shall reasonably request: (i)
conformed copies of the Registration Statement as originally filed with the
Commission and each amendment thereto (in each case including consents and
exhibits other than this Agreement and the computation of per share earnings)
and (ii) each Preliminary Prospectus, the Prospectus and any amended or
supplemented Prospectus; and, if the delivery of a prospectus is required at
any time after the Effective Time in connection with the offering or sale of
the Shares or any other securities relating thereto and if at such time any
events shall have occurred 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 under which they were made when such Prospectus
is delivered, not misleading, or, if for any other reason it shall be necessary
to amend or supplement the Prospectus in order to comply with the Securities
Act or the Exchange Act, to notify the Representative and, upon its request, to
prepare and furnish without charge to each Underwriter and to any dealer in
securities as many copies as the Representative may from time to time
reasonably request of an amended or supplemented Prospectus that will correct
such statement or omission or effect such compliance;
(d) To file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the Prospectus
that may, in the judgment of the Representative or Counsel to the Underwriters,
be required by the Securities Act or requested by the Commission;
(e) Prior to filing with the Commission any amendment to the
Registration Statement or supplement to the Prospectus or any Prospectus
pursuant to Rule 424 of the Rules and Regulations, to furnish a copy thereof to
the Representative and counsel for the Underwriters and obtain the consent of
the Representative to the filing;
(f) To make generally available to its security holders as soon as
practicable, but no later than 60 days after the close of the period covered
thereby, an earnings statement (in form complying with the provisions of
Section 11(a) of the Securities Act and Rule 158 of the Rules and Regulations),
which need not be certified by an independent registered public accounting firm
unless required by the Securities Act or the Rules and Regulations, covering a
twelve-month period commencing after the "effective date" (as defined in said
Rule 158) of the Registration Statement;
(g) To furnish to each Underwriter, from time to time during the
period when the Prospectus is required to be delivered under the Securities Act
or the Exchange Act, such number of copies of the Prospectus (as amended or
supplemented) as such Underwriter may reasonably request for the purposes
contemplated by the Securities Act or the Exchange Act or the respective
applicable Rules and Regulations;
(h) Promptly from time to time to take such action as the
Representative may reasonably request to qualify the Shares for offering and
sale under the securities, real estate syndication or Blue Sky laws of such
jurisdictions as the Representative may request and to comply with such laws so
as to permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the distribution of
the Shares;
16
(i) For a period of 90 days from the date of the Prospectus (the
"Lock-Up Period"), not to, directly or indirectly, (i) offer for sale, sell,
contract to sell, pledge or otherwise dispose of (or enter into any transaction
or device which is designed to, or could reasonably be expected to, result in
the disposition by any person at any time in the future of) any Common Shares
or securities convertible into or exercisable or exchangeable for or that
represent the right to receive any Common Shares (other than (x) the Shares and
Common Shares issued pursuant to employee benefit plans, qualified stock option
plans or other employee compensation plans described in the Prospectus and
existing on the date hereof and (y) Units that are issued in connection with an
acquisition of properties by the Company and that are not redeemable for any
Common Shares during the Lock-Up Period), or sell or grant options, rights or
warrants with respect to any Common Shares or securities convertible into or
exercisable or exchangeable for or that represent the right to receive any
Common Shares (other than the grant of options pursuant to option plans
described in the Prospectus and existing on the date hereof), or (ii) enter
into any swap or other derivatives transaction that transfers to another, in
whole or in part, any of the economic benefits or risks of ownership of such
Common Shares, whether any such transaction described in clause (i) or (ii)
above is to be settled by delivery of Common Shares or other securities, in
cash or otherwise, (iii) file or cause to be filed a registration statement
with respect to any of the Common Shares or securities convertible, exercisable
or exchangeable into Common Shares or any other securities of the Company, or
(iv) publicly disclose the intention to do any of the foregoing, in each case
without the prior written consent of the Representative on behalf of the
Underwriters; and to cause each of the persons identified on Schedule 3 hereto,
to furnish to the Representative, at or prior to the date hereof, a Lock-Up
Agreement, in form and substance satisfactory to counsel for the Underwriters,
pursuant to which each such person shall agree not to, directly or indirectly,
(i) offer for sale, sell, contract to sell, pledge or otherwise dispose of (or
enter into any transaction or device which is designed to, or could reasonably
be expected to, result in the disposition by any person at any time in the
future of) any Common Shares or securities convertible into, exchangeable for
or that represent the right to receive any Common Shares, (ii) enter into any
swap or other derivatives transaction that transfers to another, in whole or in
part, any of the economic benefits or risks of ownership of such Common Shares,
whether any such transaction described in clause (i) or (ii) above is to be
settled by delivery of Common Shares or other securities, in cash or otherwise,
(iii) cause to be filed a registration statement with respect to any of the
Common Shares or securities convertible, exercisable or exchangeable into
Common Shares or any other securities of the Company, or (iv) publicly disclose
the intention to do any of the foregoing, for a period of 90 days from the date
of the Prospectus, in each case without the prior written consent of the
Representative on behalf of the Underwriters; provided, however, that the
foregoing shall not apply to bona fide gifts, sales or other dispositions of
shares of any class of the REIT's capital stock, in each case that are made
exclusively between and among such person or members of such person's family,
or affiliates of such person, so long as it shall be a condition to any such
transfer that (i) the transferee/donee agrees to be bound by the terms of the
Lock-Up Agreement to the same extent as if the transferee/donee were a party
hereto, (ii) no filing by any party (donor, donee, transferor or transferee)
under the Exchange Act or any other applicable law, shall be required or shall
be voluntarily made in connection with such transfer or distribution (other
than a filing on Form 5, Schedule 13D or Schedule 13G (or 13D-A or 13G-A), or
any other filing required by law, made after the expiration of the 90-day
period referred to above), (iii) each party (donor, donee, transferor or
transferee) shall not be required by law (including without limitation the
disclosure
17
requirements of the Securities Act and the Exchange Act) to make, and shall
agree to not voluntarily make, any public announcement of the transfer or
disposition, and (iv) the transferor/donor notifies the Representative at least
two business days prior to the proposed transfer or disposition;
Notwithstanding the foregoing paragraph, if (1) during the
last 17 days of the Lock-Up Period, the Company issues an earnings release or
material news or a material event relating to the Company occurs or (2) prior
to the expiration of the Lock-Up Period, the Company announces that it will
release earnings results during the 16-day period beginning on the last day of
the Lock-Up Period, then the restrictions imposed in the preceding paragraph
shall continue to apply until the expiration of the 18-day period beginning on
the issuance of the earnings release or the announcement of the material news
or the occurrence of the material event, unless the Representative, on behalf
of the Underwriters, waives such extension in writing;
(j) Prior to the Effective Date, to apply for the listing of the
Shares on the NYSE, and to use its best efforts to complete that listing,
subject only to official notice of issuance, prior to the First Delivery Date;
(k) During the period when the Prospectus is required to be delivered
under the Securities Act or the Exchange Act, the REIT will (1) comply with all
provisions of the Securities Act and the Rules and Regulations and (2) file all
documents required to be filed with the Commission pursuant to the Exchange Act
within the time periods required by the Exchange Act and the rules and
regulations of the Commission thereunder;
(l) To take such steps as shall be necessary to ensure that the
Company shall not become an "investment company" within the meaning of such
term under the Investment Company Act of 1940, as amended, and the rules and
regulations of the Commission thereunder;
(m) Except for the authorization of actions permitted to be taken by
the Underwriters as contemplated herein or in the Prospectus, neither the REIT
nor any affiliate of the REIT will (1) take, directly or indirectly, any action
designated to cause or to result in, or that could reasonably be expected to
constitute, the stabilization or manipulation of the price of any security of
the REIT to facilitate the sale or resale of the Shares; (2) until the Delivery
Date, sell, bid for or purchase the Shares or pay any person any compensation
for soliciting purchases of the Shares; or (3) pay or agree to pay to any
person any compensation for soliciting another to purchase any other securities
of the REIT; and
(n) That the Company will apply the net proceeds from the sale of the
Shares being sold by the Company in accordance with the description set forth
in the Prospectus under the caption "Use of Proceeds".
6. Expenses. The Company agrees to pay (a) the costs incident
to the authorization, issuance, sale and delivery of the Shares and any taxes
payable in that connection, including any transfer taxes; (b) the costs
incident to the preparation, printing and filing under the Securities Act of
the Registration Statement and any amendments and exhibits thereto; (c) the
costs of distributing the Registration Statement as originally filed and each
amendment thereto
18
and any post-effective amendments thereof (including, in each case, exhibits),
any Preliminary Prospectus, the Prospectus and any amendment or supplement to
the Prospectus, all as provided in this Agreement; (d) the costs of producing
and distributing this Agreement and any other related documents in connection
with the offering, purchase, sale and delivery of the Shares; (e) the filing
fees incident to securing any required review by the NASD of the terms of sale
of the Shares; (f) any applicable NYSE listing fees; (g) the fees and expenses
of qualifying the Shares under the securities laws of the several jurisdictions
as provided in Section 5(h) hereof and the fees and expenses of preparing,
printing and distributing a Blue Sky Memorandum and a Canadian "wrapper"
(including related reasonable fees and expenses of counsel to the
Underwriters); (h) all other costs and expenses incident to the performance of
the obligations of the Company and its subsidiaries under this Agreement; (i)
the costs and charges of any transfer agent and registrar; (j) the costs and
expenses of the REIT relating to investor presentations on any "road show"
undertaken in connection with the marketing of the offering of the Shares,
including, without limitation, expenses associated with the production of road
show slides and graphics, fees and expenses of any consultants engaged in
connection with the road show presentations with the prior approval of the
REIT, travel and lodging expenses of the representatives and officers of the
REIT and any such consultants, and the cost of any aircraft chartered in
connection with the road show; (k) the registration fees payable pursuant to
Section 6 of the Securities Act for the registration of the Shares; and (l) the
fees and disbursements of the REIT's counsel and accountants; provided that,
except as provided in this Section 6, Section 11 and Section 13, the
Underwriters shall pay their own costs and expenses, including the costs and
expenses of their counsel, any transfer taxes attributable to sales by the
Underwriters of Shares and the expenses of advertising any offering of the
Shares made by the Underwriters.
7. Conditions of Underwriters' Obligations. The respective
obligations of the Underwriters hereunder are subject to the accuracy, when
made and on each Delivery Date, of the representations and warranties of the
Company contained herein, to the performance by the Company of its obligations
hereunder, and to each of the following additional terms and conditions:
(a) If, at the time this Agreement is executed and delivered, it is
necessary for the Registration Statement or a post-effective amendment thereto
to be declared effective before the offering of the Shares may commence, the
Registration Statement or such post-effective amendment shall have become
effective not later than 5:30 P.M., New York City time, on the date hereof, or
at such later date and time as shall be consented to in writing by the
Representative, and all filings, if any, required by Rules 424 and 430A under
the Rules and Regulations shall have been timely made; no stop order suspending
the effectiveness of the Registration Statement shall have been issued and no
proceeding for that purpose shall have been instituted or, to the knowledge of
the Company, or any Underwriter, threatened by the Commission, and any request
of the Commission for additional information (to be included in the
Registration Statement or the Prospectus or otherwise) shall have been complied
with to the satisfaction of the Representative.
(b) Subsequent to the effective date of this Agreement, there shall
not have occurred (i) any event that would, in the judgment of the
Representative, result in or cause a Material Adverse Effect, or (ii) any event
or development relating to or involving the Company or any of its subsidiaries,
or any partner, officer, director or trustee of the Company or any of its
19
subsidiaries, which makes any statement of a material fact made in the
Prospectus untrue or which, in the opinion of the REIT and its counsel or the
Underwriters and their counsel, requires the making of any addition to or
change in the Prospectus in order to state a material fact required by the
Securities Act or any other law to be stated therein or necessary in order to
make the statements therein not misleading, if amending or supplementing the
Prospectus to reflect such event or development would, in the judgment of the
Representative, adversely affect the market for the Shares.
(c) All corporate proceedings and other legal matters incident to the
authorization, form and validity of this Agreement, the Shares, the
Registration Statement and the Prospectus, and all other legal matters relating
to this Agreement and the transactions contemplated hereby and thereby shall be
reasonably satisfactory in all material respects to counsel for the
Underwriters, and the REIT shall have furnished to such counsel all documents
and information that they may reasonably request to enable them to pass upon
such matters.
(d) Hogan & Hartson L.L.P., or in certain instances noted on Annex A
hereto, McDonald Hopkins Co., L.P.A., shall have furnished to the
Representative its written opinion, as counsel to the Company, addressed to the
Underwriters and dated such Delivery Date, in form and substance as provided on
Annex B hereto and as shall be satisfactory to the Representative and counsel
to the Underwriters.
In rendering such opinion, such counsel may (i) state that its opinion
is limited to matters governed by the Federal laws of the United States of
America and the States of Delaware, Maryland, Ohio, New York and/or the law of
any other relevant jurisdiction, as applicable; (ii) in respect of matters of
fact, upon certificates of officers of the REIT or the Operating Partnership;
provided that such counsel shall state that it believes that both the
Underwriters and it are justified in relying upon such certificates.
Such counsel shall also have furnished to the Representative a written
statement, addressed to the Underwriters and dated such Delivery Date, in form
and substance satisfactory to the Representative and counsel to the
Underwriters, to the effect that (x) such counsel has acted as counsel to the
Company in connection with the preparation of the Registration Statement and
the Prospectus and has participated in discussions with representatives of the
Company and its independent registered public accounting firm, and (y) based on
the foregoing, no facts have come to the attention of such counsel which lead
it to believe that the Registration Statement, as of the Effective Date,
contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make the
statements therein not misleading, or that the Prospectus as of its date and at
the Delivery Date contains any untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading.
The foregoing opinion and statement may be qualified by a statement to
the effect that such counsel does not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus and may be further qualified by a
statement to the effect that such counsel expresses no belief with respect to
the financial statements and notes thereto and other financial and statistical
data included in the Registration Statement or the Prospectus.
20
(e) The Representative shall have received from Sullivan & Cromwell
LLP, counsel for the Underwriters, such written opinion or opinions, dated such
Delivery Date, with respect to the validity of the Shares and such other
related matters as the Representative may reasonably request, and such counsel
shall have received such documents and information as they may reasonably
request to enable them to pass upon such matters. In rendering such opinion,
Sullivan & Cromwell LLP may rely as to all matters of Maryland law upon the
opinion of Miles & Stockbridge P.C.
(f) At the time of execution of this Agreement, the Representative
shall have received from Deloitte & Touche LLP a letter, in form and substance
satisfactory to the Representative, addressed to the Underwriters and dated the
date hereof (i) confirming that they are an independent registered public
accounting firm within the meaning of the Securities Act and are in compliance
with the applicable requirements relating to the qualification of accountants
under Rule 2-01 of Regulation S-X of the Commission, and (ii) stating, as of
the date hereof (or, with respect to matters involving changes or developments
since the respective dates as of which specified financial information is given
in the Prospectus, as of a date not more than three days prior to the date
hereof), the conclusions and findings of such firm with respect to the
financial information and other matters ordinarily covered by accountants'
"comfort letters" to underwriters in connection with registered public
offerings as contemplated in the Statement on Auditing Standards No. 72.
(g) With respect to the letter of Deloitte & Touche LLP referred to in
the preceding paragraph and delivered to the Representative concurrently with
the execution of this Agreement (the "initial letter"), the Company shall have
furnished to the Representative a letter (the "bring-down letter") of such
accountants, addressed to the Underwriters and dated such Delivery Date (i)
confirming that they are an independent registered public accounting firm
within the meaning of the Securities Act and are in compliance with the
applicable requirements relating to the qualification of accountants under Rule
2-01 of Regulation S-X of the Commission, (ii) stating, as of the date of the
bring-down letter (or, with respect to matters involving changes or
developments since the respective dates as of which specified financial
information is given in the Prospectus, as of a date not more than three days
prior to the date of the bring-down letter), the conclusions and findings of
such firm with respect to the financial information and other matters covered
by the initial letter and (iii) confirming in all material respects the
conclusions and findings set forth in the initial letter.
(h) The Company shall have furnished to the Representative a
certificate, dated such Delivery Date, of its principal executive officer and
principal financial officer, stating that:
(i) The representations, warranties and agreements of the
Company in Section 1 are true and correct as of such Delivery
Date; the Company has complied with all its agreements
contained herein; and the conditions set forth in Sections
7(a) and (b) have been fulfilled;
(ii) They have carefully examined the Registration
Statement and the Prospectus and, in their opinion (A) as of
the Effective Date, the Registration Statement and Prospectus
did not include any untrue statement of a material fact and
did not omit to state a material fact required to be stated
therein or necessary to make the statements
21
therein not misleading (with respect to the Prospectus, in
light of the circumstances under which they were made), and
(B) since the Effective Date, no event has occurred which
should have been set forth in a supplement or amendment to the
Registration Statement or the Prospectus; and
(iii) No stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for
that purpose have been instituted or are contemplated by the
Commission; and
(i) Neither the Company nor any subsidiary thereof shall have
sustained since the date of the latest audited financial statements included in
the Prospectus (A) any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or
from any labor dispute or court or governmental action, order or decree,
otherwise than as set forth or contemplated in the Prospectus or (B) since such
date, there shall not have been any change in the capital stock or long-term
debt of the Company or any of its subsidiaries or any change, or any
development involving a prospective change, in or affecting the general
affairs, management, financial position, shareholders' equity or results of
operations of the Company and its subsidiaries, otherwise than as set forth or
contemplated in the Prospectus, the effect of which, in any such case described
in clause (A) or (B), is, in the judgment of the Representative, so material
and adverse as to make it impracticable or inadvisable to proceed with the
public offering or the delivery of the Shares being delivered on such Delivery
Date on the terms and in the manner contemplated in the Prospectus.
(j) Subsequent to the execution and delivery of this Agreement there
shall not have occurred any of the following: (i) trading in securities
generally on the NYSE or the American Stock Exchange or in the over-the-counter
market, or trading in any securities of the REIT on the NYSE, shall have been
suspended or materially limited, or the settlement of such trading generally
shall have been materially disrupted or minimum prices shall have been
established on any such exchange or such market by the Commission, by such
exchange or by any other regulatory body or governmental authority having
jurisdiction, (ii) a banking moratorium shall have been declared by Federal or
any state authority, (iii) the United States shall have become engaged in
hostilities, there shall have been an escalation in hostilities involving the
United States or there shall have been a declaration of a national emergency or
war by the United States, or (iv) there shall have occurred such a material
adverse change in general economic, political or financial conditions,
including, without limitation, as a result of terrorist activities after the
date hereof, or the effect of international conditions on the financial markets
in the United States shall be such as to make it, in the judgment of the
Representative, impracticable or inadvisable to proceed with the public
offering or delivery of the Shares being delivered on such Delivery Date on the
terms and in the manner contemplated in the Prospectus.
(k) The NYSE shall have approved the Shares for listing, subject only
to official notice of issuance.
(l) The NASD shall have confirmed that it has not raised any objection
with respect to the fairness and reasonableness of the underwriting terms and
arrangements.
22
(m) On each Delivery Date, counsel for the Underwriters shall have
been furnished with such documents and opinions as they may 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 the Company
in connection with the issuance and sale of the Shares as herein contemplated
shall be reasonably satisfactory in form and substance to the Representative
and counsel for the Underwriters.
(n) You shall have been furnished, at or prior to the date hereof,
with the Lock-Up Agreements.
(o) The REIT shall have furnished or caused to be furnished to you
such further certificates and documents as the Representative or counsel to the
Underwriters shall have reasonably requested.
(p) In the event that the Underwriters exercise their option provided
in Section 2 hereof to purchase all or any portion of the Option Shares, the
representations and warranties of the Company contained herein and the
statements in any certificates furnished by the Company hereunder shall be true
and correct as of each Date of Delivery and, at the relevant Date of Delivery,
the Representative shall have received:
(i) A certificate, dated such Date of Delivery, of the
Company's principal executive officer and principal financial officer,
confirming that the certificate delivered on the First Delivery Date
pursuant to Section 7(h) hereof remains true and correct as of such
Date of Delivery.
(ii) The favorable opinion of Hogan & Hartson L.L.P., counsel
for the Company, in form and substance satisfactory to counsel for the
Underwriters, dated such Date of Delivery, relating to the Option
Shares to be purchased on such Date of Delivery and otherwise to the
same effect as the opinions required by Section 7(d) hereof.
(iii) The favorable opinion of Sullivan & Cromwell LLP,
counsel for the Underwriters, dated such Date of Delivery, relating to
the Option Shares to be purchased on such Date of Delivery and
otherwise to the same effect as the opinion required by Section 7(e)
hereof.
(iv) A letter from Deloitte & Touche LLP, in form and
substance satisfactory to the Representative and dated such Date of
Delivery, substantially the same in form and substance as the letters
furnished to the Representative pursuant to Sections 7(f) and (g)
hereof.
All opinions, letters, evidence and certificates mentioned
above or elsewhere in this Agreement shall be deemed to be in compliance with
the provisions hereof only if they are in form and substance reasonably
satisfactory to counsel for the Underwriters.
Any certificate or document signed by any officer of the
Company and delivered to the Underwriters, or to counsel for the Underwriters,
shall be deemed a representation and warranty by the Company to each
Underwriter as to the statements made therein.
23
The several obligations of the Underwriters to purchase
Option Shares hereunder are subject to the satisfaction on and as of any Date
of Delivery of the conditions set forth in this Section 7, except that, if any
Date of Delivery is other than the First Delivery Date, the certificates,
opinions and letters referred to in Sections 7(d) through 7(h) hereof shall be
dated the Date of Delivery in question and the opinions called for by Sections
7(d) and 7(e) hereof shall be revised to reflect the sale of Option Shares.
8. Effective Date of Agreement. This Agreement shall become
effective: (i) upon the execution hereof by the parties hereto; or (ii) if, at
the time this Agreement is executed and delivered, it is necessary for the
Registration Statement or a post-effective amendment thereto to be declared
effective before the offering of the Shares may commence, when notification of
the effectiveness of the Registration Statement or such post-effective
amendment has been released by the Commission.
9. Default by One or More of the Underwriters. If, on either
Delivery Date, any Underwriter defaults in the performance of its obligations
under this Agreement, the remaining non-defaulting Underwriters shall be
obligated to purchase the Shares which the defaulting Underwriter agreed but
failed to purchase on such Delivery Date in the respective proportions which
the number of Firm Shares set forth opposite the name of each remaining
non-defaulting Underwriter in Schedule 1 hereto bears to the total number of
Firm Shares set forth opposite the names of all the remaining non-defaulting
Underwriters in Schedule 1 hereto; provided, however, that the remaining
non-defaulting Underwriters shall not be obligated to purchase any of the
Shares on such Delivery Date if the total number of Shares which the defaulting
Underwriter or Underwriters agreed but failed to purchase on such date exceeds
9.09% of the total number of Shares to be purchased on such Delivery Date, and
any remaining non-defaulting Underwriter shall not be obligated to purchase
more than 110% of the number of Shares which it agreed to purchase on such
Delivery Date pursuant to the terms of Section 2. If the foregoing maximums are
exceeded, the remaining non-defaulting Underwriters, or those other
underwriters satisfactory to the Representative who so agree, shall have the
right, but shall not be obligated, to purchase, in such proportion as may be
agreed upon among them, all the Shares to be purchased on such Delivery Date.
If the remaining Underwriters or other underwriters satisfactory to the
Representative do not elect to purchase the Shares which the defaulting
Underwriter or Underwriters agreed but failed to purchase on such Delivery
Date, this Agreement (or, with respect to the Second Delivery Date, the
obligation of the Underwriters to purchase, and of the REIT to sell, the Option
Shares) shall terminate without liability on the part of any non-defaulting
Underwriter or the Company, except that the Company will continue to be liable
for the payment of expenses to the extent set forth in Sections 6 and 13 and
for indemnification and contribution as provided in Section 11. As used in this
Agreement, the term "Underwriter" includes, for all purposes of this Agreement
unless the context requires otherwise, any party not listed in Schedule 1
hereto who, pursuant to this Section 9, purchases Firm Shares which a
defaulting Underwriter agreed but failed to purchase.
Nothing contained herein shall relieve a defaulting
Underwriter of any liability it may have to the Company for damages caused by
its default. If other underwriters are obligated or agree to purchase the
Shares of a defaulting or withdrawing Underwriter, either the Representative or
the REIT (on behalf of the Company) may postpone the Delivery Date for up to
seven full business days in order to effect any changes that in the opinion of
counsel for the
24
Company or counsel for the Underwriters may be necessary in the Registration
Statement, the Prospectus or in any other document or arrangement.
10. [Reserved]
11. Indemnification and Contribution. (a) The Company shall
indemnify and hold harmless each Underwriter, its directors, officers and
employees and each person, if any, who controls any Underwriter within the
meaning of the Securities Act, from and against any loss, claim, damage or
liability, joint or several, or any action or proceeding in respect thereof
(including, but not limited to, any loss, claim, damage, liability or action or
proceeding relating to purchases and sales of Shares), to which that
Underwriter, director, officer, employee or controlling person may become
subject, under the Securities Act or otherwise, insofar as such loss, claim,
damage, liability, action or proceeding arises out of, or is based upon, (i)
any untrue statement or alleged untrue statement of a material fact contained
(a) in any Preliminary Prospectus, the Registration Statement or the Prospectus
or in any amendment or supplement thereto or (b) in any blue sky application or
other document prepared or executed by the REIT (on behalf of the Company) (or
based upon any written information furnished by the Company) specifically for
the purpose of qualifying any or all of the Shares under the securities laws of
any state or other jurisdiction (any such application, document or information
being hereinafter called a "Blue Sky Application") or (c) in any materials or
information provided to investors by, or with the approval of, the Company in
connection with the marketing of the offering of the Shares, including any
roadshow or investor presentations made to investors by the REIT (on behalf of
the Company) (whether in person or electronically) (the "Marketing Materials"),
(ii) the omission or alleged omission to state in any Preliminary Prospectus,
the Registration Statement or the Prospectus, or in any amendment or supplement
thereto, or in any Blue Sky Application or Marketing Materials any material
fact required to be stated therein or necessary to make the statements therein
not misleading (with respect to the Prospectus, in light of the circumstances
under which they were made) or (iii) any act or failure to act or any alleged
act or failure to act by any Underwriter in connection with, or relating in any
manner to, the Shares or the offering contemplated hereby, and which is
included as part of or referred to in any loss, claim, damage, liability or
action arising out of or based upon matters covered by clause (i) or (ii) above
(provided that the Company shall not be liable under this clause (iii) to the
extent that it is determined in a final judgment by a court of competent
jurisdiction that such loss, claim, damage, liability or action resulted
directly from any such acts or failures to act undertaken or omitted to be
taken by such Underwriter through its gross negligence or willful misconduct),
and shall reimburse each Underwriter and each such director, officer, employee
or controlling person promptly upon demand for any legal or other expenses
reasonably incurred by that Underwriter, director, officer, employee or
controlling person in connection with investigating or defending or preparing
to defend against any such loss, claim, damage, liability or action as such
expenses are incurred; provided, however, that the Company shall not be liable
in any such case to the extent that any such loss, claim, damage, liability or
action arises out of, or is based upon, any untrue statement or alleged untrue
statement or omission or alleged omission made in any Preliminary Prospectus,
the Registration Statement or the Prospectus, or in any such amendment or
supplement, or in any Blue Sky Application or Marketing Materials, in reliance
upon and in conformity with written information concerning such Underwriter
furnished to the Company through the Representative by or on behalf of any
Underwriter specifically for inclusion therein which information consists
solely of the information specified in Section 11(f). The foregoing
25
indemnity agreement is in addition to any liability which the Company may
otherwise have to any Underwriter or to any director, officer, employee or
controlling person of that Underwriter.
(a) Each Underwriter shall indemnify and hold harmless the Company,
its officers and employees, each of its trustees (including any person who,
with his consent, is named in the Registration Statement as about to become a
trustee of the REIT), and each person, if any, who controls the Company within
the meaning of the Securities Act, from and against any loss, claim, damage or
liability, joint or several, or any action or proceeding in respect thereof, to
which the Company or any such trustee, officer or controlling person may become
subject, under the Securities Act or otherwise, insofar as such loss, claim,
damage, liability or action or proceeding arises out of, or is based upon, (i)
any untrue statement or alleged untrue statement of a material fact contained
(A) in any Preliminary Prospectus, the Registration Statement or the Prospectus
or in any amendment or supplement thereto, or (B) in any Blue Sky Application
or (ii) the omission or alleged omission to state in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or in any amendment
or supplement thereto, or in any Blue Sky Application any material fact
required to be stated therein or necessary to make the statements therein not
misleading, but in each case only to the extent that the untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information concerning such Underwriter
furnished to the REIT (on behalf of the Company) through the Representative by
or on behalf of that Underwriter specifically for inclusion therein, which
information is limited to the information set forth in Section 11(f), and shall
reimburse the Company and any such trustee, officer or controlling person for
any legal or other expenses reasonably incurred by the Company or any such
trustee, officer or controlling person in connection with investigating or
defending or preparing to defend against any such loss, claim, damage,
liability or action or proceeding as such expenses are incurred. The foregoing
indemnity agreement is in addition to any liability which any Underwriter may
otherwise have to the Company or any such trustee, officer, employee or
controlling person.
(b) [Reserved]
(c) Promptly after receipt by an indemnified party under this Section
11 of notice of any claim or the commencement of any action or proceeding, the
indemnified party shall, if a claim in respect thereof is to be made against
the indemnifying party under this Section 11, notify the indemnifying party in
writing of the claim or the commencement of that action or proceeding;
provided, however, that the failure to notify the indemnifying party shall not
relieve it from any liability which it may have under this Section 11 except to
the extent it has been materially prejudiced by such failure and, provided
further that the failure to notify the indemnifying party shall not relieve it
from any liability which it may have to an indemnified party otherwise than
under this Section 11. If any such claim, action or proceeding shall be brought
against an indemnified party, and it shall notify the indemnifying party
thereof, the indemnifying party shall be entitled to participate therein and,
to the extent that it wishes, jointly with any other similarly notified
indemnifying party, to assume the defense thereof with counsel reasonably
satisfactory to the indemnified party. After notice from the indemnifying party
to the indemnified party of its election to assume the defense of such claim,
action or proceeding, the indemnifying party shall not be liable to the
indemnified party under this Section 11 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that
the Representative
26
shall have the right to employ counsel to represent jointly the Representative
and those other Underwriters and their respective directors, officers,
employees and controlling persons who may be subject to liability arising out
of any claim in respect of which indemnity may be sought by the Underwriters
against the Company under this Section 11 if (i) the Company and the
Underwriters shall have so mutually agreed; (ii) the Company has failed within
a reasonable time to retain counsel reasonably satisfactory to the
Underwriters; (iii) the Underwriters and their respective directors, officers,
employees and controlling persons shall have reasonably concluded that there
may be legal defenses available to them that are different from or in addition
to those available to the Company; or (iv) the named parties in any such
proceeding (including any impleaded parties) include both the Underwriters or
their respective directors, officers, employees or controlling persons, on the
one hand, and the Company, on the other hand, and representation of both sets
of parties by the same counsel would be inappropriate due to actual or
potential differing interests between them, and in any such event the fees and
expenses of such separate counsel shall be paid by the Company. No indemnifying
party shall (i) without the prior written consent of the indemnified parties
(which consent shall not be unreasonably withheld), settle or compromise or
consent to the entry of any judgment with respect to any pending or threatened
claim, action, suit or proceeding in respect of which indemnification or
contribution may be sought hereunder (whether or not the indemnified parties
are actual or potential parties to such claim, action or proceeding) unless
such settlement, compromise or consent includes an unconditional release of
each indemnified party from all liability arising out of such claim, action,
suit or proceeding and does not include any findings of fact or admissions of
fault or culpability as to the indemnified party, or (ii) be liable for any
settlement of any such action effected without its written consent (which
consent shall not be unreasonably withheld), but if settled with the consent of
the indemnifying party or if there be a final judgment of the plaintiff in any
such claim, action or proceeding, the indemnifying party agrees to indemnify
and hold harmless any indemnified party from and against any loss or liability
by reason of such settlement or judgment.
(d) If the indemnification provided for in this Section 11 shall for
any reason be unavailable to or insufficient to hold harmless an indemnified
party under Section 11(a) or 11(b) in respect of any loss, claim, damage or
liability, or any claim, action or proceeding in respect thereof, referred to
therein, then each indemnifying party shall, in lieu of indemnifying such
indemnified party, contribute to the amount paid or payable by such indemnified
party as a result of such loss, claim, damage or liability, or action or
proceeding in respect thereof, (i) in such proportion as shall be appropriate
to reflect the relative benefits received by the Company on the one hand and
the Underwriters on the other 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 Company on
the one hand and the Underwriters on the other with respect to the statements
or omissions which resulted in such loss, claim, damage or liability, or action
or proceeding in respect thereof, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Underwriters on the other with respect to such offering shall be deemed
to be in the same proportion as the total net proceeds from the offering of the
Shares purchased under this Agreement (before deducting expenses) received by
the Company, on the one hand, and the total underwriting discounts and
commissions received by the Underwriters with respect to the Shares purchased
under this Agreement, on the other, bear to the total gross proceeds from the
offering of the Shares under
27
this Agreement, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault shall be determined by reference to whether the
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, on the one hand, or the Underwriters, on the other, the intent of the
parties and their relative knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company and the Underwriters
agree that it would not be just and equitable if contributions pursuant to this
Section were to be determined by pro rata allocation (even if the Underwriters
were treated as one entity for such purpose) or by any other method of
allocation which does not take into account the equitable considerations
referred to herein. The amount paid or payable by an indemnified party as a
result of the loss, claim, damage or liability, or action or proceeding in
respect thereof, referred to above in this Section shall be deemed to include,
for purposes of this Section 11(e), 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 11(e), no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Shares underwritten
by it and distributed to the public was offered to the public exceeds the
amount of any damages which such Underwriter has otherwise paid or become
liable to pay by reason of any 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 Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute as provided in
this Section 11(e) are several in proportion to their respective underwriting
obligations and not joint.
(e) The Underwriters severally, and not jointly, confirm and the
Company acknowledges that (i) with respect to the public offering of the Shares
by the Underwriters, the last sentence set forth on the cover page of, (ii) the
names of the Underwriters and the number of Shares which they are each
purchasing appearing immediately below the first paragraph under the caption
"Underwriting" in, (iii) the first paragraph on concessions and reallowances
appearing under the caption "Underwriting -- Commissions and Expenses" in, and
(iv) the first sentence appearing under the caption "Underwriting --
Stabilization, Short Positions and Penalty Bids" in the Preliminary Prospectus,
constitute the only information concerning such Underwriters furnished in
writing to the REIT by or on behalf of the Underwriters specifically for
inclusion in the Registration Statement and the Prospectus.
12. Termination. The obligations of the Underwriters hereunder
may be terminated by the Representative by notice given to and received by the
REIT (on behalf of the Company) prior to delivery of and payment for any Shares
if, prior to the time of delivery of such Shares, (i) any of the events
described in Sections 7(i) or 7(j) shall have occurred, (ii) the Company shall
have failed to have performed or complied with any of the agreements
contemplated hereby and that are required to be performed or complied with by
it hereunder, or (iii) if the Underwriters shall decline to purchase the Shares
for any reason permitted under this Agreement.
13. Reimbursement of Underwriters' Expenses. If the REIT shall
fail to tender the Shares for delivery to the Underwriters by reason of any
failure, refusal or inability on the part of the Company to perform any
agreement on their part to be performed, or because any other condition to the
Underwriters' obligations hereunder required to be fulfilled by the
28
Company is not fulfilled, the Company will reimburse the Underwriters for all
reasonable out-of-pocket expenses (including fees and disbursements of counsel)
incurred by the Underwriters in connection with this Agreement and the proposed
purchase of the Shares, and upon demand the Company shall pay the full amount
thereof to the Representative. If this Agreement is terminated pursuant to
Section 9 by reason of the default of one or more Underwriters, the Company
shall not be obligated to reimburse any defaulting Underwriter on account of
those expenses.
14. Research Independence. The Company acknowledges that the
Underwriters' research analysts and research departments are required to be
independent from their respective investment banking divisions and are subject
to certain regulations and internal policies, and that such Underwriters'
research analysts may hold and make statements or investment recommendations
and/or publish research reports with respect to the Company and/or the offering
that differ from the views of its investment bankers. The Company acknowledges
that each of the Underwriters is a full service securities firm and as such
from time to time, subject to applicable securities laws, may effect
transactions for its own account or the account of its customers and hold long
or short positions in debt or equity securities of the companies which may be
the subject of the transactions contemplated by this Agreement.
15. No Fiduciary Duty. The Company acknowledges and agrees
that in connection with the Offering, sale of the Shares or any other services
the Underwriters may be deemed to be providing hereunder, notwithstanding any
preexisting relationship, advisory or otherwise, between the parties or any
oral representations or assurances previously or subsequently made by the
Underwriters: (i) no fiduciary or agency relationship between the Company and
any other person, on the one hand, and the Underwriters, on the other, exists;
(ii) the Underwriters are not acting as advisors, expert or otherwise, to the
Company, including, without limitation, with respect to the determination of
the public offering price of the Shares, and such relationship between the
Company, on the one hand, and the Underwriters, on the other, is entirely and
solely commercial, based on arms-length negotiations; (iii) any duties and
obligations that the Underwriters may have to the Company shall be limited to
those duties and obligations specifically stated herein; and (iv) the
Underwriters and their respective affiliates may have interests that differ
from those of the Company. The Company hereby waives any claims that the
Company may have against the Underwriters with respect to any breach of
fiduciary duty in connection with the Offering.
16. Notices, Etc. All statements, requests, notices and
agreements hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or sent by mail, telex
or facsimile transmission to Lehman Brothers Inc., 745 Seventh Avenue, New
York, N.Y. 10019, Attention: Syndicate Department, Fax: (646) 834-8133, with a
copy, in the case of any notice pursuant to Section 11(d), to the Director of
Litigation, Office of the General Counsel, Lehman Brothers Inc., 399 Park
Avenue, 10th Floor, New York, NY 10022, Fax: (212) 520-0421;
(b) if to the Company, shall be delivered or sent by mail, telex or
facsimile transmission to the REIT, 6745 Engle Road, Suite 300, Cleveland, OH
44130, Attention:
29
Steven G. Osgood, Fax: (440) 234-8776, with a copy to Hogan & Hartson L.L.P.,
555 13th Street, N.W., Washington, DC 20004, Attention: David W. Bonser, Esq.,
Fax: (202) 637-5910;
provided, however, that any notice to an Underwriter pursuant to Section 11(d)
shall be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its acceptance telex to the
Representative, which address will be supplied to any other party hereto by the
Representative upon request. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof. The REIT (on
behalf of the Company) shall be entitled to act and rely upon any request,
consent, notice or agreement given or made on behalf of the Underwriters by
Lehman Brothers Inc.
17. Persons Entitled to Benefit of Agreement. This Agreement
shall inure to the benefit of and be binding upon the Underwriters, the
Company, and their respective personal representatives and successors. This
Agreement and the terms and provisions hereof are for the sole benefit of only
those persons, except that (a) the representations, warranties, indemnities and
agreements of the Company contained in this Agreement shall also be deemed to
be for the benefit of the person or persons, if any, who control any
Underwriter within the meaning of Section 15 of the Securities Act and (b) the
indemnity agreement of the Underwriters contained in Section 11(b) of this
Agreement shall be deemed to be for the benefit of any person controlling the
Company within the meaning of Section 15 of the Securities Act. Nothing in this
Agreement is intended or shall be construed to give any person, other than the
persons referred to in this Section 17, any legal or equitable right, remedy or
claim under or in respect of this Agreement or any provision contained herein.
18. Survival. The respective indemnities, representations,
warranties and agreements of the Company, and the Underwriters contained in
this Agreement or made by or on behalf on them, respectively, pursuant to this
Agreement, shall survive the delivery of and payment for the Shares and shall
remain in full force and effect, regardless of any investigation made by or on
behalf of any of them or any person controlling any of them. The provisions of
Sections 11 and 13 hereof shall survive the termination or cancellation of this
Agreement.
19. Definition of the Terms "Business Day" and "Subsidiary".
For purposes of this Agreement, (a) "business day" means each Monday, Tuesday,
Wednesday, Thursday or Friday which is not a day on which banking institutions
in New York are generally authorized or obligated by law or executive order to
close and (b) "subsidiary" has the meaning set forth in Rule 405 of the Rules
and Regulations.
20. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of New York.
21. Counterparts. This Agreement may be executed in one or
more counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
30
22. Headings. The headings herein are inserted for
convenience of reference only and are not intended to be part of, or to affect
the meaning or interpretation of, this Agreement.
31
If the foregoing is in accordance with your understanding,
please indicate your acceptance in the space provided for that purpose below,
whereupon this agreement and your acceptance shall constitute a binding
agreement among the Company and the Underwriters.
Very truly yours,
U-STORE-IT TRUST
By:
----------------------------------
Name:
Title:
U-STORE-IT, L.P.
By: U-Store-It Trust,
its general partner
By:
----------------------------------
Name:
Title:
Accepted:
LEHMAN BROTHERS INC.
By:
----------------------------
Name:
Title:
As representative of the several underwriters
named in Schedule 1 hereto
32
SCHEDULE 1
<Table>
<Caption>
Number of
Underwriters Shares
Lehman Brothers Inc................................................................. [ ]
Citigroup Global Markets Inc........................................................ [ ]
Wachovia Capital Markets, LLC....................................................... [ ]
A.G. Edwards & Sons, Inc............................................................ [ ]
Raymond James & Associates, Inc..................................................... [ ]
Banc of America Securities LLC...................................................... [ ]
KeyBanc Capital Markets, a division of McDonald Investments Inc..................... [ ]
Harris Nesbitt Corp................................................................. [ ]
Total..................................................................... 15,000,000
==========
</Table>
SCHEDULE 2
U-STORE-IT TRUST
LIST OF SUBSIDIARIES
<Table>
<Caption>
SUBSIDIARY JURISDICTION OF ORGANIZATION
- ---------- ----------------------------
1. U-Store-It, L.P. Delaware
2. Acquiport/Amsdell III, LLC Delaware
3. Acquiport/Amsdell IV, LLC Delaware
4. Acquiport/Amsdell V, LLC Delaware
5. Acquiport/Amsdell VI, LLC Delaware
6. Acquiport/Amsdell VII, LLC Delaware
7. USI II, LLC Delaware
8. U-Store-It Mini Warehouse Co. Ohio
9. YASKY LLC Delaware
10. YSI Management LLC Delaware
11. YSI I LLC Delaware
12. YSI II LLC Delaware
13. YSI III LLC Delaware
14. YSI IV LLC Delaware
15. YSI V LLC Delaware
16. YSI VI LLC Delaware
17. YSI X LP Delaware
18. YSI X GP LLC Delaware
19. YSI X LP LLC Delaware
20. YSI XI LP Delaware
21. YSI XI GP LLC Delaware
22. YSI XI LP LLC Delaware
23. YSI XII LP Delaware
24. YSI XII GP LLC Delaware
25. YSI XII LP LLC Delaware
26. YSI XIII LP Delaware
27. YSI XIII GP LLC Delaware
28. YSI XIII LP LLC Delaware
29. YSI XIV LP Delaware
30. YSI XIV GP LLC Delaware
31. YSI XIV LP LLC Delaware
32. YSI XX LP Delaware
33. YSI XX GP LLC Delaware
34. YSI XX LP LLC Delaware
35. YSI XXI LLC Delaware
36. YSI XXII LLC Delaware
37. YSI XXIII LLC Delaware
38. YSI XXIV LP Delaware
39. YSI XXIV GP LLC Delaware
40. YSI XXIV LP LLC Delaware
<Table>
<Caption>
SUBSIDIARY JURISDICTION OF ORGANIZATION
- ---------- ----------------------------
41. YSI XXV LP Delaware
42. YSI XXV GP LLC Delaware
43. YSI XXV LP LLC Delaware
44. YSI XXVI LP Delaware
45. YSI XXVI GP LLC Delaware
46. YSI XXVI LP LLC Delaware
47. YSI XXVII LP Delaware
48. YSI XXVII GP LLC Delaware
49. YSI XXVII LP LLC Delaware
50. YSI XXVIII LP Delaware
51. YSI XXVIII GP LLC Delaware
52. YSI XXVIII LP LLC Delaware
53. YSI XXIX LP Delaware
54. YSI XXIX GP LLC Delaware
55. YSI XXIX LP LLC Delaware
56. YSI XXX LLC Delaware
</Table>
2
SCHEDULE 3
Robert J. Amsdell
Barry L. Amsdell
Todd C. Amsdell
Robert J. Amsdell Family Irrevocable Trust
Loretta Amsdell Family Irrevocable Trust
Amsdell Holdings I, Inc.
Amsdell & Amsdell general partnership
Robert Amsdell and Barry Amsdell Real Estate Trust
Steven G. Osgood
Tedd D. Towsley
Thomas A. Commes
John C. Dannemiller
William M. Diefenderfer III
Harold S. Haller
David J. LaRue