Exhibit 1.2
EXECUTION COPY
1,000,000 Common Shares of Beneficial Interest
ENTERTAINMENT PROPERTIES TRUST
February 3, 2006
RBC Capital Markets Corporation,
1 Liberty Plaza
165 Broadway
New York, NY 10006
Ladies/Gentlemen:
Entertainment Properties Trust, a Maryland real estate investment trust
(the "Company"), proposes, subject to the terms and conditions stated herein, to
issue and sell to RBC Capital Markets Corporation (the "Underwriter") an
aggregate of 1,000,000 (the "Firm Shares") of its common shares of beneficial
interest, par value $.01 per share (the "Common Shares"), and, for the sole
purpose of covering over-allotments in connection with the sale of the Firm
Shares, at the option of the Underwriter, up to an additional 150,000 Common
Shares (the "Additional Shares"). The Firm Shares and any Additional Shares
purchased by the Underwriter are referred to herein as the "Shares.". The
Underwriter intends to conduct a public offering of the Shares (the "Offering").
1. Representations and Warranties of the Company. The Company represents
and warrants to, and agrees with, the Underwriter as of the date hereof and as
of the Closing Date and each Additional Closing Date (each as defined in Section
2 below) that:
(a) The Company has filed with the Securities and Exchange Commission
(the "Commission") a registration statement on Form S-3 (No. 333-113626), as
amended, for the registration of common shares, preferred shares, warrants and
debt securities, including the Shares, under the Securities Act of 1933, as
amended (the "Securities Act"), and the offering thereof from time to time in
accordance with Rule 430A or Rule 415 of the rules and regulations of the
Commission under the Securities Act (the "Securities Act Rules and
Regulations"), and the Company has filed such post-effective amendments thereto
as may be required prior to the execution of this Agreement. Such registration
statement (as so amended, if applicable) has been declared effective by the
Commission. The registration statement and prospectus may have been amended or
supplemented prior to the date of this Agreement; any such amendment or
supplement was prepared and filed, and any such amendment, filed after the
effective date of such registration statement has been declared effective. No
stop order suspending the effectiveness of the registration statement has been
issued, and no proceeding for that purpose has been instituted or threatened by
the Commission. A prospectus supplement (the "Prospectus Supplement") setting
forth the terms of the offering, sale and plan of distribution of the Shares and
additional information concerning the Company and its business has been or will
be prepared and, together with the prospectus included in the registration
statement, will be filed pursuant to Rule 424(b) of the Rules and Regulations on
or before the second business day after the date hereof (or such earlier time as
may be required by the Rules and Regulations). The registration statement, as it
may have heretofore been amended and at the time it became effective, including
the information, if any, deemed to be a part thereof pursuant to Rule 430A(b) of
the Securities Act Rules and Regulations or Rule 434(d) of the Securities Act
Rules and Regulations, is referred to herein as the "Registration Statement,"
and the final form of prospectus included in the Registration Statement, as
supplemented by the Prospectus Supplement, in the form filed by the Company with
the Commission pursuant to Rule 424(b) under the Securities Act Rules and
Regulations, is referred to herein as the "Prospectus." Any Registration
Statement filed by the Company pursuant to Rule 462(b) of the Securities Act is
hereinafter called the "Rule 462(b) Registration Statement" and from and after
the date and time of filing the Rule 462(b) Registration Statement, the term
"Registration Statement" shall include the Rule 462(b) Registration Statement.
Copies of the Registration Statement and the Prospectus, any amendments or
supplements thereto and all documents incorporated by reference therein that
were filed with the Commission on or prior to the date of this Agreement
(including one fully executed copy of the Registration Statement and of each
amendment thereto) have been delivered to the Underwriter and its counsel. Any
preliminary Prospectus Supplement relating to the offering of the Shares (a
"Preliminary Prospectus Supplement"), preliminary prospectus or prospectus
subject to completion included in the Registration Statement or filed with the
Commission pursuant to Rule 424 under the Securities Act and the Securities Act
Rules and Regulations is hereafter called a "Preliminary Prospectus." "Issuer
Free Writing Prospectus" means any "issuer free writing prospectus," as defined
in Rule 433 of the Securities Act Rules and Regulations, relating to the Shares
in the form filed or required to be filed with the Commission or, if not
required to be filed, in the form retained in the Company's records pursuant to
Rule 433(g) of the Securities Act Rules and Regulations. "General Use Issuer
Free Writing Prospectus" means any Issuer Free Writing Prospectus that is
intended for general distribution to prospective investors, as evidenced by its
being specified as such in Schedule I to this Agreement. "Limited Use Issuer
Free Writing Prospectus" means any Issuer Free Writing Prospectus that is not a
General Use Issuer Free Writing Prospectus. "Applicable Time" means 8:45 A.M.
(Eastern time) on the date of this Agreement. Any reference herein to the
Registration Statement, any Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include the documents incorporated by reference therein
pursuant to Item 12 of Form S-3 which were filed under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), on or before the effective date of
the Registration Statement, the date of such Preliminary Prospectus or the date
of the Prospectus, as the case may be, and any reference herein to the terms
"amend," "amendment" or "supplement" with respect to the Registration Statement,
any Preliminary Prospectus or the Prospectus shall be deemed to refer to and
include (i) the filing of any document under the Exchange Act after the
effective date of the Registration Statement, the date
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of such Preliminary Prospectus or the date of the Prospectus, as the case may
be, which is incorporated therein by reference and (ii) any such document so
filed. For purposes of this Agreement, all references to the Registration
Statement, the Prospectus, Prospectus Supplement, Preliminary Prospectus
Supplement, Preliminary Prospectus or Issuer Free Writing Prospectus or to any
amendment or supplement thereto shall be deemed to include any copy filed with
the Electronic Data Gathering Analysis and Retrieval System (EDGAR), and such
copy shall be identical in content to any Prospectus delivered to the
Underwriter for use in connection with the Offering.
(b) Each part of the Registration Statement, when such part became or
becomes effective, at the date of the filing of the Company's most recent Annual
Report on Form 10-K, at the Closing Date (as hereinafter defined) and, if later,
at any Additional Closing Date (as hereinafter defined), and the Prospectus and
any amendment or supplement thereto, on the date of filing thereof with the
Commission and at the Closing Date and at any Additional Closing Date, conformed
or will conform in all material respects with the requirements of the Securities
Act and the Securities Act Rules and Regulations; each part of the Registration
Statement, when such part became or becomes effective, or when such part was
filed with the Commission, or at the date of the filing of the Company's most
recent Annual Report on Form 10-K, did not or will not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading; the
Prospectus and any amendment or supplement thereto, on the date of the filing
thereof with the Commission and at the Closing Date and, if later, at any
Additional Closing Date, did not or will not include an untrue statement of a
material fact or omit to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading. When any related Preliminary Prospectus was first filed with the
Commission (whether filed as part of the registration statement for the
registration of the Shares or any amendment thereto or pursuant to Rule 424(a)
under the Securities Act) and when any amendment thereof or supplement thereto
was first filed with the Commission, such Preliminary Prospectus and any
amendments thereof and supplements thereto complied in all material respects
with the applicable provisions of the Securities Act, the Exchange Act and the
Rules and Regulations and did not contain an untrue statement of a material fact
and did not omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. No representation and warranty is
made in this subsection (b) however, with respect to any information contained
in or omitted from the Registration Statement or the Prospectus or any related
Preliminary Prospectus or any amendment thereof or supplement thereto in
reliance upon and in conformity with information furnished in writing to the
Company by or on behalf of the Underwriter specifically for use therein. The
parties acknowledge and agree that such information provided by or on behalf of
the Underwriter consists solely of the material included in paragraphs 5 and 9
under the caption "Underwriting" in the Prospectus Supplement. The Company 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 Supplement, the Prospectus or any other
materials, if any, permitted by the Securities Act (which were disclosed to the
Underwriter and
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Underwriter's Counsel and are listed on Schedule I hereof other than documents
referred to in clause (C) of Section 1(d)).
(c) At the time of filing the Registration Statement and at the date
of this Agreement, the Company was not and is not an "ineligible issuer," as
defined in Rule 405 of the Securities Act Rules and Regulations, including as a
result of (x) the Company or any subsidiary of the Company in the preceding
three years having been convicted of a felony or misdemeanor or having been made
the subject of a judicial or administrative decree or order as described in Rule
405 of the Securities Act Rules and Regulations and (y) the Company in the
preceding three years having been the subject of a bankruptcy petition or
insolvency or similar proceeding, having had a registration statement be the
subject of a proceeding under Section 8 of the Securities Act or being the
subject of a proceeding under Section 8A of the Securities Act in connection
with the offering of the Shares, all as described in Rule 405 of the Securities
Act Rules and Regulations.
(d) As of the Applicable Time, neither (i) (A) the General Use Issuer
Free Writing Prospectus(es) issued at or prior to the Applicable Time, (B) the
Preliminary Prospectus and (C) the documents mutually agreed to by the Company
and the Underwriter, considered together (collectively, the "General Disclosure
Package"), nor (ii) any individual Limited Use Issuer Free Writing Prospectus,
when considered together with the General Disclosure Package, included any
untrue statement of a material fact or omitted to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The preceding sentence
does not apply to statements contained in or omitted from any prospectus
included in the Registration Statement or any Issuer Free Writing Prospectus in
reliance upon and in conformity with information furnished in writing to the
Company by or on behalf of the Underwriter specifically for use therein. The
parties acknowledge and agree that such information provided by or on behalf of
the Underwriter consists solely of the material included in paragraphs 5 and 9
under the caption "Underwriting" in the Prospectus Supplement.
(e) Each Issuer Free Writing Prospectus, as of its issue date and at
all subsequent times through the completion of the public offer and sale of the
Shares or until any earlier date that the Company notified or notifies the
Underwriter as described in the next sentence, did not, does not and will not
include any information that conflicted, conflicts or will conflict with the
information then contained in the Registration Statement. If at any time
following issuance of an Issuer Free Writing Prospectus there occurred or occurs
an event or development as a result of which such Issuer Free Writing Prospectus
conflicted or would conflict with the information then contained in the
Registration Statement or included or would include an untrue statement of a
material fact or omitted or would omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances
prevailing at that subsequent time, not misleading, (i) the Company has promptly
notified or will promptly notify the Underwriter and (ii) the Company has
promptly amended or will promptly amend or supplement such Issuer Free Writing
Prospectus to eliminate or correct such conflict, untrue statement or omission.
The foregoing two sentences do not apply to statements contained in or
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omitted from any Issuer Free Writing Prospectus in reliance upon and in
conformity with information furnished in writing to the Company by or on behalf
of the Underwriter specifically for use therein. The parties acknowledge and
agree that such information provided by or on behalf of the Underwriter consists
solely of the material included in paragraphs 5 and 9 under the caption
"Underwriting" in the Prospectus Supplement.
(f) The documents incorporated or deemed to be incorporated by
reference in the Registration Statement, the Preliminary Prospectus and the
Prospectus, at the time they were or hereafter are filed with the Commission,
complied and will comply in all material respects with the requirements of the
Exchange Act and the rules and regulations of the Commission under the Exchange
Act (the "Exchange Act Rules and Regulations" and, together with the Securities
Act Rules and Regulations, the "Rules and Regulations") and, when read together
with the other information in the Preliminary Prospectus and the Prospectus, at
the time the Registration Statement and any amendments thereto become effective,
at the Applicable Time, at the date of the Prospectus and at the Closing Date,
did not and will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
(g) Ernst & Young LLP, who have certified certain of the financial
statements and supporting schedules and information incorporated by reference in
the Registration Statement are and, during the periods covered by their reports
incorporated by reference in the Registration Statement, were independent public
accountants as required by the Securities Act, the Exchange Act and the Rules
and Regulations. KPMG LLP, who have certified certain of the financial
statements and supporting schedules and information incorporated by reference in
the Registration Statement are and, during the periods covered by their reports
incorporated by reference in the Registration Statement, were independent public
accountants as required by the Securities Act, the Exchange Act and the Rules
and Regulations. Neither Ernst & Young LLP nor KPMG LLP has notified the
Company, the Company's board of trustees or the audit committee of the board of
trustees of any illegal acts that are required to be reported pursuant to
Section 10A of the Exchange Act.
(h) Subsequent to the respective dates as of which information is
given in the Registration Statement, the General Disclosure Package and the
Prospectus, except as set forth in the Registration Statement, the General
Disclosure Package and the Prospectus, (A) there has been no change in the
earnings, assets, properties, business, results of operations, shareholders'
equity, prospects, affairs or condition (financial or otherwise) of the Company
and each subsidiary of the Company listed on Exhibit A hereto (the
"Subsidiaries"), taken as a whole, which has had or would reasonably be expected
to have a Material Adverse Effect (as defined in Section 1(m) below), (B) there
has been no casualty, loss, condemnation or other adverse event with respect to
any property or interest therein owned, directly or indirectly, by the Company
or any Subsidiary which has had or would reasonably be expected to have a
Material Adverse Effect, (C) there have been no transactions entered into by the
Company or any Subsidiary, other than those in the ordinary course of business,
which are material with respect to
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the Company and the Subsidiaries taken as a whole, (D) except for regular
quarterly distributions on the Common Shares, 9.50% Series A Cumulative
Redeemable Preferred Shares of Beneficial Interest, par value $.01 per share
(liquidation preference $25.00 per share) (the "Series A Preferred Shares") and
7.75% Series B Cumulative Redeemable Preferred Shares of Beneficial Interest,
par value $.01 per share (liquidation preference $25.00 per share) (the "Series
B Preferred Shares"), which have been publicly announced through the date of
this Agreement, there has been no dividend or distribution of any kind declared,
paid or made by the Company on any class of its capital stock, and (E) there has
been no material increase in long-term debt or decrease in the capital of the
Company or the Subsidiaries, taken as a whole, other than in the ordinary course
of their businesses (each, a "Material Adverse Change"). Since the date of the
latest balance sheet presented in the Registration Statement and the Prospectus,
neither the Company nor any of the Subsidiaries has incurred or undertaken any
liabilities or obligations, direct or contingent, or entered into any
transactions which are material to the Company and the Subsidiaries, taken as a
whole, except for liabilities, obligations and transactions which are reflected
in the Registration Statement, the General Disclosure Package and the
Prospectus.
(i) This Agreement and the transactions contemplated by this
Agreement, the Registration Statement and the Prospectus have been duly and
validly authorized by the Company and this Agreement has been duly and validly
executed and delivered by the Company.
(j) The execution, delivery, and performance of this Agreement and the
consummation of the transactions contemplated by this Agreement, the
Registration Statement and the Prospectus (including the issuance and sale of
the Shares and the use of proceeds from the sale of the Shares as described
under the caption "Use of Proceeds") do not and will not (i) conflict with,
require consent under or result in a breach of any of the terms and provisions
of, or constitute a default (or an event which with notice or lapse of time, or
both, would constitute a default) under, or result in the creation or imposition
of any lien, charge or encumbrance upon any property or assets of the Company or
any of the Subsidiaries pursuant to, any indenture, mortgage, deed of trust,
loan agreement or other agreement, instrument, franchise, license or permit to
which the Company or any of the Subsidiaries is a party or by which the Company
or any of the Subsidiaries or their respective properties, operations or assets
may be bound or (ii) violate or conflict with any provision of the declaration
of trust, certificate or articles of incorporation, by-laws, certificate of
formation, limited liability company agreement, partnership agreement or any
other organizational document of the Company or any of the Subsidiaries or any
judgment, decree, order, statute, rule or regulation of any court or any public,
governmental or regulatory agency or body, domestic or foreign, having
jurisdiction over the Company or any of the Subsidiaries or any of their
respective properties, operations or assets. No consent, approval,
authorization, order, registration, filing, qualification, license or permit of
or with any court or any public, governmental or regulatory agency or body,
domestic or foreign, having jurisdiction over the Company or any of the
Subsidiaries or any of their respective properties, operations or assets, or any
third party, is required for the execution, delivery and performance of this
Agreement or the consummation of the transactions contemplated by this
Agreement, the Registration Statement and the Prospectus, including the
issuance, sale and
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delivery of the Shares to be issued, sold and delivered hereunder, except the
registration under the Securities Act of the Shares, filings with the New York
Stock Exchange and the Commission of the Prospectus, and such consents,
approvals, authorizations, orders, registrations, filings, qualifications,
licenses and permits as may be required under state securities or Blue Sky laws
in connection with the purchase and distribution of the Shares by the
Underwriter, each of which has been obtained.
(k) The authorized, issued and outstanding capital stock of the
Company is as set forth in the General Disclosure Package and the Prospectus in
the column entitled "Actual" under the caption "Capitalization" and, after
giving effect to the Offering and the other transactions contemplated by this
Agreement, the Registration Statement and the Prospectus, will be as set forth
in the column entitled "As Adjusted" under the caption "Capitalization." All of
the issued and outstanding shares of capital stock of the Company have been duly
and validly authorized and issued, are fully paid and non-assessable and were
not issued in violation of or subject to any preemptive or similar rights
arising by operation of law under the organizational documents of the Company or
under any agreement to which the Company or any of its subsidiaries is a party
or otherwise that entitle or will entitle any person to acquire from the Company
or any Subsidiary upon the issuance or sale thereof any Common Shares, Series A
Preferred Shares, Series B Preferred Shares, any other equity security of the
Company or any Subsidiaries and any security convertible into, or exercisable or
exchangeable for, any Common Shares, Series A Preferred Shares, Series B
Preferred Shares or other such equity security (any "Relevant Security"). The
Shares to be delivered on the Closing Date and the Additional Closing Date, if
any (as hereinafter respectively defined), have been duly and validly authorized
for issuance and sale pursuant to this Agreement and, when delivered in
accordance with this Agreement against payment of the consideration therefor
specified in this Agreement, will be duly and validly issued, fully paid and
non-assessable and will not have been issued in violation of or subject to any
preemptive or similar rights that entitle or will entitle any person to acquire
any Relevant Security from the Company or any Subsidiary upon issuance or sale
of Shares in the Offering. The Common Shares, Series A Preferred Shares, Series
B Preferred Shares, Firm Shares and Additional Shares conform in all material
respects to the descriptions thereof contained in the Registration Statement,
the General Disclosure Package and the Prospectus. The form of share certificate
to be used to evidence the Shares will be in due and proper form and will comply
with all applicable legal requirements. Except as disclosed in or specifically
contemplated by the General Disclosure Package and the Prospectus, there are no
shares of capital stock of the Company reserved for any purpose and there are no
outstanding securities convertible into or exchangeable for any shares of
capital stock of the Company and neither the Company nor any Subsidiary has
outstanding options to purchase, or any preemptive rights or other rights to
subscribe for or to purchase, or any contracts or commitments to issue or sell,
any Relevant Security.
(l) The Subsidiaries listed on Exhibit A hereto are the only
subsidiaries of the Company within the meaning of Rule 405 under the Securities
Act. Except for the Subsidiaries and Atlantic-EPR I, a Delaware general
partnership (in which the Company owns a 20% interest), Atlantic-EPR II, a
Delaware general partnership (in which the Company
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owns a 20% interest) and New Roc Associates L.P., a New York limited partnership
(in which the Company owns the general partnership interest and 70.4% of the
limited partnership interest), the Company owns no ownership or other beneficial
interest, directly or indirectly, in any corporation, partnership, joint venture
or other business entity. All of the issued shares of capital stock of or other
ownership interest in each of the Subsidiaries have been duly and validly
authorized and issued and are fully paid and non-assessable and, except as set
forth on Exhibit A hereto, are owned directly or indirectly by the Company free
and clear of all liens, encumbrances, equities or claims.
(m) Each of the Company and the Subsidiaries has been duly organized
and validly exists as a real estate investment trust, corporation, business
trust, partnership or limited liability company in good standing under the laws
of its jurisdiction of organization. Each of the Company and the Subsidiaries is
duly qualified to do business and is in good standing as a foreign trust,
corporation, partnership or limited liability company in each jurisdiction in
which the character or location of its properties (owned, leased or licensed) or
the nature or conduct of its business makes such qualification necessary, except
for those failures to be so qualified or in good standing which could not
reasonably be expected to (individually or when aggregated with other such
instances) have a material adverse effect on (i) the earnings, assets, business,
condition (financial or otherwise), results of operations, shareholders' equity,
properties, affairs or prospects of the Company and the Subsidiaries, taken as a
whole; (ii) the long-term debt or capital stock of the Company or any of its
Subsidiaries; or (iii) the Offering or consummation of any of the other
transactions contemplated by this Agreement, the Registration Statement and the
Prospectus (a "Material Adverse Effect"). Each of the Company and the
Subsidiaries has all requisite power and authority, and all necessary consents,
approvals, authorizations, orders, registrations, qualifications, licenses and
permits (collectively, the "Consents") of and from all public, regulatory or
governmental agencies and bodies and third parties, foreign and domestic, to
own, hold, lease and operate its properties and conduct its business as it is
now being conducted and as described in the Registration Statement, the General
Disclosure Package and the Prospectus, and each such Consent is valid and in
full force and effect, and neither the Company nor any of the Subsidiaries has
received notice of any investigation or proceedings which results in the
revocation of any such Consent. Each of the Company and the Subsidiaries is in
compliance with all applicable laws, rules, regulations, ordinances and
directives, except where failure to be in compliance could not reasonably be
expected to have a Material Adverse Effect. No Consent contains a materially
burdensome restriction not adequately disclosed in the Registration Statement,
the General Disclosure Package and the Prospectus. Neither the Company nor any
Subsidiary is in violation of its declaration of trust, certificate or articles
of incorporation, by-laws, certificate of formation, limited liability company
agreement, partnership agreement or any other organizational document. The
Company and Subsidiaries are not in default under any indenture, mortgage, deed
of trust, voting trust agreement, loan agreement, bond, debenture, note
agreement or evidence of indebtedness, lease, contract or other agreement or
instrument to which they are a party or by which they or any of their properties
or other assets are bound, violation of which would individually or in the
aggregate have a Material Adverse Effect, and no other party under any such
agreement or instrument to which the Company or the Subsidiaries are a party is,
to the
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knowledge of the Company, in default in any material respect thereunder. To the
knowledge of the Company, no liability (financial or otherwise) exists for the
Company or the Subsidiaries, except for those liabilities which would not have a
Material Adverse Effect.
(n) Except as described in the General Disclosure Package and the
Prospectus, there is no legal, governmental or regulatory proceeding or other
litigation (including but not limited to routine litigation) to which the
Company or any of the Subsidiaries is a party or of which any property or
operations of the Company or any of the Subsidiaries is the subject which,
individually or in the aggregate, if determined adversely to the Company or any
of the Subsidiaries, could reasonably be expected to have a Material Adverse
Effect; to the best of the Company's knowledge, no such proceeding or litigation
is threatened or contemplated by any legal, governmental or regulatory authority
or other third party, foreign or domestic; and the defense of all such
proceedings and litigation against or involving the Company or any of the
Subsidiaries could not reasonably be expected to have a Material Adverse Effect.
(o) The consolidated financial statements of the Company, included or
incorporated by reference, in the Registration Statement, the General Disclosure
Package and the Prospectus, together with the related schedules and notes, as
well as those financial statements, schedules or notes of any other entity
included therein, present fairly the financial position as of the dates
indicated and the results of operations, changes in shareholders' equity and
cash flows for the periods therein specified of the Company and its consolidated
Subsidiaries or of the respective entity or entities or group presented therein;
except as otherwise stated in the Registration Statement, the General Disclosure
Package and the Prospectus, said financial statements, notes and schedules have
been prepared in conformity with generally accepted accounting principles
("GAAP") applied on a consistent basis throughout the periods involved and
present fairly the information required to be stated therein. The other
financial and statistical information and data included or incorporated by
reference in the Registration Statement, the General Disclosure Package and the
Prospectus present fairly the information included therein and have been
prepared on a basis consistent with that of the financial statements that are
included or incorporated by reference in the Registration Statement, the General
Disclosure Package and the Prospectus and the books and records of the
respective entities presented therein, and comply with the applicable
requirements of Regulation G of the Commission.
(p) Any pro forma or as adjusted financial information and the related
notes thereto included or incorporated by reference in the Registration
Statement, the General Disclosure Package and the Prospectus present fairly the
information shown therein, have been prepared in accordance with the
Commission's rules and the guidelines of the American Institute of Certified
Public Accountants with respect to pro forma information and have been properly
compiled on the bases described therein, and the assumptions used in the
preparation thereof are, in the opinion of the Company, reasonable and the
adjustments used therein are appropriate to give effect to the transactions and
circumstances referred to therein. All historical financial statements and
information and all pro forma financial statements and information required by
the Securities Act, the Exchange Act and the Rules and Regulations are included,
or incorporated by reference, in the Registration Statement, the General
Disclosure Package and the Prospectus.
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(q) The statistical and market-related data included or incorporated
by reference in the Registration Statement, the General Disclosure Package and
the Prospectus are based on or derived from sources which the Company reasonably
and in good faith believes are reliable and accurate, and such data agree with
the sources from which they are derived.
(r) There are no contracts or other documents (including, without
limitation, any voting agreement), which are required to be described in the
Registration Statement, the General Disclosure Package and the Prospectus or
filed as exhibits to the Registration Statement by the Securities Act, the
Exchange Act or the Rules and Regulations and which have not been so described
or filed. All of the contracts to which any of the Company or the Subsidiaries
is a party and which are material to the business and operations of the Company
and the Subsidiaries, taken as a whole, (i) have been duly authorized, executed
and delivered by such entity, constitute valid and binding agreements of such
entity and are enforceable against such entity in accordance with the terms
thereof, except as such enforcement may be limited by (A) bankruptcy,
insolvency, reorganization or similar other laws affecting creditors' rights
generally and (B) general equity principles and limitations on the availability
of equitable relief, or (ii) in the case of any contract to be executed on or
before the Closing Date, will on the Closing Date be duly authorized, executed
and delivered by the Company and/or a Subsidiary, and constitute valid and
binding agreements of such entity enforceable against each entity in accordance
with the terms thereof, except as such enforcement may be limited by (A)
bankruptcy, insolvency, reorganization or similar other laws affecting
creditors' rights generally and (B) general equity principles and limitations on
the availability of equitable relief.
(s) The Common Shares, Series A Preferred Shares and Series B
Preferred Shares are registered pursuant to Section 12(b) of the Exchange Act
and the outstanding Common Shares, Series A Preferred Shares and Series B
Preferred Shares are listed on the Exchange (as defined in Section 11(b) below)
and the Company has taken no action designed to, or likely to have the effect
of, terminating the registration of the Common Shares, Series A Preferred Shares
or Series B Preferred Shares under the Exchange Act or de-listing the Common
Shares, Series A Preferred Shares or Series B Preferred Shares from the
Exchange, nor has the Company received any notification that the Commission or
the Exchange is contemplating terminating such registrations or listings. The
Shares have been approved for listing on the Exchange, subject to official
notice of issuance.
(t) Except as disclosed in the Registration Statement, the General
Disclosure Package and the Prospectus, no holder of securities of the Company
has any registration or similar rights to require registration of any debt or
equity security of the Company as part or on account of, or otherwise in
connection with, the sale of the Shares contemplated hereby, and any such rights
so disclosed have either been fully complied with by the Company or effectively
waived by the holders thereof, and any such waivers remain in full force and
effect.
(u) Neither the Company nor any of its affiliates has taken, nor will
any of them take, directly or indirectly, any action resulting in a violation of
Regulation M under the Exchange Act, or is designed to cause or result in, or
which might reasonably be expected to
10
constitute, cause or result in, the stabilization or manipulation of the price
of any security to facilitate the sale or resale of the Shares.
(v) The Company has not prior to the date hereof offered or sold any
securities which would be "integrated" with the offer and sale of the Shares
pursuant to the Registration Statement. Except as described in the Registration
Statement, the General Disclosure Package and the Prospectus (and pursuant to
the Company's dividend reinvestment plan, as in effect on the date hereof), the
Company has not sold or issued any Relevant Security during the six-month period
preceding the date of the Prospectus, including but not limited to any sales
pursuant to Rule 144A or Regulation D or S under the Securities Act, other than
Common Shares issued pursuant to employee benefit plans, qualified stock option
plans or the employee compensation plans or pursuant to outstanding options,
rights or warrants as described in the General Disclosure Package and the
Prospectus.
(w) There are no direct or indirect business relationships or related
party transactions (including those contemplated by Item 404 of Regulation S-K
under the Securities Act) involving the Company or any subsidiary or affiliate
or any other person required by the Securities Act, the Exchange Act or the
Rules and Regulations to be described in the Registration Statement, the General
Disclosure Package or the Prospectus which is not so described or is not
described as required. There are no outstanding loans, advances (except normal
advances for business expenses in the ordinary course of business) or guarantees
of indebtedness by the Company to or for the benefit of any of the officers,
directors or trustees of the Company or its subsidiaries which are required to
by the Securities Act, the Exchange Act or the Rules and Regulations to be
described in the Registration Statement, the General Disclosure Package or the
Prospectus which are not so described or not described as required. Neither the
Company nor any of its subsidiaries has, in violation of the Sarbanes-Oxley Act
of 2002 (the "Sarbanes-Oxley Act"), directly or indirectly, extended or
maintained credit, arranged for the extension of credit, or renewed an extension
of credit, in the form of a personal loan to or for any director, trustee or
executive officer of the Company or any of its subsidiaries.
(x) The Company and its Subsidiaries (i) make and keep accurate books
and records, and (ii) maintain a system of internal accounting controls
sufficient to provide reasonable assurances that (A) transactions are executed
in accordance with management's general or specific authorizations, (B)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets, (C) access to assets is permitted only in
accordance with management's general or specific authorization and (D) the
recorded accounting for assets is compared with existing assets at reasonable
intervals and appropriate action is taken with respect to any differences. Based
on an evaluation of its disclosure controls and procedures, the Company is not
aware of (i) any significant deficiency in the design or operation of internal
controls which could adversely affect the Company's ability to record, process,
summarize and report financial data or any material weakness in internal
controls; or (ii) any fraud, whether or not material, that involves management
or other employees who have a significant role in the Company's internal
controls. Since the date of the most recent evaluation of such disclosure
11
controls and procedures, there have been no significant changes in internal
controls or in other factors that could significantly affect internal controls,
including any corrective actions with regard to significant deficiencies and
material weaknesses.
(y) The conditions for use of Form S-3, as set forth in the General
Instructions thereto, have been satisfied. During the period of at least the
last 24 calendar months prior to the date of this Agreement, the Company has
timely filed with the Commission all documents and other material required to be
filed pursuant to Sections 13, 14 and 15(d) under the Exchange Act. During the
period of at least the last 36 calendar months preceding the filing of the
Registration Statement, the Company has filed all reports required to be filed
pursuant to Sections 13, 14 and 15(d) under the Exchange Act. Immediately
preceding the filing of the Registration Statement, the aggregate market value
of the Company's voting and non-voting common equity held by non-affiliates of
the Company was equal to or greater than $75 million.
(z) Each of the Company and the Subsidiaries is not and, at all times
up to and including consummation of the transactions contemplated by this
Agreement, the Registration Statement and the Prospectus, and after giving
effect to the application of the net proceeds of the Offering, will not be,
subject to registration as an "investment company" under the Investment Company
Act of 1940, as amended (the "40 Act"), and is not and will not be an entity
"controlled" by an "investment company" within the meaning of such act.
(aa) The Company and the Subsidiaries have good and marketable title
in fee simple to, or a valid and enforceable ground leasehold interest in, all
real property and good and marketable title to all personal property owned by
them, in each case free and clear of all liens, encumbrances and defects except
such as are described in the Registration Statement, the General Disclosure
Package and the Prospectus or such as do not (individually or in the aggregate)
materially affect the value of such property or interfere with the use made or
proposed to be made of such property by the Company and the Subsidiaries; and
any real property and buildings held under lease or sublease by the Company and
the Subsidiaries are held by them under valid, subsisting and enforceable leases
with such exceptions as are not material and do not interfere with the use made
and proposed to be made of such property and buildings by the Company and the
Subsidiaries. Neither the Company nor any of the Subsidiaries has received any
notice of any claim adverse to its ownership or leasing of any real or personal
property or of any claim against the continued possession of any real property,
whether owned or held under lease or sublease by the Company or any of the
Subsidiaries. All liens, charges, encumbrances, claims or restrictions on or
affecting any of the properties or the assets of the Company and the
Subsidiaries which are required to be disclosed in the General Disclosure
Package and the Prospectus are disclosed therein. No tenant under any of the
leases pursuant to which the Company or any Subsidiary leases its property has
an option or right of first refusal to purchase the premises demised under such
lease, the exercise of which would have a Material Adverse Effect. The use and
occupancy of each of the properties of the Company and the Subsidiaries comply
in all material respects with all applicable codes and zoning laws and
regulations. The Company and the Subsidiaries have no knowledge of any pending
or threatened condemnation or zoning change that will in any material respect
affect the size of, use of, improvement of,
12
construction on, or access to any of the properties of the Company or the
Subsidiaries. The Company and the Subsidiaries have no knowledge of any pending
or threatened proceeding or action that will in any manner materially affect the
size of, use of, improvements or construction on, or access to any of the
properties of the Company or the Subsidiaries. The property purchase agreements
described in the General Disclosure Package and the Prospectus have been duly
authorized, executed and delivered by the Company, have been executed by the
other parties thereto, and constitute binding obligations of the Company. The
descriptions of the property purchase agreements contained in the General
Disclosure Package and the Prospectus are accurate in all material respects.
(bb) The Company and each of the Subsidiaries owns or possesses
adequate right to use all patents, patent applications, trademarks, service
marks, trade names, trademark registrations, service mark registrations,
copyrights, licenses, formulae, customer lists, and know-how and other
intellectual property (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or procedures)
necessary for the conduct of their respective businesses as being conducted and
as described in the Registration Statement, the General Disclosure Package and
Prospectus and have no reason to believe that the conduct of their respective
businesses does or will conflict with, and have not received any notice of any
claim of conflict with, any such right of others. To the best of the Company's
knowledge, all material technical information developed by and belonging to the
Company which has not been patented has been kept confidential. Neither the
Company nor any of its Subsidiaries has granted or assigned to any other person
or entity any right to manufacture, have manufactured, assemble or sell the
current products and services of the Company or those products and services
described in the Registration Statement, the General Disclosure Package and the
Prospectus. There is no infringement by third parties of any such Intellectual
Property; there is no pending or, to the Company's knowledge, threatened action,
suit, proceeding or claim by others challenging the Company's or any
Subsidiary's rights in or to any such Intellectual Property, and the Company is
unaware of any facts which would form a reasonable basis for any such claim; and
there is no pending or, to the Company's knowledge, threatened action, suit,
proceeding or claim by others that the Company infringes or otherwise violates
any patent, trademark, copyright, trade secret or other proprietary rights of
others, and the Company is unaware of any other fact which would form a
reasonable basis for any such claim.
(cc) Each of the Company and the Subsidiaries has accurately prepared
and timely filed all federal, state and other tax returns that are required to
be filed by it and has paid or made provision for the payment of all taxes,
assessments, governmental or other similar charges, including without
limitation, all sales and use taxes and all taxes which the Company and each of
the Subsidiaries is obligated to withhold from amounts owing to employees,
creditors and third parties, with respect to the periods covered by such tax
returns (whether or not such amounts are shown as due on any tax return). No
deficiency assessment with respect to a proposed adjustment of the Company's or
any of the Subsidiaries' Federal, state, or other taxes is pending or, to the
best of the Company's knowledge, threatened. There is no tax lien, whether
imposed by any federal, state or other taxing authority, outstanding against the
assets, properties or business of the Company or any of the Subsidiaries. To the
knowledge of the Company, there
13
are no tax returns of the Company or any of the Subsidiaries that are currently
being audited by state, local or Federal taxing authorities or agencies which
would have a Material Adverse Effect.
(dd) Neither the Company, any of the Subsidiaries nor, to the
Company's knowledge, any of its employees or agents has at any time during the
last five years (i) made, on behalf of the Company, any unlawful contribution to
any candidate for foreign office, or failed to disclose fully any contribution
in violation of law or (ii) made any payment to any federal or state
governmental officer or official, or other person charged with similar public or
quasi-public duties, other than payments required or permitted by the laws of
the United States of any jurisdiction thereof.
(ee) No labor disturbance by the employees of the Company or any of
the Subsidiaries exists or, to the best of the Company's knowledge, is imminent
and the Company is not aware of any existing or imminent labor disturbance by
the employees of any of its or any Subsidiary's principal suppliers,
manufacturers', customers or contractors, which, in either case, could
reasonably be expected to have a Material Adverse Effect.
(ff) No "prohibited transaction" (as defined in Section 406 of the
Employee Retirement Income Security Act of 1974, as amended, including the
regulations and published interpretations thereunder ("ERISA"), or Section 4975
of the Internal Revenue Code of 1986, as amended from time to time (the "Code"),
or "accumulated funding deficiency" (as defined in Section 302 of ERISA) or any
of the events set forth in Section 4043(b) of ERISA (other than events with
respect to which the 30-day notice requirement under Section 4043 of ERISA has
been waived) has occurred with respect to any employee benefit plan which could
reasonably be expected to have a Material Adverse Effect; each employee benefit
plan is in compliance in all material respects with applicable law; including
ERISA (to the extent applicable) and the Code; the Company has not incurred and
does not expect to incur liability under Title IV of ERISA with respect to the
termination of, or withdrawal from any "pension plan"; and each "pension plan"
(as defined in ERISA) for which the Company would have any liability that is
intended to be qualified under Section 401(a) of the Code is so qualified in all
material respects and nothing has occurred, whether by action or by failure to
act, which could cause the loss of such qualification.
(gg) Except as would not, singularly or in the aggregate, have a
Material Adverse Effect, (i) to the Company's knowledge, there does not exist on
any of the properties described in the General Disclosure Package and the
Prospectus any Hazardous Materials (as hereinafter defined) in unlawful
quantities, (ii) to the Company's knowledge, there has not occurred on or from
such properties any unlawful spills, releases, discharges or disposal of
Hazardous Materials, (iii) the Company and the Subsidiaries have not failed to
comply with all applicable local, state and Federal laws, regulations,
ordinances and administrative and judicial orders relating to pollution or
protection of human health, the environment (including, without limitation,
ambient air, surface water, groundwater, land surface or subsurface strata) or
wildlife, including, without limitation, laws and regulations relating to the
release or threatened
14
release of Hazardous Materials or to the generation, manufacture, processing,
recycling, distribution, use, treatment, sale, storage, disposal, transport or
handling of Hazardous Materials (collectively, "Environmental Laws"), (iv) the
Company and its Subsidiaries have (to the extent not maintained by the
applicable tenants) all permits, authorizations and approvals required under any
applicable Environmental Laws and all are in compliance with their requirements,
(v) there are no pending or, to the Company's knowledge, threatened
administrative, regulatory or judicial actions, suits, demands, demand letters,
claims, liens, notices of noncompliance or violation, investigation or
proceedings pursuant to any Environmental Law against the Company or any of its
Subsidiaries, and (vi) to the Company's knowledge, there are no events or
circumstances that might reasonably be expected to form the basis of an order
for clean-up or remediation, or an action, suit or proceeding by any private
party or governmental body or agency, against the Company, any Subsidiary or any
of their assets relating to any Hazardous Materials or the violation of any
Environmental Laws.
As used herein, "Hazardous Material" shall include, without limitation, any
flammable explosives, radioactive materials, oil, petroleum, petroleum products,
hazardous materials, hazardous wastes, hazardous or toxic substances, asbestos
or any material as defined by any environmental laws, including, without
limitation, the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended (42 U.S.C. Section 9601, et seq.) (CERCLA),
the Hazardous Materials Transportation Act, as amended (49 U.S.C. Section 1801,
et seq.), the Resource Conservation and Recovery Act, as amended (42 U.S.C.
Section 6901, et seq.), and in the regulations adopted pursuant to each of the
foregoing or by any Federal, state or local governmental authority having
jurisdiction over the properties as described in the Prospectus.
All of the properties of the Company and the Subsidiaries have been, and it
is contemplated that all future acquisitions will be, subjected to a Phase I or
similar environmental assessment (which generally includes a site inspection,
interviews and a records review, but no subsurface sampling). These assessments
and follow-up investigations, if any, of the properties (including, as
appropriate, asbestos, radon and lead surveys, additional public record review,
subsurface sampling and other testing), of the properties have not revealed any
environmental liability that the Company believes would have a Material Adverse
Effect. The Company has not agreed to assume, undertake or provide
indemnification (except as may extend to lenders to the Company who finance the
acquisition of real property or the refinancing thereof) for any liability of
any other person under any environmental law, including any obligation for
cleanup or remedial action, except as could not reasonably be expected to have a
Material Adverse Effect.
(hh) Commencing with the Company's taxable year ended December 31,
1997, the Company has been, and upon the sale of the Shares will continue to be,
organized and operated in conformity with the requirements for qualification and
taxation as a "real estate investment trust" (a "REIT") under Sections 856
through 860 of the Code. The proposed method of operation of the Company as
described in the General Disclosure Package and the Prospectus will enable the
Company to continue to operate in a manner which would permit it to qualify as a
15
REIT under the Code. The Company has no present intention of changing its
operations or engaging in activities which would cause it to fail to qualify, or
make economically undesirable its continued qualification, as a REIT.
(ii) Title insurance in favor of the Company and the Subsidiaries is
maintained with respect to each of the properties described in the General
Disclosure Package and the Prospectus in an amount at least equal to the cost of
acquisition of such property.
(jj) Except as disclosed in the Registration Statement, the General
Disclosure Package and the Prospectus and any amendment or supplement thereto,
there are no mortgages or deeds of trust encumbering any of the properties
described in the General Disclosure Package and the Prospectus. The mortgages
encumbering the properties are not convertible into any equity securities of the
Company, nor does the Company or any of the Subsidiaries hold a participating
interest therein and, except as disclosed in the Registration Statement, the
General Disclosure Package and the Prospectus and any amendment or supplement
thereto, such mortgages are not cross defaulted to or cross-collateralized by
any party other than the Company and the Subsidiaries.
(kk) The Company has and maintains, or its tenants have and maintain,
property and casualty insurance in favor of the Company and the Subsidiaries
with respect to such entities and each of the properties owned, directly or
indirectly, by the Company, in an amount and on such terms as is reasonable and
customary for the businesses of the type proposed to be conducted by the Company
and the Subsidiaries. Neither the Company nor any of the Subsidiaries has
received from any insurance company written notice of any material defects or
deficiencies affecting the insurability of any such properties.
(ll) Except as otherwise disclosed in or incorporated by reference in
the Prospectus, there are no material outstanding loans or advances or material
guarantees of indebtedness by the Company or any of the Subsidiaries to or for
the benefit of any of the officers, trustees or directors of the Company or any
of the Subsidiaries or any of the members of the families of any of them.
(mm) To the knowledge of the Company, each of the properties described
in the General Disclosure Package and the Prospectus is in compliance with all
presently applicable provisions of the Americans with Disabilities Act, except
for any failures to comply which would not, singly or in the aggregate, result
in a Material Adverse Effect.
(nn) The Company has not incurred any liability for any finder's fees
or similar payments in connection with the transactions herein contemplated
except as may otherwise exist with respect to the Underwriter pursuant to this
Agreement.
(oo) No person who is a trustee of the Company or is an officer of the
Company, and to the Company's knowledge, no person who in the aggregate
beneficially owns 5% or more of the Company's Common Shares (a "Beneficial
Owner"), is a member of the National Association of Securities Dealers, Inc.
("NASD"), a controlling stockholder of a
16
member, or an affiliate of a member, or of an underwriter or related person of a
member or underwriter, in each case with respect to any proposed offering under
this Agreement. No beneficial owner of the Company's unregistered securities
acquired within the 12 months prior to the filing of the Registration Statement,
or any amendments thereto, or to the filing of the General Disclosure Package,
the Prospectus, or any amendment or supplement thereto, has any direct or
indirect affiliation or association with any NASD member.
(pp) The Company is in compliance with all presently applicable
provisions of the Sarbanes-Oxley Act and the rules and regulations promulgated
thereunder and is actively taking steps to ensure that it will be in compliance
with other applicable provisions of the Sarbanes-Oxley Act upon the
effectiveness of such provisions.
Any certificate signed by or on behalf of the Company and delivered to the
Underwriter or to counsel for the Underwriter shall be deemed to be a
representation and warranty by the Company to the Underwriter as to the matters
covered thereby.
2. Purchase, Sale and Delivery of the Shares.
(a) On the basis of the representations, warranties, covenants and
agreements herein contained, but subject to the terms and conditions herein set
forth, the Company agrees to sell to the Underwriter, and the Underwriter agrees
to purchase from the Company, 1,000,000 Firm Shares at a purchase price per
share of $40.36.
(b) Payment of the purchase price for, and delivery of certificates
representing, the Firm Shares shall be made at the office of Dechert LLP, 30
Rockefeller Plaza, New York, New York 10112 ("Underwriter's Counsel"), or at
such other place as shall be agreed upon by the Underwriter and the Company, at
10:00 A.M., New York City time, on the fourth business day (as permitted under
Rule 15c6-1 under the Exchange Act) following the effective date of this
Agreement or such other time not later than ten business days after such date as
shall be agreed upon by the Underwriter and the Company (such time and date of
payment and delivery being herein called the "Closing Date").
Payment of the purchase price for the Firm Shares shall be made by wire
transfer in same day funds to the Company at the bank account designated in
writing by the Company at least one business day prior to the Closing Date, upon
delivery of the Firm Shares to the Underwriter through the facilities of The
Depository Trust Company for the account of the Underwriter. Certificates for
the Firm Shares shall be registered in such name or names and shall be in such
denominations as the Underwriter may request at least two business days before
the Closing Date. The Company will permit the Underwriter to examine and package
such certificates for delivery at least one full business day prior to the
Closing Date.
(c) In addition, on the basis of the representations, warranties,
covenants and agreements herein contained, but subject to the terms and
conditions herein set forth, the Company hereby grants to the Underwriter the
option to purchase up to 150,000 Additional Shares at the same purchase price
per share to be paid by the Underwriter for the
17
Firm Shares as set forth in this Section 2, for the sole purpose of covering
over-allotments in the sale of Firm Shares by the Underwriter. This option may
be exercised at any time and from time to time, in whole or in part on one or
more occasions, on or before the thirtieth day following the date of the
Prospectus Supplement, by written notice by the Underwriter to the Company. Such
notice shall set forth the aggregate number of Additional Shares as to which the
option is being exercised and the date and time, as reasonably determined by the
Underwriter, when the Additional Shares are to be delivered (any such date and
time being herein sometimes referred to as the "Additional Closing Date");
provided, however, that the Additional Closing Date shall not be earlier than
the Closing Date nor later than the eighth full business day after the date on
which the option shall have been exercised.
(d) Payment of the purchase price for, and delivery of certificates
representing, the Additional Shares shall be made at the office of Underwriter's
Counsel, or at such other place as shall be agreed upon by the Underwriter and
the Company, at 10:00 A.M., New York City time, on the Additional Closing Date,
or such other time as shall be agreed upon by the Underwriter and the Company.
Payment of the purchase price for the Additional Shares shall be made by
wire transfer in same day funds to the Company at the bank account designated in
writing by the Company at least one business day prior to the Additional Closing
Date upon delivery of certificates for the Additional Shares to the Underwriter
through the facilities of The Depository Trust Company for the account of the
Underwriter. The Additional Shares shall be registered in such name or names and
shall be in such denominations as the Underwriter may request at least two
business days before the Additional Closing Date. The Company will permit the
Underwriter to examine and package such certificates for delivery at least one
full business day prior to the Additional Closing Date
3. Offering. Upon authorization of the release of the Firm Shares by the
Underwriter, the Underwriter proposes to offer the Shares for sale to the public
upon the terms and conditions set forth in the General Disclosure Package and
the Prospectus Supplement.
4. Covenants of the Company. The Company covenants and agrees with the
Underwriter that:
(a) The Company will cause the Prospectus Supplement (including any
Preliminary Prospectus Supplement) to be filed as required by Section 1(a)
hereof (but only if the Underwriter or Underwriter's Counsel have not reasonably
objected thereto by notice to the Company after having been furnished a copy a
reasonable time prior to filing) and will notify the Underwriter promptly of
such filing. The Company will file any Issuer Free Writing Prospectus to the
extent required by Rule 433 under the Securities Act.
(b) During the period in which a prospectus relating to the Shares is
required to be delivered under the Securities Act or such date which is 90 days
after the Closing Date, whichever is later, the Company will notify the
Underwriter promptly of the time when any subsequent amendment to the
Registration Statement has become effective or any
18
Preliminary Prospectus Supplement or Prospectus Supplement or other amendment or
supplement to the Prospectus or any Issuer Free Writing Prospectus has been
filed, or of any request by the Commission for any amendment or supplement to
the Registration Statement, the Preliminary Prospectus Supplement or the
Prospectus or for additional information. The Company will prepare and file with
the Commission, promptly upon the Underwriter's request, any amendments or
supplements to the Registration Statement, the General Disclosure Package or the
Prospectus that, in the Underwriter's opinion, may be necessary or advisable in
connection with the Underwriter's distribution of the Shares; and the Company
will file no Issuer Free Writing Prospectus or any amendment or supplement to
the Registration Statement, the General Disclosure Package or the Prospectus
(other than any prospectus supplement relating to the offering of other
securities registered under the Registration Statement or any document required
to be filed under the Exchange Act that upon filing is deemed to be incorporated
by reference therein) to which the Underwriter or Underwriter's Counsel shall
reasonably object by notice to the Company after having been furnished a copy a
reasonable time prior to the filing.
(c) The Company will advise the Underwriter, promptly after it shall
receive notice or obtain knowledge thereof, of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration Statement, of
the suspension of the qualification or registration of the Shares for offering
or sale in any jurisdiction, or of the initiation or threatening of any
proceeding for any such purpose; and it will promptly use its best efforts to
prevent the issuance of any stop order or to obtain its withdrawal if such a
stop order should be issued.
(d) The Company shall comply with the Securities Act, the Exchange Act
and the Rules and Regulations to permit completion of the distribution as
contemplated in this Agreement, the Registration Statement, the General
Disclosure Package and the Prospectus. If at any time when a prospectus relating
to the Shares is required to be delivered under the Securities Act or the
Exchange Act in connection with the sales of Shares, any event shall have
occurred or condition shall exist as a result of which it is necessary, in the
reasonable opinion of counsel for the Underwriter or for the Company, to amend
the Registration Statement in order that the Registration Statement will not
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, to amend or supplement the Prospectus in order that the Prospectus
will not include an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein not misleading
in the light of the circumstances existing at the time it is delivered to a
purchaser or to amend or supplement the General Disclosure Package in order that
the General Disclosure Package will not include an untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein not misleading in the light of the circumstances, or if it
shall be necessary, in the reasonable opinion of such counsel, at any such time
to amend the Registration Statement or amend or supplement the Prospectus or the
General Disclosure Package in order to comply with the requirements of the
Securities Act, Exchange Act or the Rules and Regulations, the Company will
promptly notify the Underwriter and prepare and file with the Commission (to the
extent required by applicable law), subject to Sections 4(a) and (b), such
amendment or supplement (in form and substance reasonably
19
satisfactory to counsel for the Underwriter) as may be necessary to correct such
statement or omission or to make the Registration Statement, the Prospectus or
the General Disclosure Package comply with such requirements. The Company will
use its best efforts to have any amendment to the Registration Statement be
declared effective as soon as possible, and the Company will furnish to the
Underwriter and counsel for the Underwriter, without charge, such number of
copies of such amendment or supplement as the Underwriter may reasonably
request.
(e) The Company will promptly deliver to each of you and Underwriter's
Counsel a signed copy of the Registration Statement, as initially filed and all
amendments thereto, including all consents and exhibits filed therewith, and
will maintain in the Company's files manually signed copies of such documents
for at least five years after the date of filing. The Company will promptly
deliver to the Underwriter such number of copies of any Preliminary Prospectus,
Preliminary Prospectus Supplement, the Prospectus Supplement, the Prospectus,
the Registration Statement, and all amendments of and supplements to such
documents, if any, and all documents incorporated by reference in the
Registration Statement and Prospectus or any amendment thereof or supplement
thereto, as such Underwriter may reasonably request. Prior to 10:00 A.M., New
York time, on the business day next succeeding the date of this Agreement and
from time to time thereafter, the Company will furnish the Underwriter with
copies of the Prospectus in New York City in such quantities as such Underwriter
may reasonably request. If applicable, copies of the Preliminary Prospectus,
Preliminary Prospectus Supplement, Prospectus and Registration Statement, and
any amendments or supplements thereto furnished to the Underwriter will be
identical to the electronically transmitted copies thereof filed with the
Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.
(f) The Company will make generally available to its security holders
and to the Underwriter as soon as practicable, but in any event not later than
the end of the fiscal quarter first occurring after the first anniversary of the
date that the Prospectus Supplement is filed pursuant to Rule 424(b) under the
Securities Act, an earnings statement of the Company and the Subsidiaries (which
need not be audited) complying with Section 11(a) of the Securities Act and the
Rules and Regulations (including, at the option of the Company, Rule 158)
covering a period of twelve months beginning on the date that the Prospectus
Supplement is filed pursuant to Rule 424(b) under the Securities Act.
(g) During the period of five years from the Closing Date, the Company
will furnish to you copies of all reports or other communications (financial or
other) furnished to security holders or from time to time published or publicly
disseminated by the Company, and will deliver to you (i) as soon as they are
available, copies of any reports, financial statements and proxy or information
statements furnished to or filed with the Commission or any national securities
exchange on which any class of securities of the Company is listed; provided,
however, that the Company shall not be required to provide the Underwriter with
any such reports that have been filed with the Commission by electronic
transmission pursuant to EDGAR, and (ii) such additional information concerning
the business and financial condition of the Company as you may from time to time
reasonably request (such financial
20
information to be on a consolidated basis to the extent the accounts of the
Company and the Subsidiaries are consolidated in reports furnished to its
security holders generally or to the Commission).
(h) The Company will apply the net proceeds from the sale of the
Shares as set forth under the caption "Use of Proceeds" in the Prospectus.
(i) The Company will use its best efforts to list the Shares, subject
to official notice of issuance, on the Exchange and maintain the listing of the
Shares on the Exchange.
(j) The Company, during the period when the Prospectus is required to
be delivered under the Securities Act or the Exchange Act, will file all
documents required to be filed with the Commission pursuant to the Securities
Act, the Exchange Act and the Rules and Regulations within the time periods
required thereby.
(k) The Company will not at any time, directly or indirectly, take any
action designed to, or which might reasonably be expected to, cause or result
in, or which has constituted or which might reasonably be expected to
constitute, a violation of Regulation M under the Exchange Act, or the
stabilization of the price of its capital stock to facilitate the sale or resale
of any of the Shares.
(l) The Company will use its best efforts to continue to meet the
requirements to qualify as a REIT under the Code for each of its taxable years
for so long as the board of trustees deems it in the best interests of the
Company's shareholders to remain so qualified.
(m) The Company will not be or become, at any time prior to the
expiration of three years after the date of the Agreement, an "investment
company," as such term is defined in the 40 Act.
(n) The Company will maintain a transfer agent and, if necessary under
the jurisdiction of formation of the Company, a Registrar for its Common Shares,
Series A Preferred Shares and Series B Preferred Shares.
(o) The Company will not offer, sell, contract to sell, pledge or
otherwise dispose of, directly or indirectly, or file with the Commission or
cause to be declared effective a registration statement under the Securities Act
relating to, any Common Shares or securities convertible into, exchangeable or
exercisable for or that represent the right to receive Common Shares or warrants
or other rights to purchase Common Shares or any other securities of the Company
that are substantially similar to Common Shares, or publicly disclose the
intention to make any such offer, sale, pledge, disposition or filing, for the
period specified below (the "Lock-Up Period"), without the prior written consent
of the Underwriter, except for (i) issuances of Common Shares upon the exercise
of options or warrants disclosed as outstanding in or incorporated by reference
in the General Disclosure Package and the
21
Prospectus; (ii) the issuance of employee stock options not exercisable during
the Lock-Up Period and restricted share awards, in each case pursuant to equity
compensation plans described in the General Disclosure Package and the
Prospectus; (iii) the issuance of partnership interests in connection with
ordinary course property acquisitions that are exchangeable for Common Shares;
and (iv) the filing of a universal shelf registration statement under Rule 415
of the Securities Act covering securities of the Company; provided that in the
cases described in clauses (i), (ii) and (iii) above, these transfers be made
subject to no further transfer during the Lock-Up Period. The initial Lock-Up
Period will commence on the date hereof and will continue and include the date
90 days after the date hereof or such earlier date that the Underwriter consents
to in writing; provided, however, that if (1) during the last 17 days of the
initial Lock-Up Period, the Company releases earnings results or material news
or a material event relating to the Company occurs or (2) prior to the
expiration of the initial Lock-Up Period, the Company announces that it will
release earnings results during the 16-day period beginning on the last day of
the initial Lock-Up Period, then in each case the Lock-Up Period will be
extended until the expiration of the 18-day period beginning on the date of the
release of the earnings results or the occurrence of the material news or
material event, as applicable, unless the Underwriter waives, in writing, such
extension. The Company will provide the Underwriter with notice of any
announcement described in clause (2) of the preceding sentence that gives rise
to an extension of the Lock-Up Period.
(p) The Company will use its best efforts, in cooperation with the
Underwriter, to qualify the Shares for offering and sale under the applicable
securities laws of such states and other jurisdictions (domestic or foreign) as
the Underwriter may designate and to maintain such qualifications so long as may
be required for the distribution of the Shares in effect for a period of not
less than one year from the date hereof; provided, however, that the Company
shall not be obligated to file any general consent to service of process or to
qualify or register as a foreign corporation or as a dealer in securities in any
jurisdiction in which it is not so qualified or registered, or to subject itself
to taxation in respect of doing business in any jurisdiction in which it is not
otherwise so subject. In each jurisdiction in which the Shares have been so
qualified or registered, the Company will file such statements and reports as
may be required by the laws of such jurisdiction to continue such qualification
in effect for so long as may be required for the distribution of the Shares.
(q) The Company will use its best efforts to do and perform all things
required to be done or performed under this Agreement by the Company prior to
the Closing Date or the Additional Closing Date, as the case may be, and to
satisfy all conditions precedent to the delivery of the Firm Shares and the
Additional Shares.
(r) The Company will comply with all effective applicable provisions
of the Sarbanes-Oxley Act.
5. Free Writing Prospectuses. The Company represents and agrees that,
unless it obtains the prior consent of the Underwriter, and the Underwriter
represents and agrees that, subject to the last sentence of this Section, unless
it obtains the prior consent of the
22
Company, it has not made and will not make any offer relating to the Shares that
would constitute an Issuer Free Writing Prospectus, or that would otherwise
constitute a "free writing prospectus," as defined in Rule 405 of the Securities
Act Rules and Regulations. Any such free writing prospectus consented to by the
Company and the Underwriter is hereinafter referred to as a "Permitted Free
Writing Prospectus." The Company represents that it has treated and agrees that
it will treat each Permitted Free Writing Prospectus as an "issuer free writing
prospectus," as defined in Rule 433 of the Securities Act Rules and Regulations,
and has complied and will comply with the requirements of Rule 433 of the
Securities Act Rules and Regulations applicable to any Permitted Free Writing
Prospectus, including timely Commission filing where required, legending and
record keeping. Notwithstanding the foregoing, the Underwriter may use a free
writing prospectus that contains no "issuer information" (as defined in Rule 433
of the Securities Act Rules and Regulations) that was not included (including
through incorporation by reference) in the Preliminary Prospectus or a
previously filed Issuer Free Writing Prospectus.
6. Payment of Expenses. Whether or not the transactions contemplated by
this Agreement, the Registration Statement and the Prospectus are consummated or
this Agreement is terminated, the Company hereby agrees to pay all costs and
expenses incident to the performance of its obligations hereunder, including the
following: (i) all expenses in connection with the preparation, printing and
filing of the Registration Statement, any Preliminary Prospectus, any Issuer
Free Writing Prospectus, the General Disclosure Package and the Prospectus and
any and all amendments and supplements thereto and the mailing and delivering of
copies thereof to the Underwriter and dealers; (ii) the fees, disbursements and
expenses of the Company's counsel and accountants in connection with the
registration of the Shares under the Securities Act and the Offering; (iii) the
cost of producing this Agreement and any agreement among underwriters, blue sky
survey, closing documents and other instruments, agreements or documents
(including any compilations thereof) in connection with the Offering; (iv) all
expenses in connection with the qualification of the Shares for offering and
sale under state securities laws, if required, including the fees and
disbursements of counsel for the Underwriter in connection with such
qualification and in connection with any blue sky survey; (v) the filing fees
incident to, and the fees and disbursements of counsel for the Underwriter in
connection with, securing any required review by the NASD of the terms of the
Offering; (vi) all fees and expenses in connection with the preparation and
filing of the Registration Statement on Form 8-A relating to the Shares and all
fees and expenses in connection with listing the Shares on the Exchange; (vii)
all travel expenses of the Company's officers and employees and any other
expense of the Company incurred in connection with attending or hosting meetings
with prospective purchasers of the Shares; and (viii) any stock transfer taxes
incurred in connection with this Agreement or the Offering. The Company also
will pay or cause to be paid: (x) the cost of preparing stock certificates, if
any, representing the Shares; (y) the cost and charges of any transfer agent or
registrar for the Shares; and (z) all other costs and expenses incident to the
performance of its obligations hereunder which are not otherwise specifically
provided for in this Section 6. It is understood, however, that except as
provided in this Section, and Sections 8, 9 and 11 hereof, the Underwriter will
pay all of its own costs and expenses, including the fees of its counsel and
stock transfer taxes on resale of any of the Shares by the Underwriter.
Notwithstanding anything to the contrary in this Section 6, in the event that
this Agreement is
23
terminated pursuant to Section 7 or 11(b) hereof, or subsequent to a Material
Adverse Change, the Company will pay all out-of-pocket expenses of the
Underwriter (including but not limited to fees and disbursements of counsel to
the Underwriter) incurred in connection herewith.
7. Conditions of Underwriter's Obligations. The obligations of the
Underwriter to purchase and pay for the Firm Shares and the Additional Shares,
as provided herein, shall be subject to the accuracy of the representations and
warranties of the Company herein contained, as of the date hereof and as of the
Closing Date (for purposes of this Section 7 "Closing Date" shall refer to the
Closing Date for the Firm Shares and any Additional Closing Date, if different,
for the Additional Shares), to the absence from any certificates, opinions,
written statements or letters furnished to you or to Underwriter's Counsel
pursuant to this Section 7 of any material misstatement or omission, to the
performance by the Company of its obligations hereunder, and to each of the
following additional conditions:
(a) The Registration Statement shall have become effective and all
necessary regulatory approvals shall have been received not later than 5:30
P.M., New York time, on the date of this Agreement, or at such later time and
date as shall have been consented to in writing by the Underwriter; the
Prospectus containing information relating to the description of the Shares and
the method of distribution and similar matters shall have been filed with the
Commission pursuant to Rule 424(b) in accordance with Section 4(a) hereof; and,
at or prior to the Closing Date no stop order suspending the effectiveness of
the Registration Statement or any post-effective amendment thereof shall have
been issued and no proceedings therefor shall have been initiated or threatened
by the Commission, nor has any state securities authority suspended the
qualification or registration of the Shares for offering or sale in any
jurisdiction and any request of the Commission for additional information (to be
included in the Registration Statement, the General Disclosure Package or the
Prospectus or otherwise) shall have been complied with to the satisfaction of
the Underwriter and Underwriter's Counsel. Each Issuer Free Writing Prospectus
shall have been timely filed with the Commission under Rule 433 or 164 of the
Securities Act Rules and Regulations (to the extent required by Rule 433 of the
Securities Act Rules and Regulations).
(b) The Underwriter shall not have advised the Company that the
Registration Statement or any amendment thereto contains an untrue statement of
fact that in the opinion of the Underwriter or Underwriter's Counsel is material
or omits to state a fact that in the opinion of the Underwriter or its counsel
is material and is required to be stated therein or is necessary to make the
statements therein not misleading, that the General Disclosure Package (at the
Applicable Time and at the Closing Date) or the Prospectus, or any amendment or
supplement thereto, contains an untrue statement of fact that in the opinion of
the Underwriter or Underwriter's Counsel is material or omits to state a fact
that in the opinion of the Underwriter or Underwriter's Counsel is material and
is necessary, in the light of the circumstances under which they were made, to
make the statements therein not misleading.
24
(c) At the Closing Date you shall have received the favorable written
opinion of Sonnenschein Nath & Rosenthal LLP, counsel for the Company, dated the
Closing Date addressed to the Underwriter substantially in the form attached
hereto as Annex 1.
(d) All proceedings taken in connection with the sale of the Firm
Shares and the Additional Shares as herein contemplated shall be satisfactory in
form and substance to the Underwriter and to Underwriter's Counsel, and the
Underwriter shall have received from Underwriter's Counsel a favorable written
opinion, dated as of the Closing Date, with respect to the issuance and sale of
the Shares, the Registration Statement, the General Disclosure Package and the
Prospectus and such other related matters as the Underwriter may require, and
the Company shall have furnished to Underwriter's Counsel such documents as they
may reasonably request for the purpose of enabling them to pass upon such
matters.
(e) At the Closing Date you shall have received a certificate of the
Chief Executive Officer and Chief Financial Officer of the Company, dated the
Closing Date to the effect that (i) the condition set forth in subsection (a) of
this Section 7 has been satisfied, (ii) as of the date hereof and as of the
Closing Date, the representations and warranties of the Company set forth in
Section 1 hereof are accurate, (iii) as of the Closing Date all agreements,
conditions and obligations of the Company to be performed or complied with
hereunder on or prior thereto have been duly performed or complied with, (iv)
the Company and the Subsidiaries have not sustained any material loss or
interference with their respective businesses or properties from fire, flood,
hurricane, accident or other calamity, whether or not covered by insurance, or
from any labor dispute or any legal or governmental proceeding, (v) no stop
order suspending the effectiveness of the Registration Statement or any
post-effective amendment thereof has been issued and no proceedings therefor
have been initiated or threatened by the Commission and (vi) subsequent to the
respective dates as of which information is given in the Registration Statement,
the General Disclosure Package and the Prospectus there has not been any
Material Adverse Change or any development involving a prospective Material
Adverse Change, whether or not arising from transactions in the ordinary course
of business, in or affecting (x) the business, condition (financial or
otherwise), results of operations, shareholders' equity, properties, affairs or
prospects of the Company and the Subsidiaries, taken as a whole; (y) the
long-term debt or capital stock of the Company or any of its Subsidiaries; or
(z) the Offering or consummation of any of the other transactions contemplated
by this Agreement, the Registration Statement and the Prospectus.
(f) At the time this Agreement is executed and at the Closing Date,
you shall have received comfort letters from KPMG LLP, independent public
accountants for the Company, and Ernst & Young LLP, in each case dated as of the
date of this Agreement and as of the Closing Date addressed to the Underwriter
and in form and substance satisfactory to the Underwriter and Underwriter's
Counsel.
(g) Subsequent to the execution and delivery of this Agreement or, if
earlier, the dates as of which information is given in the Registration
Statement (exclusive of any amendment thereof), the General Disclosure Package
and the Prospectus and through the
25
Closing, there shall not have been any material change in the capital stock
(except pursuant to the Company's dividend reinvestment plan, as in effect on
the date hereof, or the exercise of vested options), or long-term debt of the
Company or any of the Subsidiaries or any change or development involving a
change, whether or not arising from transactions in the ordinary course of
business, in the business, condition (financial or otherwise), results of
operations, shareholders' equity, properties, affairs or prospects of the
Company and the Subsidiaries, taken as a whole, including but not limited to the
occurrence of any fire, flood, explosion or other calamity at any of the
properties owned or leased by the Company or any of its Subsidiaries, the effect
of which, in any such case described above, is, in the reasonable judgment of
the Underwriter, so material and adverse as to make it impracticable or
inadvisable to proceed with the Offering on the terms and in the manner
contemplated in the General Disclosure Package and the Prospectus (exclusive of
any supplement).
(h) Prior to the Closing Date, the Shares shall have been approved for
listing, subject to official notice of issuance, on the Exchange.
(i) Subsequent to the execution and delivery of this Agreement (i) no
downgrading or adverse change shall have occurred in the rating accorded any
security of the Company by any "nationally recognized statistical rating
organization," as that term is defined by the Commission for purposes of Rule
436(g)(2) of the Securities Act Rules and Regulations and (ii) no such
organization shall have publicly announced that it has under surveillance or
review, with possible negative implications, its rating of any security of the
Company, that, in either event, makes it impractical or inadvisable, in the
Underwriter's judgment, to offer or deliver the Shares on the terms and in the
manner contemplated in the General Disclosure Package and the Prospectus.
(j) Prior to the Closing Date, the Company shall have obtained for the
benefit of the Underwriter the agreement (a "Lock-Up Agreement"), in the form
set forth as Annex 2 hereto, of each of its executive officers;
(k) The Company shall have furnished the Underwriter and Underwriter's
Counsel with such other certificates, opinions or other documents as they may
have reasonably requested.
If any of the conditions specified in this Section 7 shall not have been
fulfilled when and as required by this Agreement, or if any of the certificates,
opinions, written statements or letters furnished to you or to Underwriter's
Counsel pursuant to this Section 7 shall not be satisfactory in form and
substance to the Underwriter and Underwriter's Counsel, acting reasonably, all
obligations of the Underwriter hereunder may be cancelled by the Underwriter at,
or at any time prior to, the Closing Date and the obligations of the Underwriter
to purchase the Additional Shares may be cancelled by the Underwriter at, or at
any time prior to, the Additional Closing Date. Notice of such cancellation
shall be given to the Company in writing, or by telephone. Any such telephone
notice shall be confirmed promptly thereafter in writing.
26
8. Indemnification.
(a) The Company shall indemnify and hold harmless the Underwriter and
each person, if any, who controls the Underwriter within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act, against any and all
losses, liabilities, claims, damages and expenses whatsoever as incurred
(including but not limited to attorneys' fees and any and all expenses
whatsoever incurred in investigating, preparing or defending against any
litigation, commenced or threatened, or any claim whatsoever, and any and all
amounts paid in settlement of any claim or litigation), joint or several, to
which they or any of them may become subject under the Securities Act, the
Exchange Act or otherwise, insofar as such losses, liabilities, claims, damages
or expenses (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement, as originally filed or any amendment thereof, or any
related Preliminary Prospectus, any Issuer Free Writing Prospectus, the General
Disclosure Package or the Prospectus, or in any supplement thereto or amendment
thereof, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading; provided, however, that the Company will
not be liable in any such case to the extent but only to the extent that any
such loss, liability, claim, damage or expense arises out of or is based upon
any such untrue statement or alleged untrue statement or omission or alleged
omission made therein in reliance upon and in conformity with written
information furnished to the Company by or on behalf of the Underwriter
expressly for use therein. The parties agree that such information provided by
or on behalf of the Underwriter consists solely of the material referred to in
the second to last sentence of Section 1(b) hereof. This indemnity agreement
will be in addition to any liability which the Company may otherwise have,
including but not limited to other liability under this Agreement.
(b) The Underwriter shall indemnify and hold harmless the Company,
each of the trustees of the Company and each other person, if any, who controls
the Company within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act, against any losses, liabilities, claims, damages and
expenses whatsoever as incurred (including but not limited to attorneys' fees
and any and all expenses whatsoever incurred in investigating, preparing or
defending against any litigation, commenced or threatened, or any claim
whatsoever, and any and all amounts paid in settlement of any claim or
litigation), joint or several, to which they or any of them may become subject
under the Securities Act, the Exchange Act or otherwise, insofar as such losses,
liabilities, claims, damages or expenses (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement, as originally filed or
any amendment thereof, or any related Preliminary Prospectus, any Issuer Free
Writing Prospectus, the General Disclosure Package or the Prospectus, or in any
amendment thereof or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that any such loss, liability,
claim, damage or expense arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with
27
information furnished in writing to the Company by or on behalf of the
Underwriter specifically for use therein; provided, however, that in no case
shall the Underwriter be liable or responsible for any amount in excess of the
underwriting discount or commission applicable to the Shares to be purchased by
such Underwriter hereunder. This indemnity will be in addition to any liability
which such Underwriter may otherwise have, including but not limited to other
liability under this Agreement. The parties acknowledge and agree that such
information provided by or on behalf of the Underwriter consists solely of the
material referred to in the second to last sentence of Section 1(b) hereof.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of any claims or the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify each party against whom
indemnification is to be sought in writing of the claim or the commencement
thereof, but the failure so to notify an indemnifying party shall not relieve
the indemnifying party from any liability which it may have under this Section
8. In case any such claim or action is brought against any indemnified party,
and it notifies an indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate, at its own expense in the
defense of such action, and to the extent it may elect by written notice
delivered to the indemnified party promptly after receiving the aforesaid notice
from such indemnified party, to assume the defense thereof with counsel
satisfactory to such indemnified party; provided, however, that counsel to the
indemnifying party shall not (except with the written consent of the indemnified
party) also be counsel to the indemnified party. Notwithstanding the foregoing,
the indemnified party or parties shall have the right to employ its or their own
counsel in any such case, but the fees and expenses of such counsel shall be at
the expense of such indemnified party or parties unless (i) the employment of
such counsel shall have been authorized in writing by one of the indemnifying
parties in connection with the defense of such action, (ii) the indemnifying
parties shall not have employed counsel to have charge of the defense of such
action within a reasonable time after notice of commencement of the action,
(iii) the indemnifying party does not diligently defend the action after
assumption of the defense, or (iv) such indemnified party or parties shall have
reasonably concluded that there may be defenses available to it or them which
are different from or additional to those available to one or all of the
indemnifying parties (in which case the indemnifying parties shall not have the
right to direct the defense of such action on behalf of the indemnified party or
parties), in any of which events such fees and expenses shall be borne by the
indemnifying parties. No indemnifying party shall, without the prior written
consent of the indemnified parties, effect any settlement or compromise of, or
consent to the entry of judgment with respect to, any pending or threatened
claim, investigation, action or proceeding in respect of which indemnity or
contribution may be or could have been sought by an indemnified party under this
Section 8 or Section 9 hereof (whether or not the indemnified party is an actual
or potential party thereto), unless (x) such settlement, compromise or judgment
(i) includes an unconditional release of the indemnified party from all
liability arising out of such claim, investigation, action or proceeding and
(ii) does not include a statement as to or an admission of fault, culpability or
any failure to act, by or on behalf of the indemnified party, and (y) the
indemnifying party confirms in writing
28
its indemnification obligations hereunder with respect to such settlement,
compromise or judgment.
9. Contribution. In order to provide for contribution in circumstances in
which the indemnification provided for in Section 8 hereof is for any reason
held to be unavailable from any indemnifying party or is insufficient to hold
harmless a party indemnified thereunder, the Company and the Underwriter shall
contribute to the aggregate losses, claims, damages, liabilities and expenses of
the nature contemplated by such indemnification provision (including any
investigation, legal and other expenses incurred in connection with, and any
amount paid in settlement of, any action, suit or proceeding or any claims
asserted, but after deducting in the case of losses, claims, damages,
liabilities and expenses suffered by the Company any contribution received by
the Company from persons, other than the Underwriter, who may also be liable for
contribution, including persons who control the Company within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act, officers of
the Company who signed the Registration Statement and trustees of the Company)
as incurred to which the Company and the Underwriter may be subject, in such
proportions as is appropriate to reflect the relative benefits received by the
Company on the one hand and the Underwriter on the other hand from the Offering
or, if such allocation is not permitted by applicable law, in such proportion as
are appropriate to reflect not only the relative benefits referred to above but
also the relative fault of the Company on the one hand and the Underwriter on
the other hand in connection with the statements or omissions which resulted in
such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative benefits received by the Company
on the one hand and the Underwriter on the other hand shall be deemed to be in
the same proportion as (x) the total proceeds from the Offering (net of
underwriting discounts and commissions but before deducting expenses) received
by the Company bears to (y) the underwriting discount or commissions received by
the Underwriter, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault of the Company and of the Underwriter shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company or the
Underwriter and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The Company
and the Underwriter agree that it would not be just and equitable if
contribution pursuant to this Section 9 were determined by pro rata allocation
or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 9. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 9 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission. Notwithstanding the provisions of
this Section 9, (i) 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 were offered to the public exceeds the
amount of any damages which the Underwriter has otherwise been required to pay
by reason of
29
such untrue or alleged untrue statement or omission or alleged omission and (ii)
no person guilty of fraudulent misrepresentation (within the meaning of Section
10(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. For purposes of this
Section 9, each person, if any, who controls an Underwriter within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act shall have
the same rights to contribution as such Underwriter, and each person, if any,
who controls the Company within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act, each officer of the Company who shall have
signed the Registration Statement and each trustee of the Company shall have the
same rights to contribution as the Company, subject in each case to clauses (i)
and (ii) of the immediately preceding sentence. Any party entitled to
contribution will, promptly after receipt of notice of commencement of any
action, suit or proceeding against such party in respect of which a claim for
contribution may be made against another party or parties, notify each party or
parties from whom contribution may be sought, but the omission to so notify such
party or parties shall not relieve the party or parties from whom contribution
may be sought from any obligation it or they may have under this Section 9 or
otherwise.
10. Survival of Representations and Agreements. All representations and
warranties, covenants and agreements of the Underwriter and the Company
contained in this Agreement or in certificates of officers of the Company or any
Subsidiary submitted pursuant hereto, including the agreements contained in
Section 6, the indemnity agreements contained in Section 8 and the contribution
agreements contained in Section 9, shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of the Underwriter
or any controlling person thereof or by or on behalf of the Company, any of its
officers and trustees or any controlling person thereof, and shall survive
delivery of and payment for the Shares to and by the Underwriter. The
representations and agreements contained in Sections 1, 5, 6, 8, 9, 10, 11 and
12 through 18, inclusive, hereof shall survive any termination of this
Agreement, including termination pursuant to Section 11 hereof.
11. Effective Date of Agreement; Termination.
(a) This Agreement shall become effective upon the execution of this
Agreement. Until this Agreement becomes effective as aforesaid, it may be
terminated by the Company by notifying you or by the Underwriter notifying the
Company. Notwithstanding any termination of this Agreement, the provisions of
this Section 11 and of Sections 1, 5, 6, 8, 9, 10 and 12 through 18, inclusive,
shall be in full force and effect at all times after the execution hereof.
(b) The Underwriter shall have the right to terminate this Agreement
at any time prior to the Closing Date or to terminate the obligation, if any, of
the Underwriter to purchase the Additional Shares at any time prior to the
Additional Closing Date, as the case may be, if (A) there has been, since the
time of execution of this Agreement or since the respective dates as of which
information is given in the General Disclosure Package and the Prospectus
(exclusive of any supplement thereto), any material adverse change in the
condition, financial or
30
otherwise, or in the earnings, business affairs or business prospects of the
Company and the Subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, (B) any domestic or international
event or act or occurrence has materially disrupted, or in the opinion of the
Underwriter will in the immediate future materially disrupt, the market for the
Company's securities or securities in general; or (C) if trading on The New York
Stock Exchange (the "Exchange") shall have been suspended or been made subject
to material limitations, or minimum or maximum prices for trading shall have
been fixed, or maximum ranges for prices for securities shall have been
required, on the Exchange or by order of the Commission or any other
governmental authority having jurisdiction; or (D) if a banking moratorium has
been declared by any state or federal authority or if any material disruption in
commercial banking or securities settlement or clearance services shall have
occurred; or (E) any downgrading shall have occurred in the Company's corporate
credit rating or the rating accorded the Company's debt securities or preferred
stock by any "nationally recognized statistical rating organization" (as defined
for purposes of Rule 436(g) under the Securities Act) or if any such
organization shall have publicly announced that it has under surveillance or
review, with possible negative implications, its rating of any of the Company's
debt securities; or (F) (i) if there shall have occurred any outbreak or
escalation of hostilities or acts of terrorism involving the United States or
there is a declaration of a national emergency or war by the United States or
(ii) if there shall have been any other calamity or crisis or any change in
political, financial or economic conditions if the effect of any such event in
(i) or (ii), in the judgment of the Underwriter, makes it impracticable or
inadvisable to proceed with the offering, sale and delivery of the Firm Shares
or the Additional Shares, as the case may be, on the terms and in the manner
contemplated by the General Disclosure Package and the Prospectus.
(c) Any notice of termination pursuant to this Section 11 shall be in
writing.
(d) If this Agreement shall be terminated pursuant to any of the
provisions hereof (other than pursuant to notification by the Underwriter as
provided in Section 11(a) hereof), or if the sale of the Shares provided for
herein is not consummated because any condition to the obligations of the
Underwriter set forth herein is not satisfied or because of any refusal,
inability or failure on the part of the Company to perform any agreement herein
or comply with any provision hereof, the Company will, subject to demand by the
Underwriter, reimburse the Underwriter for all out-of-pocket expenses (including
the fees and expenses of its counsel), incurred by the Underwriter in connection
herewith.
12. Notices. All communications hereunder, except as may be otherwise
specifically provided herein, shall be in writing, and:
(a) if sent to the Underwriter, shall be mailed, delivered, or faxed
and confirmed in writing, to the RBC Capital Markets Corporation, 1 Liberty
Plaza, 165 Broadway, 5th Floor, New York, New York 10006, Attention: Legal
Department, with a copy to Underwriter's Counsel at Dechert LLP, 30 Rockefeller
Plaza, New York, New York 10112, Attention: Bonnie Barsamian, Esq.; and
31
(b) if sent to the Company, shall be mailed, delivered, or faxed and
confirmed in writing to the Company and its counsel at the addresses set forth
in the Registration Statement, Attention: Chief Executive Officer.
Any such notices and other communications shall take effect at the time of
receipt thereof.
13. Parties. This Agreement shall inure solely to the benefit of, and shall
be binding upon, the Underwriter and the Company and the controlling persons,
directors, trustees, officers, employees and agents referred to in Sections 8
and 9 hereof, and their respective successors and assigns, and no other person
shall have or be construed to have any legal or equitable right, remedy or claim
under or in respect of or by virtue of this Agreement or any provision herein
contained. This Agreement and all conditions and provisions hereof are intended
to be for the sole and exclusive benefit of the parties hereto and said
controlling persons and their respective successors, officers, directors,
trustees, employees, agents, heirs and legal representatives, and it is not for
the benefit of any other person, firm or corporation. The term "successors and
assigns" shall not include a purchaser, in its capacity as such, of Shares from
the Underwriter.
14. Governing Law and Jurisdiction; Waiver of Jury Trial. THIS AGREEMENT
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK. The Company irrevocably (a) submits to the jurisdiction of any court
of the State of New York or the United States District Court for the Southern
District of the State of New York for the purpose of any suit, action, or other
proceeding arising out of this Agreement, or any of the agreements or
transactions contemplated by this Agreement, the Registration Statement and the
Prospectus (each, a "Proceeding"), (b) agrees that all claims in respect of any
Proceeding may be heard and determined in any such court, (c) waives, to the
fullest extent permitted by law, any immunity from jurisdiction of any such
court or from any legal process therein, (d) agrees not to commence any
Proceeding other than in such courts, and (e) waives, to the fullest extent
permitted by law, any claim that such Proceeding is brought in an inconvenient
forum. THE COMPANY (ON BEHALF OF ITSELF AND, TO THE FULLEST EXTENT PERMITTED BY
LAW, ON BEHALF OF ITS RESPECTIVE EQUITY HOLDERS AND CREDITORS) HEREBY WAIVES ANY
RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED UPON, ARISING
OUT OF OR IN CONNECTION WITH THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED BY
THIS AGREEMENT, THE REGISTRATION STATEMENT AND THE PROSPECTUS.
15. Absence of Fiduciary Relationship. The Company acknowledges and agrees
that:
(a) The Underwriter has been retained solely to act as underwriter in
connection with the sale of the Company's securities and that no fiduciary,
advisory or agency relationship between the Company and the Underwriter has been
created in respect of any of the
32
transactions contemplated by this Agreement, irrespective of whether the
Underwriter has advised or is advising the Company on other matters;
(b) the price of the securities set forth in this Agreement was
established by the Company following discussions and arms-length negotiations
with the Underwriter, and the Company is capable of evaluating and understanding
and understands and accepts the terms, risks and conditions of the transactions
contemplated by this Agreement;
(c) it has been advised that the Underwriter and its affiliates are
engaged in a broad range of transactions which may involve interests that differ
from those of Company and that the Underwriter has no obligation to disclose
such interests and transactions to Company by virtue of any fiduciary, advisory
or agency relationship; and
(d) it waives, to the fullest extent permitted by law, any claims it
may have against the Underwriter for breach of fiduciary duty or alleged breach
of fiduciary duty in respect of the transactions contemplated by this Agreement
and agrees that the Underwriter shall have no liability (whether direct or
indirect) to Company in respect of such a fiduciary duty claim or to any person
asserting a fiduciary duty claim on behalf of or in right of the Company,
including shareholders, employees or creditors of the Company.
16. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same instrument. Delivery of
a signed counterpart of this Agreement by facsimile transmission shall
constitute valid and sufficient delivery thereof.
17. 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.
18. Time is of the Essence. Time shall be of the essence in this Agreement.
As used herein, the term "business day" shall mean any day when the Commission's
office in Washington, D.C. is open for business.
[signature page follows]
33
If the foregoing correctly sets forth your understanding, please so
indicate in the space provided below for that purpose, whereupon this letter
shall constitute a binding agreement among us.
Very truly yours,
ENTERTAINMENT PROPERTIES TRUST
By:
------------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Accepted as of the date first above written
RBC CAPITAL MARKETS CORPORATION
By:
------------------------------------
Name:
-----------------------------
Title:
----------------------------
34
SCHEDULE I
None.
SchI-1
EXHIBIT A
Subsidiaries
Wholly Owned Subsidiary Jurisdiction of Organization
- ----------------------- ----------------------------
EPT DownREIT, Inc. Missouri
EPT DownREIT II, Inc. Missouri
3 Theatres, Inc.* Missouri
Megaplex Holdings, Inc. Missouri
Megaplex Nine Inc. Missouri
Theater Sub Inc.* Missouri
Megaplex Four Inc.* Missouri
EPR Canada, Inc. Missouri
EPT Melbourne, Inc. Missouri
EPT Boynton Beach 16, Inc. Missouri
EPT Sarasota 20, Inc. Missouri
EPT Kendall Empire 20, Inc. Missouri
EPR TRS Holdings, Inc. Missouri
EPR TRS I, Inc. Missouri
EPR TRS II, Inc. Missouri
VinREIT, LLC Delaware
WestCol Holdings LLC Delaware
WestCol Corp. Delaware
WestCol Center LLC* Delaware
ExA-1
Wholly Owned Subsidiary Jurisdiction of Organization
- ----------------------- ----------------------------
WestCol Theatre LLC Delaware
Westminster Promenade Homeowners Association LLC Colorado
Flik, Inc. Delaware
Flik Depositor, Inc. Delaware
Tampa Veterans 24, Inc. Delaware
Cantera 30, Inc. Delaware
EPT Waterparks, Inc. Missouri
EPR Hialeah, Inc. Missouri
EPT New Roc LLP Delaware
EPT New Roc GP, Inc. Delaware
30 West Pershing LLC Missouri
EPR North Trust Delaware
EPR Metropolis Trust Delaware
Burbank Village, Inc. Delaware
Burbank Village, L.P. Delaware
Exit 108 Entertainment LLC - AL Alabama
EPT Kalamazoo, Inc. Missouri
EPR Pensacola, Inc. Missouri
EPT Crotched Mountain, Inc. Missouri
EPT Mad River, Inc. Missouri
EPT Davie, Inc. Delaware
EPT Aliso Viejo, Inc. Delaware
EPT Boise, Inc. Delaware
ExA-2
Wholly Owned Subsidiary Jurisdiction of Organization
- ----------------------- ----------------------------
EPT Deer Valley, Inc. Delaware
EPT Hamilton, Inc. Delaware
EPT Little Rock, Inc. Delaware
EPT Pompano, Inc. Delaware
EPT Raleigh Theatres, Inc. Delaware
Kanata Entertainment Holdings, Inc. New Brunswick, Canada
Mississauga Entertainment Holdings, Inc. New Brunswick, Canada
Oakville Entertainment Holdings, Inc. New Brunswick, Canada
Whitby Entertainment Holdings, Inc. New Brunswick, Canada
Metropolis Entertainment Holdings, Inc. New Brunswick, Canada
* Equity interest pledged to secure loan
Not Wholly Owned Subsidiary Jurisdiction of Organization
- --------------------------- ----------------------------
Tampa Veterans 24, L.P. Delaware
(limited partnership interest wholly-owned
by Atlantic - EPR II)**
Cantera 30 Theatre, L.P. Delaware
(limited partnership interest wholly-owned
by Atlantic - EPR I)**
New Roc Associates L.P. New York
(general partnership interest wholly-owned by
EPT New Roc GP, Inc.; 70.4% of limited partnership
interest owned by EPT New Roc LLC)
**Atlantic's interest may be exchanged for EPR shares or cash, at EPR's option.
ExA-3
ANNEX 1
Form of Opinion of Company Counsel
(i) The Company is a real estate investment trust duly formed and
validly existing under and by virtue of the laws of the State of Maryland and is
in good standing with the State Department of Assessments and Taxation of the
State of Maryland with full power and authority to own, lease and operate its
properties and conduct its business as described in the Registration Statement
and Prospectus. Each of the Company's subsidiaries is a corporation, limited
partnership or limited liability company, as the case may be, duly formed and
validly existing in its jurisdiction of organization and is in good standing in
its respective jurisdiction of organization with full power and authority to
own, lease and operate its properties and conduct the business in which it is
engaged. Each of the Company and its subsidiaries is duly qualified and in good
standing as a foreign corporation in each jurisdiction in which the character or
location of its properties (owned, leased or licensed) or the nature or conduct
of its business makes such qualification necessary, except for those failures to
be so qualified or in good standing which will not in the aggregate have a
Material Adverse Effect.
(ii) The Company has an authorized capitalization as set forth in the
Registration Statement, the General Disclosure Package and the Prospectus. All
of the issued shares of capital stock of the Company have been duly and validly
authorized and issued, are fully paid and non-assessable and are not now in
violation of or subject to any preemptive or, to the best of such counsel's
knowledge, similar rights that entitle or will entitle any person to acquire any
Shares from the Company upon issuance or sale thereof. All of the issued shares
of capital stock, partnership interests or membership interests, as the case may
be, of each subsidiary of the Company have been duly and validly authorized and
issued and are fully paid and non-assessable and, except as disclosed in Exhibit
A to the Underwriting Agreement, are owned directly or indirectly by the
Company, free and clear of all liens, encumbrances, equities or claims (other
than pledges of the shares of certain subsidiaries to secure indebtedness to
lenders). The issued and outstanding Common Shares, Series A Preferred Shares
and Series B Preferred Shares conform to the descriptions thereof contained in
the Registration Statement, the General Disclosure Package and the Prospectus.
(iii) The Shares to be delivered on the Closing Date and the
Additional Closing Date, if any, have been duly and validly authorized by the
Company for issuance and sale pursuant to the Underwriting Agreement. When
issued and delivered by the Company in accordance with the terms of the
Underwriting Agreement, the Shares will be duly and validly issued, fully paid
and non-assessable and will not have been issued in violation or subject to
preemptive or, to the best of such counsel's knowledge, similar rights that
entitle or will entitle any person to acquire any Shares from the Company upon
issuance or sale thereof. The form of certificate used to evidence the Shares is
in due and proper form and complies with all applicable statutory requirements,
with any applicable requirements of the Company's organizational
Anx1-1
documents and with the requirements of the New York Stock Exchange ("NYSE"). The
Shares conform in all material respects to the descriptions thereof contained in
the Registration Statement, the General Disclosure Package and the Prospectus.
(iv) The Common Shares, Series A Preferred Shares and Series B
Preferred Shares currently outstanding are listed, and the Shares to be sold
under the Underwriting Agreement to the Underwriter are duly authorized for
listing on the NYSE.
(v) The Underwriting Agreement has been duly and validly authorized,
executed and delivered by the Company and constitutes the legal, valid and
binding obligation of the Company, enforceable against the Company in accordance
with its terms subject to the qualification that the enforceability may be
limited by bankruptcy, fraudulent conveyance, insolvency, reorganization,
moratorium, and other laws relating to or affecting creditors' rights generally
and by general equitable principles.
(vi) To the best of such counsel's knowledge, there is no litigation
or governmental or other proceeding or investigation, before any court or before
or by any public body or board pending or threatened against, or involving the
assets, properties or businesses of, the Company or any of its subsidiaries,
involving the Company's or any of its subsidiaries' officers or trustees or to
which any of the Company's or any of its subsidiaries' properties or other
assets are subject which might reasonably be expected to have a Material Adverse
Effect or to affect the consummation of the transactions contemplated herein or
the performance by the Company of its obligations hereunder.
(vii) The execution, delivery, and performance of the Underwriting
Agreement and the consummation of the transactions contemplated by the
Underwriting Agreement (including the issuance of Shares), the Registration
Statement and the Prospectus do not and will not (A) conflict with or result in
a breach of any of the terms and provisions of, or constitute a default (or an
event which with notice or lapse of time, or both, would constitute a default)
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any of its
subsidiaries pursuant to, any indenture, mortgage, deed of trust, loan agreement
or any other agreement, instrument, franchise, license or permit known to such
counsel to which the Company or any of its subsidiaries is a party or by which
any of the Company or any of its subsidiaries or their respective properties or
assets may be bound or (B) violate or conflict with any provision of the
declaration of trust, certificate of incorporation, certificate of limited
partnership, articles of organization, by-laws or other organizational
documents, as the case may be, of the Company or any of its subsidiaries, or, to
the best knowledge of such counsel, any judgment, decree, order, statute, rule
or regulation of any court or any public, governmental or regulatory agency or
body having jurisdiction over the Company or any of its subsidiaries or any of
their respective properties or assets.
(viii) No consent, approval, authorization, order, registration,
filing, qualification, license or permit of or with any court or any public,
governmental, or regulatory agency or body having jurisdiction over the Company
or any of its subsidiaries or any of their respective properties or assets is
required for the execution, delivery and performance of this
Anx1-2
Agreement or the consummation of the transactions contemplated by the
Underwriting Agreement, the Registration Statement and the Prospectus, except
for (1) such as may be required under state securities or Blue Sky laws in
connection with the purchase and distribution of the Shares by the Underwriter
(as to which such counsel need express no opinion) or (2) such as have been made
or obtained under the Securities Act.
(ix) The Registration Statement, at the time it became effective and
at the date of the filing of the Company's Annual Report on Form 10-K for the
year ended December 31, 2004, the Preliminary Prospectus and the Prospectus and
any amendments thereof or supplements thereto (other than the financial
statements and schedules and other financial data included or incorporated by
reference therein, as to which no opinion need be rendered), at the date of
filing thereof with the Commission and at the Closing Date, complied as to form
in all material respects with the requirements of the Securities Act, the
Exchange Act and the Rules and Regulations. The documents filed under the
Exchange Act and incorporated by reference in the Registration Statement, the
Preliminary Prospectus included in the General Disclosure Package or the
Prospectus or any amendment thereof or supplement thereto (other than the
financial statements and schedules and other financial data included or
incorporated by reference therein, as to which no opinion need be rendered) when
they became effective or were filed with the Commission, as the case may be,
complied as to form in all material respects with the Securities Act or the
Exchange Act, as applicable, and the Rules and Regulations.
(x) The statements under the captions "Risk Factors," "U.S. Federal
Income Tax Consequences," "Additional Federal Income Tax Consequences,"
"Description of Securities," and "Underwriting" in the Prospectus and the
Preliminary Prospectus, and in Items 14 and 15 of Part II of the Registration
Statement, insofar as such statements constitute a summary of the legal matters,
documents or proceedings referred to therein, fairly present the information
called for with respect to such legal matters, documents and proceedings.
(xi) The Company and its subsidiaries are not and, after giving effect
to the offering and sale of the Shares and the application of the proceeds
thereof as described in the Prospectus, will not be, an "investment company" as
such term is defined in the Investment Company Act of 1940, as amended.
(xii) The Registration Statement and all post-effective amendments, if
any, have become effective under the Act, and, to the best knowledge of such
counsel, no stop order suspending the effectiveness of the Registration
Statement or any post-effective amendment thereof has been issued and no
proceedings therefor have been initiated or threatened by the Commission and all
filings required by Rule 424(b) under the Securities Act have been made.
(xiii) The Company has full right, power and authority to execute and
deliver the Underwriting Agreement and the Shares and to perform its obligations
thereunder, and all corporate action required to be taken for the due and proper
authorization, execution and delivery of the Underwriting Agreement and the
Shares and the consummation of the transactions contemplated by Underwriting
Agreement, the Registration Statement and the Prospectus and as described in the
Prospectus have been duly and validly taken.
Anx1-3
(xiv) To the best knowledge of such counsel, there is no contract or
agreement of a character (1) to be filed under the Exchange Act if upon such
filing they would be incorporated by reference in the Registration Statement,
the Preliminary Prospectus or Prospectus or (2) to be filed as exhibits to the
Registration Statement that are not described and filed as required.
(xv) Neither the Company nor any of its subsidiaries is in violation
of its respective declaration of trust, articles of incorporation, articles of
organization, certificate of limited partnership, by-laws or other
organizational document, as the case may be, and, to the best of such counsel's
knowledge after due inquiry, neither the Company nor any of its subsidiaries is
in default in the performance of any obligation, agreement, covenant or
condition contained in any indenture, loan agreement, mortgage, lease or other
agreement or instrument that is material to the Company and its subsidiaries,
taken as a whole, to which the Company or any of its subsidiaries is a party or
by which the Company or any of its subsidiaries or their respective property is
bound.
(xvi) Neither the Company nor any of its subsidiaries has violated any
provisions of the Employee Retirement Income Security Act of 1974, as amended,
or any provisions of the Foreign Corrupt Practices Act, or the rules and
regulations promulgated thereunder, except for such violations which, singly or
in the aggregate, would not have a Material Adverse Effect.
(xvii) Each of the Company and its subsidiaries has such
authorizations of, and has made all filings with and notices to, all
governmental or regulatory authorities and self-regulatory organizations and all
courts and other tribunals, including, without limitation, under any applicable
environmental laws, as are necessary to own, lease, license and operate its
respective properties and to conduct its business, except where the failure to
have any such authorization or to make any such filing or notice would not,
singly or in the aggregate, have a Material Adverse Effect; each such
authorization is valid and in full force and effect and each of the Company and
its subsidiaries is in compliance with all the terms and conditions thereof and
with the rules and regulations of the authorities and governing bodies having
jurisdiction with respect thereto; and no event has occurred (including, without
limitation, the receipt of any notice from any authority or governing body)
which allows or, after notice or lapse of time or both, would allow, revocation,
suspension or termination of any such authorization or results or, after notice
or lapse of time or both, would result in any other impairment of the rights of
the holder of any such authorization; and such authorizations contain no
restrictions that are burdensome to the Company or any of its subsidiaries;
except where such failure to be valid and in full force and effect or to be in
compliance, the occurrence of any such event or the presence of any such
restriction would not, singly or in the aggregate, have a Material Adverse
Effect.
(xviii) Except as disclosed in the Registration Statement, the General
Disclosure Package and the Prospectus, there is no outstanding option, warrant
or other right calling for the issuance of, and no commitment, plan or
arrangement to issue, any shares of capital stock of the Company, or any
security convertible into, exercisable for, or exchangeable for shares of
capital
Anx1-4
stock in the Company, and no holder of any security of the Company has the right
to have any security owned by such holder included for registration in the
Registration Statement or otherwise registered by the Company under the
Securities Act in connection with the issuance and sale of the Shares.
(xix) The descriptions in the Registration Statement, the General
Disclosure Package and the Prospectus of statutes, legal and governmental
proceedings, contracts and other documents, are accurate and fairly present the
information required to be shown in all material respects; and counsel does not
know of statutes or legal or governmental proceedings required to be described
in the prospectus that are not described as required, or of any contracts or
documents of a character required to be described that are not described as
required, in the Registration Statement, the General Disclosure Package or
Prospectus.
(xx) The Company has satisfied all of the conditions and requirements
for filing the Registration Statement on Form S-3.
(xxi) Commencing with its taxable year ended December 31, 1997, the
Company has been organized in conformity with the requirements for qualification
and taxation as a REIT for federal income tax purposes, and, based on the facts
and assumptions set forth in the Prospectus and the representations by the
Company, set forth in an Officer's Certificate regarding certain federal income
tax matters, its method of operation has enabled it, and its proposed method of
operation will enable it to continue to meet the requirements under the Code for
qualification and taxation as a REIT, and the Company's partnership subsidiaries
and limited liability company subsidiaries will be treated for Federal income
tax purposes as partnerships (or as disregarded entities) and not as
associations taxable as corporations or as publicly-traded partnerships.
(xxii) To the best knowledge of such counsel, each of the Company and
its subsidiaries has filed on a timely basis all necessary federal, state, local
and foreign income and franchise tax returns through the date hereof, if any
such returns are required to be filed, and have paid all taxes shown as due
thereon; and no tax deficiency has been asserted against any such entity which,
if determined adversely to any such entity, could have a Material Adverse Effect
on the assets, operations, business or condition (financial or otherwise) of any
such entity, respectively.
In addition, such opinion shall also contain a statement that such
counsel has participated in conferences with officers and representatives of the
Company, representatives of the independent public accountants for the Company
and the Underwriter at which the contents of the Registration Statement, the
General Disclosure Package, the Preliminary Prospectus and the Prospectus and
related matters were discussed and, no facts have come to the attention of such
counsel which would lead such counsel to believe that (i) the Registration
Statement (including the documents incorporated by reference therein), at the
time it became effective, or any amendment thereof made prior to the Closing
Date, as of the date of such amendment, contained or incorporated by reference
any untrue statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements therein not
Anx1-5
misleading, (ii) the Prospectus (including the documents incorporated by
reference therein), as of its date (or any amendment thereof or supplement
thereto made prior to the Closing Date as of the date of such amendment or
supplement) and as of the Closing Date, contained an untrue statement of a
material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading and (iii) the
Preliminary Prospectus(1) (including the documents incorporated by reference
therein) and the documents if any specified in a schedule to such counsel's
letter (consisting of identified "issuer free writing prospectus(es)" that are
intended for general dissemination to prospective investors), at the Applicable
Time, when considered together with the public offering price per share and the
number of shares to be sold in the offering, contained or contains an untrue
statement of a material fact or omitted or omits to state any material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading (it being
understood in each case that such counsel need express no belief or opinion with
respect to the financial statements and schedules and other financial data
included or incorporated by reference therein).
- ----------------------------
1 Note: Reference to "Preliminary Prospectus" will be the latest preliminary
prospectus included in the Registration Statement and generally
distributed to investors.
Anx1-6
ANNEX 2
ENTERTAINMENT PROPERTIES TRUST
Common Shares
($ 0.01 Par Value)
February 3, 2006
RBC Capital Markets Corporation
1 Liberty Plaza
165 Broadway
New York, NY 10006
Ladies and Gentlemen:
This Lock-Up Letter Agreement is being delivered to you in connection
with the Underwriting Agreement (the "Underwriting Agreement") entered into by
Entertainment Properties Trust (the "Company") and you, the Underwriter, with
respect to the public offering (the "Offering") of Common Shares, par value $
0.01 per share, of the Company (the "Common Stock").
The undersigned agrees that, for the period specified in the following
paragraph (the "Lock-Up Period"), the undersigned will not, without your prior
written consent, (i) sell, offer to sell, contract or agree to sell,
hypothecate, pledge, grant any option to purchase or otherwise dispose of or
agree to dispose of, directly or indirectly, or file (or participate in the
filing of) a registration statement with the Securities and Exchange Commission
(the "Commission") in respect of, or establish or increase a put equivalent
position or liquidate or decrease a call equivalent position within the meaning
of Section 16 of the Securities Exchange Act of 1934, as amended, and the rules
and regulations of the Commission promulgated thereunder with respect to, any
Common Stock of the Company or any securities convertible into or exercisable or
exchangeable for Common Stock, or warrants or other rights to purchase Common
Stock, (ii) enter into any swap or other arrangement that transfers to another,
in whole or in part, any of the economic consequences of ownership of Common
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock, or warrants or other rights to purchase Common Stock, whether any
such transaction is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise, or (iii) publicly announce an intention to
effect any transaction specified in clause (i) or (ii). The foregoing sentence
shall not apply to (a) bona fide gifts, provided the recipient thereof agrees in
writing with you to be bound by the terms of this Lock-Up Letter Agreement, (b)
dispositions to any trust for the direct or indirect benefit of the undersigned
and/or the immediate family of the undersigned, provided that such trust agrees
in writing with you to be bound by the terms of this Lock-Up Letter Agreement or
(c) dispositions not to exceed an aggregate of 50,000 shares of Common Stock
pursuant to Rule
Anx2-1
10(b)(5)-1 plans. The undersigned further agrees that, during the Lock-Up
Period, the undersigned will not, without your prior written consent, make any
demand for, or exercise any right with respect to, the registration of Common
Stock of the Company or any securities convertible into or exercisable or
exchangeable for Common Stock, or warrants or other rights to purchase Common
Stock.
The initial Lock-Up Period will commence on the date of this Lock-Up
Letter Agreement and continue and include the date 90 days after the public
offering date set forth on the final prospectus supplement used to sell the
Common Stock (the "Public Offering Date") pursuant to the Underwriting
Agreement, to which you are or expect to become parties; provided, however, that
if (1) during the last 17 days of the initial Lock-Up Period, the Company
releases earnings results or material news or a material event relating to the
Company occurs or (2) prior to the expiration of the initial Lock-Up Period, the
Company announces that it will release earnings results during the 16-day period
beginning on the last day of the initial Lock-Up Period, then in each case the
Lock-Up Period will be extended until the expiration of the 18-day period
beginning on the date of release of the earnings results or the occurrence of
the material news or material event, as applicable, unless you waive, in
writing, such extension.
The undersigned hereby acknowledges and agrees that, prior to engaging
in any transaction or taking any other action that is subject to the terms of
this Lock-Up Letter Agreement during the period from the date of this Lock-Up
Letter Agreement to and including the 34th day following the expiration of the
initial Lock-Up Period, it will give notice thereof to the Company and will not
consummate such transaction or take any such action unless it has received
written confirmation from the Company that the Lock-Up Period (as may have been
extended pursuant to the previous paragraph) has expired.
If (i) the Company notifies you in writing that it does not intend to
proceed with the Offering, or (ii) for any reason the Underwriting Agreement
shall be terminated prior to the Closing Date (as defined in the Underwriting
Agreement), this Lock-Up Letter Agreement shall be terminated and the
undersigned shall be released from its obligations hereunder.
Yours very truly,
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Name:
Anx2-2