Exhibit 1.1
2,700,000 Shares
of 6.5% Series C Cumulative Convertible Preferred Stock
LEXINGTON CORPORATE PROPERTIES TRUST
UNDERWRITING AGREEMENT
December 2, 2004
Bear, Xxxxxxx & Co. Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Lexington Corporate Properties Trust, a statutory real estate
investment trust organized and existing under the laws of Maryland (the
"Company"), proposes, subject to the terms and conditions stated herein, to
issue and sell to Bear, Xxxxxxx & Co. Inc. ("Bear Xxxxxxx") an aggregate of
2,700,000 preferred shares of beneficial interest (the "Firm Shares"),
classified as 6.5% Series C Cumulative Convertible Preferred Stock, par value
$0.0001 per share, liquidation preference $50.00 per share (the "Series C
Preferred Shares") and, for the sole purpose of covering over-allotments in
connection with the sale of the Firm Shares, at the option of Bear Xxxxxxx, up
to an additional 400,000 shares of Series C Preferred Shares (the "Additional
Shares"). The Firm Shares and any Additional Shares purchased by Bear Xxxxxxx
are referred to herein as the "Shares." The Shares are more fully described in
the Registration Statement and the Prospectus referred to below. Bear Xxxxxxx is
acting as the sole underwriter in connection with the offering and sale of the
Shares (the "Offering").
The Company and each of Lepercq Corporate Income Fund, L.P., Lepercq
Corporate Income Fund II, L.P. and Net 3 Acquisition, L.P., for each of which
the Company serves directly or indirectly as sole general partner (each, a
"Partnership" and collectively, the "Partnerships"), hereby agree with Bear
Xxxxxxx as follows:
1. Representations and Warranties. The Company and each Partnership,
jointly and severally, represent and warrant to, and agree with, Bear Xxxxxxx as
of the date hereof and as of the Closing Date and each Additional Closing Date
(as hereinafter defined) that:
(a) A registration statement on Form S-3 (File No. 333-109393), with
respect to the Shares, including a base prospectus dated October 22, 2003, was
prepared by the Company in conformity with the requirements of the Securities
Act of 1933, as amended (the "Securities Act"), and the rules and regulations
(the "Rules and Regulations") of the Securities and Exchange Commission (the
"Commission"), was filed with the Commission and declared effective. 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 to the
Company's knowledge, threatened by the Commission. On or subsequent to the date
hereof, a registration statement on Form S-3 may be filed pursuant to Rule
462(b) (the "Rule 462(b) Registration Statement") with the Commission, which
would become effective upon filing in accordance with Rule 462(b). 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 original 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 original registration statement and,
the Rule 462(b) Registration Statement in the event that it is filed with the
Commission and becomes effective, as they may have heretofore been amended or
will be amended in the future and at the time they became or become effective,
are referred to herein together 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 Rules and Regulations, is referred to herein
as the "Prospectus", except that if any revised prospectus or prospectus
supplement shall be provided to Bear Xxxxxxx by the Company for use in
connection with the Offering which differs from the Prospectus (whether or not
such revised prospectus or prospectus supplement is required to be filed by the
Company pursuant to Rule 424(b) of the Rules and Regulations), the term
"Prospectus" shall refer to such revised prospectus or prospectus supplement, as
the case may be, from and after the time it is first provided to Bear Xxxxxxx
for such use. 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 have been made available to Bear Xxxxxxx and their counsel. Any
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 Rules and Regulations is hereafter called a
"Preliminary Prospectus." 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 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, any Preliminary
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
(XXXXX), and such copy shall be identical in content to any Prospectus delivered
to Bear Xxxxxxx for use in connection with the Offering.
(b) The Registration Statement, when it became or becomes effective,
and the Prospectus and any amendment or supplement thereto, on the date of
filing thereof with the Commission and at the Closing Date (as hereinafter
defined) and, if later, at any Additional
2
Closing Date (as hereinafter defined), complied or will comply in all material
respects with the applicable requirements of the Securities Act and the Rules
and Regulations; the Registration Statement, when it became or becomes
effective, or when it was filed with the Commission, 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 required to be stated therein 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 Bear Xxxxxxx specifically for use therein ("Bear Xxxxxxx' Information"). The
parties acknowledge and agree that Bear Xxxxxxx' Information consists solely of
the second to last paragraph of the cover page to the Prospectus and the
material included in paragraphs six, nine, ten, eleven and twelve and the fourth
and fifth sentences of paragraph eight under the caption "Underwriting" in the
Prospectus.
(c) The documents incorporated or deemed to be incorporated by
reference in the Prospectus or Registration Statement, or any amendments or
supplements thereto, 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, and did not and
will not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
(d) KPMG LLP, the accountants whose reports on the audited financial
statements of the Company are incorporated by reference in the Registration
Statement, are independent public accountants as required by the Securities Act
and the Rules and Regulations.
(e) Subsequent to the respective dates as of which information is given
in the Registration Statement and the Prospectus, except as set forth in the
Registration Statement and the Prospectus, there has been no material adverse
change or any development involving a prospective material adverse change in the
business, prospects, properties, operations, condition (financial or other) or
results of operations of the Company and any of its partnership, limited
liability company or corporate subsidiaries including without limitation the
Partnerships set forth in the Company's Annual Report on Form 10-K for the year
ended December 31, 2003 (each, a
3
"Subsidiary", together, the "Subsidiaries" and such list, the "List of
Subsidiaries"), taken as a whole, whether or not arising from transactions in
the ordinary course of business, and 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, which are material to the Company and the
Subsidiaries, taken as a whole, except for liabilities or obligations which are
reflected in the Registration Statement and the Prospectus. The Company has no
other significant subsidiaries (as such term is defined in Rule 1-02 of
Regulation S-X) that are not set forth on the List of Subsidiaries.
(f) This Agreement and the transactions contemplated herein have been
duly and validly authorized by the Company and the Partnerships, and this
Agreement has been duly and validly executed and delivered by the Company and
the Partnerships and constitutes the legal, valid and binding obligation of the
Company and the Partnerships enforceable against the Company and the
Partnerships in accordance with its terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally or by general principles of equity.
(g) At the Closing Date (as defined herein), the joint and several
funding agreement (the "Funding Agreement"), in a form satisfactory to Bear
Xxxxxxx and Bear Xxxxxxx' Counsel (as defined herein), and the transactions
contemplated therein will have been validly authorized by the Company and the
Partnerships, and the Funding Agreement will be duly and validly executed and
delivered by the Company and the Partnerships and will constitute the legal,
valid and binding obligation of the Company and the Partnerships enforceable
against the Company and the Partnerships in accordance with its terms, except as
may be limited by bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting creditors' rights generally or by general principles of equity.
Upon execution of the Funding Agreement and except as permitted by its terms,
each of the Partnerships will be jointly and severally liable to pay the Company
an amount which, when taken together with other funds the Company has available,
will be equal to the declared and unpaid dividends on the Shares before paying
any distributions (from operations or upon liquidation) on account of
outstanding operating partnership units held by partners in the Partnerships.
(h) The execution, delivery, and performance of this Agreement and the
Funding Agreement and the consummation of the transactions contemplated hereby
and thereby do not and will not (i) 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 the Subsidiaries pursuant to, any
indenture, mortgage, deed of trust, loan agreement, partnership 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 or assets may be bound and which is
material to the business of the Company and the Subsidiaries taken as a whole,
except as would not have a material adverse effect on the condition (financial
or otherwise), results of operations, business, properties or prospects of the
Company and the Subsidiaries taken as a whole (a "Material Adverse Effect"), or
(ii) violate or conflict with any provision of the charter, bylaws, partnership
agreements or limited liability company agreements as the case may be, of the
Company or the Subsidiaries or any judgment, decree, order, statute,
4
rule or regulation of any court or any public, governmental or regulatory agency
or body having jurisdiction over the Company or any of the Subsidiaries or any
of their respective properties 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 having
jurisdiction over the Company or any of the Subsidiaries or any of their
respective properties or assets is required for the execution, delivery and
performance of this Agreement and the Funding Agreement or the consummation of
the transactions contemplated hereby or thereby, by the Registration Statement
and by the Prospectus, including the issuance, sale and delivery of the Shares
to be issued, sold and delivered by the Company hereunder, except the
registration under the Securities Act of the Shares 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 Bear Xxxxxxx.
(i) The Company has the authorized equity capitalization set forth in
the Prospectus and all of the issued and outstanding shares of capital stock of
the Company have been duly authorized and validly issued, are fully paid and
non-assessable and were not issued in violation of or subject to any preemptive
or similar rights that entitle or will entitle any person to acquire any Shares
from the Company upon issuance thereof by the Company, except for such rights as
may have been fully satisfied or waived prior to the effectiveness of the
Registration Statement. 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 and, when issued and delivered by the Company
against payment therefore in accordance with this Agreement, will be 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 Shares from the Company upon issuance thereof by the
Company. At or prior to the Closing Date, the Company will have executed and
filed Articles Supplementary (the "Articles Supplementary") to the Company's
Articles of Amendment and Restatement establishing the terms of the Shares with
the State Department of Assessments and Taxation of the State of Maryland. All
of the issued shares of capital stock (or other equity interests, as the case
may be) of each of the Subsidiaries of the Company have been duly authorized and
validly issued and are fully paid and non-assessable and (except as set forth in
the Prospectus) are owned directly or indirectly by the Company, free and clear
of all liens, encumbrances, equities or claims. The Firm Shares and the
Additional Shares conform to the descriptions thereof contained in the
Registration Statement and the Prospectus and such description conforms to the
rights set forth in the Articles Supplementary. The Company has authorized and
has reserved, free of any preemptive or similar rights, a sufficient number of
authorized but unissued shares of common stock (the "Common Stock") of the
Company (the "Conversion Shares"), to satisfy the conversion of the Shares into
the Conversion Shares. The Conversion Shares have been duly authorized for
issuance upon conversion of the Shares and, upon conversion in accordance with
their terms and the terms of the Articles Supplementary, will be issued free of
statutory and contractual preemptive rights and are sufficient in number to meet
the current conversion requirements of the Shares. The Conversion Shares, if and
when so issued, will be duly and validly issued and fully paid and
non-assessable. The Conversion Shares (i) will be issued in compliance with all
applicable state, federal and foreign securities laws, (ii) will not be issued
in violation of, or subject to, any preemptive or similar right that does or
will entitle any person to acquire any security from the Company or any of its
Subsidiaries upon issuance or sale of the
5
Shares or the Conversion Shares and (iii) except as provided in the Company's
declaration of trust, will not be subject to any restriction upon the voting or
transfer thereof pursuant to applicable law or the Company's declaration of
trust, bylaws or governing documents or any agreement to which the Company or
any of its Subsidiaries is a party or by which any of them may otherwise be
bound. The Common Stock (including the Conversion Shares) conforms in all
material respects to the descriptions thereof contained in the Registration
Statement and the Prospectus. Except as disclosed in the Registration Statement
or the Prospectus, neither the Company nor any Subsidiary has outstanding
warrants, 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 security of the Company. All corporate action required to be taken by the
Company for the issuance and delivery of the Conversion Shares has been, or will
be prior to the issuance of the Conversion Shares, duly and validly taken.
(j) The Company and each of the Subsidiaries has been duly organized
and is validly existing as a corporation, limited liability company or real
estate investment trust in good standing under the laws of its respective
jurisdiction of organization. Each of the Company and the Subsidiaries is duly
qualified to do business and is in good standing as a foreign corporation,
limited liability company, limited partnership or real estate investment trust
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 have 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 of and from all public, regulatory or governmental agencies
and bodies (collectively, "Governmental Licenses"), to own, lease and operate
their respective properties and conduct their respective businesses as are now
being conducted and as described in the Registration Statement and the
Prospectus, except where the failure to possess any such Governmental Licenses
would not in the aggregate have a Material Adverse Effect; and no such consent,
approval, authorization, order, registration, qualification, license or permit
contains a materially burdensome restriction that is not adequately disclosed in
the Registration Statement and the Prospectus. Each of the Company and each
Subsidiary is in compliance with all applicable laws, rules, regulations,
ordinances, directives, judgments, decrees and orders, foreign and domestic,
except where failure to be in compliance could not reasonably be expected to
have a Material Adverse Effect.
(k) The Limited Partnership Agreement of each Partnership, including
any amendments thereto has been duly and validly authorized, executed and
delivered by the Company and its Subsidiaries and constitutes a valid and
binding agreement, enforceable in accordance with its terms, except as may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally or by general principles of equity.
(l) Except as described in the Prospectus, there is no legal or
governmental proceeding to which the Company or any of the Subsidiaries is a
party, or any property of the Company or any of the Subsidiaries is the subject
which, singularly or in the aggregate, if determined adversely to the Company or
any of the Subsidiaries, are reasonably likely to have a Material Adverse
Effect, and to the Company's knowledge, no such proceedings are overtly
6
threatened or contemplated by governmental authorities or overtly threatened or
contemplated by others.
(m) Neither the Company nor any of its affiliates have taken nor will
take, directly or indirectly, any action designed to cause or result in, or
which constitutes or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of the Shares to facilitate the sale
or resale of the Shares.
(n) The financial statements, including the notes thereto, incorporated
by reference in the Registration Statement and the Prospectus present fairly the
financial position of the Company and its consolidated subsidiaries as of the
dates indicated and the condition and results of operations for the periods
specified; except as otherwise stated in the Registration Statement, said
financial statements have been prepared in conformity with generally accepted
accounting principles in the United States applied on a consistent basis
throughout the periods involved; the financial statement schedules incorporated
by reference in the Registration Statement and the Prospectus fairly present the
information required to be shown therein.
(o) Except as set forth in the Registration Statement and Prospectus,
there are no pro forma or as adjusted financial statements which are required to
be included in accordance with Regulation S-X under the Rules and Regulations.
(p) No relationship, direct or indirect, exists between or among any of
the Company or any affiliate of the Company, on the one hand, and any director,
officer, stockholder, customer or supplier of the Company or any affiliate of
the Company, on the other hand, which is required by the Securities Act, the
Exchange Act, and the Rules and Regulations to be described in the Registration
Statement 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 or
directors of the Company or any of their respective family members, except as
disclosed in the Registration Statement and the Prospectus.
(q) The Company and the Subsidiaries maintain a system of internal
accounting and other controls sufficient to provide reasonable assurances that
(i) transactions are executed in accordance with management's general or
specific authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets, (iii) access to
assets is permitted only in accordance with management's general or specific
authorization, and (iv) the recorded accounting for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(r) No holder of securities of the Company has any rights to the
registration of securities of the Company because of the filing of the
Registration Statement or otherwise in connection with the sale of the Shares
contemplated hereby.
(s) Neither the Company nor any Subsidiary is, and upon consummation of
the transactions contemplated hereby and in the Prospectus neither will be, an
"investment
7
company" as such term is defined in the Investment Company Act of 1940, as
amended (the "Investment Company Act").
(t) With such exceptions as could not reasonably be expected to have a
Material Adverse Effect, the Company and the Subsidiaries have good and
marketable fee simple title or leasehold title, as the case may be, to all real
property owned or leased, as applicable, by the Company or the Subsidiaries, and
good title to all other personal property owned by them, in each case free and
clear of all liens, encumbrances, claims, security interests and defects, except
such as are disclosed in the Prospectus or such as do not materially and
adversely affect the value of such property and do not 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 by the
Company or the Subsidiaries are held under valid, existing and enforceable
leases, with such exceptions as are disclosed in the Prospectus or are not
material and do not interfere with the use made or proposed to be made of such
property and buildings by the Company or the Subsidiaries.
(u) The Company and each of the Subsidiaries have accurately prepared
in all material respects and timely filed all federal, state and other tax
returns that are required to be filed by it and have 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 such
entity 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), except, in all cases,
for any such amounts that the Company is contesting in good faith and except in
any case in which the failure to so file or pay would not in the aggregate have
a Material Adverse Effect. 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 Company's knowledge, threatened, which could
reasonably be expected in the aggregate at to have a Material Adverse Effect.
There is no tax lien, other than for taxes not yet due, 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.
(v) Within thirty (30) days of the Closing Date, the Shares and the
Conversion Shares will be registered pursuant to Section 12(b) of the Exchange
Act and will have been approved for listing, subject to notice of issuance, on
the New York Stock Exchange, Inc. (the "NYSE"), and the Company has not taken
and will not take any action designed to, or likely to have the effect of,
terminating the registration of the Shares and the Conversion Shares under the
Exchange Act, nor has the Company received any notification that the Commission
is contemplating terminating such registration.
(w) There are no contracts or other documents which are required to be
described in the Prospectus or filed as exhibits to the Registration Statement
by the Securities Act or by the Rules and Regulations 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
obligations 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
8
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.
(x) Neither the Company nor any of the Subsidiaries (i) is in
violation of its charter, by-laws, partnership agreement or limited liability
company agreement as the case may be, (ii) is in default under, and no event has
occurred which, with notice or lapse of time or both, would constitute such a
default, 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, partnership agreement or other agreement or instrument to which the
Company or any of the Subsidiaries is a party or by which the Company or any of
the Subsidiaries is bound or to which any of their properties or assets is
subject or (iii) is in violation in any respect of any statute or any judgment,
decree, order, rule or regulation of any court or governmental or regulatory
agency or body having jurisdiction over the Company or any of the Subsidiaries
or any of their properties or assets, except in the case of (ii) or (iii) above
any violation or default, lien, charge or encumbrance that would not have a
Material Adverse Effect.
(y) The Company and the Subsidiaries own or possess adequate right to
use all trademarks, service marks, trade names, trademark registrations, service
xxxx registrations, copyrights, licenses, 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 and Prospectus, except where the failure to own or
possess such right would not in the aggregate have a Material Adverse Effect,
and have no reason to believe that the conduct of their respective businesses
will conflict with, and have not received any notice of any claim of conflict
with, any such right of others which claim, if the subject of an unfavorable
decision, ruling or judgment, could in the aggregate reasonably be expected to
result in a Material Adverse Effect.
(z) The statistical and market-related data included in the Prospectus
are based on or derived from sources which the Company believes, in good faith,
to be reliable and accurate.
(aa) The conditions for use of Form S-3 under the Securities Act, 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 stock held by non-affiliates
of the Company was equal to or greater than $150 million.
9
(bb) 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 and the Prospectus, the Company has not sold or issued any of its
common shares, preferred shares, any other equity security of the Company or the
Subsidiaries and any security convertible into, or exercisable or exchangeable
for, any of its common shares, preferred shares or other such equity 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 its common shares issued pursuant to employee benefit
plans, qualified stock option plans or the employee compensation plans, pursuant
to outstanding options, rights or warrants as described in the Prospectus.
(cc) Commencing with its taxable year ended December 31, 1998, the
Company has been, and upon the sale of the Shares, the Company 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 the Internal
Revenue Code of 1986, as amended (the "Code"), and the Company's proposed method
of operation as described in the Prospectus will enable it to continue to meet
the requirements for qualification and taxation as a REIT under the Code, and no
actions have been taken (or not taken which are required to be taken) which, in
of themselves, would cause such qualification to be lost.
(dd) 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 Bear Xxxxxxx pursuant to this
Agreement.
(ee) Each of the Company, the Partnerships and the Subsidiaries
maintains insurance (issued by insurers of recognized financial responsibility)
of the types and in the amounts generally deemed adequate, if any, for their
respective businesses and consistent with insurance coverage maintained by
similar companies in similar businesses, including, but not limited to,
insurance covering real and personal property owned or leased by the Company,
the Partnerships and the Subsidiaries against theft, damage, destruction, acts
of vandalism and all other risks customarily insured against, all of which
insurance is in full force and effect.
(ff) Except as otherwise described in the Prospectus, neither the
Company, the Partnerships nor any Subsidiary has authorized or conducted or has
knowledge of the generation, transportation, storage, presence, use, treatment,
disposal, release, or other handling of any hazardous substance, hazardous
waste, hazardous material, hazardous constituent, toxic substance, pollutant,
contaminant, asbestos, radon, polychlorinated biphenyls ("PCBs"), petroleum
product or waste (including crude oil or any fraction hereof, natural gas,
liquefied gas, synthetic gas or other material defined, regulated, controlled or
potentially subject to any remediation requirement under any environmental law
(collectively, "Hazardous Materials"), on, in, under or affecting any Property,
except in material compliance with applicable laws and in a manner that will not
result in any claim or liability under Environmental Laws; except as disclosed
in the Prospectus, to the knowledge of the trustees and officers of the Company,
the Properties are in compliance with all federal, state and local laws,
ordinances, rules, regulations and other governmental requirements relating to
pollution, exposure to Hazardous Materials, control of chemicals, management of
waste (collectively, "Environmental Laws"), and the
10
Company, the Partnerships and the Subsidiaries are in compliance with all
licenses, permits, registrations and government authorizations necessary to
operate under all applicable Environmental Laws in all material respects;
neither the Company, the Partnerships nor any Subsidiary is subject to any
material capital expenditures of material obligations (contractual or otherwise)
arising under or relating to Environmental Laws; except as otherwise described
in the Prospectus, neither the Company, any Partnership or any Subsidiary has
received any written or oral notice from any governmental entity or any other
person and there is no pending, or, to the knowledge of the trustees and
officers of the Company, threatened claim, litigation or any administrative
agency proceeding that: alleges a violation of any Environmental Laws by the
Company, the Partnerships or any Subsidiary; or that the Company, any
Partnership or any Subsidiary is a liable party or a potentially responsible
party under the Comprehensive Environmental Response, Compensation and Liability
Act, 42 U.S.C. ss. 9601, et. seq., or any state superfund law; has resulted in
or could result in the attachment of an environmental lien on any of the
properties; or alleges that the Company, any Partnership or any Subsidiary is
liable for any contamination of the environment, contamination of the Property,
damage to natural resources, property damage, or personal injury based on their
activities or the activities of their predecessors or third parties (whether at
the properties or elsewhere) involving Hazardous Materials, whether arising
under the Environmental Laws common law principles, or other legal standards and
neither the Company, the Partnerships nor any Subsidiary is aware of any basis
for such claim. In the ordinary course of its business, the Company, the
Partnerships and the Subsidiaries conduct Phase I environmental assessments on
each of the Properties at the time such Property is acquired and periodic
reviews of the effect of Environmental Laws on the business, operations and
properties of the Company, the Partnerships and the Subsidiaries.
(gg) None of the entities which prepared appraisals of the real
properties owned by the Company or environmental assessment reports with respect
to such real properties owned by the Company was employed for such purpose on a
contingent basis or has any substantial interest in the Company, any Partnership
or any Subsidiary, and none of their directors, officers or employees is
connected with the Company, any Partnership or any Subsidiary as a promoter,
selling agent, voting trustee, officer or employee.
(hh) Neither the Company or any Subsidiary nor, to the best of the
Company's knowledge, any employee or agent of the Company or any Subsidiary has
at any time during the last five years (i) made 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 or any jurisdiction thereof.
(ii) (i) Immediately after the consummation of the Offering, the fair
value and present fair saleable value of the assets of the Company and the
Subsidiaries will exceed the sum of their stated liabilities and identified
contingent liabilities; and (ii) the Company and the Subsidiaries are not, nor
will they be, after giving effect to the execution, delivery and performance of
the Agreement and the consummation of the transactions contemplated hereby, (x)
left with unreasonably small capital with which to carry on their businesses as
is proposed to be conducted, (y) unable to pay their debts (contingent or
otherwise) as they mature or (z) insolvent.
11
(jj) The Company is in material compliance with applicable provisions
of the Xxxxxxxx-Xxxxx Act that are effective and is actively taking steps to
ensure that it will be in compliance with other applicable provisions of the
Xxxxxxxx-Xxxxx Act upon the effectiveness of such provisions.
(kk) The Company has implemented the "disclosure controls and
procedures" (as defined in Rules 13a-14(c) and 15d-14(c) of the Exchange Act)
required in order for the Chief Executive Officer and Chief Financial Officer of
the Company to engage in the review and evaluation process mandated by the
Exchange Act. The Company's "disclosure controls and procedures" are reasonably
designed to ensure that all information (both financial and non-financial)
required to be disclosed by the Company in the reports that it files or submits
under the Exchange Act is recorded, processed, summarized and reported within
the specified time periods, and that all such information is accumulated and
communicated to the Company's management as appropriate to allow timely
decisions regarding required disclosure and to make the certifications of the
Chief Executive Officer and Chief Financial Officer of the Company required
under the Exchange Act with respect to such reports.
(ll) The section entitled "Management's Discussion and Analysis of
Financial Condition and Results of Operation - Critical Accounting Policies" in
certain documents incorporated by reference into the Registration Statement or
the Prospectus accurately and fully describes (i) accounting policies which the
Company believes are the most important in the portrayal of the financial
condition and results of operations of the Company and its consolidated
subsidiaries and which require management's most difficult, subjective or
complex judgments ("critical accounting policies"), (ii) judgments and
uncertainties affecting the application of critical accounting policies and
(iii) the explanation of the likelihood that materially different amounts would
be reported under different conditions or using different assumptions. The
Company's board of trustees, senior management and audit committee have reviewed
and agreed with the selection, application and disclosure of critical accounting
policies and have consulted with the Company's legal advisers and independent
accountants with regard to such disclosure. Since the date of the filing of the
Company's Annual Report on Form 10-K for the year ended December 31, 2003, the
Company's auditors and the audit committee of the board of trustees of the
Company (or persons fulfilling the equivalent function) have not been advised of
(i) any significant deficiencies in the design or operation of internal controls
over financial reporting which are reasonably likely to adversely affect the
Company's ability to record, process, summarize and report financial data nor
any material weaknesses in internal controls over financial reporting or (ii)
fraud, whether or not material, that involves management or other employees who
have a significant role in the Company's internal controls.
(mm) Since the date of the filing of the Company's Annual Report on
Form 10-K for the year ended December 31, 2003, except as disclosed in the
Prospectus or the Company's Quarterly Report on Form 10-Q for the nine months
ended September 30, 2004, 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 in such
controls.
12
(nn) Except as disclosed in the Registration Statement or the
Prospectus, there are no off-balance sheet arrangements, or guarantees or other
contingent obligations of the Company or any Subsidiary that could reasonably be
expected to have a Material Adverse Effect.
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 Bear Xxxxxxx and Bear Xxxxxxx agrees to
purchase from the Company, at a purchase price per Share of $50.00, the Firm
Shares.
(b) Payment of the purchase price for, and delivery of certificates
for, the Shares shall be made at the office of Xxxxxxx Xxxx & Xxxxxxxxx, 000
Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("Bear Xxxxxxx' Counsel"), or at such
other place as shall be agreed upon by Bear Xxxxxxx and the Company, at 10:00
A.M., New York City time, on or before December 8, 2004, or such other time not
later than ten business days after such date as shall be agreed upon by Bear
Xxxxxxx and the Company (such time and date of payment and delivery being herein
called the "Closing Date").
Payment for the Shares shall be made to or upon the order of the
Company of the purchase price by wire transfer in Federal (same day) funds to
the Company upon delivery of certificates for the Shares to Bear Xxxxxxx through
the facilities of the Depository Trust Company for the respective account of
Bear Xxxxxxx. Certificates for the Shares to be delivered to Bear Xxxxxxx shall
be registered in such name or names and shall be in such denominations as Bear
Xxxxxxx may request at least one (1) business day before the Closing Date. The
Company will permit Bear Xxxxxxx to examine and package such certificates for
delivery at least one (1) full business day prior to the Closing Date.
(c) In addition, the Company hereby grants to Bear Xxxxxxx the option
to purchase up to 400,000 Additional Shares at the same purchase price per Share
to be paid by Bear Xxxxxxx to the Company for the Firm Shares as set forth in
this Section 2, for the sole purpose of covering over-allotments in the sale of
Firm Shares by Bear Xxxxxxx. This option may be exercised at any time and from
time to time, in whole or in part, on or before the thirtieth (30th) day
following the date of the Prospectus, by written notice by Bear Xxxxxxx 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 Bear Xxxxxxx , when the Additional Shares are to be delivered
(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 or earlier than the second full business day after
the date on which the option shall have been exercised nor later than the eighth
full business day after the date on which the option shall have been exercised
(unless such time and date are postponed in accordance with the provisions of
Section 9 hereof). Certificates for the Additional Shares shall be registered in
such name or names and in such authorized denominations as Bear Xxxxxxx may
request in writing at least two (2) full business days prior to the Additional
Closing Date. The Company will permit Bear Xxxxxxx to examine and package such
certificates for delivery at least one (1) full business day prior to the
Additional Closing Date.
13
(d) Payment for the Additional Shares shall be made to or upon the
order of the Company of the purchase price by wire transfer in Federal (same
day) funds to the Company at the offices of Bear Xxxxxxx' Counsel, or such other
location as may be mutually acceptable, upon delivery of the certificates for
the Additional Shares to Bear Xxxxxxx.
3. Offering. Upon authorization of the release of the Firm Shares, Bear
Xxxxxxx proposes to offer the Shares for sale to the public upon the terms and
conditions set forth in the Prospectus.
4. Covenants of the Company. The Company covenants and agrees with Bear
Xxxxxxx that:
(a) The Company will cause the Prospectus Supplement to be filed as
required by Section 1(a) hereof (but only if the Bear Xxxxxxx or Bear Xxxxxxx'
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
Bear Xxxxxxx promptly of such filing.
(b) The Company will notify Bear Xxxxxxx (and, if requested by Bear
Xxxxxxx, will confirm such notice in writing) of (i) any request by the
Commission for any amendment of or supplement to the Registration Statement or
the Prospectus or for any additional information, (ii) the mailing or the
delivery to the Commission for filing of any amendment of or supplement to the
Registration Statement or the Prospectus, (iii) the issuance by the Commission
of any stop order suspending the effectiveness of the Registration Statement or
any post-effective amendment thereto or of the initiation, or the threatening,
of any proceedings therefor, (iv) the receipt of any comments from the
Commission, and (v) the receipt by the Company of any notification with respect
to the suspension of the qualification of the Shares for sale in any
jurisdiction or the initiation or threatening of any proceeding for that
purpose. If the Commission shall propose or enter a stop order at any time, the
Company will make every reasonable effort to prevent the issuance of any such
stop order and, if issued, to obtain the lifting of such order as soon as
possible. The Company will prepare and file with the Commission, promptly upon
Bear Xxxxxxx' request, any amendments or supplements to the Registration
Statement or the Prospectus that, in Bear Xxxxxxx' opinion, may be necessary or
advisable in connection with Bear Xxxxxxx' distribution of the Shares; and the
Company will not file any amendment to the Registration Statement or any
amendment of or supplement to 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) that
differs from the prospectus on file at the time of the effectiveness of the
Registration Statement before or after the effective date of the Registration
Statement to which Bear Xxxxxxx shall reasonably object in writing after being
timely furnished in advance a copy thereof.
(c) 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 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 any event shall have
occurred as a result of which the Prospectus as then amended or supplemented
would, in the judgment of Bear Xxxxxxx or the Company, include an untrue
14
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it shall be
necessary at any time to amend or supplement the Prospectus or Registration
Statement to comply with the Securities Act or the Exchange Act or the Rules and
Regulations, the Company will notify Bear Xxxxxxx promptly and prepare and file
with the Commission an appropriate amendment or supplement (at the expense of
the Company and in form and substance satisfactory to Bear Xxxxxxx ) which will
correct such statement or omission and will use its best efforts to have any
amendment to the Registration Statement declared effective as soon as possible.
(d) The Company will promptly deliver to Bear Xxxxxxx and Bear Xxxxxxx'
Counsel a copy of the Registration Statement, including all consents and
exhibits filed therewith and all amendments thereto, and the Company will
promptly deliver to e Bear Xxxxxxx such number of copies of any Preliminary
Prospectus (which Bear Xxxxxxx has agreed may be in electronic form in lieu of
paper copies), the Prospectus, the Registration Statement, and all amendments of
and supplements to such documents, if any, as Bear Xxxxxxx may reasonably
request. Prior to 10:00 A.M., New York City time, on the business day next
succeeding the date of this Agreement and from time to time thereafter the
Company will furnish Bear Xxxxxxx with copies of the Prospectus in such
quantities as Bear Xxxxxxx may reasonably request.
(e) The Company consents to the use and delivery of the Preliminary
Prospectus by Bear Xxxxxxx in accordance with Section 5(b) of the Securities
Act.
(f) The Company will make generally available to its security holders
and to Bear Xxxxxxx as soon as practicable, but not later than 45 days (or 90
days, in the case of a period that is also the Company's fiscal year) after the
close of the period covered thereby an earnings statement of the Company (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 (12) months beginning not later than the first day
of the Company's fiscal quarter following the "effective date" (as defined in
Rule 158) of the Registration Statement.
(g) During the period of three (3) years from the effective date of the
Registration Statement, to furnish to Bear Xxxxxxx copies of all reports or
other communications (financial or other) furnished to security holders, and the
Company will deliver to Bear Xxxxxxx (i) as soon as practicable after the filing
thereof, copies of any reports and financial statements furnished to or filed
with the Commission or any national securities exchange on which any class of
securities of the Company are listed; and (ii) such additional information
concerning the business and financial condition of the Company as Bear Xxxxxxx
may from time to time reasonably request (such financial statements to be on a
consolidated basis to the extent the accounts of the Company and its
subsidiaries are consolidated in reports furnished to its security holders
generally or to the Commission); provided that the Company shall not have any
delivery obligations under this Section 4(g) to the extent that such reports,
communications, financial statements or additional information are otherwise
publicly available.
(h) The Company will apply the net proceeds from the sale of the Shares
as set forth under "Use of Proceeds" in the Prospectus.
15
(i) The Company will use its best efforts to list, subject to notice of
issuance, the Shares on the NYSE. The Company will use its best efforts to list
the Conversion Shares for quotation on the NYSE as required by the rules and
regulations of the NYSE.
(j) The Company will, at all times, reserve and keep available, free of
preemptive rights, enough shares of Common Stock for the purpose of enabling the
Company to satisfy its obligations to issue the Conversion Shares upon
conversion of the Shares in full.
(k) 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.
(l) 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.
(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 Investment Company Act.
(n) The Company will use its best efforts to continue to meet the
requirements to qualify as a "real estate investment trust" under the Code for
each of its taxable years for so long as the Board of Trustees of the Company
deems it in the best interests of the Company's stockholders to remain so
qualified.
(o) During the period of 60 days from the date of the Registration
Statement and the Prospectus, without the prior written consent of Bear Xxxxxxx,
the Company (i) will not, directly or indirectly, issue, offer, sell, agree to
issue, offer or sell, solicit offers to purchase, grant any call option, warrant
or other right to purchase, purchase any put option or other right to sell,
pledge, borrow or otherwise dispose of any securities issued by the Company,
including without limitation any Shares or any parity or senior securities with
respect to the Shares, or make any announcement of any of the foregoing, (ii)
will not establish or increase any "put equivalent position" or liquidate or
decrease any "call equivalent position" (in each case within the meaning of
Section 16 of the Exchange Act) with respect to any Relevant Security and (iii)
will not otherwise enter into any swap, derivative or other transaction or
arrangement that transfers to another, in whole or in part, any economic
consequence of ownership of a security of the Company, whether or not such
transaction is to be settled by delivery of securities, cash or other
consideration, other than (A) the sale of the Shares as contemplated by this
Agreement; (B) the issuance of the Conversion Shares; (C) the issuance of
operating partnership units of Lepercq Corporate Income Fund L.P., Lepercq
Corporate Income Fund II L.P. and Net 3 Acquisition L.P. (collectively "OP
Units") in connection with acquisitions, joint ventures and similar arrangements
so long as each recipient of such OP Units executes and delivers to Bear Xxxxxxx
a Lock-Up Agreement in form and substance satisfactory to Bear Xxxxxxx pursuant
to which each such recipient agrees not to sell or transfer those OP Units (or
common shares issued upon the
16
exchange of such OP Units) in a public market transaction for the remainder of
the sixty (60) day period commencing on the date of this Agreement; and (D) the
Company's issuance of Common Stock upon (1) the conversion or exchange of
convertible or exchangeable securities outstanding on the date hereof; (2) the
exercise of currently outstanding options; (3) the grant and exercise of options
and rights under, or the issuance and sale of shares pursuant to, employee stock
option, stock purchase, dividend reinvestment and incentive plans in effect on
the date hereof; and (4) the exchange of OP Units.
(p) During the period when the Prospectus is required to be delivered
under the Securities Act or the Exchange Act, the Company shall notify Bear
Xxxxxxx of the occurrence of any material events respecting its activities,
affairs or condition, financial or otherwise, if, but only if, as a result of
any such event it is necessary, in the opinion of counsel, to amend or
supplement the Prospectus in order to make the Prospectus not misleading in the
light of the circumstances existing at the time it is delivered to a purchaser,
and prepare an amendment or supplement to the Prospectus so that, as so amended
or supplemented, the Prospectus will not contain an untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances existing at the time it is
delivered to a purchaser, not misleading.
5. Payment of Expenses. Whether or not the transactions contemplated in
this Agreement are consummated or this Agreement is terminated, the Company
hereby agrees to pay all costs and expenses incident to the performance of the
obligations of the Company hereunder, including the following: (i) 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 all
other expenses in connection with the preparation, printing and filing of the
Registration Statement, any Preliminary Prospectus and the Prospectus and
amendments and supplements thereto and the mailing and delivering of copies
thereof to Bear Xxxxxxx and dealers; (ii) the cost of producing this Agreement,
the Blue Sky Memoranda, closing documents (including any compilations thereof)
and any other documents in connection with the offering, purchase, sale and
delivery of the Shares; (iii) all expenses in connection with the qualification
of the Shares for offering and sale under state securities laws, including the
any filing fees in connection with the Blue Sky survey; (iv) all fees and
expenses in connection with listing the Shares on the NYSE; (v) 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 (other than as shall have been specifically
approved by Bear Xxxxxxx in writing to be paid for by Bear Xxxxxxx); (vi) any
stock transfer taxes incurred in connection with this Agreement or the Offering;
and (vii) the filing fees incident to securing any required review by the
National Association of Securities Dealers, Inc. (the "NASD") of the terms of
the sale of the Shares. The Company also will pay or cause to be paid: (i) the
cost of preparing stock certificates representing the Shares; (ii) the cost and
charges of any transfer agent or registrar for the Shares; and (iii) all other
costs and expenses incident to the performance of its obligations hereunder
which are not otherwise specifically provided for in this Section 5. It is
understood, however, that except as provided in this Section, and Sections 7, 8
and 10 hereof, Bear Xxxxxxx will pay all of their own costs and expenses,
including the fees and expenses of Bear Xxxxxxx' counsel, stock transfer taxes
on resale of any of the Shares by it, and any advertising expenses connected
with any offers it may make.
17
6. Conditions of Bear Xxxxxxx' Obligations. The obligations of Bear
Xxxxxxx 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 and the Partnerships herein contained, as of the date
hereof and as of the Closing Date (for purposes of this Section 6 "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 Bear Xxxxxxx
or to Bear Xxxxxxx' Counsel pursuant to this Section 6 of any misstatement or
omission, to the performance by the Company and the Partnerships of their
respective obligations hereunder, and to each of the following additional terms
and conditions:
(a) If, at the time this Agreement is executed and delivered, it is
necessary for a post-effective amendment to the Registration Statement to be
declared effective before the Offering may commence, such post-effective
amendment shall have become effective 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 Bear Xxxxxxx ; at the Closing Date, the Shares shall
have been approved for listing on the NYSE upon official notice of issuance; 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 a timely fashion 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 shall any state securities
authority have 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 or the
Prospectus or otherwise) shall have been complied with to the satisfaction of
Bear Xxxxxxx and Bear Xxxxxxx' Counsel.
(b) Bear Xxxxxxx 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 Bear Xxxxxxx or Bear Xxxxxxx' Counsel is material or
omits to state a material fact that in the opinion of Bear Xxxxxxx or Bear
Xxxxxxx' Counsel is required to be stated therein or is necessary to make the
statements therein not misleading, or that the Prospectus, or any amendment or
supplement thereto, contains an untrue statement of fact that in the opinion of
Bear Xxxxxxx or Bear Xxxxxxx' counsel is material or omits to state a material
fact that in the opinion of Bear Xxxxxxx or Bear Xxxxxxx' counsel is material
and is required to be stated therein or necessary, in the light of the
circumstances under which they were made, to make the statements therein not
misleading.
(c) At the Closing Date Bear Xxxxxxx shall have received the written
opinion of Paul, Hastings, Xxxxxxxx & Xxxxxx LLP, counsel for the Company, dated
the Closing Date and addressed to Bear Xxxxxxx. Such opinion shall substantially
reflect the statements set forth in Annex I and shall be in form and substance
reasonably satisfactory to Bear Xxxxxxx and Bear Xxxxxxx' Counsel.
(d) At the Closing Date Bear Xxxxxxx shall have received the written
opinion of Xxxxx Xxxxxxx LLP (or such other counsel that shall be approved by
Bear Xxxxxxx and Bear Xxxxxxx' Counsel), special Maryland counsel to the
Company, dated the Closing Date and addressed to
18
Bear Xxxxxxx which shall be in form and substance reasonably satisfactory to
Bear Xxxxxxx and Bear Xxxxxxx' Counsel.
(e) At the Closing Date Bear Xxxxxxx shall have received the written
opinion of Paul, Hastings, Xxxxxxxx & Xxxxxx LLP, tax counsel for the Company,
dated the Closing Date and addressed to Bear Xxxxxxx regarding the qualification
of the Company as a REIT under the Code. Such opinion shall substantially
reflect the statements set forth in Annex II and shall be in form and substance
reasonably satisfactory to Bear Xxxxxxx and Bear Xxxxxxx' Counsel.
(f) All proceedings taken in connection with the sale of the Firm
Shares and the Additional Shares as herein contemplated shall be reasonably
satisfactory in form and substance to Bear Xxxxxxx and to Bear Xxxxxxx' Counsel,
and Bear Xxxxxxx shall have received from Bear Xxxxxxx' Counsel a favorable
opinion, dated as of the Closing Date, with respect to the issuance and sale of
the Shares, the Registration Statement and the Prospectus and such other related
matters as Bear Xxxxxxx may reasonably require, and the Company shall have
furnished to Bear Xxxxxxx' Counsel such documents as they request for the
purpose of enabling them to pass upon such matters. In rendering such opinion,
Xxxxxxx Xxxx & Xxxxxxxxx may rely upon the opinion of Xxxxx Xxxxxxx LLP as to
matters of Maryland law.
(g) At the Closing Date Bear Xxxxxxx shall have received a certificate
of the Chairman of the Board or the President and the chief financial officer or
chief accounting officer of the Company, dated the Closing Date to the effect
that (i) the conditions set forth in subsection (a) of this Section 6 have been
satisfied, (ii) as of the date hereof and as of the Closing Date, the
representations and warranties of the Company and the Partnerships set forth in
Section 1 hereof are accurate, (iii) as of the Closing Date, all obligations,
agreements and conditions of the Company to be performed hereunder on or prior
thereto have been duly performed and (iv) subsequent to the respective dates as
of which information is given in the Registration Statement and the Prospectus,
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, and there has
not been any material adverse change, or any development involving a material
adverse change, in the business prospects, properties, operations, condition
(financial or otherwise), or results of operations of the Company and the
Subsidiaries taken as a whole, except in each case as described in or
contemplated by the Prospectus.
(h) At the time this Agreement is executed and at the Closing Date,
Bear Xxxxxxx shall have received a comfort letter from KPMG LLP, independent
public accountants for the Company, dated, respectively, as of the date of this
Agreement and as of the Closing Date addressed to Bear Xxxxxxx and in form and
substance satisfactory to Bear Xxxxxxx and Bear Xxxxxxx' Counsel.
(i) 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) and the Prospectus (exclusive of
any supplement thereto), there shall not have been any change in the capital
stock or long-term debt of the Company or any of the Subsidiaries or any change,
or any development involving a prospective change, in or affecting the condition
19
(financial or otherwise), results of operations, business, properties or
prospects of the Company and the Subsidiaries taken as a whole, the effect of
which, in any such case described above, is, in the judgment of Bear Xxxxxxx, so
material and adverse as to make it impracticable or inadvisable to proceed with
the public offering or the delivery of the Shares on the terms and in the manner
contemplated in the Prospectus (exclusive of any supplement).
(j) The Company shall have complied with the provisions of Section 4(d)
hereof with respect to the furnishing of Prospectuses.
(k) On or prior to the Closing Date, the Company shall have duly filed
the Articles Supplementary with the State Department of Assessments and Taxation
of Maryland.
(l) On or prior to the Closing Date, the Company and the Partnerships
shall have executed and delivered the Funding Agreement, in form and substance
satisfactory to Bear Xxxxxxx and Bear Xxxxxxx' Counsel.
(m) The Company shall have furnished Bear Xxxxxxx and Bear Xxxxxxx'
Counsel with such other certificates, opinions or other documents as they may
have reasonably requested.
(n) On or prior to the Closing Date, Bear Xxxxxxx shall have received
from each of the officers and trustees listed on Schedule I hereto an executed
Lock-Up Agreement in substantially in the form of Exhibit A hereto.
If any of the conditions specified in this Section 6 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 Bear Xxxxxxx or to Bear
Xxxxxxx' Counsel pursuant to this Section 6 shall not be in all material
respects reasonably satisfactory in form and substance to Bear Xxxxxxx and to
Bear Xxxxxxx' Counsel, all obligations of Bear Xxxxxxx hereunder may be
cancelled by Bear Xxxxxxx at, or at any time prior to, the Closing Date and the
obligations of Bear Xxxxxxx to purchase the Additional Shares may be cancelled
by Bear Xxxxxxx 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.
7. Indemnification.
(a) The Company shall indemnify and hold harmless Bear Xxxxxxx and each
person, if any, who controls Bear Xxxxxxx 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 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
20
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 Bear Xxxxxxx expressly
for use therein. The parties agree that such information provided by or on
behalf of Bear Xxxxxxx consists solely of the material referred to in the last
sentence of Section 1(b) hereof. The foregoing indemnity agreement with respect
to any Preliminary Prospectus shall not inure to the benefit of Bear Xxxxxxx if
it failed to deliver the Prospectus (as then amended or supplemented, provided
to Bear Xxxxxxx in the requisite quantity and on a timely basis to permit proper
delivery on or prior to the Closing Date) to the person asserting any losses,
claims, damages and liabilities and judgments caused by any untrue statement or
alleged untrue statement of a material fact contained in any Preliminary
Prospectus, or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, if such material misstatement or omission or alleged
material misstatement or omission was cured, as determined by a court of
competent jurisdiction in a decision not subject to further appeal, in such
Prospectus and such Prospectus was required by law to be delivered at or prior
to the written confirmation of sale to such person. This indemnity agreement
will be in addition to any liability which the Company may otherwise have
including under this Agreement.
(b) Bear Xxxxxxx shall indemnify and hold harmless the Company, each of
the directors of the Company, each of the officers of the Company who shall have
signed the Registration Statement, 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 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 written information
furnished to the Company by or on behalf of Bear Xxxxxxx expressly for use
therein. The parties agree that such information provided by or on behalf of a
Bear Xxxxxxx consists solely of the material referred to in the last sentence of
Section 1(b) hereof. This indemnity agreement will be in addition to any
liability which Bear Xxxxxxx may otherwise have including under this Agreement.
(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,
21
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 it from any liability which it may have under this
Section 7 to the extent that such indemnifying party is not materially
prejudiced as a result thereof and in any event shall not relieve such
indemnifying party from any liability that such indemnifying party may have
otherwise than on account of the indemnity agreement hereunder). 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 such 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 or (iii) 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
party, effect any settlement or compromise of, or consent to the entry of
judgment with respect to, any pending or threatened action in respect of which
the indemnified party is or reasonably could have been a party and indemnity or
contribution may be or could have been sought hereunder by the indemnified
party, unless (x) such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability on claims that
are or reasonably could have been the subject matter of such action and (ii)
does not include a statement as to or an admission of fault, culpability or a
failure to act, by or on behalf of the indemnified party and (y) the
indemnifying party confirms in writing its indemnification obligations hereunder
with respect to such settlement, compromise or judgment.
8. Contribution. In order to provide for contribution in circumstances
in which the indemnification provided for in Section 7 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 Bear Xxxxxxx 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 Bear Xxxxxxx, 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 directors of the Company)
as incurred to which the Company and Bear Xxxxxxx may be subject, in such
proportions as is appropriate to reflect the
22
relative benefits received by the Company, on the one hand, and Bear Xxxxxxx, on
the other hand, from the offering of the Shares or, if such allocation is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to above but also the relative fault of the
Company, on the one hand, and Bear Xxxxxxx, 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 Bear
Xxxxxxx, 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 and (y) the
underwriting discount received by Bear Xxxxxxx, respectively, in each case as
set forth in the table on the cover page of the Prospectus. The relative fault
of the Company, on the one hand, and of Bear Xxxxxxx, on the other hand, shall
be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company, on the one hand,
or Bear Xxxxxxx, on the other hand, and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Company and Bear Xxxxxxx agree that it would not be just and
equitable if contribution pursuant to this Section 8 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 8.
Notwithstanding the provisions of this Section 8, (i) Bear Xxxxxxx shall be not
required to contribute any amount in excess of the amount by which the total
price at which the Shares are underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which Bear Xxxxxxx
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission and (ii) no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section 8,
each person, if any, who controls Bear Xxxxxxx 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 Bear Xxxxxxx, 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 director 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 8 or otherwise.
9. Survival of Representations and Agreements. All representations and
warranties, covenants and agreements of Bear Xxxxxxx, the Company and the
Partnerships contained in this Agreement, including the agreements contained in
Section 5, the indemnity agreements contained in Section 7 and the contribution
agreements contained in Section 8, shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of any Underwriter
or any controlling
23
person thereof or by or on behalf of the Company or the Partnerships, any of
their respective officers, directors, partners or members or any controlling
person thereof, and shall survive delivery of and payment for the Shares to and
by Bear Xxxxxxx. The representations contained in Section 1 and the agreements
contained in Sections 5, 7, 8, 9 and 10(d) hereof shall survive the termination
of this Agreement, including termination pursuant to Section 10 hereof.
10. Effective Date of Agreement; Termination.
(a) This Agreement shall become effective upon the execution of this
Agreement.
(b) Bear Xxxxxxx shall have the right to terminate this Agreement at
any time prior to the Closing Date or the obligations of Bear Xxxxxxx to
purchase the Additional Shares at any time prior to the Additional Closing Date,
as the case may be, if there has been, since the time of execution of this
Agreement or since the respective dates as of which information is given in the
Prospectus, (A) any material adverse change in the condition, financial or
otherwise, or in the earnings business affairs or business prospects of the
Company; or (B) any domestic or international event or act or occurrence has
materially disrupted, or in Bear Xxxxxxx' opinion will in the immediate future
materially disrupt, the market for the Company's securities or securities in
general; or (C) if trading in any securities of the Company has been suspended
or materially limited by the Commission or the NYSE, or if trading on the NYSE
shall have been suspended, or minimum or maximum prices for trading shall have
been fixed, or maximum ranges for prices for securities shall have been
required, by the NYSE 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 new restriction materially adversely
affecting the distribution of the Firm Shares or the Additional Shares, as the
case may be, shall have become effective or if a material disruption in
commercial banking or securities settlement or clearance services shall have
occurred; or (E) (i) there has 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) there
shall have been any other such calamity or crisis or any change in political,
financial or economic conditions, if the effect of any such event in (i) or (ii)
as in Bear Xxxxxxx' judgment 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
Prospectus.
(c) Any notice of termination pursuant to this Section 10 shall be in
writing.
(d) If this Agreement shall be terminated pursuant to any of the
provisions hereof (otherwise than pursuant to Section 10(b)(B), (C), (D) or (E)
hereof), or if the sale of the Shares provided for herein is not consummated
because any condition to the obligations of Bear Xxxxxxx set forth herein is not
satisfied or because of any refusal, inability or failure on the part of the
Company or the Partnerships to perform any agreement or covenant contained
herein or comply with any provision hereof, the Company will reimburse Bear
Xxxxxxx for all out-of-pocket expenses (including the fees and expenses of their
counsel) incurred by Bear Xxxxxxx in connection herewith.
11. Notices. All communications hereunder, except as may be otherwise
specifically provided herein, shall be in writing, and:
24
(a) if sent to Bear Xxxxxxx, shall be mailed, delivered, or faxed and
confirmed in writing, to Bear Xxxxxxx, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Equity Capital Markets, with a copy to Xxxxxxx Xxxx &
Xxxxxxxxx, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxx X.
Xxxxx;
(b) if sent to the Company or the Partnerships, shall be mailed,
delivered, or faxed and confirmed in writing to such party c/o Lexington
Corporate Properties Trust, Xxx Xxxx Xxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx
00000-0000, Attention: Xxxxxxx Xxxxxxx, with a copy to Paul, Hastings, Xxxxxxxx
& Xxxxxx LLP, 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxx
Xxxxxxxxxxx. Any such statements, requests, notices or agreements shall take
effect at the time of receipt thereof.
12. No Waiver; Modifications in Writing. No failure or delay on the
part of the Company or Bear Xxxxxxx in exercising any right, power or remedy
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right, power or remedy preclude any other or further
exercise thereof or the exercise of any other right, power or remedy. The
remedies provided for herein are cumulative and are not exclusive of any
remedies that may be available to the Company or Bear Xxxxxxx at law or in
equity or otherwise. No waiver of or consent to any departure by the Company or
Bear Xxxxxxx from any provision of this Agreement shall be effective unless
signed in writing by the party entitled to the benefit thereof; provided that
notice of any such waiver shall be given to each party hereto as set forth
above. Except as otherwise provided herein, no amendment, modification or
termination of any provision of this Agreement shall be effective unless signed
in writing by or on behalf of the Company and Bear Xxxxxxx. Any amendment,
supplement or modification of or to any provision of this Agreement, any waiver
of any provision of this Agreement, and any consent to any departure by the
Company or Bear Xxxxxxx from the terms of any provision of this Agreement shall
be effective only in the specific instance and for the specific purpose for
which made or given. Except where notice is specifically required by this
Agreement, no notice to or demand on the Company in any case shall entitle the
Company to any other or further notice or demand in similar or other
circumstances.
13. Parties. This Agreement shall inure solely to the benefit of, and
shall be binding upon, Bear Xxxxxxx, the Company and the Partnerships and the
controlling persons, directors, officers, employees and agents referred to in
Section 7 and 8, 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. The term "successors and assigns" shall not include a
purchaser, in its capacity as such, of Shares from Bear Xxxxxxx.
14. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, but without regard to
principles of conflicts of law.
15. 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.
25
16. 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.
17. Time is of the Essence. Time shall be of the essence of 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 pages follow]
26
If the foregoing correctly sets forth the understanding between Bear
Xxxxxxx, on the one hand, and the Company and the Partnerships, on the other
hand, please so indicate in the space provided below for that purpose, whereupon
this letter shall constitute a binding agreement among us.
Very truly yours,
LEXINGTON CORPORATE PROPERTIES TRUST
By: /s/ X. Xxxxxx Eglin
------------------------------------
Name: X. Xxxxxx Eglin
Title: Chief Executive Officer
LEPERCQ CORPORATE INCOME FUND, L.P.
By: Lex GP-1 Trust, General Partner
By: /s/ X. Xxxxxx Eglin
------------------------------------
Name: X. Xxxxxx Eglin
Title: President
LEPERCQ CORPORATE INCOME FUND II, L.P.
By: Lex GP-1 Trust, General Partner
By: /s/ X. Xxxxxx Eglin
------------------------------------
Name: X. Xxxxxx Eglin
Title: President
NET 3 ACQUISITION, L.P.
By: Lex GP-1 Trust, General Partner
By: /s/ X. Xxxxxx Eglin
------------------------------------
Name: X. Xxxxxx Eglin
Title: President
Accepted as of the date first above written
BEAR, XXXXXXX & CO. INC.
By: Bear, Xxxxxxx & Co. Inc.
By: /s/ Xxxx X. Xxxxxx
------------------------------------
Name: Xxxx X. Xxxxxx
Title: Senior Managing Director
Schedule I
----------
Officers and Trustees Executing Lock-Up Agreements
X. Xxxxxx Eglin
Xxxxxxx Xxxxxxx
Xxxxxxxx Xxxxxxxx
Xxxx X. Xxxxxxxx
Xxxxx Xxxxxxxx
Xxxxx X. Xxxxx
Xxxxxxx Xxxxx
E. Xxxxxx Xxxxxxx
Xxxxxxx X. Xxxxx
Xxxx X. Xxxx
Xxxx Xxxxxxx
Exhibit A
---------
Form of Lock-Up Agreement
(See Attached)
Lock-Up Agreement
-----------------
December 2, 2004
Bear, Xxxxxxx & Co. Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Equity Capital Markets
Lexington Corporate Properties Trust Lock-Up Agreement
------------------------------------------------------
Ladies and Gentlemen:
This letter agreement (this "Agreement") relates to the proposed
offering (the "Offering") by Lexington Corporate Properties Trust, a statutory
real estate investment trust organized and existing under the law of Maryland
(the "Company"), of its 6.5% Series C Cumulative Convertible Preferred Stock
(the "Shares") in an aggregate principal amount of up to $155 million (including
the Underwriter's over-allotment option).
In order to induce you, the Underwriter, to purchase Shares in the
Offering, the undersigned hereby agrees that, without your prior written consent
during the period from the date hereof until 60 days from the date of the final
offering memorandum for the Offering (the "Lock-Up Period"), the undersigned (a)
will not, directly or indirectly, offer, sell, agree to offer or sell, solicit
offers to purchase, grant any call option or purchase any put option with
respect to, pledge, borrow or otherwise dispose of any Relevant Security (as
defined below) and (b) will not establish or increase any "put equivalent
position" or liquidate or decrease any "call equivalent position" with respect
to any Relevant Security (in each case within the meaning of Section 16 of the
Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder), or otherwise enter into any swap, derivative or other
transaction or arrangement that transfers to another, in whole or in part, any
economic consequence of ownership of a Relevant Security, whether or not such
transaction is to be settled by delivery of Relevant Securities, other
securities, cash or other consideration. The foregoing sentence shall not apply
to: (1) the transfer of shares of a Relevant Security by the undersigned as a
gift or gifts; (2) the transfer of shares of a Relevant Security by the
undersigned to its affiliates, as such term is defined in Rule 405 under the
Securities Act; (3) the exercise of stock options granted pursuant to the
Company's stock option plans; (4) the exchange of operating partnership units of
Lepercq Corporate Income Fund L.P., Lepercq Corporate Income Fund II L.P. and
Net 3 Acquisition L.P. (collectively, "OP Units") for shares of the Company's
common shares of beneficial interest; (5) the transfer of shares of a Relevant
Security by the undersigned to its family members; (6) the transfer of OP Units;
and (7) the transfer of shares of a Relevant Security by the undersigned as a
charitable donation; provided that with respect to any transfer of Relevant
Securities pursuant to the foregoing clause (1), (2), (5), (6) or (7), each
resulting transferee of the Relevant Securities shall execute and deliver to you
an agreement
satisfactory to you certifying that such transferee is bound by the terms of
this Agreement and has been in compliance with the terms hereof since the date
first above written as if it had been an original party hereto. As used herein
"Relevant Security" means the Company's common shares of beneficial interest,
any other equity security of the Company and any security convertible into, or
exercisable or exchangeable for, any common shares of beneficial interest or
other such equity security of the Company; provided, further, that "Relevant
Security" shall not include the Company's Series B Cumulative Redeemable
Preferred Stock.
The undersigned hereby authorizes the Company during the Lock-Up Period
to cause any transfer agent for the Relevant Securities to decline to transfer,
and to note stop transfer restrictions on the stock register and other records
relating to, Relevant Securities for which the undersigned is the record holder
and, in the case of Relevant Securities for which the undersigned is the
beneficial but not the record holder, agrees during the Lock-Up Period to cause
the record holder to cause the relevant transfer agent to decline to transfer,
and to note stop transfer restrictions on the stock register and other records
relating to, such Relevant Securities. The undersigned hereby further agrees
that, without your prior written consent, during the Lock-up Period the
undersigned (x) will not file or participate in the filing with the Securities
and Exchange Commission of any registration statement, or circulate or
participate in the circulation of any preliminary or final prospectus or other
disclosure document with respect to any proposed offering or sale of a Relevant
Security and (y) will not exercise any rights the undersigned may have to
require registration with the Securities and Exchange Commission of any proposed
offering or sale of a Relevant Security.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to enter into this Agreement and that this Agreement
constitutes the legal, valid and binding obligation of the undersigned,
enforceable in accordance with its terms. Upon request, the undersigned will
execute any additional documents necessary in connection with enforcement
hereof. Any obligations of the undersigned shall be binding upon the successors
and assigns of the undersigned from the date first above written.
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York. Delivery of a signed copy of this letter by
facsimile transmission shall be effective as delivery of the original hereof.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, the undersigned has executed this Agreement as of the date
first above written.
Very truly yours,
By: _____________________________
Print Name: ______________________
ANNEX I
-------
Form of Opinion of Counsel to be delivered pursuant to Section 6(c)
1. Each of the Partnerships and Lex GP is validly existing as a trust
or partnership, as applicable, in good standing under the laws of the state
in which it is organized or formed as set forth on Schedule I attached
hereto.
2. Each of the Partnerships and Lex GP has the requisite power and
authority to (i) own, lease and operate its properties and to conduct its
business as described in the Registration Statement, except where the
failure to have such power or authority would not have, individually or in
the aggregate, a Material Adverse Effect and, (ii) with respect to the
Partnerships, deliver and perform the Underwriting Agreement and the
Funding Agreement. The Company owns 100% of the outstanding units of Lex GP
and Lex GP is the sole general partner of the Partnerships.
3. Based solely on a review of the Foreign Good Standing Certificates,
we confirm that each of the Partnerships and Lex GP is in good standing as
a foreign trust or partnership, as applicable, in each jurisdiction listed
on Schedule I attached hereto, as of the respective dates of the Foreign
Good Standing Certificates.
4. The execution, delivery and performance of the Underwriting
Agreement and the Funding Agreement has been duly authorized by all
necessary partnership action on the part of the Partnerships, and the
Underwriting Agreement and Funding Agreement have been duly executed and
delivered by the Partnerships.
5. All the outstanding equity interests of Lex GP and the Partnerships
(a) have been duly authorized and validly issued, are fully paid and
nonassessable, (b) based solely upon a review of the pertinent certificates
registered in the name of Lex GP and the Partnerships and their respective
certificate transfer ledger, and except as set forth on Exhibit A attached
hereto, are owned of record, directly or, through a subsidiary, indirectly,
by the Company and (c) are not, to our knowledge, subject to any perfected
security interest or, to our knowledge, any other encumbrance or adverse
claim. To our knowledge, no options, warrants or other rights to purchase,
agreements or other obligations to issue or other rights to convert any
obligation into an equity interest of Lex GP or the Partnerships is
outstanding.
6. To our knowledge, no person or entity has a right to participate in
the registration under the Securities Act of the Shares pursuant to the
Registration Statement and the holders of the outstanding shares of capital
stock of the Company are not entitled to any statutory or contractual
preemptive rights to subscribe to the Shares.
7. The Registration Statement and the Prospectus, as of their
respective dates (other than the financial statements, notes and schedules
thereto and other information of a financial, statistical or accounting
nature included or incorporated by reference therein, as to which we
express no opinion), appear on their face to comply as to form in all
material respects with the applicable requirements of the Securities Act.
A-1
8. Based solely on the SEC Confirmation, the Registration Statement
has been declared effective by the Commission under the Securities Act. To
our knowledge, based solely on a telephone conversation with the
Commission, we are not aware of any stop order suspending the effectiveness
of the Registration Statement, and, to our knowledge, no stop order
proceedings for such purpose are pending by the Commission. Any required
filing of the Prospectus pursuant to Rule 424 under the Securities Act has
been made in the manner and within the time period required by such Rule
424.
9. No consent, approval, authorization or order of or filing with any
federal or New York governmental authority or to our knowledge, any New
York or United States federal court is required for the Company's or
Partnerships', as applicable, execution and delivery of the Underwriting
Agreement and the Funding Agreement and the issuance of the Shares pursuant
thereto, other than (a) those that have been obtained under the Securities
Act, the Exchange Act or the rules of the New York Stock Exchange, (b)
those under state securities or blue sky laws (as to which we express no
opinion) and (c) any necessary approval of the Corporate Financing
Department of NASD Regulation, Inc. (as to which we express no opinion).
10. The execution and delivery of the Underwriting Agreement and the
Funding Agreement by the Partnerships do not (a) violate any provisions of
the Charter Documents; (b) constitute a breach by the Partnerships of, or
constitute a default by the Partnerships under, any of the agreements filed
as an exhibit to the Registration Statement, other than such breach or
default by the Partnerships as could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect; (c) cause the
Partnerships to violate any federal or New York law, regulation or rule
(other than state securities or blue sky laws, as to which we express no
opinion) applicable to the Partnerships; or (d) cause the Partnerships to
violate any decree, judgment or order of any federal or New York state
court or governmental instrumentality to which the Partnerships are a named
party and which is known to us.
11. To our knowledge, there is no action, suit or proceeding at law or
in equity, or by or before any federal or New York state court or
governmental or regulatory body or agency or arbitration board or panel
pending or overtly threatened against the Company, the Partnerships or Lex
GP, which is required to be described in the Registration Statement or the
Prospectus but is not so described.
12. The statements set forth in the Prospectus under the captions
"Description of Debt Securities," "Federal Income Tax Considerations" and
"Risk Factors," insofar as they purport to constitute summaries of legal
matters, agreements, documents or proceedings referred to therein, fairly
summarize the matters, agreements, documents or proceedings described
therein in all material respects.
13. The Shares have been listed, admitted and authorized for trading
on the New York Stock Exchange, subject to notice of issuance.
14. The Company is not and, immediately after giving effect to the
offer and sale of the Shares as contemplated by the Underwriting Agreement
and described in the
A-2
Prospectus, will not be an "investment company" or an entity "controlled"
by an "investment company", as such terms are defined in the Investment
Company Act of 1940, as amended.
In connection with the preparation of the Registration Statement
and Prospectus, we have participated in conferences with directors, officers and
other representatives of the Company, the Partnerships and Lex GP,
representatives of KPMG LLP and representatives of the Underwriter and counsel
for the Underwriter at which the contents of the Registration Statement and
Prospectus were discussed and, although we have not independently verified and
are not passing upon and do not assume responsibility, explicitly or implicitly,
for the accuracy, completeness or fairness of the statements contained in the
Registration Statement or Prospectus (except as to the extent stated, but only
to the extent expressly stated, in paragraph 12 set forth above), on the basis
of the foregoing, relying as to materiality to a large extent on the
representations of officers and other representatives of the Company, the
Partnerships and Lex GP, no fact has come to our attention which leads us to
believe that the Registration Statement at the time such Registration Statement
became effective contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, or that the Prospectus at the date of such
Prospectus or at the date hereof contained or contains an untrue statement of a
material fact or omitted or omits to state a 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
that we express no view with respect to the financial statements, notes and
schedules thereto and other information of a financial, statistical or
accounting nature included in the Registration Statement or Prospectus).
A-3
ANNEX II
Form of Opinion of Counsel to be delivered pursuant to Section 6(e)
Commencing with its taxable year ended December 31, 1998, the
Company has been organized and has operated in conformity with the requirements
for qualification as a real estate investment trust pursuant to Sections 856
through 860 of the Code, and the Company's current and proposed method of
operation will enable it to continue to meet the requirements for qualification
and taxation as a real estate investment trust under the Code.
