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EXHIBIT 1.2
882,353 Shares
COMMERCIAL NET LEASE REALTY, INC.
Common Stock
UNDERWRITING AGREEMENT
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December 18, 1997
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, Incorporated
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
P.O. Box 1476
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
COMMERCIAL NET LEASE REALTY, INC., a Maryland corporation (the
"Company"), proposes to issue and sell 882,353 shares of common stock of the
Company, par value $.01 per share (the "Shares"), to ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
Incorporated (you or the "Underwriter"). The shares of common stock, par value
$.01 per share, of the Company to be outstanding after giving effect to the sale
contemplated hereby are hereinafter referred to as shares of the "Common Stock."
1. Registration Statement and Prospectus. The Company has prepared and
filed with the Securities and Exchange Commission (the "Commission") in
accordance with the provisions of the Securities Act of 1933, as amended, and
the rules and regulations of the Commission thereunder (collectively called the
"Act"), a registration statement on Form S-3 (Registration No.
333-24773)including a prospectus relating to the registration of the Shares and
such other securities which may be offered from time to time by the Company in
accordance with Rule 415 under the Act. Such registration statement (as amended,
if applicable) has been declared effective by the Commission on April 22, 1997.
Such registration statement (as amended, if applicable), on the one hand, and
the prospectus constituting a part thereof and the prospectus supplement
relating to the offering of the Shares provided to the Underwriter by the
Company for use (whether or not such prospectus supplement is required to be
filed with the Commission by the Company pursuant to the Act) (the "Prospectus
Supplement"), on the other hand, including all documents incorporated therein by
reference, as from time to time amended or supplemented pursuant to the
Securities Exchange Act of 1934, as amended, and the rules and regulations of
the Commission thereunder (collectively called the "Exchange Act") and the Act
are referred to herein as the "Registration Statement" and the "Prospectus,"
respectively; provided, however, that a prospectus supplement shall be deemed to
have supplemented the
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Prospectus only with respect to the offering of the Shares to which it relates.
Any registration statement (including any amendment or supplement thereto or
information which is deemed part thereof) filed by the Company under Rule 462(b)
of the Act (a "Rule 462(b) Registration Statement") shall be deemed to be part
of the "Registration Statement" as defined herein and any prospectus or any term
sheet as contemplated by Rule 434 of the Act (a "Term Sheet") (including any
amendment or supplement thereto or information which is deemed part thereof)
included in such registration statement shall be deemed to be part of the
"Prospectus," as defined herein. All references in this Agreement to financial
statements and schedules and other information which is "contained," "included,"
"described" or "stated" in the Registration Statement or the Prospectus (and all
other references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is or is deemed
to be incorporated by reference in the Registration Statement or Prospectus, as
the case may be; and all references in this Agreement to amendments or
supplements to the Registration Statement or the Prospectus shall be deemed to
mean and include, without limitation, even though not specifically stated, any
document filed under the Exchange Act which is or is deemed to be incorporated
by reference in the Registration Statement or the Prospectus, as the case may
be. Capitalized terms used but not otherwise defined herein shall have the
meanings given to those terms in the Prospectus.
2. Agreements to Sell and Purchase. On the basis of the representations
and warranties contained in this Agreement, and subject to its terms and
conditions, the Company agrees to issue and sell the Shares and the Underwriter
agrees to purchase from the Company at a price per share of $_________ (the
"Purchase Price"), the Shares.
3. Terms of the Offering. The Company is advised by the Underwriter that
it proposes (i) to deposit the Shares directly with the Trustee of ▇▇▇▇ ▇▇▇▇▇
REIT Trust, December 1997 Series (the "Trust"), a registered unit investment
trust under the Investment Company Act of 1940, as amended (the "Offering"), as
soon after the execution and delivery hereof as in its judgment is advisable and
(ii) initially to offer the Shares upon the terms set forth in the Prospectus.
The Company further acknowledges that the Underwriter is the sponsor of the
Trust and therefore is considered an affiliate of the Trust.
4. Delivery and Payment. Delivery to the Underwriter of certificates for,
and payment of the Purchase Price for the Shares shall be made, subject to
Section 9, at 10:00 A.M., New York City time, on December 23, 1997, or such
other time not later than ten business days after such date as shall be agreed
upon by the Underwriter and the Company (such time and date of payment and
delivery being herein called the "Closing Date") at such place as you shall
designate. The Closing Date and the location of, delivery of and the form of
payment for the Shares may be varied by agreement between you and the Company.
Certificates for the Shares shall be registered in such names
and issued in such denominations as you shall request in writing not later than
two full business days prior to the Closing Date. Such certificates shall be
made available to you for inspection not later than 9:30 A.M., New York City
time, on the business day next preceding the Closing Date. Certificates in
definitive form evidencing the Shares shall be delivered to you on the Closing
Date, with any
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transfer taxes thereon duly paid by the Company, for the account of the
Underwriter, against payment of the Purchase Price therefor by intra-bank
transfer or wire transfer of same day funds to such account as may be designated
by the Company at least two business days prior to the Closing Date.
5. Agreements of the Company. The Company agrees with you as follows:
(a) In respect of the offering of Shares, the Company will (i)
prepare a Prospectus Supplement setting forth the number of Shares covered
thereby and their terms not otherwise specified in the Prospectus pursuant to
which the Shares are being issued, the name of the Underwriter and the number of
Shares which the Underwriter has agreed to purchase, the price at which the
Shares are to be purchased by the Underwriter from the Company, the initial
offering price, and such other information as the Underwriter and the Company
deem appropriate in connection with the offering of the Shares, and (ii) file
the Prospectus in a form approved by you pursuant to Rule 424(b) under the Act
no later than the Commission's close of business on the second business day
following the date of the determination of the offering price of the Shares The
Company will furnish to the Underwriter and to such dealers as you shall specify
as many copies of the Prospectus as the Underwriter shall reasonably request for
the purposes contemplated by the Act or the Exchange Act.
(b) At any time when the Prospectus is required to be delivered
under the Act or the Exchange Act in connection with sales of Shares, the
Company will advise you promptly and, if requested by you, confirm such advice
in writing, of (i) the effectiveness of any amendment to the Registration
Statement, (ii) the transmittal to the Commission for filing of any Prospectus
or other supplement or amendment to the Prospectus to be filed pursuant to the
Act, (iii) the receipt of any comments from the Commission relating to the
Registration Statement, any preliminary prospectus, the Prospectus or any of the
transactions contemplated by this Agreement, (iv) any request by the Commission
for post-effective amendments to the Registration Statement or amendments or
supplements to the Prospectus or for additional information, (v) the issuance by
the Commission of any stop order suspending the effectiveness of the
Registration Statement or of the suspension of qualification of the Shares for
offering or sale in any jurisdiction, or the initiation of any proceeding for
such purposes, and (vi) the happening of any event as a result of which the
Prospectus as then amended or supplemented would include an untrue statement of
a material fact or omit to state any material fact necessary in order to make
the statements therein, in the light of the circumstances when the Prospectus is
delivered to a purchaser, not misleading. The Company will make every reasonable
effort to prevent the issuance of any stop order, and if at any time the
Commission shall issue any stop order suspending the effectiveness of the
Registration Statement, the Company will make every reasonable effort to obtain
the withdrawal or lifting of such order at the earliest possible time.
(c) The Company will furnish to you without charge, one signed
copy of the Registration Statement as first filed with the Commission and of
each amendment to it, including all exhibits, and furnish to you such number of
conformed copies of the Registration Statement as so filed and of each amendment
to it as you may reasonably request. If applicable, the copies of the
Registration Statement and each amendment thereto furnished to the
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Underwriter will be identical to the electronically transmitted copies thereof
filed with the Commission pursuant to ▇▇▇▇▇, except to the extent permitted by
Regulation S-T.
(d) At any time when the Prospectus is required to be delivered
under the Act or the Exchange Act in connection with sales of Shares, the
Company will not file any amendment to the Registration Statement or any Rule
462(b) Registration Statement or make any amendment or supplement to the
Prospectus or any Term Sheet, if applicable, of which you shall not previously
have been advised or to which you or your counsel shall reasonably object; and
the Company will prepare and file with the Commission, promptly upon your
reasonable request, any amendment to the Registration Statement, Rule 462(b)
Registration Statement, Term Sheet, or amendment or supplement to the Prospectus
which, in the opinion of your counsel, may be necessary in connection with the
distribution of the Shares by you, and will use its best efforts to cause the
same to become promptly effective. If applicable, the Prospectus and any
amendments or supplements thereto furnished to the Underwriter will be identical
to the electronically transmitted copies thereof filed with the Commission
pursuant to ▇▇▇▇▇, except to the extent permitted by Regulation S-T.
(e) If, at any time when the Prospectus is required to be
delivered under the Act or the Exchange Act in connection with sales of Shares,
any event shall occur as a result of which, in the opinion of counsel for the
Underwriter, it becomes necessary to amend or supplement the Prospectus in order
to make the statements therein, in the light of the circumstances existing when
the Prospectus is delivered to a purchaser, not misleading, or if it is
necessary to amend or supplement the Prospectus to comply with any law, the
Company will forthwith prepare and file with the Commission an appropriate
amendment or supplement to the Prospectus (in form and substance reasonably
satisfactory to counsel for the Underwriter) so that the statements in the
Prospectus, as so amended or supplemented, will not contain an untrue statement
of a material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances existing when it is so
delivered, not misleading, or so that the Prospectus will comply with any law,
and to furnish to the Underwriter and to such dealers as you shall specify, such
number of copies thereof as the Underwriter or dealers may reasonably request.
(f) The Company will use its best efforts, in cooperation with the
Underwriter, to qualify, register or perfect exemptions for the Shares for offer
and sale by the Underwriter under the applicable state securities or Blue Sky
laws and real estate syndication laws of such jurisdictions as you may
reasonably request; provided, however, the Company will not be required to
qualify as a foreign corporation, file a general consent to service of process
in any such jurisdiction, subject itself to taxation in respect of doing
business in any jurisdiction in which it is not otherwise so subject, or provide
any undertaking or make any change in its charter or by-laws that the Board of
Directors of the Company reasonably determines to be contrary to the best
interests of the Company and its stockholders. In each jurisdiction in which the
Shares have been so qualified or registered, the Company will use all reasonable
efforts to file such statements, reports and other documents as may be required
by the laws of such jurisdiction, to continue such qualification or registration
in effect for so long a period as the Underwriter may reasonably request for the
distribution of the Shares.
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(g) To make generally available to the Company's stockholders as
soon as reasonably practicable but not later than sixty (60) days after the
close of the period covered thereby (ninety (90) days in the event the close of
such period is the close of the Company's fiscal year), an earnings statement
(in form complying with the provisions of Rule 158 of the Act) covering a period
of at least twelve months after the effective date of the Registration Statement
(but in no event commencing later than ninety (90) days after such date) which
shall satisfy the provisions of Section 11(a) of the Act, and, if required by
Rule 158 of the Act, to file such statement as an exhibit to the next periodic
report required to be filed by the Company under the Exchange Act covering the
period when such earnings statement is released.
(h) During the period of five years after the date of this
Agreement, to furnish to you as soon as available a copy of each regular and
periodic report, financial statement or other publicly available information of
the Company and any of its subsidiaries mailed to the holders of the Shares or
filed with the Commission or any securities exchange, and any such publicly
available information concerning the Company or any of its subsidiaries as you
may reasonably request.
(i) During the period when the Prospectus is required to be
delivered under the Act or the Exchange Act in connection with sales of the
Shares, to file all documents required to be filed by it with the Commission
pursuant to Section 13, 14 or 15 of the Exchange Act within the time periods
required by the Exchange Act.
(j) To pay all costs, expenses, fees and taxes incident to (i) the
preparation, printing, filing and distribution under the Act of the Registration
Statement and any amendment thereto (including financial statements and
exhibits), each preliminary prospectus, the Prospectus and all amendments and
supplements to any of them prior to or during the period specified in Section
5(b), (ii) the printing and delivery of this Agreement and the Blue Sky
Memorandum (including the reasonable disbursements of counsel for the
Underwriter relating to the printing and delivery of the Blue Sky Memorandum),
(iii) the qualification of registration of the Shares for offer and sale under
the securities, Blue Sky laws or real estate syndication laws of the several
states in accordance with Section 5(f) hereof, (iv) the fee of and the filings
and clearance, if any, with the National Association of Securities Dealers, Inc.
(the "NASD") in connection with the Offering, (v) the fee of and the listing of
the Shares on the New York Stock Exchange, Inc. ("NYSE"), (vi) furnishing such
copies of the Registration Statement, the Prospectus and all amendments and
supplements thereto as may be requested for use in connection with the offering
or sale of the Shares by the Underwriter, (vii) the preparation, issuance and
delivery of certificates for the Shares to the Underwriter, (viii) the costs and
charges of any transfer agent or registrar, (ix) any transfer taxes imposed on
the sale by the Company of the Shares to the Underwriter and (x) the fees and
disbursements of the Company's counsel and accountants.
(k) The Company will use its best efforts to maintain the listing
of the Shares on the NYSE for a period of three years after the Closing Date and
thereafter unless the Company's Board of Directors determines that it is no
longer in the best interests of the Company for the Shares to continue to be so
listed.
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(l) The Company will use its best efforts to do and perform all
things required to be done and performed under this Agreement by the Company
prior to the Closing Date and to satisfy all conditions precedent to the
delivery of the Shares.
(m) The Company will use the net proceeds received by it from the
sale of the Shares substantially in the manner specified in the Prospectus
Supplement under "Use of Proceeds."
(n) The Company will prepare and file or transmit for filing with
the Commission in accordance with Rule 424(b) of the Act copies of the
Prospectus.
(o) The Company will use its best efforts to ensure that the
Company continues to qualify as a "real estate investment trust" ("REIT") under
Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the
"Code"), for a period of three years after the date of this Agreement unless the
Company's Board of Directors determines that it is no longer in the best
interest of the Company to be so qualified.
(p) The Company will not at any time, directly or indirectly, take
any action intended, or which might reasonably be expected, to cause or result
in, or which will constitute, stabilization of the price of the Shares to
facilitate the sale or resale of any Shares in violation of the Act.
6. Representations and Warranties of the Company. The Company jointly and
severally represents and warrants to the Underwriter as of the date hereof and
the Closing Date that:
(a) The Registration Statement became effective on April 22, 1997.
No stop order suspending the effectiveness of the Registration Statement or any
part thereof has been issued and no proceeding for that purpose has been
instituted or, to the knowledge of the Company, threatened by the Commission or
by the state securities authority of any jurisdiction. No order preventing or
suspending the use of the Prospectus has been issued and no proceeding for that
purpose has been instituted or, to the knowledge of the Company, threatened by
the Commission or by the state securities authority of any jurisdiction.
(b) The Registration Statement and the Prospectus, including the
financial statements, schedules and related notes included in the Prospectus or
incorporated therein by reference and, if applicable, any Term Sheet to the
Prospectus, as of the date hereof and at the time the Registration Statement
became effective, and when any post-effective amendment to the Registration
Statement or Rule 462(b) Registration Statement becomes effective or any
amendment or supplement to the Prospectus is filed with the Commission, did or
will comply in all material respects with all applicable provisions of the Act
and will contain all statements required to be stated therein in accordance with
the Act. The Prospectus, including the financial statements, schedules and
related notes included in the Prospectus or incorporated therein by reference,
and if applicable, any Term Sheet to the Prospectus, as of the date hereof and
at the time the Registration Statement became effective, and at the Closing
Date, and when any post-effective amendment to the Registration Statement or
Rule 462(b) Registration Statement becomes effective or any amendment or
supplement to the Prospectus is filed with the Commission, did or will comply in
all material respects with all applicable provisions of the Act
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and will contain all statements required to be stated therein in accordance with
the Act. On the date the Registration Statement was declared effective, on the
date hereof, on the date of filing of any Rule 462(b) Registration Statement and
on the Closing Date, no part of the Registration Statement or any amendment did
or will contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein not misleading. On the date the Registration Statement was
declared effective, on the date hereof, as of its date, on the date of filing of
any Rule 462(b) Registration Statement and at the Closing Date, the Prospectus
and the Prospectus Supplement did not or will not contain any untrue statement
of a material fact or omit to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. If a Rule 462(b) Registration Statement is filed in connection
with the offering and sale of the Shares, the Company will have complied or will
comply with the requirements of Rule 111 under the Act relating to the payment
of filing fees therefor. The foregoing representations and warranties in this
Section 6(b) do not apply to any statements or omissions made in reliance on and
in conformity with information relating to the Underwriter furnished in writing
to the Company by the Underwriter specifically for inclusion in the Registration
Statement or Prospectus or any amendment or supplement thereto. The Company has
not distributed any offering material in connection with the offering or sale of
the Shares other than the Registration Statement, the Prospectus or any other
materials, if any, permitted by the Act (which were disclosed to the Underwriter
and Underwriter's counsel).
(c) Each 462(b) Registration Statement, if any, complied or will
comply when so filed in all material respects with all applicable provisions of
the Act; did not or will not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading; and the Prospectus delivered to the Underwriter for use in
connection with the offering of the Shares will, at the time of such delivery,
be identical to the electronically transmitted copies thereof filed with the
Commission pursuant to ▇▇▇▇▇, except to the extent permitted by Regulation S-T.
(d) The documents incorporated or deemed to be incorporated by
reference in the Prospectus pursuant to Item 12 of Form S-3 under the Act, at
the time they were, or hereafter are, filed with the Commission, complied and
will comply in all material respects with the requirements of the Exchange Act,
and, when read together with other information in and incorporated by reference
in the Prospectus, at the time the Registration Statement became effective, and
as of the Closing Date, or during the period specified in Section 5(b) did not
and will not include an untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. The foregoing
representations and warranties in this Section 6(d) do not apply to any
statements or omissions made in reliance on and in conformity with information
relating to the Underwriter furnished in writing to the Company by the
Underwriter specifically for inclusion in the Registration Statement or
Prospectus or any amendment or supplement thereto.
(e) The historical financial statements and the related notes
thereto, included or incorporated by reference in the Registration Statement and
the Prospectus, comply in all
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material respects with the requirements of the Act and the Exchange Act, as
applicable, and present fairly the consolidated financial position of the
Company and its consolidated subsidiaries as of the dates indicated and the
results of their operations and the changes in their cash flows for the periods
specified; the foregoing financial statements have been prepared in conformity
with generally accepted accounting principles applied on a consistent basis, and
the supporting schedules included or incorporated by reference in the
Registration Statement present fairly the information required to be stated
therein; the pro forma financial information, and the related notes thereto,
included or incorporated by reference in the Registration Statement and the
Prospectus comply in all material respects with the applicable requirements of
the Act and the Exchange Act, as applicable; at the time they were made, the
assumptions used in preparing such pro forma information are reasonable and the
adjustments used therein are appropriate to give effect to the transactions
referred to therein; and the other financial and statistical information and
data set forth in the Registration Statement and the Prospectus are accurately
presented in all material respects and prepared on a basis consistent with the
books and records of the Company and its consolidated subsidiaries.
(f) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, (i) there has not been any
material adverse change, or any development involving a prospective material
adverse change, in or affecting the condition (financial or otherwise),
business, prospects, properties, net worth or results of operations of the
Company and its subsidiaries, taken as a whole, otherwise than as set forth or
contemplated in the Prospectus; and (ii) except as set forth or contemplated in
the Prospectus, neither the Company nor any of its subsidiaries has entered into
any transaction or agreement (whether or not in the ordinary course of business)
material to the Company and its subsidiaries, taken as a whole.
(g) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the state of Maryland, with
corporate power and authority to own or lease its properties and to conduct its
business as described in the Prospectus, and is duly qualified as a foreign
corporation for the transaction of business and is in good standing under the
laws of each other jurisdiction in which it owns or leases properties, or
conducts any business, so as to require such qualification, other than where the
failure to be so qualified or in good standing would not (1) have a material
adverse effect on the condition (financial or otherwise), business, prospects,
properties, net worth or results of operations of the Company and its
subsidiaries, taken as a whole, (2) adversely affect the issuance or validity of
the Shares or (3) adversely affect the consummation of any of the transactions
contemplated by this Agreement (each of (1), (2) and (3) above, a "Material
Adverse Effect"); except for investments in its subsidiaries, in short-term
investment securities and in other securities as described in the Registration
Statement or Prospectus, the Company has no direct or indirect equity or other
interest in any corporation, partnership, trust or other entity; each of the
subsidiaries of the Company is defined on Schedule I hereto and has been duly
organized and is validly existing as a corporation or limited partnership, as
the case may be, in good standing under the laws of its jurisdiction of
organization with corporate or partnership power and authority, as the case may
be, to own or lease its properties and conduct its business as presently
conducted and as described in the Prospectus, and has been duly qualified as a
foreign corporation or foreign
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limited partnership, as the case may be, for the transaction of business and is
in good standing under the laws of each other jurisdiction in which it owns or
leases properties, or conducts any business, so as to require such
qualification, other than where the failure to be so qualified or in good
standing would not have a Material Adverse Effect; all the outstanding shares of
capital stock of each subsidiary have been duly authorized and validly issued
and are fully paid and nonassessable; except as disclosed in Schedule I hereto,
all the outstanding shares of capital stock and all partnership interests of
each subsidiary are owned by the Company, directly or indirectly, free and clear
of all liens, encumbrances, security interests and claims.
(h) This Agreement has been duly authorized, executed and
delivered by the Company.
(i) The Shares have been duly authorized and, when issued and
delivered to the Underwriter against payment therefor in accordance with the
terms hereof, will be validly issued, fully paid and nonassessable. Application
has been made to list the Shares on the NYSE. The form of certificate for the
Shares will comply with all applicable legal and NYSE requirements. The holders
of outstanding shares of capital stock of the Company are not entitled to
preemptive or other rights to subscribe for the Shares. The capital stock of the
Company conforms to the description thereof in the Registration Statement and
the Prospectus.
(j) Neither the Company nor any of its subsidiaries is, or with
the giving of notice or lapse of time or both would be, in violation of or in
default under (1) its Articles of Incorporation, Certificate of Incorporation or
partnership agreement, as the case may be (in each case as amended to the date
of this Agreement), (2) its Bylaws (as amended to the date of this Agreement) or
(3) any indenture, mortgage, deed of trust, loan agreement, partnership
agreement or other agreement or instrument or obligation to which the Company or
any of its subsidiaries is a party or by which it or any of its properties is
bound, except, with respect to clauses (2) and (3), for violations and defaults
which individually or in the aggregate would not have a Material Adverse Effect;
the issue and sale of the Shares and the performance by the Company of all of
the obligations under this Agreement and the consummation of the transactions
herein contemplated will not conflict with or result in a breach of any of the
terms or provisions of, or constitute a default under, any indenture, mortgage,
deed of trust, loan agreement, partnership agreement or other material agreement
or instrument to which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries is bound or to which any of the
property or assets of the Company or any of its subsidiaries is subject, except
for such conflicts, breaches, defaults or violations which individually or in
the aggregate would not have a Material Adverse Effect, nor will any such action
result in any violation of the provisions of the Articles of Incorporation or
the Bylaws of the Company or any applicable law or statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction over
the Company or any of its properties, except for such violations which
individually or in the aggregate would not have a Material Adverse Effect; and
no consent, approval, authorization, order, registration or qualification of or
with any such court or governmental agency or body is required for the issue and
sale of the Shares or the consummation by the Company of the transactions
contemplated by this Agreement, except such consents, approvals, authorizations,
orders, registrations or qualifications (x) as have been
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obtained under the Act and the Exchange Act, (y) as may be required under state
securities or Blue Sky laws or Sections 2710 and 2720 of the Conduct Rules of
the NASD in connection with the purchase and distribution of the Shares by the
Underwriter or (z) the failure to obtain which would not have a Material Adverse
Effect.
(k) Other than as set forth or contemplated in the Prospectus,
there are no legal or governmental proceedings pending or, to the knowledge of
the Company, threatened to which the Company or its subsidiaries is or may be a
party or to which any property of the Company or its subsidiaries is or may be
the subject which, if determined adversely to the Company, could individually or
in the aggregate reasonably be expected to have a Material Adverse Effect; there
are no contracts or other documents of a character required to be filed as an
exhibit to the Registration Statement or required to be described in the
Registration Statement or the Prospectus which are not filed or described as
required; and the descriptions of the terms of all such contracts and documents
contained or incorporated by reference in the Registration Statement or
Prospectus are complete and correct in all material respects.
(l) The authorized capital stock of the Company consists of 50
million shares of Common Stock, $.01 par value per share. All of the issued
shares of capital stock of the Company have been duly and validly authorized and
issued and are fully paid and nonassessable.
(m) The Company or a subsidiary thereof has good and marketable
title to each Property, in each case free of any lien, mortgage, pledge, charge
or encumbrance of any kind except those (i) described in the Prospectus or (ii)
which do not materially affect or detract from the value of such Property or
interfere with the use made and proposed to be made of such Property by the
Company and its subsidiaries and which individually and in the aggregate are in
an amount which is not material to the Company.
(n) Except as disclosed in the Prospectus, each entity identified
in the Prospectus as a tenant of any Property, or a subtenant thereof, has
entered into a lease or a sublease, if applicable, for the possession of such
Property; except as disclosed in the Prospectus, each such lease is in full
force and effect and neither the Company nor any of its subsidiaries has notice
of any defense to the obligations of the tenant thereunder or any claim asserted
or threatened by any person or entity, which claim, if sustained, would have a
Material Adverse Effect; and except as disclosed in the Prospectus, the lessor
under each lease has complied with its obligations under such lease in all
material respects and neither the Company nor any of its subsidiaries has notice
of any default by the tenant under such lease which, individually or in the
aggregate with other such defaults, would have a Material Adverse Effect.
(o) Except as previously disclosed in writing by the Company to
the Underwriter, the mortgages and deeds of trust encumbering the Properties are
not (i) cross-defaulted to any indebtedness other than indebtedness of the
Company or any of its subsidiaries or (ii) cross-collateralized to any property
not owned by any of the Company or its subsidiaries.
(p) The Company and its subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks and in such
amounts as are customary in the business
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11
in which they are engaged and such insurance is adequate for the value of their
properties; all policies of insurance insuring the Company or its subsidiaries
or their respective businesses, assets, employees, officers, trustees and
directors, as the case may be, are in full force and effect; the Company and its
subsidiaries are in compliance with the terms such policies in all material
respects and there are no claims by the Company or by its subsidiaries under any
such policy as to which any insurance company is denying liability or defending
under a reservation of rights clause, other than claims which individually or in
the aggregate would not have a Material Adverse Effect.
(q) The Company has filed all federal, state and foreign income
tax returns which have been required to be filed and have paid all taxes
indicated by said returns and all assessments received by it to the extent that
such taxes have become due and are not being contested in good faith.
(r) The Company and its subsidiaries own, possess and have
obtained all material licenses, permits, certificates, consents, orders,
approvals and other authorizations from, and has made all material declarations
and filings with, all federal, state, local and other governmental authorities,
all self-regulatory organizations and all courts and other tribunals necessary
to own or lease, as the case may be, and to operate its properties and to carry
on its business as conducted as of the date hereof, except in each case where
the failure to obtain licenses, permits, certificates, consents, orders,
approvals and other authorizations, or to make all declarations and filings,
would not have a Material Adverse Effect, and none of the Company or its
subsidiaries has received any notice of any proceeding relating to revocation or
modification of any such license, permit, certificate, consent, order, approval
or other authorization, except as described in the Prospectus and except, in
each case, where such revocation or modification would not have a Material
Adverse Effect; and the Company and each of its subsidiaries are in compliance
with all laws, rules and regulations relating to the conduct of their respective
businesses as conducted as of the date hereof, except where noncompliance with
such laws, rules or regulations would not have a Material Adverse Effect.
(s) To the knowledge of the Company, their independent accountants
who have certified certain of the financial statements filed with the Commission
as part of, or incorporated by reference in, the Registration Statement or the
Prospectus, are independent public accountants as required by the Act.
(t) To the knowledge of the Company, no relationship, direct or
indirect, exists between or among the Company or its subsidiaries on the one
hand, and the directors, trustees, officers, stockholders, customers or
suppliers of the Company or its subsidiaries on the other hand, which is
required by the Act to be described in the Registration Statement and the
Prospectus which is not so described.
(u) The Company has never been, is not now, and immediately after
giving effect to the sale of the Shares under this Agreement will not be, an
"investment company" or entity "controlled" by an "investment company," within
the meaning of the Investment Company Act of 1940, as amended (the "Investment
Company Act").
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(v) With respect to all tax periods regarding which the Internal
Revenue Service is or will be entitled to assert any claim against the Company,
the Company has met the requirements for qualification as a REIT under Sections
856 through 860 of the Code, and the present and contemplated operations, assets
and income of the Company and its subsidiaries, taken as a whole, continue to
meet such requirements
(w) The conditions for the use by the Company of a registration
statement on Form S-3 set forth in the General Instructions to Form S-3 have
been satisfied and the Company is entitled to use such form for the transactions
contemplated herein.
(i) To the best of the Company's knowledge, the Company,
its subsidiaries, the properties described in the Prospectus
(the "Properties") and the operations conducted thereon comply
and heretofore have complied with all applicable Environmental
Laws, except as disclosed in the Environmental Reports
(defined below) and not likely to have a material adverse
effect on the relevant Property.
(ii) The Company and its subsidiaries have not at any time
and, to the best of the Company's knowledge, no other party
has at any time handled, buried, stored, retained, refined,
transported, processed, manufactured, generated, produced,
spilled, allowed to seep, leak, escape or ▇▇▇▇▇, or be pumped,
poured, emitted, emptied, discharged, injected, dumped,
transferred or otherwise disposed of or dealt with Hazardous
Materials ( as defined below) on, to, under or from the
Properties except as disclosed in the environmental site
assessment reports obtained by the Company on or before the
date hereof in connection with the purchase of any of the
Properties and provided to the Underwriter or its counsel
(collectively, the "Environmental Reports") and not likely to
have a material adverse effect on the relevant Property.
Neither the Company nor its subsidiaries intends to use the
Properties or any subsequently acquired properties for the
purpose of handling, burying, storing, retaining, refining,
transporting, processing, manufacturing, generating,
producing, spilling, seeping, leaking, escaping, leaching,
pumping, pouring, emitting, emptying, discharging, injecting,
dumping, transferring or otherwise disposing of or dealing
with Hazardous Materials.
(iii) To the best of the Company's knowledge, no seepage,
leak, escape, ▇▇▇▇▇, discharge, injection, release, emission,
spill, pumping, pouring, emptying or dumping of Hazardous
Materials into waters on or adjacent to the Properties or the
Acquisition Properties has occurred, is occurring or is
reasonably expected to occur, except as disclosed in the
Environmental Reports and not likely to have a material
adverse effect on the relevant Property.
(iv) Neither the Company nor its subsidiaries have
received notice form any Governmental Authority or other
person of, and does not have knowledge of, any occurrence or
circumstance which, with notice, passage of time, or failure
to act, would give rise to, any claim under or pursuant to any
Environmental Law or under common law pertaining to Hazardous
Materials on or originating from the
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Properties or arising out of the conduct of any party with
respect to the Properties, except as disclosed in the
Environmental Reports.
(v) To the best of the Company's knowledge, the
Properties are not included or proposed for inclusion on any
federal, state, or local lists of sits which require or might
require environmental cleanup, including, but not limited to,
the National Priorities List or CERCLIS List issued pursuant
to CERCLA (as defined below) by the United States
Environmental Protection Agency).
As used herein, "Hazardous Material" shall include, without
limitation any flammable explosives, radioactive materials,
hazardous materials, hazardous wastes, hazardous or toxic
substances, or related materials, asbestos, polychlorinated
biphenyls ("PCBs"), petroleum products and by-products and
substances defined or listed as "hazardous substances," "toxic
Substances," "hazardous waste," or "hazardous materials" in
any Federal, state or local Environmental Law.
As used herein, "Environmental Law" shall mean all laws,
regulations or ordinances of any Federal, state or local
governmental authority having or claiming jurisdiction over
any of the Properties (a "Governmental Authority") that are
designed to protect public health and the environment or
regulate the handling of Hazardous Materials, including,
without limitation, the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended (42 U.S.C.
Section 9601 et seq.)("CERCLA"), the Hazardous Material
Transportation Act, as amended (49 U.S.C. Section 1801 et
seq.), the Resource Conservation and Recovery Act, as amended
(42 U.S.C.Section 6901 et seq.), the Federal Water Pollution
Control Act, as amended (33 U.S.C. Section 1251 et seq.), and
the Clean Air Act, as amended (42 U.S.C. Section 7401 et
seq.), and any and all analogous future federal or present or
future state or local laws.
(x) Subsequent to the respective dates as of which information is
given in the Prospectus, (i) the Company has not purchased any of its
outstanding shares of capital stock, or declared, paid or otherwise made any
dividend or distribution of any kind on its shares of capital stock other than
regular periodic dividends on such shares; and (ii) there has not been any
material change in the shares of capital stock of the Company or any material
change in the short-term debt or long-term debt of the Company and its
subsidiaries on a consolidated basis, except as described in or contemplated by
the Prospectus. Other than as described in or contemplated by the Prospectus,
including documents incorporated therein by reference, there are no outstanding
warrants or options to purchase or rights to acquire any shares of capital stock
of the Company and there are no restrictions upon the voting or transfer of, or
the declaration or payment of any dividend or distribution on, any shares of
capital stock of the Company pursuant to the Company's Articles of Incorporation
or Bylaws, any agreement or other instruments to which the Company is a party or
by which the Company is bound, or any order, law, rule, regulation or
determination of any court, governmental agency or body (including, without
limitation, any banking or insurance regulatory agency or body), or
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14
arbitrator having jurisdiction over the Company. No holders of securities of the
Company or of securities convertible into or exchangeable for securities of the
Company have rights to the registration of such securities of the Company under
the Registration Statement which have not herewith been waived.
(y) The Company and its subsidiaries and affiliates have not taken
and will not take, directly or indirectly, any action designed to, or that might
be reasonably expected to, cause or result in stabilization or manipulation of
the price of the Shares, and the Company and its subsidiaries and affiliates
have not distributed and agree not to distribute any prospectus or other
offering material in connection with the offering and sale of the Shares other
than the Prospectus or other material permitted by the Act.
(z) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are executed
in accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(aa) There is (i) no significant unfair labor practice complaint
pending against the Company or its subsidiaries or, to the knowledge of the
Company, threatened against any of them, before the National Labor Relations
Board or any state or local labor relations board, and no significant grievance
or more significant arbitration proceeding arising out of or under any
collective bargaining agreement is so pending against the Company or its
subsidiaries or, to the knowledge of the Company, threatened against any of
them, and (ii) no significant strike, labor dispute, slowdown or stoppage
pending against the Company or its subsidiaries or, to the knowledge of the
Company, threatened against it or its subsidiaries except for such actions
specified in clause (i) or (ii) above which individually or in the aggregate
could not reasonably be expected to have a Material Adverse Effect.
(bb) No statement, representation, warranty or covenant made by the
Company in this Agreement or made in any certificate or document required by
this Agreement to be delivered to the Underwriter is, or will be, when made,
inaccurate, untrue or incorrect in any material respect; it being understood
that no representation is made under this Section 6(gg) with respect to the
Registration Statement or the Prospectus which are the subject of
representations contained in other paragraphs in this Section 6.
(cc) Any certificate or other document signed by any officer or
authorized representative of the Company or its subsidiaries, and delivered to
the Underwriter or to counsel for the Underwriter in connection with the sale of
the Shares shall be deemed a representation and warranty by such entity or
person, as the case may be, to the Underwriter as to the matters covered
thereby.
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7. Indemnification.
(a) The Company agrees to indemnify and hold harmless the
Underwriter and each person, if any, who controls the Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, from and
against any and all losses, claims, damages, expenses, liabilities and judgments
caused by or resulting from any untrue statement or alleged untrue statement of
a material fact contained in the Registration Statement or the Prospectus (as
amended or supplemented if the Company shall have furnished any amendments or
supplements thereto) or any preliminary prospectus, or caused by or resulting
from any omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages, expenses, liabilities or
judgments are caused by or result from any such untrue statement or omission or
alleged untrue statement or omission based upon and in conformity with
information relating to the Underwriter furnished in writing to the Company by
or on behalf of the Underwriter through you expressly for use therein, provided,
that this indemnity agreement with respect to any preliminary prospectus shall
not inure to the benefit of the Underwriter from whom the person asserting any
such losses, liabilities, claims, damages or expenses purchased Shares, or any
person controlling the Underwriter, if a copy of the prospectus (as then amended
or supplemented if the Company shall have furnished any such amendments or
supplements thereto) was not sent or given by or on behalf of the Underwriter to
such person, if such is required by law, at or prior to the written confirmation
of the sale of such Shares to such person and if the Prospectus (as so amended
or supplemented) would have corrected the defect giving rise to such loss,
liability, claim, damage or expense.
(b) In case any action shall be brought against the Underwriter or
any person controlling the Underwriter, based upon any preliminary prospectus,
the Registration Statement or the Prospectus or any amendment or supplement
thereto and with respect to which indemnity may be sought against the Company,
the Underwriter shall promptly notify the Company in writing and the Company
may, at its election, assume the defense thereof, including the employment of
counsel reasonably satisfactory to such indemnified party and payment of all
fees and expenses. The Underwriter or any such controlling person shall have the
right to employ separate counsel in any such action and participate in the
defense thereof, but the fees and expenses of such counsel shall, if the Company
has assumed the defense as indicated above, be at the expense of the Underwriter
or such controlling person unless (i) the employment of such counsel shall have
been specifically authorized in writing by the Company, (ii) the Company shall
have failed to assume the defense and employ counsel or (iii) the named parties
to any such action (including any impleaded parties) include both the
Underwriter or such controlling person and the Company and the Underwriter or
such controlling person shall have been advised by such counsel that there may
be one or more legal defenses available to it which are different from or
additional to those available to the Company (in which case the Company shall
not have the right to assume the defense of such action on behalf of the
Underwriter or such controlling person, it being understood, however, that the
Company shall not, in connection with any one such action or separate but
substantially similar or related actions in
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the same jurisdiction arising out of the same general allegations or
circumstances, be liable for the fees and expenses of more than one separate
firm of attorneys (in addition to any local counsel) for the Underwriter and
controlling persons, which firm shall be designated in writing by the
Underwriter and that all such fees and expenses shall be reimbursed as they are
incurred). The Company shall not be liable for any settlement of any such action
effected without its written consent, but if settled with its written consent,
the Company agrees to indemnify and hold harmless the Underwriter and any such
controlling person from and against any loss or liability by reason of such
settlement to the extent required by this Section 7. No indemnifying party
shall, without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.
(c) The Underwriter agrees to indemnify and hold harmless the
Company and each of its officers and directors who sign the Registration
Statement and any person controlling the Company within the meaning of Section
15 of the Act or Section 20 of the Exchange Act, to the same extent as the
foregoing indemnity from the Company to the Underwriter, but only with reference
to and in conformity with information relating to the Underwriter furnished in
writing by or on behalf of the Underwriter expressly for use in the Registration
Statement, the Prospectus or any preliminary prospectus. In case any action
shall be brought against the Company, any of its officers, directors, or any
person controlling the Company, based on the Registration Statement, the
Prospectus or any preliminary prospectus and in respect of which indemnity may
be sought against the Underwriter, the Underwriter shall have the rights and
duties given to the Company (except that if the Company shall have assumed the
defense thereof, the Underwriter shall not be required to do so, but may employ
separate counsel therein and participate in the defense thereof but the fees and
expenses of such counsel shall, except as otherwise provided herein, be at the
expense of the Underwriter), and the Company, its officers, directors, and any
person controlling the Company shall have the rights and duties given to the
Underwriter, by Section 7(b) hereof.
(d) If the indemnification provided for in this Section 7 is
unavailable to an indemnified party in respect of any losses, claims, damages,
expenses, liabilities or judgments referred to therein, then each indemnifying
party, in lieu of indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result of such losses,
claims, damages, expenses, liabilities and judgments (i) in such proportion as
is appropriate to reflect the relative benefits received by the Company on the
one hand and the Underwriter on the other hand from the offering of the Shares
or (ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company, on the one hand, and the Underwriter, on the other hand, in
connection with the statements or omissions which resulted in such losses,
claims, damages, expenses, liabilities or judgments, as well as any other
relevant equitable considerations. The relative benefits received by the
Company, on the one hand, and the Underwriter, on the other hand, shall be
deemed to be in the same proportion as the total net proceeds from the Offering
(before deducting expenses)
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17
received by the Company and the total underwriting discounts and commissions
received by the Underwriter, bear to the total price to the public of the
Shares, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault of the Company, on the one hand, and the
Underwriter, on the other hand, shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the Company
or the Underwriter and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Underwriter agree that it would not be
just and equitable if contribution pursuant to this Section 7(d) were determined
by pro rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages, expenses, liabilities or judgments referred to in the
immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 7, the
Underwriter shall not be required to contribute any amount in excess of the
amount by which the total price at which the Shares underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which the Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
8. Conditions of Underwriter's Obligations. The obligations of the
Underwriter to purchase the Shares under this Agreement are subject to the
satisfaction of each of the following conditions:
(a) All the representations and warranties of the Company
contained in this Agreement shall be true and correct, in all material respects,
on the Closing Date, with the same force and effect as if made on and as of the
Closing Date.
(b) No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall have
been commenced or shall be pending before or threatened by the Commission to the
knowledge, after due inquiry, of the Company. No stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been commenced or shall be pending
before or threatened by the state securities authority of any jurisdiction, to
the knowledge of the Company.
(c) (i) Since the date of the latest balance sheet included or
incorporated by reference in the Registration Statement and the Prospectus,
there shall not have been any Material Adverse Effect, (ii) other than as set
forth in the Prospectus, no proceedings shall be pending or, to the knowledge of
the Company, after due inquiry, threatened against the Company or any
-17-
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Property before or by any federal, state or other commission, board or
administrative agency, where an unfavorable decision, ruling or finding could
reasonably be expected to result in a Material Adverse Effect, and on the
Closing Date you shall have received a certificate dated the Closing Date,
signed by the Chief Executive Officer and the Chief Financial Officer of the
Company and the General Partner, in their capacities as the Chief Executive
Officer and Chief Financial Officer of each entity and on behalf of each entity,
confirming the matters set forth in paragraphs (a), (b) and (c) of this Section
8.
(d) You shall have received on the Closing Date opinions, dated
the Closing Date of ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇, counsel for the Company, in
the forms attached hereto as Annex A and Annex B.
(e) You shall have received on the Closing Date an opinion, dated
the Closing Date, of Hunton & ▇▇▇▇▇▇▇▇, counsel for the Underwriter, to the
effect that:
(i) the Shares have been duly authorized, and when issued
and delivered to the Underwriter against payment therefor as
provided by this Agreement, will have been validly issued and
will be fully paid and nonassessable, and the issuance of such
Shares is not subject to any preemptive or similar rights;
(ii) the Registration Statement has become effective under
the Act and, to the knowledge of such counsel, no stop order
suspending its effectiveness has been issued and no
proceedings for that purpose are pending before or threatened
by the Commission;
(iii) this Agreement was duly and validly authorized,
executed and delivered by the Company; and
(iv) the Registration Statement, at the time it became
effective, and the Prospectus, as of the date of the
Prospectus Supplement (in each case, other than documents
incorporated therein by reference and the financial statements
and supporting schedules and other financial and statistical
data included or incorporated by reference therein, as to
which no opinion need be rendered) complied as to form in all
material respects with the requirements of the Act.
In addition, Hunton & ▇▇▇▇▇▇▇▇ shall state that they have
participated in conferences with officers and other representatives of the
Company and representatives of the independent public accountants for the
Company and representatives of the Underwriter at which the contents of the
Prospectus and related matters were discussed and, although they are not passing
upon and do not assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement or the
Prospectus or the documents incorporated therein by reference, on the basis of
the foregoing (relying as to materiality to a large extent upon the opinions of
officers and other representatives of the Company), no facts have come to the
attention of such counsel which lead them to believe that the Registration
Statement, including the documents incorporated therein by reference, at the
time the Company filed its Annual Report on Form 10-K for the Year Ended
December 31, 1996, or at the date of
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19
the Underwriting Agreement, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading or that the Prospectus, including the
documents incorporated therein by reference, at the time the Prospectus was
first provided to the Underwriter for use in connection with the offering of the
Shares or at the date hereof, contained or contains an untrue statement of a
material fact or omitted or omits to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading (it being understood that such counsel need express no
opinion with respect to the financial statements and schedules and other
financial or statistical data included in the Registration Statement, the
Prospectus or the documents incorporated therein by reference).
(f) On the date hereof, KPMG Peat Marwick L.L.P. shall have
furnished to the Underwriter a letter, dated the date of its delivery, addressed
to the Underwriter and in form and substance satisfactory to the Underwriter
(and to its counsel), confirming that they are independent public accountants
with respect to the Company and its subsidiaries as required by the Act and with
respect to the financial and other statistical and numerical information
contained in the Registration Statement. At the Closing Date, KPMG Peat Marwick
L.L.P. shall have furnished to the Underwriter a letter, dated the date of its
delivery, which shall confirm, on the basis of a review in accordance with the
procedures set forth in the letter from it, that nothing has come to its
attention during the period from the date of the letter referred to in the prior
sentence to a date (specified in the letter) not more than five days prior to
the Closing Date, which would require any change in its letter dated the date
hereof if it were required to be dated and delivered at the Closing Date.
(g) At the Closing Date, the Shares shall have been approved for
listing on the NYSE upon official notice of issuance.
(h) The Company and its subsidiaries shall not have failed at or
prior to the Closing Date, to perform or comply with any of the agreements
pursuant to Section 5 herein contained and required to be performed or complied
with by the Company at or prior to the Closing Date.
(i) At the Closing Date, Hunton & ▇▇▇▇▇▇▇▇ shall have been
furnished with such documents and opinions as they may reasonably require for
the purpose of enabling them to pass upon the issuance and sale of the Shares,
as herein contemplated and related proceedings, or in order to evidence the
accuracy of any of the representations or warranties, or the fulfillment of any
of the conditions, herein contained; and all proceedings taken by the Company in
connection with the issuance and sale of the Shares as herein contemplated shall
be reasonably satisfactory in form and substance to the Underwriter and Hunton &
▇▇▇▇▇▇▇▇.
9. Effective Date of Agreement and Termination. This Agreement shall
become effective upon the execution of this Agreement.
This Agreement may be terminated at any time prior to the
Closing Date by you by written notice to the Company if any of the following has
occurred: (i) since the respective dates as of which information is given in the
Registration Statement and the Prospectus, there has been a Material Adverse
Effect, (ii) any outbreak or escalation of hostilities or other national or
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international calamity or crisis or change in economic conditions or in the
financial markets of the United States or elsewhere that, in your judgment, is
material and adverse and would, in your judgment, make it impracticable or
inadvisable (x) to commence or continue the offering of the shares to the public
or (y) to enforce contracts for the sale of the shares, (iii) the suspension or
material limitation of trading in securities on the NYSE or the American Stock
Exchange or material limitation on prices for securities on either of such
exchanges, (iv) (a) the downgrading of any of the debt securities of the Company
or its subsidiaries by any "nationally recognized statistical rating
organization" or the announcement by any such organization of an initial rating
with respect to any such securities that is below the ratings of other such
organizations in effect for such securities on the date hereof, or (b) the
public announcement by any such organization that it has under surveillance or
review, with possible negative implications, its rating of any of such
securities, (v) the enactment, publication, decree or other promulgation of any
federal or state statute, regulation, rule or order of any court or other
governmental authority which in your opinion would result in a Material Adverse
Effect, (vi) the declaration of a banking moratorium by either federal or New
York State authorities or (vii) the taking of any action by any federal, state
or local government or agency in respect of its monetary or fiscal affairs which
in your opinion has a material adverse effect on the financial markets in the
United States.
10. Miscellaneous. Notices given pursuant to any provision of this
Agreement shall be addressed as follows: (a) if to the Company, to [name and
address of Company] and (b) if to you, to ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, Incorporated,
Attention: Syndicate Department, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇, or in any case to such other address as the person to be notified may
have requested in writing.
The provisions of Sections 5, 6 and 7 shall remain operative
and in full force and effect, and will survive delivery of and payment for the
Shares, regardless of (i) any investigation, or statement as to the results
thereof, made by or on behalf of the Underwriter or by or on behalf of the
Company, the officers or directors of any of the Company or any controlling
person of the Company and (ii) acceptance of the Shares and payment for them
hereunder.
In the event of termination of this Agreement, the provisions
of Sections 5(k) and 7 shall remain operative and in full force and effect.
If this Agreement shall be terminated by the Underwriter
because of any failure or refusal on the part of the Company to comply with the
terms or to fulfill any of the conditions of this Agreement, the Company agrees
to reimburse the Underwriter for all out-of-pocket expenses (including the fees
and documented disbursements of counsel) reasonably incurred by the Underwriter.
Except as otherwise provided, this Agreement has been and is
made solely for the benefit of and shall be binding upon the Company and the
Underwriter, any controlling persons referred to herein and their respective
successors and assigns, all as and to the extent provided in this Agreement, and
no other person shall acquire or have any right under or by virtue of this
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Agreement. The term "successors and assigns" shall not include a purchaser of
any of the Shares from the Underwriter merely because of such purchase.
This Agreement shall be governed and construed in accordance
with the laws of the State of New York.
This Agreement may be signed in various counterparts which
together shall constitute one and the same instrument.
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Please confirm that the foregoing correctly sets forth the
agreement among the parties hereto.
Very truly yours,
COMMERCIAL NET LEASE REALTY, INC.
By:
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Name:
Title:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, INCORPORATED
By:
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Name:
Title:
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