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Exhibit 1.1
Execution
Copy
D IGITAL R
EALTY T RUST , I NC
.
12,000,000 Shares
5.500% Series D
Cumulative Convertible Preferred Shares
Underwriting
Agreement
New York, New York
January 31,
2008
C ITIGROUP G
LOBAL M ARKETS I NC
.
C REDIT S
UISSE S ECURITIES (USA)
LLC
As Representatives of the several
Underwriters
named in Schedule II hereto
c/o Citigroup Global Markets
Inc.
388 Greenwich Street, 32nd
Floor
New York, NY 10013
Ladies and Gentlemen:
Digital Realty Trust, Inc., a
corporation organized under the laws of the State of Maryland (the
“ Company ”), proposes to sell to the several
underwriters named in Schedule II hereto (the “
Underwriters ”), for whom you (the “
Representatives ”) are acting as representatives, the
number of shares of 5.500% Series D Cumulative Convertible
Preferred Shares (Liquidation Preference $25.00 Per Share) (the
“ Convertible Preferred Stock ”), of the Company
set forth in Schedule I hereto (said shares to be issued and sold
by the Company being hereinafter called the “ Underwritten
Securities ”). The Company also proposes to grant to the
Underwriters an option to purchase up to the number of additional
shares of Convertible Preferred Stock set forth in Schedule I
hereto to cover over-allotments (the “ Option
Securities ”; the Option Securities, together with the
Underwritten Securities, being hereinafter called the “
Securities ”). The Convertible Preferred Stock will be
established by the Articles Supplementary to the Articles of
Amendment and Restatement of the Company (the “ Articles
Supplementary ”) to be filed with the State Department of
Assessments and Taxation of the State of Maryland (the “
SDAT ”). To the extent there are no additional
Underwriters listed on Schedule II other than you, the term
Representatives as used herein shall mean you, as Underwriters, and
the terms Representatives and Underwriters shall mean either the
singular or plural as the context requires. Any reference herein to
the Registration Statement, the Base Prospectus, 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 Exchange
Act on or before the Effective Date of the Registration Statement
or the issue date of the Base Prospectus, any Preliminary
Prospectus or the Prospectus, as the case may be; and any reference
herein to the terms “amend,” “amendment” or
“supplement” with respect to the Registration
Statement, the
Base Prospectus, any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and
include the filing of any document under the Exchange Act after the
Effective Date of the Registration Statement or the issue date of
the Base Prospectus, any Preliminary Prospectus or the Prospectus,
as the case may be, deemed to be included or incorporated by
reference therein. Certain terms used herein are defined in
Section 20 hereof.
1. Representations and
Warranties . Each of the Company and its operating partnership
subsidiary, Digital Realty Trust, L.P. (the “ Operating
Partnership ”), jointly and severally represents and
warrants to each Underwriter, and agrees with each Underwriter as
set forth below in this Section 1.
(a) The Company meets the
requirements for use of Form S-3 under the Act and has prepared and
filed with the Commission an automatic shelf registration
statement, as defined in Rule 405 (file number 333-132980) on Form
S-3, including a related base prospectus, for registration under
the Act of the offering and sale of the Securities. Such
Registration Statement, including any amendments thereto filed
prior to the Execution Time, became effective upon filing. The
Company may have filed with the Commission, as part of an amendment
to the Registration Statement or pursuant to Rule 424(b), one or
more Preliminary Prospectuses, each of which has previously been
furnished to you. The Company will file with the Commission a
Prospectus relating to the Securities in accordance with Rule
424(b). As filed, such Prospectus shall contain all information
required by the Act and the rules thereunder, and, except for such
modifications to which the Representatives do not reasonably
object, shall be in all substantive respects in the form furnished
to you prior to the Execution Time or, to the extent not completed
at the Execution Time, shall contain only such specific additional
information and other substantive changes (beyond that contained in
the Base Prospectus and any Preliminary Prospectus) as the Company
has advised you, prior to the Execution Time, will be included or
made therein. The Registration Statement, at the Execution Time,
meets the requirements set forth in Rule 415(a)(1)(x).
(b) On the Effective Date,
the Registration Statement did, and when the Prospectus is first
filed (if required) in accordance with Rule 424(b) and on the
Closing Date (as defined herein) and on any date on which Option
Securities are purchased, if such date is not the Closing Date (a
“ settlement date ”), the Prospectus (and any
supplement thereto) will, comply in all material respects with the
applicable requirements of the Act and the Exchange Act and the
respective rules thereunder; on the Effective Date and at the
Execution Time, the Registration Statement did not and will not
contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in
order to make the statements therein not misleading; and, on the
date of any filing pursuant to Rule 424(b) and on the Closing Date
and any settlement date, the Prospectus (together with any
supplements thereto) will not include any 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
under which they were made, not misleading; provided ,
however , that the Company makes no representations or
warranties as to the information contained in or omitted from the
Registration Statement or the Prospectus (or any supplement
thereto) in reliance upon and in conformity with information
furnished in writing to the Company by or on behalf of any
Underwriter
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through the Representatives
specifically for inclusion in the Registration Statement or the
Prospectus (or any supplement thereto), it being understood and
agreed that the only such information furnished by or on behalf of
any Underwriters consists of the information described as such in
Section 8 hereof.
(c) The Disclosure Package
does not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were
made, not misleading. The preceding sentence does not apply to
statements in or omissions from the Disclosure Package based upon
and in conformity with written information furnished to the Company
by any Underwriter through the Representatives specifically for use
therein, it being understood and agreed that the only such
information furnished by or on behalf of any Underwriter consists
of the information described as such in Section 8 hereof. No
stop order suspending the effectiveness of the Registration
Statement or any part thereof has been issued and, to the
Company’s knowledge, no proceeding for that purpose has been
instituted or 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, to the
Company’s knowledge, no proceeding for that purpose has been
instituted by the Commission or by the state securities authority
of any jurisdiction.
(d) (i) At the time of filing
the Registration Statement, (ii) at the time of the most
recent amendment thereto for the purposes of complying with
Section 10(a)(3) of the Act (whether such amendment was by
post-effective amendment, incorporated report filed pursuant to
Sections 13 or 15(d) of the Exchange Act or form of prospectus),
(iii) at the time the Company or any person acting on its
behalf (within the meaning, for this clause only, of Rule 163(c))
made any offer relating to the Securities in reliance on the
exemption in Rule 163, and (iv) at the Execution Time (with
such date being used as the determination date for purposes of this
clause (iv)), the Company was or is (as the case may be) a
“well-known seasoned issuer” as defined in Rule 405.
The Company agrees to pay the fees required by the Commission
relating to the Securities within the time required by Rule
456(b)(1) without regard to the proviso therein and otherwise in
accordance with Rules 456(b) and 457(r).
(e) (i) At the earliest time
after the filing of the Registration Statement that the Company or
another offering participant made a bona fide offer (within
the meaning of Rule 164(h)(2)) of the Securities and (ii) as
of the Execution Time (with such date being used as the
determination date for purposes of this clause (ii)), the Company
was not and is not an Ineligible Issuer (as defined in Rule 405),
without taking account of any determination by the Commission
pursuant to Rule 405 that it is not necessary that the Company be
considered an Ineligible Issuer.
(f) Each Issuer Free Writing
Prospectus, as of its date of issue, did not, does not or will not
include any information that conflicted, conflicts or will conflict
with the information contained in the Registration Statement,
including any document included or incorporated by reference
therein and any prospectus supplement deemed to be a part thereof
that has not been superseded or modified. The foregoing sentence
does not apply to statements in or omissions from any Issuer Free
Writing Prospectus based
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upon and in conformity with
written information furnished to the Company by any Underwriter
through the Representatives specifically for use therein, it being
understood and agreed that the only such information furnished by
or on behalf of any Underwriter consists of the information
described as such in Section 8 hereof.
(g) All documents filed by
the Company pursuant to Sections 12, 13, 14 or 15 of the Exchange
Act, when they became or, prior to the settlement date for the
Option Securities, become effective or were or, prior to the
settlement date for the Option Securities, are filed with the
Commission, as the case may be, complied or will comply in all
material respects with the requirements of the Act and the rules
thereunder or the Exchange Act and the rules thereunder, as
applicable.
(h) 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 full
corporate power and authority to own or lease, as the case may be,
and to operate its properties and conduct its business as described
in the Disclosure Package and the Prospectus, and to enter into and
perform its obligations under this Agreement and as general partner
of the Operating Partnership to cause the Operating Partnership to
enter into and perform the Operating Partnership’s
obligations under this Agreement and the Fourth Amended and
Restated Agreement of Limited Partnership of the Operating
Partnership (the “ Operating Partnership Agreement
”), and is duly qualified to do business as a foreign
corporation and is in good standing under the laws of each
jurisdiction which requires such qualification, except where the
failure to be so qualified would not reasonably be expected to have
a material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of the
Company and its subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of business. The
Articles Supplementary have been, or by the Closing Date will be,
duly authorized and executed by the Company and filed by the
Company with the SDAT, and will be in full force and effect as of
the Closing Date.
(i) The Operating Partnership
has been duly formed and is validly existing as a limited
partnership in good standing under the laws of the State of
Maryland with full power and authority to own or lease, as the case
may be, and to operate its properties and conduct its business as
described in the Disclosure Package and the Prospectus and to enter
into and perform its obligations under this Agreement, and is duly
qualified to do business and is in good standing as a foreign
limited partnership under the laws of each jurisdiction which
requires such qualification, except where the failure to be so
qualified would not reasonably be expected to have a material
adverse effect on the condition (financial or otherwise),
prospects, earnings, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business.
(j) Each Subsidiary (as
defined in Section 20 hereof) of the Company has been duly
formed and is validly existing as a corporation, limited liability
company or limited partnership, as the case may be, in good
standing under the laws of the jurisdiction in which it is
chartered or organized with full power and authority (corporate and
other) to own or lease, as the case may be, and to operate its
properties and conduct
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its business as described in
the Disclosure Package and the Prospectus, and is duly qualified to
do business as a foreign corporation, limited liability company or
limited partnership, as the case may be, and is in good standing
under the laws of each jurisdiction which requires such
qualification, except where the failure to be so qualified would
not reasonably be expected to have a material adverse effect on the
condition (financial or otherwise), prospects, earnings, business
or properties of the Company and its subsidiaries, taken as a
whole, whether or not arising from transactions in the ordinary
course of business. The Subsidiaries collectively own not less than
90% of the consolidated assets of the Company.
(k) All the outstanding
shares of capital stock or other ownership interests of each
Subsidiary (other than the Operating Partnership) have been duly
and validly authorized and issued and are fully paid and
nonassessable, and, as of the Closing Date, except as otherwise set
forth in the Disclosure Package and the Prospectus, all outstanding
shares of capital stock or other ownership interests of the
Subsidiaries will be owned by the Company or the Operating
Partnership either directly or through wholly owned subsidiaries
free and clear of any perfected security interest or any other
security interests, claims, mortgages, pledges, liens, encumbrances
or other restrictions of any kind (collectively, “
Liens ”), except for Liens securing indebtedness as
described in the Disclosure Package and the Prospectus or except
where such Liens would not individually or in the aggregate
materially affect or interfere in any material respect with the
Company’s ability to exercise control over each of such
Subsidiaries. Except as set forth in the Disclosure Package and the
Prospectus, there are no outstanding options, warrants or other
rights to purchase, agreements or other obligations to issue, or
rights to convert any obligations into or exchange any securities
or interests for capital stock or other ownership interests of any
Subsidiary.
(l) The Company’s
authorized equity capitalization is as set forth in the Disclosure
Package and the Prospectus; the capital stock of the Company
conforms in all material respects to the description thereof
contained in the Disclosure Package and the Prospectus; the
outstanding shares of Common Stock, $0.01 par value per share
(“ Common Stock ”), 8.50% Series A
Cumulative Redeemable Preferred Stock, $0.01 par value per share
(“ Series A Preferred Stock ”), 7.875%
Series B Cumulative Redeemable Preferred Stock, $0.01 par
value per share (“ Series B Preferred Stock
”), and the 4.375% Series C Cumulative Convertible
Preferred Stock, $0.01 par value per share (“
Series C Preferred Stock ”) of the Company have
been duly and validly authorized and issued and are fully paid and
nonassessable; none of the shares of Common Stock, Series A
Preferred Stock, Series B Preferred Stock or Series C
Preferred Stock were issued in violation of the preemptive or other
similar rights of any security holder of the Company or any other
person or entity; the Company has not filed a report pursuant to
Section 13(a) or 15(d) of the Exchange Act since the filing of
its last Annual Report on Form 10-K, indicating that it has failed
to pay any dividend or sinking fund installment on the
Series A Preferred Stock, Series B Preferred Stock or
Series C Preferred Stock; the issuance of the Securities to be
issued and sold pursuant to this Agreement has been duly and
validly authorized, and, when issued and delivered to and paid for
by the Underwriters pursuant to the terms of this Agreement, the
Securities will have been validly issued and will be fully paid and
nonassessable and free of preemptive or similar
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rights; the terms of the
Securities conform in all material respects to the description
thereof contained in the Prospectus under the caption
“Description of Series D Preferred Stock”; the
Securities conform to the provisions of the Articles Supplementary
and the relative rights, preferences, interests and powers of the
Shares are as set forth in the Articles Supplementary, and such
provisions do not violate Maryland law; all outstanding shares of
Common Stock are duly listed, and admitted and authorized for
trading on the New York Stock Exchange; the certificates for the
Securities are in valid and sufficient form and the holders of the
Securities will not be subject to personal liability solely by
virtue of being such holders; the holders of outstanding shares of
capital stock of the Company are not entitled to preemptive or
other rights to subscribe for the Securities; and, except as set
forth in the Disclosure Package and the Prospectus, no options,
warrants or other rights to purchase, agreements or other
obligations to issue, or rights to convert any obligations into or
exchange any securities for, shares of capital stock of or
ownership interests in the Company are outstanding; all offers and
sales by the Company of the Company’s shares of Common Stock,
Series A Preferred Stock, Series B Preferred Stock, and
Series C Preferred Stock prior to the date hereof were at all
relevant times duly registered under the Act or were exempt from
the registration requirements of the Act and were duly registered
or the subject of an available exemption from the registration
requirements of the applicable state securities or blue sky
laws.
(m) Upon issuance and
delivery of the Securities in accordance with this Agreement, the
Securities will be convertible at the option of the holder thereof
for shares of Common Stock in accordance with the terms of the
Convertible Preferred Stock and the Articles Supplementary; the
shares of Common Stock issuable upon conversion of the Securities
(the “ Conversion Shares ”) have been duly
authorized and reserved for issuance upon conversion of the
Securities by all necessary corporate action and such Conversion
Shares, when issued upon conversion of the Securities will be
validly issued, fully paid and nonassessable and free of any
preemptive or similar rights and will conform to the description of
the Common Stock in the Prospectus.
(n) The Conversion Shares
have been approved for listing on the New York Stock Exchange,
subject only to official notice of issuance.
(o) All of the issued and
outstanding units of limited partnership (“ Units
”) of the Operating Partnership have been duly and validly
authorized and issued by the Operating Partnership and conform in
all material respects to the description thereof contained in the
Disclosure Package and the Prospectus. None of the Units was issued
in violation of the preemptive or other similar rights of any
security holder of the Operating Partnership or any other person or
entity. Except as set forth in the Disclosure Package and the
Prospectus or are issued and outstanding as of the date hereof
under the Company’s 2004 Equity Incentive Plan as in effect
as of the date hereof (as set forth in Schedule 1(o) hereto), there
are no outstanding options, warrants or other rights to purchase,
agreements or other obligations to issue, or rights to convert any
obligations into or exchange any securities or interests for, Units
or other ownership interests of the Operating Partnership. The
Units owned by the Company (including all outstanding Series A
preferred limited partnership units, Series B preferred
limited partnership units and Series C preferred limited
partnership units in the Operating Partnership) are
owned
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directly by the Company, free
and clear of all Liens. The issuance of the convertible preferred
limited partnership Units to be issued by the Operating Partnership
in connection with the contribution of the net proceeds from the
sale of the Securities to the Operating Partnership (the “
New Convertible Preferred Units ”) has been duly
authorized, and, when issued and delivered by the Operating
Partnership, the New Convertible Preferred Units will be validly
issued and fully paid. The New Convertible Preferred Units will be
exempt from registration or qualification under the Act and
applicable state securities laws. None of the New Convertible
Preferred Units will be issued in violation of the preemptive or
other similar rights of any security holder of the Operating
Partnership or any other person or entity. Except for Series A
preferred limited partnership units, Series B preferred
limited partnership units and Series C preferred limited
partnership units in the Operating Partnership, the New Convertible
Preferred Units to be issued in connection with the offering of the
Securities and the common Units to be issued by the Operating
Partnership upon conversion of the New Convertible Preferred Units,
there are no outstanding options, warrants or other rights to
purchase, agreements or other obligations to issue, or rights to
convert any obligations into or exchange any securities or
interests for, New Convertible Preferred Units, common Units or
other ownership interest of the Operating Partnership that rank
senior to or on parity with the New Convertible Preferred Units
with respect to dividend or liquidation rights. The common Units to
be issued by the Operating Partnership upon conversion of the New
Convertible Preferred Units or the Option Units (as defined below)
(the “ Conversion Units ”) have been duly
authorized and reserved for issuance upon conversion of the
Securities by all necessary actions and such Conversion Units, when
issued upon conversion of the Securities, will be validly issued,
fully paid and free of any preemptive or similar rights. The
Conversion Units to be issued upon conversion of the New
Convertible Preferred Units will be exempt from registration or
qualification under the Act and applicable state securities laws.
None of the Conversion Units will be issued in violation of the
preemptive or other similar rights of any security holder of the
Operating Partnership or any other person or entity. To the extent
any portion of the over-allotment option is exercised, the Company
will contribute the net proceeds from the sale of the Option
Securities to the Operating Partnership for a number of New
Convertible Preferred Units, the economic terms of which are
substantially similar to the Convertible Preferred Stock, equal to
the number of Option Securities issued (the “ Option
Units ”). The issuance of the Option Units has been duly
authorized, and, when issued and delivered by the Operating
Partnership, the Option Units will be validly issued and fully
paid. The Option Units will be exempt from registration or
qualification under the Act and applicable state securities laws.
None of the Option Units will be issued in violation of the
preemptive or other similar rights of any security holder of the
Operating Partnership or any other person or entity.
(p) There is no franchise,
contract or other document of a character required to be described
in the Registration Statement or the Prospectus, or to be filed as
an exhibit thereto, which is not described or filed as required;
and the statements included or incorporated by reference
(A) in the Base Prospectus under the headings
“Description of the Partnership Agreement of Digital Realty
Trust, L.P.,” “Description of Securities,”
“Material Provisions of Maryland Law and of Our Charter and
Bylaws,” “Plan of Distribution” and
“Restrictions on Ownership and Transfer,” (B) in
the Prospectus under
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the headings
“Description of Series D Preferred Stock,” and
“United States Federal Income Tax Considerations,” and
(C) in the current report on Form 8-K filed with the
Commission on October 11, 2007 under the headings
“United States Federal Income Tax
Considerations—Taxation of our Company,”
“—Failure to Qualify” and “—Tax
Aspects of Our Operating Partnership, the Subsidiary Partnerships
and the Limited Liability Companies,” as supplemented or
superseded by the discussion in the Prospectus under the heading
“United States Federal Income Tax Considerations,”
insofar as such statements summarize legal matters, agreements,
documents or proceedings discussed therein, are accurate and fair
summaries of such legal matters, agreements, documents or
proceedings.
(q) This Agreement has been
duly authorized, executed and delivered by each of the Company and
the Operating Partnership; this Agreement constitutes a legally
valid and binding obligation of each of the Company and the
Operating Partnership, enforceable against each of the Company and
the Operating Partnership in accordance with its terms, except to
the extent that such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization or other similar laws
relating to or affecting creditors’ rights and general
principles of equity and except as rights to indemnity and
contribution thereunder may be limited by applicable law or
policies underlying such law.
(r) Neither the Company nor
the Operating Partnership is and, after giving effect to the
offering and sale of the Securities and the application of the
proceeds thereof as described in the Prospectus or upon issuance of
the Conversion Shares upon conversion of the Securities, neither
the Company nor the Operating Partnership will be an
“investment company” as defined in the Investment
Company Act of 1940, as amended.
(s) No consent, approval,
authorization, filing with or order of any court or governmental
agency or body is required in connection with the transactions
contemplated herein (including the issuance and delivery of the
Securities and the Conversion Shares and the filing of the Articles
Supplementary), except such as have been obtained under the Act,
such as may be required under the blue sky laws of any jurisdiction
in connection with the purchase and distribution of the Securities
by the Underwriters in the manner contemplated herein and in the
Disclosure Package and the Prospectus or such consents, approvals,
authorizations, filings or orders that will be obtained or
completed by the Closing Date or the absence of which, individually
or in the aggregate, would not reasonably be expected to have a
material adverse effect on the condition (financial or otherwise),
prospects, earnings, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business.
(t) Neither the issuance and
sale of the Securities nor the consummation of any other of the
transactions herein contemplated (including the issuance and
delivery of the Conversion Shares), nor the fulfillment of the
terms hereof by the Company will conflict with, result in a breach
or violation of, or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or any of its
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subsidiaries pursuant to,
(i) the charter or bylaws of the Company or the organizational
or other governing documents of any of its subsidiaries,
(ii) the terms of any indenture, contract, lease, mortgage,
deed of trust, note agreement, loan agreement or other agreement,
obligation, condition, covenant or instrument to which the Company
or any of its subsidiaries is a party or bound or to which its or
their property is subject, or (iii) any statute, law, rule,
regulation, judgment, order or decree applicable to the Company or
any of its subsidiaries of any court, regulatory body,
administrative agency, governmental body, arbitrator or other
authority having jurisdiction over the Company or any of its
subsidiaries or any of its or their properties, except, in the case
of clauses (ii) or (iii) above, for such conflicts,
breaches, violations, liens, charges or encumbrances that,
individually or in the aggregate, would not reasonably be expected
to have a material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of the
Company and its subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of
business.
(u) Except as set forth in
the Disclosure Package and the Prospectus, no holders of securities
of the Company have rights to the registration of such securities
under the Registration Statement. Except as set forth in the
Disclosure Package and the Prospectus, there are no contracts,
agreements or understandings between the Company or the Operating
Partnership and any person granting such person the right to
require the Company or the Operating Partnership to file a
registration statement under the Act with respect to any securities
of the Company or the Operating Partnership owned or to be owned by
such person or to require the Company or the Operating Partnership
to include such securities in any securities being registered
pursuant to any other registration statement filed by the Company
or the Operating Partnership under the Act.
(v) The financial statements
and schedules, including the notes thereto, filed with the
Commission as part of or incorporated by reference in the
Registration Statement, and included or incorporated by reference
in the Disclosure Package and the Prospectus, present fairly in all
material respects the financial condition, results of operations
and cash flows of the Company as of the dates and for the periods
indicated, comply as to form in all material respects with the
applicable accounting requirements of the Act and the Exchange Act
and have been prepared in conformity with U.S. generally accepted
accounting principles applied on a consistent basis throughout the
periods involved (except as otherwise noted therein). The selected
financial data set forth under the caption “Selected
Financial Data” incorporated by reference in the Prospectus
and the Registration Statement fairly present in all material
respects, on the basis stated therein, the information included
therein. The pro forma financial statements incorporated by
reference in the Prospectus and the Registration Statement include
assumptions that provide a reasonable basis for presenting the
significant effects directly attributable to the transactions and
events described therein, the related pro forma adjustments give
appropriate effect to those assumptions, and the pro forma
adjustments reflect the proper application of those adjustments to
the historical financial statement amounts in the pro forma
financial statements incorporated by reference in the Prospectus
and the Registration Statement. The pro forma financial statements
including the notes thereto, incorporated by reference in the
Registration Statement, and incorporated by reference in the
Disclosure Package and the Prospectus, comply as to form in all
material respects
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with the applicable
accounting requirements of Regulation S-X under the Act and the pro
forma adjustments have been properly applied to the historical
amounts in the compilation of those statements. No other financial
statements or schedules are required to be included or incorporated
by reference in the Registration Statement, the Disclosure Package
or the Prospectus.
(w) No action, suit or
proceeding by or before any court or governmental agency, authority
or body or any arbitrator involving the Company or any of its
subsidiaries or its or their property is pending or, to the best
knowledge of the Company, threatened that (i) could reasonably
be expected to have a material adverse effect on the performance of
this Agreement or the consummation of any of the transactions
contemplated hereby or (ii) could reasonably be expected to
have a material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of the
Company and its subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of business,
except as set forth in or contemplated in the Disclosure Package
and the Prospectus (exclusive of any supplement
thereto).
(x) Except as otherwise
disclosed in the Disclosure Package and the Prospectus,
(i) the Company or its subsidiaries have fee simple title to
or leasehold interest in, and have acquired title insurance with
respect to, all of the properties described in the Disclosure
Package and the Prospectus as owned or leased by them and the
improvements (exclusive of improvements owned by tenants) located
thereon (the “ Properties ”), in each case, free
and clear of all liens, encumbrances, claims, security interests,
restrictions and defects, except such as are disclosed in the
Disclosure Package and the Prospectus or do not materially affect
the value of such Property and do not materially interfere with the
use made and proposed to be made of such Property by the Company
and any subsidiary; (ii) neither the Company nor any of its
subsidiaries knows of any condemnation which is threatened and
which if consummated would reasonably be expected to have a
material adverse effect on the condition (financial or otherwise),
prospects, earnings, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business; (iii) each of
the Properties complies with all applicable codes, laws and
regulations (including without limitation, building and zoning
codes, laws and regulations and laws relating to access to the
Properties), except as disclosed in the Disclosure Package and the
Prospectus and except for such failures to comply that would not
individually or in the aggregate reasonably be expected to
materially affect the value of such Property or interfere in any
material respect with the use made and proposed to be made of such
Property by the Company or any subsidiary; and (iv) to the
knowledge of the Company and the Operating Partnership, except as
set forth in or contemplated in the Disclosure Package and the
Prospectus and, with respect to (A) below, except as would not
individually or in the aggregate reasonably be expected to
materially affect the value of such Property or interfere in any
material respect with the use made and proposed to be made of such
Property by the Company or any subsidiary: (A) there are no
uncured events of default, or events that with the giving of notice
or passage of time, or both, would constitute an event of default
by any tenant under any of the terms and provisions of any lease
described in the “Properties” section of the
Company’s Annual Report on Form 10-K for the fiscal year
ended December 31, 2006 where the tenant has been specifically
identified; and (B) no tenant under any of the leases at the
Properties has a right of first refusal to purchase the premises
demised under such lease.
10
(y) The Company and its
subsidiaries own, possess, license or have other rights to use, on
reasonable terms, all patents, patent applications, trade and
service marks, trade and service mark registrations, trade names,
copyrights, licenses, inventions, trade secrets, technology,
know-how and other intellectual property (collectively, the “
Intellectual Property ”) reasonably necessary for the
conduct of the Company’s and the Operating
Partnership’s business as now conducted or as proposed in the
Disclosure Package and the Prospectus to be conducted. Except as
set forth in the Disclosure Package and the Prospectus; (i) to
the Company’s or the Operating Partnership’s best
knowledge, there is no material infringement by third parties of
any such Intellectual Property and (ii) there is no pending
or, to the Company’s or the Operating Partnership’s
best knowledge, threatened action, suit, proceeding or claim by
others that the Company or the Operating Partnership infringes or
otherwise violates any patent, trademark, copyright, trade secret
or other proprietary rights of others, and the Company is unaware
of any other fact which would form a reasonable basis for any such
claim.
(z) Neither the Company nor
any Subsidiary is in violation or default of (i) any provision
of its charter, bylaws or other organizational or governing
documents, (ii) the terms of any indenture, contract, lease,
mortgage, deed of trust, note agreement, loan agreement or other
agreement, obligation, condition, covenant or instrument to which
it is a party or bound or to which its property is subject, or
(iii) any statute, law, rule, regulation, judgment, order or
decree of any court, regulatory body, administrative agency,
governmental body, arbitrator or other authority having
jurisdiction over the Company or such Subsidiary or any of its
properties, as applicable, except, in the case of clauses
(ii) or (iii) above, for such violations or defaults
that, individually or in the aggregate, would not reasonably be
expected to have a material adverse effect on the condition
(financial or otherwise), prospects, earnings, business or
properties of the Company and its subsidiaries, taken as a whole,
whether or not arising from transactions in the ordinary course of
business.
(aa) KPMG LLP, who have
certified the financial statements and supporting schedules
included or incorporated by reference in the Prospectus and
delivered their reports with respect to the audited financial
statements and schedules included or incorporated by reference in
the Prospectus, are independent registered public accountants
within the meaning of the Act and the applicable published rules
and regulations thereunder.
(bb) The Company and each of
its Subsidiaries has filed all foreign, federal, state and local
tax returns that are required to be filed or has requested
extensions thereof (except in any case in which the failure so to
file would not reasonably be expected to have a material adverse
effect on the condition (financial or otherwise), prospects,
earnings, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set
forth in or contemplated in the Disclosure Package and the
Prospectus (exclusive of
11
any supplement thereto)) and
has paid all taxes required to be paid by it and any other
assessment, fine or penalty levied against it, to the extent that
any of the foregoing is due and payable, except for any such tax,
assessment, fine or penalty that is currently being contested in
good faith or as would not reasonably be expected to have a
material adverse effect on the condition (financial or otherwise),
prospects, earnings, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business and except as set
forth in or contemplated in the Disclosure Package and the
Prospectus (exclusive of any supplement thereto).
(cc) No material labor
problem or dispute with the employees of the Company or any of its
subsidiaries exists or is threatened or imminent.
(dd) The Company and each of
its Subsidiaries are insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as
are prudent and customary in the businesses in which they are
engaged; all policies of insurance and fidelity or surety bonds
insuring the Company or any of its Subsidiaries or their respective
businesses, assets, employees, officers and directors are in full
force and effect; the Company and its subsidiaries are in
compliance with the terms of such policies and instruments in all
material respects; and there are no claims by the Company or any of
its Subsidiaries under any such policy or instrument as to which
any insurance company is denying liability or defending under a
reservation of rights clause; neither the Company nor any such
Subsidiary has been refused any insurance coverage sought or
applied for; and neither the Company nor any such Subsidiary has
any reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to
obtain similar coverage from similar insurers as may be necessary
to continue its business at a cost that would not reasonably be
expected to have a material adverse effect on the condition
(financial or otherwise), prospects, earnings, business or
properties of the Company and its subsidiaries, taken as a whole,
whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Disclosure
Package and the Prospectus (exclusive of any supplement
thereto).
(ee) No Subsidiary of the
Company is currently prohibited, directly or indirectly, from
paying any dividends or distributions to the Company, from making
any other distribution on such Subsidiary’s capital stock or
equity interests, from repaying to the Company any loans or
advances to such Subsidiary from the Company or from transferring
any of such Subsidiary’s property or assets to the Company or
any other subsidiary of the Company, except pursuant to the terms
of any indebtedness set forth in or contemplated in the Disclosure
Package and the Prospectus (exclusive of any supplement
thereto).
(ff) The Company and its
subsidiaries possess all licenses, certificates, permits and other
authorizations issued by the appropriate federal, state or foreign
regulatory authorities necessary to conduct their respective
businesses, except for such licenses, certificates, permits and
other authorizations the absence of which, individually or in the
aggregate, would not reasonably be expected to have a material
adverse effect
12
on the condition (financial
or otherwise), prospects, earnings, business or properties of the
Company and its subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of business; and
neither the Company nor any such subsidiary has received any notice
of proceedings relating to the revocation or modification of any
such certificate, authorization or permit which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or
finding, would reasonably be expected to have a material adverse
effect on the condition (financial or otherwise), prospects,
earnings, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set
forth in or contemplated in the Disclosure Package and the
Prospectus (exclusive of any supplement thereto).
(gg) The Company and each of
its subsidiaries maintain a system of internal accounting controls
sufficient to provide reasonable assurance 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 U.S.
generally accepted accounting principles and to maintain asset
accountability; (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 the existing assets at reasonable intervals and
appropriate action is taken with respect to any
differences.
(hh) Neither the Company nor
the Operating Partnership has taken, directly or indirectly, any
action designed to or that would constitute or that would
reasonably be expected to cause or result in, under the Exchange
Act or otherwise, stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the
Securities.
(ii) The Company and its
subsidiaries (i) are in compliance with any and all applicable
foreign, federal, state and local laws and regulations relating to
the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
(“ Environmental Laws ”), (ii) have
received and are in compliance with all permits, licenses or other
approvals required of them under applicable Environmental Laws to
conduct their respective businesses and (iii) have not
received notice of any actual or potential liability under any
Environmental Laws, except where such non-compliance with
Environmental Laws, failure to receive required permits, licenses
or other approvals, or liability would not, individually or in the
aggregate, reasonably be expected to have a material adverse effect
on the condition (financial or otherwise), prospects, earnings,
business or properties of the Company and its subsidiaries, taken
as a whole, whether or not arising from transactions in the
ordinary course of business, except as set forth in or contemplated
in the Disclosure Package and the Prospectus (exclusive of any
supplement thereto). Except as set forth in the Disclosure Package
and the Prospectus, neither the Company nor any of the subsidiaries
has been notified that it has been named as a “potentially
responsible party” under the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended.
Except as otherwise set forth in the Disclosure Package and the
Prospectus, and except as would not individually or in the
aggregate reasonably be expected to
13
materially affect the value
of such Property or interfere in any material respect with the use
made and proposed to be made of such Property by the Company or any
subsidiary, to the knowledge of the Company and the Operating
Partnership, there have been no and are no (i) aboveground or
underground storage tanks; (ii) polychlorinated biphenyls
(“ PCBs ”) or PCB-containing equipment;
(iii) asbestos or asbestos containing materials;
(iv) lead based paints; (v) mold or other airborne
contaminants; or (vi) dry-cleaning facilities in, on, under,
or about any Property owned by the Company, the Operating
Partnership or their subsidiaries.
(jj) In the ordinary course
of its business, the Company periodically reviews the effect of
Environmental Laws on the business, operations and properties of
the Company and its subsidiaries, in the course of which it
identifies and evaluates associated costs and liabilities
(including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or
compliance with Environmental Laws, or any permit, license or
approval, any related constraints on operating activities and any
potential liabilities to third parties). On the basis of such
review, the Company has reasonably concluded that such associated
costs and liabilities would not, singly or in the aggregate,
reasonably be expected to have a material adverse effect on the
condition (financial or otherwise), prospects, earnings, business
or properties of the Company and its subsidiaries, taken as a
whole, whether or not arising from transactions in the ordinary
course of business, except as set forth in or contemplated in the
Disclosure Package and the Prospectus (exclusive of any supplement
thereto).
(kk) Neither the Company nor
any of its subsidiaries maintains or contributes to any
“pension plan” (within the meaning of Section 3(2)
of the Employee Retirement Income Security Act of 1974, as amended
(“ ERISA ”)) that is subject to Title IV of
ERISA or any “multiemployer plan” (within the meaning
of Section 4001(a)(3) of ERISA). Each “pension
plan” (within the meaning of Section 3(2) of ERISA)
maintained by the Company or any of its subsidiaries which is
intended to be qualified under Section 401(a) of the Internal
Revenue Code of 1986, as amended (the “ Code ”),
has received a favorable determination or opinion letter from the
Internal Revenue Service that such plan is so qualified, and, to
the knowledge of the Company, nothing has occurred, whether by
action or failure to act, that could reasonably be expected to
cause the loss of such qualification. Neither the Company nor any
of its subsidiaries maintains or is required to contribute to a
“welfare plan” (as defined in Section 3(1) of
ERISA) which provides retiree or other post-employment welfare
benefits or insurance coverage (other than “continuation
coverage” (as defined in Section 602 of ERISA) or as
otherwise required by applicable law). Each “employee benefit
plan” (within the meaning of Section 3(3) of ERISA)
established or maintained by the Company and/or one or more of its
subsidiaries is in compliance with the currently applicable
provisions of ERISA except for such failures to comply that would
not individually or in the aggregate reasonably be expected to have
a material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of the
Company and its subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of
business.
14
(ll) There is and has been no
failure on the part of the Company and any of the Company’s
directors or officers, in their capacities as such, to comply with
any provision of the Sarbanes-Oxley Act of 2002 and the rules and
regulations promulgated in connection therewith (the “
Sarbanes-Oxley Act ”), including the establishment and
maintenance of disclosure controls and procedures, Section 402
related to loans and Sections 302 and 906 related to
certifications, except for such failures to comply that would not
individually or in the aggregate reasonably be expected to have a
material adverse effect on the condition (financial or otherwise),
prospects, earnings, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business.
(mm) Neither the Company nor
any of its subsidiaries nor, to the knowledge of the Company, any
director, officer, agent, employee or affiliate of the Company or
any of its subsidiaries is aware of or has taken any action,
directly or indirectly, that would result in a violation by such
persons of the Foreign Corrupt Practices Act of 1977, as amended,
and the rules and regulations thereunder (“ FCPA
”), including, without limitation, making use of the mails or
any means or instrumentality of interstate commerce corruptly in
furtherance of an offer, payment, promise to pay or authorization
of the payment of any money, or other property, gift, promise to
give, or authorization of the giving of anything of value to any
“foreign official” (as such term is defined in the
FCPA) or any foreign political party or official thereof or any
candidate for foreign political office, in contravention of the
FCPA and the Company, its subsidiaries and, to the knowledge of the
Company and the Operating Partnership, its affiliates have
conducted their businesses in compliance with the FCPA and have
instituted and maintain policies and procedures designed to ensure,
and which are reasonably expected to continue to ensure, continued
compliance therewith except for such violations or failures to
comply that would not individually or in the aggregate reasonably
be expected to have a material adverse effect on the condition
(financial or otherwise), prospects, earnings, business or
properties of the Company and its subsidiaries, taken as a whole,
whether or not arising from transactions in the ordinary course of
business.
(nn) The operations of the
Company and its subsidiaries are and have been conducted at all
times in compliance with applicable financial recordkeeping and
reporting requirements of the Currency and Foreign Transactions
Reporting Act of 1970, as amended, the money laundering statutes of
all jurisdictions, the rules and regulations thereunder and any
related or similar rules, regulations or guidelines, issued,
administered or enforced by any governmental agency (collectively,
the “ Money Laundering Laws ”) and no action,
suit or proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving the Company or any of
its subsidiaries with respect to the Money Laundering Laws is
pending or, to the best knowledge of the Company, threatened except
for such failures to comply, actions, suits or proceedings that
would not individually or in the aggregate reasonably be expected
to have a material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of the
Company and its subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of
business.
15
(oo) Except as would not
individually or in the aggregate reasonably be expected to have a
material adverse effect on the condition (financial or otherwise),
prospects, earnings, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, neither the
Company nor any of its subsidiaries nor, to the knowledge of the
Company, any director, officer
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