Exhibit 1.1
EXECUTION COPY
3,000,000 Shares
9.00% Series E Cumulative Convertible Preferred Shares of
Beneficial Interest
ENTERTAINMENT PROPERTIES TRUST
March 27, 2008
J.P.
Morgan Securities Inc.
277 Park Avenue
New York, NY 10172
Morgan
Stanley & Co. Incorporated
1585 Broadway
New York, NY 10036
as
Representatives of the several Underwriters
Ladies/Gentlemen:
Entertainment
Properties Trust, a Maryland real estate investment trust (the
“ Company ”), proposes, subject to the terms and
conditions stated herein, to issue and sell to J.P. Morgan
Securities Inc. (“ JPMorgan ”) and Morgan
Stanley & Co. Incorporated (“ Morgan Stanley
”) and each of the several underwriters named in
Schedule I hereto (collectively, the “
Underwriters ,” which term shall also include any
underwriter substituted as hereinafter provided in Section 2(e)
hereof) for which JPMorgan and Morgan Stanley are acting as
representatives (in such capacity, the “
Representatives ”) an aggregate of 3,000,000 (the
“ Firm Shares ”) of its 9.00% Series E
Cumulative Convertible Preferred Shares of Beneficial Interest, par
value $0.01 per share (liquidation preference $25.00 per share)
(the “ Series E Preferred Shares ”), as set
forth on Schedule I hereto, and, for the sole purpose
of covering over-allotments in connection with the sale of the Firm
Shares, at the option of the Underwriters, up to an additional
450,000 Series E Preferred Shares (the “ Additional
Shares ”). The Series E Preferred Shares shall be
convertible into common shares of beneficial interest, par value
$0.01 per share, of the Company (the “ Conversion
Shares ”). The Firm Shares and any Additional Shares
purchased by the Underwriters are referred to herein as the “
Shares .” The dividend payment dates, conversion and
redemption provisions, rank and other terms of the Series E
Preferred Shares are set forth in the Articles Supplementary
relating to the Series E Preferred Shares (the “
Articles Supplementary ”) to be filed with the State
Department of Assessments and Taxation of the State of Maryland
(the “ SDAT ”). The Representatives are acting
as joint book-running and co-lead managers in connection with the
public offering of the Shares that the Underwriters intend to
conduct (the “ Offering ”). It is understood
that the Company proposes, and is
concurrently entering into an agreement (the “ Common
Underwriting Agreement ”), subject to the terms and
conditions stated therein, to issue and sell to the underwriters
named therein, an aggregate of 2,100,000 Common Shares (the “
New Common Shares ”). This Offering is not conditioned
on the completion of the offering of the New Common Shares, and the
offering of the New Common Shares is not conditioned on the
completion of this Offering.
1.
Representations and Warranties of the Company . The Company
represents and warrants to, and agrees with, each of the
Underwriters as of the date hereof, as of the Applicable Time (as
defined below), as of the Closing Date (as defined below) and, if
applicable, as of the time of any Additional Closing Date (as
defined below) that:
(a) The
Company has filed with the Securities and Exchange Commission (the
“ Commission ”) an automatic shelf registration
statement on Form S-3 (No. 333-140978) for the
registration of common shares, preferred shares, depositary shares,
warrants and debt securities, including the Shares, under the
Securities Act of 1933, as amended (the “ Securities
Act ”), and the offering thereof from time to time in
accordance with Rule 430A or Rule 415 of the rules and
regulations of the Commission under the Securities Act (the “
Securities Act Rules and Regulations ”), and the
Company has filed such post-effective amendments thereto as may be
required prior to the execution of this Agreement. Such
registration statement (as so amended, if applicable) automatically
became effective under the Securities Act upon filing with the
Commission. The registration statement and prospectus may have been
amended or supplemented prior to the date of this Agreement; any
such amendment or supplement was prepared and filed, and any such
amendment, filed after the effective date of such registration
statement has automatically become effective. No stop order
suspending the effectiveness of the registration statement has been
issued, and no proceeding for that purpose has been instituted or
threatened by the Commission. A prospectus supplement (the “
Prospectus Supplement ”) to the base prospectus
included as part of the registration statement setting forth the
terms of the offering, sale and plan of distribution of the Shares
and additional information concerning the Company and its business
has been or will be prepared and filed (together with the
prospectus included in the registration statement) in accordance
with the provisions of Rule 430B of the Securities Act Rules
and Regulations and pursuant to Rule 424(b) of the Securities Act
Rules and Regulations on or before the second business day after
the date hereof (or such earlier time as may be required by the
Rules and Regulations). The registration statement, as it may have
heretofore been amended at the time it became effective, including
the information, if any, deemed to be a part thereof pursuant to
Rule 430A(b) of the Securities Act Rules and Regulations or
Rule 430B of the Securities Act Rules and Regulations, is
referred to herein as the “ Registration Statement
.” The final form of prospectus included in the Registration
Statement, as supplemented by the Prospectus Supplement, in the
form filed by the Company with the Commission pursuant to Rule
424(b) under the Securities Act Rules and Regulations, is referred
to herein as the “ Prospectus .” Any
Registration Statement filed by the Company pursuant to Rule 462(b)
of the Securities Act is hereinafter called the “
Rule 462(b) Registration Statement ” and from and
after the date and time of filing the Rule 462(b) Registration
Statement, the term “Registration Statement” shall
include the Rule 462(b) Registration Statement. Copies of the
Registration Statement and the Prospectus, any amendments or
supplements thereto and all
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documents incorporated by reference therein that were filed with
the Commission on or prior to the date of this Agreement (including
one fully executed copy of the Registration Statement and of each
amendment thereto) have been delivered to the Underwriters and
their counsel. Any preliminary Prospectus Supplement relating to
the offering of the Shares (a “ Preliminary Prospectus
Supplement ”), preliminary prospectus or prospectus
subject to completion included in the Registration Statement or
filed with the Commission pursuant to Rule 424 under the
Securities Act and the Securities Act Rules and Regulations is
hereafter called a “ Preliminary Prospectus .”
“ Issuer Free Writing Prospectus ” means any
“issuer free writing prospectus,” as defined in
Rule 433 of the Securities Act Rules and Regulations, relating
to the Shares in the form filed or required to be filed with the
Commission or, if not required to be filed, in the form retained in
the Company’s records pursuant to Rule 433(g) of the
Securities Act Rules and Regulations. “ General Use Issuer
Free Writing Prospectus ” means any Issuer Free Writing
Prospectus that is intended for general distribution to prospective
investors, as evidenced by its being specified as such in
Schedule II to this Agreement. “ Limited Use
Issuer Free Writing Prospectus ” means any Issuer Free
Writing Prospectus that is not a General Use Issuer Free Writing
Prospectus (including the electronic roadshow of the Company posted
on netroadshow.com on March 27, 2008). “ Applicable
Time ” means 9:00 A.M. (Eastern time) on March 28,
2008, or such other date and time agreed to by the Company and the
Underwriters. Any reference herein to the Registration Statement,
any Preliminary Prospectus or the Prospectus shall be deemed to
refer to and include the documents incorporated by reference
therein pursuant to Item 12 of Form S-3 which were filed under
the Securities Exchange Act of 1934, as amended (the “
Exchange Act ”), on or before the effective date of
the Registration Statement, the date of such Preliminary Prospectus
or the date of the Prospectus, as the case may be, and any
reference herein to the terms “ amend ,” “
amendment ” or “ supplement ” with
respect to the Registration Statement, any Preliminary Prospectus
or the Prospectus shall be deemed to refer to and include
(i) the filing of any document under the Exchange Act after
the effective date of the Registration Statement, the date of such
Preliminary Prospectus or the date of the Prospectus, as the case
may be, which is incorporated therein by reference and
(ii) any such document so filed. For purposes of this
Agreement, all references to the Registration Statement, the
Prospectus, Prospectus Supplement, Preliminary Prospectus
Supplement, Preliminary Prospectus or Issuer Free Writing
Prospectus or to any amendment or supplement thereto shall be
deemed to include any copy filed with the Electronic Data Gathering
Analysis and Retrieval System (EDGAR), and such copy shall be
identical in content to any Prospectus delivered to the
Underwriters for use in connection with the Offering.
(b) Each
part of the Registration Statement and any post-effective amendment
thereto, when such part became or becomes effective (including at
each deemed effective date with respect to the Underwriters
pursuant to Rule 430B(f)(2) of the Securities Act Rules and
Regulations), at the date of the filing of the Company’s most
recent Annual Report on Form 10-K, at the Closing Date (as
hereinafter defined) and, if later, at any Additional Closing Date
(as hereinafter defined), and the Prospectus and any amendment or
supplement thereto, on the date of filing thereof with the
Commission, at the Closing Date and at any Additional Closing Date,
conformed or will conform in all material respects with the
requirements of the Securities Act and the Securities Act Rules and
Regulations; each part of the Registration Statement and
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any
post-effective amendment thereto, when such part became or becomes
effective (including at each deemed effective date with respect to
the Underwriters pursuant to Rule 430B(f)(2) of the Securities
Act Rules and Regulations), or when such part was or is filed with
the Commission, or at the date of the filing of the Company’s
most recent Annual Report on Form 10-K, did not or will not contain
an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading; the Prospectus and any amendment
or supplement thereto, on the date of the filing thereof with the
Commission, at the Closing Date and, if later, at any Additional
Closing Date, did not or will not include an untrue statement of a
material fact or omit to state a material fact necessary to make
the statements therein, in light of the circumstances under which
they were made, not misleading. When any related Preliminary
Prospectus was first filed with the Commission (whether filed as
part of the registration statement for the registration of the
Shares or any amendment thereto or pursuant to Rule 424(a) under
the Securities Act) and when any amendment thereof or supplement
thereto was first filed with the Commission, such Preliminary
Prospectus and any amendments thereof and supplements thereto
complied in all material respects with the applicable provisions of
the Securities Act, the Exchange Act and the Rules and Regulations
and did not contain an untrue statement of a material fact and did
not omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. No
representation and warranty is made in this subsection
(b) however, with respect to any information contained in or
omitted from the Registration Statement or the Prospectus or any
related Preliminary Prospectus or any amendment thereof or
supplement thereto in reliance upon and in conformity with
information furnished in writing to the Company by or on behalf of
the Underwriters through the Representatives specifically for use
therein. The parties acknowledge and agree that such information
provided by or on behalf of the Underwriters through the
Representatives consists solely of the first sentence of paragraph
10 and paragraph 18 (except the first and last sentences thereof),
under the caption “Underwriting” in the Prospectus
Supplement. The Company has not distributed, and prior to the later
of the Closing Date and the completion of the distribution of the
Shares, will not distribute, any offering material in connection
with the offering or sale of the Shares other than the Registration
Statement, the Preliminary Prospectus Supplement, the Prospectus or
any other materials, if any, permitted by the Securities Act (which
were disclosed to the Underwriters and Underwriter Counsel and are
listed on Schedule II hereof other than documents
referred to in clause (C) of Section 1(d)).
(c) (i)
(A) At the time of filing the Registration Statement,
(B) at the time of the most recent amendment thereto, if any,
for the purposes of complying with Section 10(a)(3) of the
1933 Act (whether such amendment was by post-effective amendment,
incorporated report filed pursuant to the Exchange Act or form of
prospectus), (C) at the time the Company or any person acting
on its behalf (within the meaning, for this clause only, of Rule
163(c) of the Securities Act Rules and Regulations) made any offer
relating to the Shares in reliance on the exemption provided by
Rule 163 of the Securities Act Rules and Regulations and
(D) at the date hereof, the Company was and is a
“well-known seasoned issuer” as defined in
Rule 405 of the Securities Act Rules and Regulations (“
Rule 405 ”). At the time of filing the
Registration Statement and at the date of this Agreement, the
Company was not and is not an
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“ineligible issuer” as defined in Rule 405,
including as a result of (x) the Company or any subsidiary of
the Company in the preceding three years having been convicted of a
felony or misdemeanor or having been made the subject of a judicial
or administrative decree or order as described in Rule 405 and
(y) the Company in the preceding three years having been the
subject of a bankruptcy petition or insolvency or similar
proceeding, having had a registration statement be the subject of a
proceeding under Section 8 of the Securities Act or being the
subject of a proceeding under Section 8A of the Securities Act
in connection with the offering of the Shares, all as described in
Rule 405. The Company has not received from the Commission any
notice pursuant to the Securities Act Rules and Regulations
objecting to the use of the automatic shelf registration statement
form. The Shares, since their registration on the Registration
Statement, have been and remain eligible for registration by the
Company on an “automatic shelf registration statement”
as defined under Rule 405.
(d) As
of the Applicable Time, neither (i) (A) the General Use Issuer
Free Writing Prospectus(es) issued at or prior to the Applicable
Time, (B) the Preliminary Prospectus and (C) the documents
mutually agreed to by the Company and the Underwriters, considered
together (collectively, the “ General Disclosure
Package ”), nor (ii) any individual Limited Use
Issuer Free Writing Prospectus, when considered together with the
General Disclosure Package, included any untrue statement of a
material fact or omitted to state any material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The
preceding sentence does not apply to statements contained in or
omitted from any prospectus included in the Registration Statement
or any Issuer Free Writing Prospectus in reliance upon and in
conformity with information furnished in writing to the Company by
or on behalf of the Underwriters through the Representatives
specifically for use therein. The parties acknowledge and agree
that such information provided by or on behalf of the Underwriters
through the Representatives consists solely of the material
included in the first sentence of paragraph 10 and paragraph 18
(except the first and last sentences thereof), under the caption
“Underwriting” in the Prospectus Supplement.
(e) Each
Issuer Free Writing Prospectus, as of its issue date and at all
subsequent times through the completion of the public offer and
sale of the Shares or until any earlier date that the Company
notified or notifies the Underwriters as described in the next
sentence, did not, does not and will not include any information
that conflicted, conflicts or will conflict with the information
then contained in the Registration Statement or the Prospectus. If
at any time following issuance of an Issuer Free Writing Prospectus
there occurred or occurs an event or development as a result of
which such Issuer Free Writing Prospectus conflicted or would
conflict with the information then contained in the Registration
Statement or included or would include an untrue statement of a
material fact or omitted or would omit to state a material fact
necessary in order to make the statements therein, in the light of
the circumstances prevailing at that subsequent time, not
misleading, (i) the Company has promptly notified or will
promptly notify the Underwriters and (ii) the Company has
promptly amended or will promptly amend or supplement such Issuer
Free Writing Prospectus to eliminate or correct such conflict,
untrue statement or omission. The foregoing two sentences do not
apply to statements contained in or omitted from any Issuer Free
Writing Prospectus in reliance upon and in conformity with
5
information furnished in writing to the Company by or on behalf of
the Underwriters through the Representatives specifically for use
therein. The parties acknowledge and agree that such information
provided by or on behalf of the Underwriters through the
Representatives consists solely of the first sentence of paragraph
10 and paragraph 18 (except the first and last sentences thereof),
under the caption “Underwriting” in the Prospectus
Supplement.
(f) The
documents incorporated or deemed to be incorporated by reference in
the Registration Statement, the Preliminary Prospectus and the
Prospectus, at the time they became or become effective or were or
hereafter are filed with the Commission, complied and will comply
in all material respects with the requirements of the Securities
Act and the Exchange Act and the rules and regulations of the
Commission under the Exchange Act (the “ Exchange Act
Rules and Regulations ” and, together with the Securities
Act Rules and Regulations, the “ Rules and Regulations
”) and, when read together with the other information in the
Preliminary Prospectus and the Prospectus, at the time the
Registration Statement and any amendments thereto become effective,
at the Applicable Time, at the date of the Prospectus and at the
Closing Date and any Additional Closing Date, did not and will not
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under
which they were made, not misleading.
(g) KPMG
LLP, which has certified certain of the financial statements and
supporting schedules and information incorporated by reference in
the Registration Statement is and, during the periods covered by
their reports incorporated by reference in the Registration
Statement, was an independent registered public accounting firm as
required by the Securities Act, the Exchange Act, the Rules and
Regulations and the PCAOB, except to the extent that registration
with the PCAOB was not required thereunder during an applicable
period, in which case KPMG LLP consisted of independent public
accountants as required by the Securities Act, the Exchange Act and
the Rules and Regulations then in effect. KPMG LLP has not notified
the Company, the Company’s board of trustees or the audit
committee of the board of trustees of any illegal acts that are
required to be reported pursuant to Section 10A of the
Exchange Act.
(h) Subsequent
to the respective dates as of which information is given in the
Registration Statement, the General Disclosure Package (including
as of the Applicable Time) and the Prospectus, except as set forth
in the Registration Statement, the General Disclosure Package and
the Prospectus, (A) there has been no change in the earnings,
assets, properties, business, results of operations,
shareholders’ equity, prospects, affairs or condition
(financial or otherwise) of the Company and each subsidiary of the
Company listed on Exhibit A hereto (the “
Subsidiaries ”), taken as a whole, which has had or
would reasonably be expected to have a Material Adverse Effect (as
defined in Section 1(m) below), (B) there has been no
casualty, loss, condemnation or other adverse event with respect to
any property or interest therein owned, directly or indirectly, by
the Company or any Subsidiary which has had or would reasonably be
expected to have a Material Adverse Effect, (C) there have
been no transactions entered into by the Company or any Subsidiary,
other than those in the ordinary course of
6
business, which are material with respect to the Company and the
Subsidiaries taken as a whole, (D) except for regular
quarterly distributions on the Common Shares, 7.75% Series B
Cumulative Redeemable Preferred Shares of Beneficial Interest, par
value $.01 per share (liquidation preference $25.00 per share) (the
“ Series B Preferred Shares ”), 5.75%
Series C Cumulative Convertible Preferred Shares of Beneficial
Interest, par value $.01 per share (liquidation preference $25.00
per share) (the “ Series C Preferred Shares
”), and 7.375% Series D Cumulative Redeemable Preferred
Shares of Beneficial Interest, par value $.01 per share
(liquidation preference $25.00 per share) (the “
Series D Preferred Shares ”), which have been
publicly announced through the date of this Agreement, there has
been no dividend or distribution of any kind declared, paid or made
by the Company on any class of its shares of beneficial interest,
and (E) there has been no material increase in long-term debt
or decrease in the capital of the Company or the Subsidiaries,
taken as a whole, other than in the ordinary course of their
businesses (each, a “ Material Adverse Change
”). Since the date of the latest balance sheet presented in
the Registration Statement, Preliminary Prospectus and the
Prospectus, neither the Company nor any of the Subsidiaries has
incurred or undertaken any liabilities or obligations, direct or
contingent, or entered into any transactions which are material to
the Company and the Subsidiaries, taken as a whole, except for
liabilities, obligations and transactions which are reflected in
the Registration Statement, the General Disclosure Package and the
Prospectus.
(i) This
Agreement and the transactions contemplated by this Agreement, the
Registration Statement and the Prospectus have been duly and
validly authorized by the Company and this Agreement has been duly
and validly executed and delivered by the Company. The Articles
Supplementary has been, or by the Closing Date will be, duly
authorized and executed by the Company and filed by the Company
with the SDAT.
(j) The
execution, delivery, and performance of this Agreement and the
Articles Supplementary and the consummation of the transactions
contemplated by this Agreement, the Articles Supplementary, the
Registration Statement and the Prospectus (including the issuance
and sale of the Shares, the issuance of any Conversion Shares, and
the use of proceeds from the sale of the Shares as described under
the caption “Use of Proceeds”) do not and will not
(i) conflict with, require consent under or result in a breach
of any of the terms and provisions of, or constitute a Repayment
Event (as defined below) or default (or an event which with notice
or lapse of time, or both, would constitute a Repayment Event or
default) under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the
Company or any of the Subsidiaries pursuant to, any indenture,
mortgage, deed of trust, loan agreement or other agreement,
instrument, franchise, license or permit to which the Company or
any of the Subsidiaries is a party or by which the Company or any
of the Subsidiaries or their respective properties, operations or
assets may be bound or (ii) violate or conflict with any
provision of the declaration of trust, certificate or articles of
incorporation, by-laws, certificate of formation, limited liability
company agreement, partnership agreement or any other
organizational document of the Company or any of the Subsidiaries
or any judgment, decree, order, statute, rule or regulation of any
court or any public, governmental or regulatory agency or body,
domestic or foreign, having jurisdiction over the Company or
any
7
of the
Subsidiaries or any of their respective properties, operations or
assets. As used herein, “ Repayment Event ”
means any event or condition that gives the holder of any note,
debenture or other evidence of indebtedness (or any person acting
on such holder’s behalf) the right to require the repurchase,
redemption or repayment of all or a portion of such indebtedness by
the Company or any Subsidiary. No consent, approval, authorization,
order, registration, filing, qualification, license or permit of or
with any court or any public, governmental or regulatory agency or
body, domestic or foreign, having jurisdiction over the Company or
any of the Subsidiaries or any of their respective properties,
operations or assets, or any third party, is required for the
execution, delivery and performance of this Agreement or the
consummation of the transactions contemplated by this Agreement,
the Registration Statement and the Prospectus, including the
issuance, sale and delivery of the Shares to be issued, sold and
delivered hereunder, the issuance of any Conversion Shares, and
compliance with the provisions of the Articles Supplementary,
except the registration under the Securities Act of the Shares,
filings with the New York Stock Exchange and the Commission of the
Prospectus, and such consents, approvals, authorizations, orders,
registrations, filings, qualifications, licenses and permits as may
be required under state securities or Blue Sky laws in connection
with the purchase and distribution of the Shares by the
Underwriters, each of which has been obtained.
(k) The
authorized, issued and outstanding shares of beneficial interest of
the Company is as set forth in the General Disclosure Package and
the Prospectus in the column entitled “Actual” under
the caption “Capitalization,” will be, after giving
effect to the Offering and the other transactions contemplated by
this Agreement, the Registration Statement and the Prospectus
(other than the offering contemplated under the Common Underwriting
Agreement), as of the date indicated and as set forth in the column
entitled “As Adjusted(1)” under the caption
“Capitalization” and will be, after giving effect to
the Offering and the other transactions contemplated by this
Agreement, the Registration Statement and the Prospectus (including
the offering contemplated under the Common Underwriting Agreement),
as of the date indicated and as set forth in the column entitled
“As Adjusted(2)” under the caption
“Capitalization.” There is no class or series of shares
of beneficial interest of the Company authorized other than the
Common Shares, 9.50% Series A Cumulative Redeemable Preferred
Shares of Beneficial Interest, par value $.01 per share
(liquidation preference $25.00 per share), Series B Preferred
Shares, Series C Preferred Shares and Series D Preferred
Shares. There is no class or series of shares of beneficial
interest of the Company issued or outstanding other than the Common
Shares, Series B Preferred Shares, Series C Preferred
Shares and Series D Preferred Shares. All of the issued and
outstanding shares of beneficial interest of the Company have been
duly and validly authorized and issued, are fully paid and
non-assessable and were not issued in violation of or subject to
any preemptive or similar rights arising by operation of law under
the organizational documents of the Company or under any agreement
to which the Company or any of its subsidiaries is a party or
otherwise that entitle or will entitle any person to acquire from
the Company or any Subsidiary upon the issuance or sale thereof any
Common Shares, Series B Preferred Shares, Series C
Preferred Shares, Series D Preferred Shares, Series E
Preferred Shares, any other equity security of the Company or any
Subsidiaries and any security convertible into, or exercisable or
exchangeable for, any Common Shares, Series B Preferred
Shares, Series C Preferred Shares Series D Preferred
Shares, Series E Preferred Shares or other
8
such
equity security (any “ Relevant Security ”). The
Shares to be delivered on the Closing Date and the Additional
Closing Date, if any (as hereinafter respectively defined), have
been duly and validly authorized for issuance and sale pursuant to
this Agreement and, when delivered in accordance with this
Agreement against payment of the consideration therefor specified
in this Agreement, will be duly and validly issued, fully paid and
non-assessable, and will not have been issued in violation of or
subject to any preemptive or similar rights that entitle or will
entitle any person to acquire any Relevant Security from the
Company or any Subsidiary upon issuance or sale of Shares in the
Offering. The Conversion Shares have been duly and validly
authorized and reserved for issuance by the Company and, when
issued and delivered upon conversion and in accordance with the
Articles Supplementary, will be duly and validly issued, fully paid
and non-assessable, and will not have been issued in violation of
or subject to any preemptive or similar rights that entitle or will
entitle any person to acquire any Relevant Security from the
Company or any Subsidiary. The Common Shares, Series B
Preferred Shares, Series C Preferred Shares and Series D
Preferred Shares conform in all material respects to the
descriptions thereof contained in the Registration Statement, the
General Disclosure Package and the Prospectus, and such description
conforms to the rights set forth in the instruments defining the
same. The Firm Shares and the Additional Shares conform to the
provisions of the Articles Supplementary and the relative rights,
preferences, interests and powers of such Firm Shares and
Additional Shares are as set forth in the Articles Supplementary.
The Firm Shares, the Additional Shares and the Conversion Shares
conform in all material respects to the descriptions thereof
contained in the Registration Statement, the General Disclosure
Package and the Prospectus. The forms of share certificate to be
used to evidence the Shares and the Conversion Shares will be in
due and proper form and will comply with all applicable legal
requirements. Except as disclosed in or specifically contemplated
by the General Disclosure Package and the Prospectus, and except
for restricted Common Shares or options to purchase Common Shares
to be granted to the Company’s non-employee trustees pursuant
to the Company’s 2007 Equity Incentive Plan and Common Shares
to be issued in respect thereof, there are no shares of beneficial
interest of the Company reserved for any purpose and there are no
outstanding securities convertible into or exchangeable for any
shares of beneficial interest of the Company and neither the
Company (except pursuant to the Common Underwriting Agreement) nor
any Subsidiary has outstanding options to purchase, or any
preemptive rights or other rights to subscribe for or to purchase,
or any contracts or commitments to issue or sell, any Relevant
Security. The holders of the Shares or the Conversion Shares will
not be subject to liability by reason of being such holders.
(l) The
Subsidiaries listed on Exhibit A hereto are the only
subsidiaries of the Company within the meaning of Rule 405.
Except for the Subsidiaries and Atlantic-EPR I, a Delaware general
partnership (in which the Company owns a 20% interest),
Atlantic-EPR II, a Delaware general partnership (in which the
Company owns a 20% interest) and New Roc Associates L.P., a New
York limited partnership (in which the Company owns the general
partnership interest and 70.4% of the limited partnership
interest), the Company owns no ownership or other beneficial
interest, directly or indirectly, in any corporation, partnership,
joint venture or other business entity. All of the issued shares of
capital stock of or other ownership interest in each of the
Subsidiaries have been duly and validly authorized and issued and
are fully
9
paid and
non-assessable and, except as set forth on Exhibit A
hereto, are owned directly or indirectly by the Company free and
clear of all liens, encumbrances, equities or claims.
(m) Each
of the Company and the Subsidiaries has been duly organized and
validly exists as a real estate investment trust, corporation,
business trust, partnership or limited liability company in good
standing under the laws of its jurisdiction of organization. Each
of the Company and the Subsidiaries is duly qualified to do
business and is in good standing as a foreign trust, corporation,
partnership or limited liability company in each jurisdiction in
which the character or location of its properties (owned, leased or
licensed) or the nature or conduct of its business makes such
qualification necessary, except for those failures to be so
qualified or in good standing which could not reasonably be
expected to (individually or when aggregated with other such
instances) have a material adverse effect on (i) the earnings,
assets, business, condition (financial or otherwise), results of
operations, shareholders’ equity, properties, affairs or
prospects of the Company and the Subsidiaries, taken as a whole;
(ii) the long-term debt, shares of beneficial interest or
capital stock of the Company and any of its Subsidiaries, taken as
a whole; or (iii) the Offering or consummation of any of the
other transactions contemplated by this Agreement, the Registration
Statement and the Prospectus (a “ Material Adverse
Effect ”). Each of the Company and the Subsidiaries has
all requisite power and authority, and all necessary consents,
approvals, authorizations, orders, registrations, qualifications,
licenses and permits (collectively, the “ Consents
”) of and from all public, regulatory or governmental
agencies and bodies and third parties, foreign and domestic, to
own, hold, lease and operate its properties and conduct its
business as it is now being conducted and as described in the
Registration Statement, the General Disclosure Package and the
Prospectus, and each such Consent is valid and in full force and
effect, and neither the Company nor any of the Subsidiaries has
received notice of any investigation or proceedings which could
result in the revocation of any such Consent. Each of the Company
and the Subsidiaries is in compliance with all applicable laws,
rules, regulations, ordinances and directives, except where failure
to be in compliance could not reasonably be expected to have a
Material Adverse Effect. No Consent contains a materially
burdensome restriction not adequately disclosed in the Registration
Statement, the General Disclosure Package and the Prospectus.
Neither the Company nor any Subsidiary is in violation of its
declaration of trust, certificate or articles of incorporation,
by-laws, certificate of formation, limited liability company
agreement, partnership agreement or any other organizational
document. The Company and Subsidiaries are not in default (or with
notice or lapse of time, or both, would be in default) under any
indenture, mortgage, deed of trust, voting trust agreement, loan
agreement, bond, debenture, note agreement or evidence of
indebtedness, lease, contract or other agreement or instrument to
which they are a party or by which they or any of their properties
or other assets are bound, violation of which would individually or
in the aggregate have a Material Adverse Effect, and no other party
under any such agreement or instrument to which the Company or the
Subsidiaries are a party is, to the knowledge of the Company, in
default (or with notice or lapse of time, or both, would be in
default) in any material respect thereunder. To the knowledge of
the Company, no liability (financial or otherwise) exists for the
Company or the Subsidiaries, except for those liabilities which
would not have a Material Adverse Effect.
10
(n) Except
as described in the General Disclosure Package and the Prospectus,
there is no legal, governmental or regulatory proceeding or other
litigation (including but not limited to routine litigation) to
which the Company or any of the Subsidiaries or any of their
respective officers or trustees/directors is a party or of which
any property or operations of the Company or any of the
Subsidiaries is the subject which, individually or in the
aggregate, if determined adversely to the Company or any of the
Subsidiaries (or any of their respective officers or
trustees/directors), could reasonably be expected to have a
Material Adverse Effect; to the best of the Company’s
knowledge, no such proceeding or litigation is threatened or
contemplated by any legal, governmental or regulatory authority or
other third party, foreign or domestic; and the defense of all such
proceedings and litigation against or involving the Company or any
of the Subsidiaries (or any of their respective officers or
trustees/directors) could not reasonably be expected to have a
Material Adverse Effect.
(o) The
consolidated financial statements of the Company, included or
incorporated by reference, in the Registration Statement, the
General Disclosure Package and the Prospectus, together with the
related schedules and notes, as well as those financial statements,
schedules or notes of any other entity included therein, present
fairly the financial position as of the dates indicated and the
results of operations, changes in shareholders’ equity and
cash flows for the periods therein specified of the Company and its
consolidated Subsidiaries or of the respective entity or entities
or group presented therein; except as otherwise stated in the
Registration Statement, the General Disclosure Package and the
Prospectus, said financial statements, notes and schedules have
been prepared in conformity with generally accepted accounting
principles (“ GAAP ”) applied on a consistent
basis throughout the periods involved and present fairly the
information required to be stated therein. The other financial and
statistical information and data included or incorporated by
reference in the Registration Statement, the General Disclosure
Package and the Prospectus present fairly the information included
therein and have been prepared on a basis consistent with that of
the financial statements that are included or incorporated by
reference in the Registration Statement, the General Disclosure
Package and the Prospectus and the books and records of the
respective entities presented therein, and comply with the
applicable requirements of Regulation G of the
Commission.
(p) Any
pro forma or as adjusted financial information and the related
notes thereto included or incorporated by reference in the
Registration Statement, the General Disclosure Package and the
Prospectus present fairly the information shown therein, have been
prepared in accordance with the Commission’s rules and the
guidelines of the American Institute of Certified Public
Accountants with respect to pro forma information and have been
properly compiled on the bases described therein, and the
assumptions used in the preparation thereof are, in the opinion of
the Company, reasonable and the adjustments used therein are
appropriate to give effect to the transactions and circumstances
referred to therein. All historical financial statements and
information and all pro forma financial statements and information
required by the Securities Act, the Exchange Act and the Rules and
Regulations are included, or incorporated by reference, in the
Registration Statement, the General Disclosure Package and the
Prospectus.
11
(q) The
statistical and market-related data included or incorporated by
reference in the Registration Statement, the General Disclosure
Package and the Prospectus are based on or derived from sources
which the Company reasonably and in good faith believes are
reliable and accurate, and such data agree with the sources from
which they are derived.
(r) There
are no contracts or other documents (including, without limitation,
any voting agreement), which are required to be described in the
Registration Statement, the General Disclosure Package and the
Prospectus or filed as exhibits to the Registration Statement by
the Securities Act, the Exchange Act or the Rules and Regulations
and which have not been so described or filed. All of the contracts
to which any of the Company or the Subsidiaries is a party and
which are material to the business and operations of the Company
and the Subsidiaries, taken as a whole, (i) have been duly
authorized, executed and delivered by such entity, constitute valid
and binding agreements of such entity and are enforceable against
such entity in accordance with the terms thereof, except as such
enforcement may be limited by (A) bankruptcy, insolvency,
reorganization or similar other laws affecting creditors’
rights generally and (B) general equity principles and
limitations on the availability of equitable relief, or
(ii) in the case of any contract to be executed on or before
the Closing Date, will on the Closing Date be duly authorized,
executed and delivered by the Company and/or a Subsidiary, and
constitute valid and binding agreements of such entity enforceable
against each entity in accordance with the terms thereof, except as
such enforcement may be limited by (A) bankruptcy, insolvency,
reorganization or similar other laws affecting creditors’
rights generally and (B) general equity principles and
limitations on the availability of equitable relief.
(s) The
Common Shares, Series B Preferred Shares, Series C
Preferred Shares and Series D Preferred Shares are registered
pursuant to Section 12(b) of the Exchange Act and the outstanding
Common Shares, Series B Preferred Shares, Series C
Preferred and Shares Series D Preferred Shares are listed on
The New York Stock Exchange and the Company has taken no action
designed to, or likely to have the effect of, terminating the
registration of the Common Shares, Series B Preferred Shares,
Series C Preferred Shares or Series D Preferred Shares
under the Exchange Act or de-listing the Common Shares,
Series B Preferred Shares, Series C Preferred Shares or
Series D Preferred Shares from The New York Stock Exchange,
nor has the Company received any notification that the Commission
or The New York Stock Exchange is contemplating terminating such
registrations or listings. The Shares and the Conversion Shares
have been approved for listing on The New York Stock Exchange,
subject to official notice of issuance.
(t) Except
as disclosed in the Registration Statement, the General Disclosure
Package and the Prospectus, no holder of securities of the Company
has any registration or similar rights to require registration of
any debt or equity security of the Company as part or on account
of, or otherwise in connection with, the sale of the Shares
contemplated hereby, and any such rights so disclosed have either
been fully complied with by the Company or effectively waived by
the holders thereof, and any such waivers remain in full force and
effect.
12
(u) Neither
the Company nor any of its affiliates has taken, nor will any of
them take, directly or indirectly, any action resulting in a
violation of Regulation M under the Exchange Act, or that is
designed to cause or result in, or which might reasonably be
expected to constitute, cause or result in, the stabilization or
manipulation of the price of any security to facilitate the sale or
resale of the Shares.
(v) The
Company has not prior to the date hereof offered or sold any
securities which would be “integrated” with the offer
and sale of the Shares pursuant to the Registration Statement.
Except as described in the Registration Statement, the General
Disclosure Package and the Prospectus (and pursuant to the
Company’s dividend reinvestment plan, as in effect on the
date hereof), the Company has not sold or issued any Relevant
Security during the six-month period preceding the date of the
Prospectus, including but not limited to any sales pursuant to
Rule 144A or Regulation D or S under the Securities Act,
other than Common Shares issued pursuant to employee benefit plans,
qualified stock option plans or the employee compensation plans or
pursuant to outstanding options, rights or warrants as described in
the General Disclosure Package and the Prospectus.
(w) There
are no direct or indirect business relationships or related party
transactions (including those contemplated by Item 404 of
Regulation S-K under the Securities Act) involving the Company
or any subsidiary or affiliate or any other person required by the
Securities Act, the Exchange Act, the Rules and Regulations or the
rules and regulations of The New York Stock Exchange or the FINRA
(as defined below) to be described in the Registration Statement,
the General Disclosure Package or the Prospectus which is not so
described or is not described as required. There are no outstanding
loans, advances (except normal advances for business expenses in
the ordinary course of business) or guarantees of indebtedness by
the Company to or for the benefit of any of the officers, directors
or trustees of the Company or its subsidiaries which are required
to by the Securities Act, the Exchange Act or the Rules and
Regulations to be described in the Registration Statement, the
General Disclosure Package or the Prospectus which are not so
described or not described as required. Neither the Company nor any
of its subsidiaries has, in violation of the Sarbanes-Oxley Act of
2002 (the “ Sarbanes-Oxley Act ”), directly or
indirectly, extended or maintained credit, arranged for the
extension of credit, or renewed an extension of credit, in the form
of a personal loan to or for any director, trustee or executive
officer (or any family member or affiliate thereof) of the Company
or any Subsidiary.
(x) The
Company and its Subsidiaries (i) make and keep accurate books
and records, and (ii) maintain a system of internal accounting
controls sufficient to provide reasonable assurances that
(A) transactions are executed in accordance with
management’s general or specific authorizations,
(B) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for
assets, (C) access to assets is permitted only in accordance
with management’s general or specific authorization and
(D) the recorded accounting for assets is compared with
existing assets at reasonable intervals and appropriate action is
taken with respect to any differences. The Company has established
and maintains disclosure controls
13
and
procedures (as such term is defined in Rule 13a-14 and 15d-14
under the Exchange Act) that (i) are designed to ensure that
material information relating to the Company and its Subsidiaries
is made known to the Company’s Chief Executive Officer and
its Chief Financial Officer, (ii) are effective to perform the
functions for which they were established, and (iii) have been
evaluated for effectiveness as of the end of the period covered by
the Company’s most recent Annual Report on Form 10-K filed
with the Commission. The principal executive officers (or their
equivalents) and principal financial officers (or their
equivalents) of the Company have made all certifications required
by Sections 302 and 906 of the Sarbanes-Oxley Act and any
related rules and regulations of the Commission, and the statements
contained in any such certification were correct when made. Based
on an evaluation of its disclosure controls and procedures, the
Company is not aware of (i) any significant deficiency in the
design or operation of internal controls which could adversely
affect the Company’s ability to record, process, summarize
and report financial data or any material weakness in internal
controls; or (ii) any fraud, whether or not material, that
involves management or other employees who have a significant role
in the Company’s internal controls. Since the date of the
most recent evaluation of such disclosure controls and procedures,
there have been no significant changes in internal controls or in
other factors that could significantly affect internal controls,
including any corrective actions with regard to significant
deficiencies and material weaknesses.
(y) The
conditions for use of Form S-3, as set forth in the General
Instructions thereto, have been satisfied. During the period of at
least the last 24 calendar months prior to the date of this
Agreement, the Company has timely filed with the Commission all
documents and other material required to be filed pursuant to
Sections 13, 14 and 15(d) under the Exchange Act. During the
period of at least the last 36 calendar months preceding the filing
of the Registration Statement, the Company has filed all reports
required to be filed pursuant to Sections 13, 14 and 15(d)
under the Exchange Act. Immediately preceding the filing of the
Registration Statement, the aggregate market value of the
Company’s voting and non-voting common equity held by
non-affiliates of the Company was equal to or greater than
$75 million.
(z) Each
of the Company and the Subsidiaries is not and, at all times up to
and including consummation of the transactions contemplated by this
Agreement, the Registration Statement and the Prospectus, and after
giving effect to the application of the net proceeds of the
Offering, will not be, subject to registration as an
“investment company” under the Investment Company Act
of 1940, as amended (the “ 40 Act ”), and is not
and will not be an entity “controlled” by an
“investment company” within the meaning of such
act.
(aa) The
Company and the Subsidiaries have good and marketable title in fee
simple to, or a valid and enforceable ground leasehold interest in,
all real property and good and marketable title to all personal
property owned by them, in each case free and clear of all liens,
encumbrances and defects except such as are described in the
Registration Statement, the General Disclosure Package and the
Prospectus or such as do not (individually or in the aggregate)
materially affect the value of such property or interfere with the
use made or proposed to be made of such property by the Company and
the Subsidiaries; and any real property and buildings held under
lease or sublease by the Company and the Subsidiaries are held by
them
14
under
valid, subsisting and enforceable leases with such exceptions as
are not material and do not interfere with the use made and
proposed to be made of such property and buildings by the Company
and the Subsidiaries. Neither the Company nor any of the
Subsidiaries has received any notice of any claim adverse to its
ownership or leasing of any real or personal property or of any
claim against the continued possession of any real property,
whether owned or held under lease or sublease by the Company or any
of the Subsidiaries that has had or would reasonably be expected to
have a Material Adverse Effect. All liens, charges, encumbrances,
claims or restrictions on or affecting any of the properties or the
assets of the Company and the Subsidiaries which are required to be
disclosed in the General Disclosure Package and the Prospectus are
disclosed therein. No tenant under any of the leases pursuant to
which the Company or any Subsidiary leases its property has an
option or right of first refusal to purchase the premises demised
under such lease, the exercise of which would have a Material
Adverse Effect. The use and occupancy of each of the properties of
the Company and the Subsidiaries comply in all material respects
with all applicable codes and zoning laws and regulations. The
Company and the Subsidiaries have no knowledge of any pending or
threatened condemnation or zoning change that will in any material
respect affect the size of, use of, improvement of, construction
on, or access to any of the properties of the Company or the
Subsidiaries. The Company and the Subsidiaries have no knowledge of
any pending or threatened proceeding or action that will in any
manner materially affect the size of, use of, improvements or
construction on, or access to any of the properties of the Company
or the Subsidiaries. The property purchase agreements described in
the General Disclosure Package and the Prospectus have been duly
authorized, executed and delivered by the Company, have been
executed by the other parties thereto, and constitute binding
obligations of the Company. The descriptions of the property
purchase agreements contained in the General Disclosure Package and
the Prospectus are accurate in all material respects.
(bb) The
Company and each of the Subsidiaries owns or possesses adequate
right to use all patents, patent applications, trademarks, service
marks, trade names, trademark registrations, service mark
registrations, copyrights, licenses, formulae, customer lists, and
know-how and other intellectual property (including trade secrets
and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures) necessary for the
conduct of their respective businesses as being conducted and as
described in the Registration Statement, the General Disclosure
Package and Prospectus and have no reason to believe that the
conduct of their respective businesses does or will conflict with,
and have not received any notice of any claim of conflict with, any
such right of others. To the best of the Company’s knowledge,
all material technical information developed by and belonging to
the Company which has not been patented has been kept confidential.
Neither the Company nor any of its Subsidiaries has granted or
assigned to any other person or entity any right to manufacture,
have manufactured, assemble or sell the current products and
services of the Company or those products and services described in
the Registration Statement, the General Disclosure Package and the
Prospectus. There is no infringement by third parties of any such
Intellectual Property; there is no pending or, to the
Company’s knowledge, threatened action, suit, proceeding or
claim by others challenging the Company’s or any
Subsidiary’s rights in or to any such Intellectual Property,
and the Company is unaware of any facts which would form a
reasonable basis for any
15
such
claim; and there is no pending or, to the Company’s
knowledge, threatened action, suit, proceeding or claim by others
that the Company infringes or otherwise violates any patent,
trademark, copyright, trade secret or other proprietary rights of
others, and the Company is unaware of any other fact which would
form a reasonable basis for any such claim.
(cc) Each
of the Company and the Subsidiaries has accurately prepared and
timely filed all federal, state and other tax returns that are
required to be filed by it and has paid or made provision for the
payment of all taxes, assessments, governmental or other similar
charges, including without limitation, all sales and use taxes and
all taxes which the Company and each of the Subsidiaries is
obligated to withhold from amounts owing to employees, creditors
and third parties, with respect to the periods covered by such tax
returns (whether or not such amounts are shown as due on any tax
return). No deficiency assessment with respect to a proposed
adjustment of the Company’s or any of the Subsidiaries’
Federal, state, or other taxes is pending or, to the best of the
Company’s knowledge, threatened. There is no tax lien,
whether imposed by any federal, state or other taxing authority,
outstanding against the assets, properties or business of the
Company or any of the Subsidiaries. To the knowledge of the
Company, there are no tax returns of the Company or any of the
Subsidiaries that are currently being audited by state, local or
Federal taxing authorities or agencies which would have a Material
Adverse Effect.
(dd) Neither
the Company, any of the Subsidiaries nor, to the Company’s
knowledge, any of its employees or agents has at any time during
the last five years (i) made, on behalf of the Company, any
unlawful contribution to any candidate for foreign office, or
failed to disclose fully any contribution in violation of law or
(ii) made any payment to any federal or state governmental
officer or official, or other person charged with similar public or
quasi-public duties, other than payments required or permitted by
the laws of the United States of any jurisdiction thereof.
(ee) No
labor disturbance by the employees of the Company or any of the
Subsidiaries exists or, to the best of the Company’s
knowledge, is imminent and the Company is not aware of any existing
or imminent labor disturbance by the employees of any of its or any
Subsidiary’s principal suppliers, manufacturers’,
customers or contractors, which, in either case, could reasonably
be expected to have a Material Adverse Effect.
(ff) No
“prohibited transaction” (as defined in
Section 406 of the Employee Retirement Income Security Act of
1974, as amended, including the regulations and published
interpretations thereunder (“ ERISA ”), or
Section 4975 of the Internal Revenue Code of 1986, as amended
from time to time (the “ Code ”), or
“accumulated funding deficiency” (as defined in
Section 302 of ERISA) or any of the events set forth in
Section 4043(b) of ERISA (other than events with respect to which
the 30-day notice requirement under Section 4043 of ERISA has
been waived) has occurred with respect to any employee benefit plan
which could reasonably be expected to have a Material Adverse
Effect; each employee benefit plan is in compliance in all material
respects with applicable law; including ERISA (to the extent
applicable) and the Code; the Company has not incurred and does not
expect to incur liability
16
under
Title IV of ERISA with respect to the termination of, or withdrawal
from any “pension plan”; and each “pension
plan” (as defined in ERISA) for which the Company would have
any liability that is intended to be qualified under Section 401(a)
of the Code is so qualified in all material respects and nothing
has occurred, whether by action or by failure to act, which could
cause the loss of such qualification.
(gg) Except
as would not, singularly or in the aggregate, have a Material
Adverse Effect, (i) to the Company’s knowledge, there does
not exist on any of the properties described in the General
Disclosure Package and the Prospectus any Hazardous Materials (as
hereinafter defined) in unlawful quantities, (ii) to the
Company’s knowledge, there has not occurred on or from such
properties any unlawful spills, releases, discharges or disposal of
Hazardous Materials, (iii) the Company and the Subsidiaries
have not failed to comply with all applicable local, state and
Federal laws, regulations, ordinances and administrative and
judicial orders relating to pollution or protection of human
health, the environment (including, without limitation, ambient
air, surface water, groundwater, land surface or subsurface strata)
or wildlife, including, without limitation, laws and regulations
relating to the release or threatened release of Hazardous
Materials or to the generation, manufacture, processing, recycling,
distribution, use, treatment, sale, storage, disposal, transport or
handling of Hazardous Materials (collectively, “
Environmental Laws ”), (iv) the Company and its
Subsidiaries have (to the extent not maintained by the applicable
tenants) all permits, authorizations and approvals required under
any applicable Environmental Laws and all are in compliance with
their requirements, (v) there are no pending or, to the
Company’s knowledge, threatened administrative, regulatory or
judicial actions, suits, demands, demand letters, claims, liens,
notices of noncompliance or violation, investigation or proceedings
pursuant to any Environmental Law against the Company or any of its
Subsidiaries, and (vi) to the Company’s knowledge, there
are no events or circumstances that might reasonably be expected to
form the basis of an order for clean-up or remediation, or an
action, suit or proceeding by any private party or governmental
body or agency, against the Company, any Subsidiary or any of their
assets relating to any Hazardous Materials or the violation of any
Environmental Laws.
As used
herein, “ Hazardous Material ” shall include,
without limitation, any flammable explosives, radioactive
materials, oil, petroleum, petroleum products, hazardous materials,
hazardous wastes, hazardous or toxic substances, asbestos or any
material as defined by any environmental laws, including, without
limitation, the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980, as amended (42 U.S.C. Section 9601,
et seq.) (CERCLA), the Hazardous Materials Transportation Act, as
amended (49 U.S.C. Section 1801, et seq.), the Resource
Conservation and Recovery Act, as amended (42 U.S.C.
Section 6901, et seq.), and in the regulations adopted
pursuant to each of the foregoing or by any Federal, state or local
governmental authority having jurisdiction over the properties as
described in the Prospectus.
All of
the properties of the Company and the Subsidiaries have been, and
it is contemplated that all future acquisitions will be, subjected
to a Phase I or similar environmental assessment (which generally
includes a site inspection, interviews and a records review, but
no
17
subsurface sampling). These assessments and follow-up
investigations, if any, of the properties (including, as
appropriate, asbestos, radon and lead surveys, additional public
record review, subsurface sampling and other testing), of the
properties have not revealed any environmental liability that the
Company believes would have a Material Adverse Effect. The Company
has not agreed to assume, undertake or provide indemnification
(except as may extend to lenders to the Company who finance the
acquisition of real property or the refinancing thereof) for any
liability of any other person under any environmental law,
including any obligation for cleanup or remedial action, except as
could not reasonably be expected to have a Material Adverse
Effect.
(hh) Commencing
with the Company’s taxable year ended December 31, 1997,
the Company has been, and upon the sale of the Shares will continue
to be, organized and operated in conformity with the requirements
for qualification and taxation as a “real estate investment
trust” (a “ REIT ”) under
Sections 856 through 860 of the Code. The proposed method of
operation of the Company as described in the General Disclosure
Package and the Prospectus will enable the Company to continue to
operate in a manner which would permit it to qualify as a REIT
under the Code. The Company has no present intention of changing
its operations or engaging in activities which would cause it to
fail to qualify, or make economically undesirable its continued
qualification, as a REIT.
(ii) Title
insurance in favor of the Company and the Subsidiaries is
maintained with respect to each of the properties described in the
General Disclosure Package and the Prospectus in an amount at least
equal to the cost of acquisition of such property.
(jj) Except
as disclosed in the Registration Statement, the General Disclosure
Package and the Prospectus and any amendment or supplement thereto,
there are no mortgages or deeds of trust encumbering any of the
properties described in the General Disclosure Package and the
Prospectus. The mortgages encumbering the properties are not
convertible into any equity securities of the Company, nor does the
Company or any of the Subsidiaries hold a participating interest
therein and, except as disclosed in the Registration Statement, the
General Disclosure Package and the Prospectus and any amendment or
supplement thereto, such mortgages are not cross defaulted to or
cross-collateralized by any party other than the Company and the
Subsidiaries.
(kk) The
Company has and maintains, or its tenants have and maintain,
property and casualty insurance in favor of the Company and the
Subsidiaries with respect to such entities and each of the
properties owned, directly or indirectly, by the Company, in an
amount and on such terms as is reasonable and customary for the
businesses of the type proposed to be conducted by the Company and
the Subsidiaries. Neither the Company nor any of the Subsidiaries
has received from any insurance company written notice of any
material defects or deficiencies affecting the insurability of any
such properties.
(ll) Except
as otherwise disclosed in or incorporated by reference in the
Prospectus, there are no material outstanding loans or advances or
material guarantees of indebtedness by the Company or any of the
Subsidiaries to or for the benefit of any of the
18
officers, trustees or directors of the Company or any of the
Subsidiaries or any of the members of the families of any of
them.
(mm) To
the knowledge of the Company, each of the properties described in
the General Disclosure Package and the Prospectus is in compliance
with all presently applicable provisions of the Americans with
Disabilities Act, except for any failures to comply which would
not, singly or in the aggregate, result in a Material Adverse
Effect.
(nn) The
Company has not incurred any liability for any finder’s fees
or
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