UBS Securities
LLC
299 Park Avenue
39th Floor New York, NY 10171
Parkway
Properties, Inc., a Maryland corporation (the “
Company ”) and Parkway Properties LP, a Delaware
limited partnership (the “ Partnership ”),
confirm their agreement (this “ Agreement ”)
with UBS Securities LLC (“ UBS ”), as
follows:
Introductory. The Company, proposes to issue and sell to UBS
(the “ Underwriter ”) an aggregate of 6,250,000
shares (the “ Firm Shares ”) of its Common
Stock, par value $0.001 per share (the “ Common Stock
”). In addition, the Company has granted to the Underwriter
an option to purchase up to an additional 937,500 shares of Common
Stock (the “ Optional Shares ”) as provided in
Section 2. The Firm Shares and, if and to the extent such
option is exercised, the Optional Shares, are collectively called,
the “ Shares ”.
Section 1.
Representations and Warranties of the Company and the
Partnership .
A. The
Company and the Partnership hereby jointly and severally represent
and warrant to, and covenant with, each Underwriter as
follows:
(a)
Registration Statement . The Company has prepared and filed
with the Securities and Exchange Commission (the “
Commission ”) a registration statement on Form S-3
(File No. 333-156050 under the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder
(collectively, the “ Securities Act ”) on
December 10, 2008, which contains a base prospectus (the
“ Base Prospectus ”), to be used in connection
with the public offering and sale of the Shares. Such registration
statement, as amended, including the financial statements, exhibits
and schedules thereto in the form in which it was declared
effective by the Commission under the Securities Act, including any
required information deemed to be a part thereof at the time of
effectiveness pursuant to Rule 430B under the Securities Act
or the Securities Exchange Act of 1934, as amended, and the rules
and regulations promulgated thereunder (collectively, the “
Exchange Act ”), is called the “ Registration
Statement .” Any registration statement filed by the
Company pursuant to Rule 462(b) under the Securities Act is called
the “ Rule 462(b) Registration Statement ,”
and from and after the date and time of filing of the Rule 462(b)
Registration Statement the term “ Registration
Statement ” shall include the Rule
1
462(b)
Registration Statement. Any preliminary prospectus supplement to
the Base Prospectus that describes the Shares and the offering
thereof and is used prior to filing of the Prospectus is called,
together with the Base Prospectus, a “ preliminary
prospectus .” The term “ Prospectus ”
shall mean the final prospectus supplement relating to the Shares,
together with the Base Prospectus, that are first filed pursuant to
Rule 424(b) under the Securities Act after the date and time that
this Agreement is executed and delivered by the parties hereto (the
“ Execution Time ”). 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 under the Securities Act; any reference to any amendment or
supplement to any preliminary prospectus or the Prospectus shall be
deemed to refer to and include any documents filed after the date
of such preliminary prospectus or Prospectus, as the case may be,
under the Exchange Act, and incorporated by reference in such
preliminary prospectus or Prospectus, as the case may be; and any
reference to any amendment to the Registration Statement shall be
deemed to refer to and include any annual report of the Company
filed pursuant to Section 13(a) or 15(d) of the Exchange Act after
the effective date of the Registration Statement that is
incorporated by reference in the Registration Statement.
(b)
Compliance with Registration Requirements. The Registration
Statement has been declared effective by the Commission under the
Securities Act. The Company has complied to the Commission’s
satisfaction with all requests of the Commission for additional or
supplemental information. No stop order suspending the
effectiveness of the Registration Statement is in effect, the
Commission has not issued any order or notice preventing or
suspending the use of the Registration Statement, any preliminary
prospectus or the Prospectus and no proceedings for such purpose
have been instituted or are pending or, to the best knowledge of
the Company, are contemplated or threatened by the
Commission.
Each preliminary
prospectus and the Prospectus when filed complied in all material
respects with the Securities Act and the rules thereunder. Each of
the Registration Statement and any post-effective amendment
thereto, at the time it became effective and at the date hereof,
complied and will comply in all material respects with the
Securities Act and did not and will not contain any untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the
statements therein not misleading. The Prospectus (including any
Prospectus wrapper), as amended or supplemented, as of its date, at
the date hereof, at the time of any filing pursuant to Rule 424(b)
under the Securities Act, at the Closing Date (as defined herein)
and at any Subsequent Closing Date, did not and will not contain
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. The representations and warranties set forth in the two
immediately preceding sentences do not apply to statements in or
omissions from the Registration Statement or any post-effective
amendment thereto, or the Prospectus (including any wrapper
thereto), or any amendments or supplements thereto, made in
reliance upon and in conformity with information relating to the
Underwriter furnished to the Company in writing by the Underwriter
expressly for use therein, it being understood and agreed that the
only such information furnished by the Underwriter consists of the
Underwriter Content (as defined herein). There is no contract or
other document required to be described in the Prospectus or to be
filed as an exhibit to the Registration Statement that has not been
described or filed as required.
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(c)
Incorporation by Reference in the Prospectus. The documents
incorporated by reference in the Prospectus, when they were filed
with the Commission or became effective, as the case may be,
conformed in all material respects with the requirements of the
Securities Act or the Exchange Act, as applicable. Any further
documents so filed and incorporated by reference in the Prospectus
and any further amendments or supplements thereto will conform in
all material respects with the requirements of the Securities Act
or the Exchange Act and the rules and regulations thereunder, as
applicable, 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 not
misleading.
(d)
Disclosure Package . The term “ Disclosure
Package ” shall mean (i) the Base Prospectus, as
amended or supplemented, (ii) the issuer free writing
prospectuses as defined in Rule 433 under the Securities Act
(each, an “ Issuer Free Writing Prospectus ”),
if any, identified in Schedule A hereto, (iii) any
other free writing prospectus that the parties hereto shall
hereafter expressly agree in writing to treat as part of the
Disclosure Package and (iv) the information set forth in
Schedule B hereto. As of 4:30 p.m. (New York time) on
April 22, 2009 (the “ Applicable Time ”),
the Disclosure Package did 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 made in reliance upon and in conformity with the
Underwriter Content furnished to the Company in writing by the
Underwriter expressly for use therein, it being understood and
agreed that the only such information furnished by the Underwriter
consists of the Underwriter Content.
(e)
Company Not Ineligible Issuer . (i) At the earliest
time after the filing of the Registration Statement relating to the
Shares that the Company or another offering participant made a
bona fide offer (within the meaning of Rule 164(h)(2))
of the Securities Act and (ii) as of the date of the execution
and delivery of this Agreement (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 of the Securities Act), without taking account of any
determination by the Commission pursuant to Rule 405 of the
Securities Act that it is not necessary that the Company be
considered an Ineligible Issuer.
(f)
Issuer Free Writing Prospectuses . Each Issuer Free Writing
Prospectus, as of its issue date and at all subsequent times
through the completion of the offering of Shares under this
Agreement or until any earlier date that the Company notified or
notifies the Underwriter as described in the next sentence, did
not, does not and will not include any information that conflicted,
conflicts or will conflict with the information contained in the
Registration Statement, including any prospectus or prospectus
supplement that is or becomes part of the Registration Statement.
If at any time following issuance of an Issuer Free Writing
Prospectus there occurred or occurs an event or development as a
result of which such Issuer Free Writing Prospectus conflicted or
would conflict with the information contained in the Registration
Statement, the Company has promptly notified or will promptly
notify the Underwriter and has promptly amended or supplemented or
will promptly amend or supplement, at its own expense, such Issuer
Free Writing Prospectus to eliminate or correct such conflict. The
foregoing two sentences do not apply to statements in or omissions
from any Issuer Free Writing Prospectus based upon and in
conformity with the Underwriter Content furnished to the Company by
the Underwriter specifically for use therein, it being understood
and
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agreed that the
only such information furnished by the Underwriter consists of the
Underwriter Content.
(g)
Accuracy of Statements in Prospectus. The statements in the
Disclosure Package under the headings “Description of Capital
Stock”, “Description of Common Stock”,
“Description of Preferred Stock”, “Description of
Warrants”, “Certain Provisions of Maryland Law and Our
Charter and Bylaws” and “Material United States Federal
Income Tax Consequences”, “Plan of Distribution,”
and “Underwriting” (other than the Underwriter
Content), 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.
(h)
Distribution of Offering Material By the Company. The
Company has not distributed and will not distribute, prior to the
later of the last Subsequent Closing Date (as defined below) and
the completion of the Underwriter’s distribution of the
Shares, any offering material in connection with the offering and
sale of the Shares other than a preliminary prospectus, the
Prospectus, any Issuer Free Writing Prospectus reviewed and
consented to by the Underwriter or included in
Schedule A hereto or the Registration
Statement.
(i) The
Underwriting Agreement. This Agreement has been duly
authorized, executed and delivered by the Company and the
Partnership and constitutes the legal, valid and binding obligation
of the Company and the Partnership enforceable against the Company
and the Partnership in accordance with its terms, except as may be
limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors rights generally or by general
principles of equity.
(j)
Authorization of the Shares. The Shares to be purchased by
the Underwriter from the Company have been duly authorized for
issuance and sale pursuant to this Agreement and, when issued and
delivered by the Company to the Underwriter against payment
therefor pursuant to this Agreement on the Closing Date or any
Subsequent Closing Date, will be validly issued, fully paid and
nonassessable. The form of certificate representing the Common
Stock complies with all applicable legal requirements, the
requirements of the Company’s charter and bylaws, and the
requirements of the New York Stock Exchange (“ NYSE
”).
(k) No
Transfer Taxes. There are no transfer taxes or other similar
fees or charges under federal law or the laws of any state, or any
political subdivision thereof, or any other U.S. or non U.S.
governmental authority required to be paid in connection with the
execution and delivery of this Agreement or the issuance by the
Company or sale by the Company of the Shares.
(l) No
Private Issuances of Common Stock . Except as disclosed in the
Registration Statement, the Company has not issued or sold any
securities during the six-month period preceding the date of the
Prospectus, including any sales pursuant to Rule 144A, under,
or Regulation D or S of, the Securities Act.
(m) No
Material Adverse Change. Except as otherwise disclosed in the
Disclosure Package and the Prospectus, subsequent to the respective
dates as of which information is given in the Disclosure Package:
(i) there has been no material adverse change, or any
development
4
that could
reasonably be expected to result in a material adverse change, in
the condition, financial or otherwise, or in the earnings,
business, properties or operations, whether or not arising from
transactions in the ordinary course of business, of the Company,
the Partnership and the Subsidiaries, considered as one entity (any
such change is called a “ Material Adverse Change
”); (ii) the Company, the Partnership and the
Subsidiaries, considered as one entity, have not incurred any
material liability or obligation, indirect, direct or contingent,
nor entered into any material transaction or agreement; and
(iii) there has been no dividend or distribution of any kind
declared, paid or made by the Company, the Partnership or, except
for dividends paid to the Company or other subsidiaries, any of the
Subsidiaries on any class of capital stock or repurchase or
redemption by the Company or any of its subsidiaries of any class
of capital stock.
(n)
Independent Accountants. (i) KPMG LLP, who has
expressed its opinion with respect to the financial statements for
the twelve-month period ending December 31, 2008 and
(ii) Ernst & Young LLP, who has expressed its opinion with
respect to the financial statements for the twelve-month periods
ending December 31, 2006 and 2007, including in each case, the
related notes thereto, and any supporting schedules filed with the
Commission as a part of or incorporated by reference in the
Registration Statement and included or incorporated by reference in
the Disclosure Package and the Prospectus, are independent
registered public accountants with respect to the Company as
required by the Securities Act and the Exchange Act and the
applicable published rules and regulations thereunder.
(o)
Preparation of the Financial Statements. The financial
statements filed with the Commission as a 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 the consolidated financial position of
the Company, the Partnership and the Subsidiaries as of and at the
dates indicated and the results of their operations and cash flows
for the periods specified. The supporting schedules included or
incorporated by reference in the Registration Statement present
fairly the information required to be stated therein. Such
financial statements and supporting schedules comply as to form
with the applicable accounting requirements of the Securities Act
and have been prepared in conformity with generally accepted
accounting principles as applied in the United States applied on a
consistent basis throughout the periods involved (“
GAAP ”), except as may be expressly stated in the
related notes thereto. No other financial statements or supporting
schedules are required to be included or incorporated by reference
in the Registration Statement, the Disclosure Package and the
Prospectus. The financial data set forth in the preliminary
prospectus and the Prospectus under the caption
“Capitalization” fairly presents the information set
forth therein on a basis consistent with that of the audited
financial statements contained in the Disclosure Package and the
Prospectus. The Company’s ratio of earnings to fixed charges
and preferred stock dividends set forth in the Disclosure Package
and the Prospectus have been calculated in compliance with Item
503(d) of Regulation S-K under the Securities Act.
(p)
Subsidiaries. The only subsidiaries (as defined in the
Securities Act Rules and Regulations) of the Company and the
Partnership are the subsidiaries listed on Schedule C
hereto (the “ Subsidiaries ”).
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(q)
Incorporation and Good Standing of the Company, the Partnership
and its Subsidiaries . Each of the Company, the Partnership and
the Subsidiaries has been duly organized and is validly existing as
a corporation, general or limited partnership, or limited liability
company, as the case may be, in good standing under the laws of the
jurisdiction of its organization. Each of the Company, the
Partnership and each of the Subsidiaries has full power and
authority (corporate and other) to own or lease, as the case may
be, and operate its properties and to conduct its business as
described in the Registration Statement and Prospectus, and in the
case of the Company, to enter into and perform its obligations
under this Agreement. Each of the Company, the Partnership and the
Subsidiaries is duly qualified or registered to do business in each
jurisdiction in which it owns or leases real property or in which
the conduct of its business requires such qualification or
registration, except where the failure to be so qualified or
registered would not, individually or in the aggregate, result in a
material adverse effect on the condition, financial or otherwise,
or on the earnings, business, properties or operations, whether or
not arising from transactions in the ordinary course of business,
of the Company, the Partnership and the Subsidiaries, considered as
one entity (“ Material Adverse Effect ”); and,
other than the Subsidiaries, the Company owns no stock or other
beneficial interest in any corporation, partnership, joint venture
or other business entity.
(r)
Ownership Interests in the Partnership and Subsidiaries. All
of the issued and outstanding general partnership interests in the
Partnership and all of the issued and outstanding capital stock or
ownership interests of each Subsidiary have been duly authorized
and are validly issued, fully paid and nonassessable and are
wholly-owned by the Company, directly or through subsidiaries, free
and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity. All of the issued and outstanding
limited partnership interests in the Partnership have been duly
authorized and are validly issued, fully paid and nonassessable and
are majority owned by the Company directly or indirectly through
its Subsidiaries.
(s)
Capitalization. As of the date hereof, (A) 67,600,000
shares of Common Stock were authorized for issuance, of which
15,369,802 shares were issued and outstanding, (B) 2,400,000
shares of Series D Preferred Stock, par value $.001 per share
(the “ BPreferred Stock ”) were authorized for
issuance, all of which were issued and outstanding, and
(C) 30,000,000 shares of Excess Stock, par value $.001 per
share, were authorized for issuance, none of which were issued or
outstanding. All of the issued and outstanding shares of capital
stock of the Company have been duly authorized and are validly
issued, fully paid and nonassessable and conform to the description
thereof in the Prospectus. The stockholders of the Company have no
preemptive rights with respect to the Common Stock. All of the
issued and outstanding shares of capital stock of the Company, all
the issued and outstanding partnership interests in the
Partnership, and all ownership interests in each Subsidiary have
been offered, sold and issued by such entity in compliance with all
applicable laws, including without limitation, federal and state
securities laws; except as described in the Prospectus, there is no
outstanding option, warrant or other right requiring the issuance
of, and no commitment, plan or arrangement to issue, any shares of
capital stock of the Company or equity interests in the Partnership
or any Subsidiary or any security convertible into or exchangeable
for such shares or interests.
(t) Due
Authorization of the Shares . The Shares will be as of the
Closing Date or any Subsequent Closing Date, duly authorized by the
Company for issuance and sale pursuant to this Agreement; and when
issued and delivered by the Company pursuant to this
Agreement
6
against payment
of the consideration therefor specified herein, will be validly
issued, fully paid and nonassessable. The Shares conform to the
description thereof in the Prospectus and will not be subject to
any preemptive rights of any securityholder of the Company. No
holder of Common Stock will be subject to personal liability by
reason of being such a holder.
(u)
Listing. The Shares have been approved for listing on the
NYSE, subject only to official notice of issuance.
(v)
Non-Contravention of Agreements; No Further Authorizations or
Approvals Required. The execution, delivery and performance of
this Agreement by each of the Company and the Partnership and
consummation of the transactions contemplated hereby, by the
Disclosure Package and by the Prospectus (i) have been duly
authorized by all necessary corporate or limited partnership
action, as applicable, and will not result in any Default under the
Charter or by-laws of the Company, the certificate of limited
partnership or agreement of limited partnership of the Partnership
or any organizational document of any subsidiary thereof,
(ii) will not conflict with or constitute a breach of, or
default (or, with the giving of notice or lapse of time, would be
in default) (“ Default ”) or a Debt Repayment
Triggering Event (as define below) under, or result in the creation
or imposition of any lien, charge or encumbrance upon any property
or assets of the Company, the Partnership or any of the
Subsidiaries pursuant to, or require the consent of any other party
to, any indenture, mortgage, loan or credit agreement, deed of
trust, note, contract, franchise, lease or other agreement,
obligation, condition, covenant or instrument to which the Company
or such subsidiary is a party or by which it may be bound, and
(iii) will not result in any violation of any statute, law,
rule, regulation, judgment, order or decree applicable to the
Company, the Partnership or any of the Subsidiaries of any court,
regulatory body, administrative agency, governmental body,
arbitrator or other authority having jurisdiction over the Company,
the Partnership or any of the Subsidiaries or any of their
properties. No consent, approval, authorization or other order of,
or registration or filing with, any court or other governmental or
regulatory authority or agency is required for the execution,
delivery and performance of this Agreement by each of the Company
and the Partnership and consummation of the transactions
contemplated hereby, by the Disclosure Package and by the
Prospectus, except such as have been obtained or made by each of
the Company and the Partnership and are in full force and effect
under the Securities Act, applicable state securities or blue sky
laws and from the Financial Industry Regulatory Authority (“
FINRA ”). As used herein, a “ Debt Repayment
Triggering Event ” means any event or condition which
gives, or with the giving of notice or lapse of time would give,
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 either of the Company or the Partnership or
any of the Subsidiaries.
(w)
Compliance with Law; No Defaults . The Company, the
Partnership and the Subsidiaries have complied in all respects with
all laws, regulations and orders applicable to them or their
respective businesses, except as would not have a Material Adverse
Effect; the Company, the Partnership and the Subsidiaries are not
in default under any indenture, mortgage, deed of trust, voting
trust agreement, loan agreement, bond, debenture, note agreement or
evidence of indebtedness, lease, contract or other agreement or
instrument to which they are a party or by which they or any of
their properties or other assets are bound, violation of which
would individually or in the aggregate have a Material Adverse
Effect, and no other party under any such agreement or instrument
to which the Company, the Partnership or any of the
7
Subsidiaries
are a party is, to the knowledge of the Company, in default in any
material respect thereunder; and the Company, the Partnership and
the Subsidiaries are not in violation of their respective articles
of incorporation, by-laws, certificate of general or limited
partnership, partnership agreement or other organizational
documents, as the case may be.
(x) Due
Authorization of Partnership Agreement . The Agreement of
Limited Partnership of the Partnership, including any amendments
thereto (the “ Partnership Agreement ”), has
been duly and validly authorized, executed and delivered by all
partners of the Partnership and constitutes a valid and binding
agreement, enforceable in accordance with its terms, except as may
be limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors’ rights generally or by
general principles of equity.
(y) No
Liabilities or Obligations. Except as contemplated in the
Prospectus, subsequent to the respective dates as of which
information is given in the Registration Statement and the
Prospectus, the Company, the Partnership and the Subsidiaries have
not incurred any liabilities or obligations, direct or contingent;
or entered into any transactions, not in the ordinary course of
business, that are material to the Company, the Partnership and the
Subsidiaries on a consolidated basis; and there has not been any
material change in the capital stock or structure, short-term debt
or long-term debt of the Company, the Partnership and the
Subsidiaries; or any Material Adverse Change, or any development
that is reasonably likely to involve a prospective Material Adverse
Change, in the condition (financial or other), business, prospects,
net worth or results of operations of the Company, the Partnership
and the Subsidiaries on a consolidated basis; and, except for
regular dividends on the Company’s Common Stock, in amounts
per share that are consistent with past practice or the charter
documents of the Company and the minimum dividends required by the
Company’s Charter, as amended, or the Preferred Stock, there
has been no dividend or distribution of any kind declared, paid or
made by the Company on any class of its capital stock.
(z) No
Material Actions or Proceedings. Except as set forth in the
Disclosure Package and the Prospectus, there is not pending or, to
the knowledge of the Company, threatened any action, suit or
proceeding to which the Company, the Partnership, any of the
Subsidiaries or any of their respective officers or directors is a
party, or of which any of their properties or other assets is the
subject, before or by any court or governmental agency or body,
that is reasonably likely to result in any Material Adverse
Effect.
(aa)
Labor Matters. No labor problem or dispute with the
employees of the Company, the Partnership or any of the
Subsidiaries exists or, to the best of the Company’s
knowledge, is threatened or imminent, and the Company is not aware
of any existing or imminent labor disturbance by the employees of
any of its or the Subsidiaries’ principal suppliers,
contractors or customers, that could have a Material Adverse
Effect.
(bb)
Timeliness of Commission Filings . 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 materials required to be filed pursuant to
Sections 13, 14 and 15(d) under the Exchange Act.
8
(cc)
Completeness of Commission Filings . There are no contracts
or documents of the Company that are required to be filed as
exhibits to the Registration Statement or to any of the documents
incorporated by reference therein by the Securities Act or the
Exchange Act or by the rules and regulations of the Commission
thereunder that have not been so filed.
(dd)
Intellectual Property Rights. The Company, the Partnership
and the 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 necessary for the conduct
of the Company’s business as now conducted or as proposed in
the Disclosure Package and the Prospectus to be
conducted.
(ee)
Licenses, Certificates and Permits . The Company, the
Partnership and the Subsidiaries hold all material licenses,
certificates and permits from governmental authorities which are
necessary to the conduct of their businesses and are in compliance
with the terms and conditions of such licenses, certificates and
permits; and the Company, the Partnership and the Subsidiaries have
not received any notice of proceedings relating to the revocation
or modification of any such permits, licenses or certificates that,
if determined adversely to the Company, the Partnership or any
Subsidiary, would have a Material Adverse Effect.
(ff)
Title to Properties. Each of the Company, the Partnership
and the Subsidiaries have good and marketable title to the
properties and assets, as described in the Disclosure Package and
the Prospectus (the “ Properties ”), owned by
them, free and clear of all liens, charges, encumbrances or
restrictions, except such as are described in the Prospectus or are
not material in relation to the business of the Company, the
Partnership and the Subsidiaries on a consolidated basis. The
Company, the Partnership and the Subsidiaries have valid,
subsisting and enforceable leases for the Properties as leased by
the Company, the Partnership and the Subsidiaries with such
exceptions as are not material and do not interfere with the use
made and proposed to be made of such properties by the Company, the
Partnership and the Subsidiaries. No tenant under any of the leases
pursuant to which the Company, the Partnership or any of the
Subsidiaries lease the Properties has an option or right of first
refusal to purchase the premises demised under such lease. The use
and occupancy of each of the Properties comply in all material
respects with all applicable codes and zoning laws and regulations;
the Company, the Partnership 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; and the Company, the Partnership 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.
(gg) No
Claims . Except as described in the Prospectus, there are no
contracts, agreements or understandings between the Company, the
Partnership, any of the Subsidiaries and any person that would give
rise to a valid claim against the Company, the Partnership, any of
the Subsidiaries or the Underwriter for a brokerage commission,
finder’s fee or other like payment in connection with the
offering, issuance and sale of the Shares.
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(hh) No
Conversion into Equity . The mortgages and deeds of trust
encumbering the properties and assets described or referred to in
the Prospectus are not convertible into the equity of the Company
or any Subsidiary.
(ii) Tax
Matters. Each of the Company, the Partnership and the
Subsidiaries has filed all federal, state, local and foreign income
tax returns which have been required to be filed and has paid all
taxes indicated by said returns and all assessments received by
them to the extent that such taxes have become due. No tax
deficiency has been asserted against the Company, the Partnership
or any Subsidiary, nor, does the Company or the Partnership know of
any tax deficiency which is likely to be asserted against the
Company, the Partnership or any Subsidiary; all tax liabilities, if
any, are adequately provided for on the respective books of the
entities in all material respects.
(jj) Tax
Classification of the Partnership . The Partnership has been
properly classified either as a partnership or as an entity
disregarded as separate from the Company for federal tax purposes
throughout the period from its formation through the date
hereof.
(kk)
Company Not an “Investment Company”. Neither the
Company, the Partnership or any Subsidiary is and, after giving
effect to the offering and sale of the Shares and the application
of the proceeds thereof as described in the Prospectus, will not be
an “investment company” or a company
“controlled” by an “investment company”
within the meaning of the Investment Company Act of 1940, as
amended.
(ll)
Insurance. Each of the Company, the Partnership and the
Subsidiaries maintains insurance (issued by insurers of recognized
financial responsibility) of the types and in the amounts generally
deemed adequate, if any, for their respective businesses and
consistent with insurance coverage maintained by similar companies
in similar businesses, including, but not limited to, insurance
covering real and personal property owned or leased by the Company,
the Partnership and the Subsidiaries against theft, damage,
destruction, acts of vandalism and all other risks customarily
insured against, all of which insurance is in full force and
effect.
(mm) No
Restrictions on Dividends. No Subsidiary of the Company is
currently prohibited, directly or indirectly, from paying any
dividends to the Company or the Partnership, from making any other
distribution on such Subsidiary’s capital stock, from
repaying to the Company or the Partnership any loans or advances to
such Subsidiary from the Company or the Partnership or from
transferring any of such Subsidiary’s property or assets to
the Company, the Partnership or any other Subsidiary of the Company
or the Partnership, except as described in or contemplated by the
Disclosure Package and the Prospectus.
(nn) No
Price Stabilization or Manipulation. The Company has not taken,
nor will it take, directly or indirectly, any action designed to or
that might reasonably be expected to cause or result in, or which
has constituted or which might reasonably be expected to
constitute, the stabilization or manipulation of the price of any
security of the Company, to facilitate the sale or resale of any of
the Shares.
(oo)
Disclosure of Related Party Transactions. No transaction has
occurred between or among the Company, the Partnership or any
Subsidiaries, on one hand, and any of their officers or directors
or any affiliate or affiliates of any such officer or
director,
10
on the other
hand, that is required to be described in and is not described or
incorporated by reference in the Registration Statement and the
Prospectus.
(pp) No
Related Party Loans. Except as otherwise described in the
Prospectus, there are no material outstanding loans or advances or
material guarantees of indebtedness by the Company, the Partnership
or any of the Subsidiaries to or for the benefit of any of the
officers or directors of the Company or any of their family
members.
(qq)
Internal Controls and Procedures. The Company, the
Partnership and the Subsidiaries maintain (i) effective
internal control over financial reporting as defined in
Rule 13a-15 under the Exchange Act, and (ii) a system of
internal accounting controls sufficient to provide reasonable
assurance 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 GAAP and to
maintain asset accountability; (C) access to assets is
permitted only in accordance with management’s general or
specific authorization; and (D) the recorded accountability
for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any
differences.
(rr) No
Material Weakness in Internal Controls. Except as disclosed in
the Disclosure Package and the Prospectus, or in any document
incorporated by reference therein, since the end of the
Company’s most recent audited fiscal year, there has been
(i) no material weakness in the Company’s internal
control over financial reporting (whether or not remediated) and
(ii) no change in the Company’s internal control over
financial reporting that has materially affected, or is reasonably
likely to materially affect, the Company’s internal control
over financial reporting.
(ss)
Disclosure Controls. The Company has established and
maintains disclosure controls and procedures (as such term is
defined in Rule 13a-15 under the Exchange Act), which
(i) are designed to ensure that material information relating
to the Company, the Partnership and the Subsidiaries, is made known
to the Company’s principal executive officer and its
principal financial officer by others within those entities,
particularly during the periods in which the periodic reports
required under the Exchange Act are being prepared, (ii) have
been evaluated for effectiveness as of a date within 90 days
prior to the filing of the Company’s most recent annual or
quarterly report filed with the Commission and (iii) are
effective in all material respects to perform the functions for
which they were established. Based on the evaluation of the
Company’s disclosure controls and procedures described above,
the Company is not aware of (a) 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 weaknesses in internal
controls or (b) 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 most recent
evaluation of the Company’s disclosure controls and
procedures described above, there have been no significant changes
in internal controls or in other factors that could significantly
affect internal controls.
(tt)
Maintenance of Title Insurance . Title insurance in favor of
the Company, the Partnership or the Subsidiaries is maintained with
respect to each of the properties owned by them in an amount at
least equal to the cost of acquisition of such property, except, in
each
11
case, where the
failure to maintain such title insurance is not reasonably likely
to have a Material Adverse Effect.
(uu)
Condition of the Business . Since the date of the last
audited financial statements included or incorporated by reference
in the Registration Statement and the Prospectus, except as
described therein, (i) there has not been any change in the
assets or properties, business, results of operations, prospects or
condition (financial or otherwise) of the Company, the Partnership
or any of the Subsidiaries, whether or not arising from
transactions in the ordinary course of business reasonably likely
to result in a Material Adverse Effect, nor any event or
development involving a prospective Material Adverse Effect;
(ii) neither the Company, the Partnership nor any of the
Subsidiaries has sustained any material loss or interference with
its assets, businesses or properties (whether owned or leased) from
fire, explosion, earthquake, flood or other calamity, whether or
not covered by insurance, or from any labor dispute or any court or
legislative or other governmental action, order or decree; and
(iii) neither the Company, the Partnership nor any of the
Subsidiaries has undertaken any liability or obligation, direct or
contingent, except such liabilities or obligations undertaken in
the ordinary course of business.
(vv)
Compliance with Law . The Company, the Partnership and the
Subsidiaries are conducting their respective businesses in material
compliance with all applicable laws, rules and regulations of the
jurisdictions in which they are conducting business, including,
without limitation, the Americans with Disabilities Act of 1990 and
all applicable local, state and federal employment,
truth-in-advertising, franchising and immigration laws and
regulations, except where the failure to be so in compliance would
not have a Material Adverse Effect.
(ww) No
Conflict with Money Laundering Laws . The operations of each of
the Company, the Partnership and the 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 applicable 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 any of the Company, the Partnership and the
Subsidiaries with respect to the Money Laundering Laws is pending
or, to the best knowledge of the Company, threatened.
(xx) No
Unlawful Contributions or Other Payments. None of the Company,
the Partnership or the Subsidiaries nor, to the knowledge of the
Company, any director, officer, agent, employee or affiliate of any
of the Company, the Partnership or the Subsidiaries has taken any
action, directly or indirectly, that would result in a violation by
such persons of the 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 each of the Company, the Partnership
and the Subsidiaries, and to the knowledge of the Company, their
affiliates have conducted their businesses in compliance with the
FCPA and have instituted and maintain policies and procedures
designed to ensure,
12
and which are
reasonably expected to continue to ensure, continued compliance
therewith.
“
FCPA ” means the Foreign Corrupt Practices Act of
1977, as amended, and the rules and regulations
thereunder.
(yy) No
Conflict with OFAC Laws . None of the Company, the Partnership
or the Subsidiaries nor, to the knowledge of the Company, any
director, officer, agent, employee or affiliate of any of the
Company, the Partnership or the Subsidiaries is currently subject
to any U.S. sanctions administered by the Office of Foreign Assets
Control of the U.S. Treasury Department (“ OFAC
”); and none of the Company, the Partnership or the
Subsidiaries will directly or indirectly use the proceeds of the
offering, or lend, contribute or otherwise make available such
proceeds, to any subsidiary, joint venture partner or other person
or entity, for the purpose of financing the activities of any
person currently subject to any U.S. sanctions administered by
OFAC.
(zz) REIT
Qualification . For its taxable years ended December 31,
1997 through December 31, 2008, the Company has continuously
been organized and operating in conformity with the requirements
for qualification as a “real estate investment trust”
under the Internal Revenue Code of 1986, as amended (the “
Code ”). The Company’s current and proposed
organization and method of operation will permit it to meet and to
continue to meet the requirements for taxation as a “real
estate investment trust” under the Code for its 2009 taxable
year and thereafter. The Company has no 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 real estate investment trust.
(aaa) No
Applicable Registration or Other Similar Rights. There are no
persons with registration or other similar rights to have any
equity or debt securities registered for sale under the
Registration Statement or included in the offering contemplated by
this Agreement, nor does any person have preemptive rights, co-sale
rights, rights of first refusal or other rights to purchase any of
the Shares, except in each case for such rights as have been duly
waived.
(bbb) Company
Not a Broker or Dealer. None of the Company, the Partnership or
any of the Subsidiaries, and if operated in the manner described in
the Prospectus, as amended or supplemented, none will be, a
“broker” within the meaning of Section 3(a)(4) of
the Exchange Act or a “dealer” within the meaning of
Section 3(a)(5) of the Exchange Act or required to be
registered pursuant to Section 15(a) of the Exchange
Act.
(ccc)
Environmental Matters. Except as otherwise described in the
Disclosure Package and the Prospectus, neither the Company, the
Partnership nor any Subsidiary has authorized or conducted or has
knowledge of the generation, transportation, storage, presence,
use, treatment, disposal, release, or other handling of any
hazardous substance, hazardous waste, hazardous material, hazardous
constituent, toxic substance, pollutant, contaminant, asbestos,
radon, polychlorinated biphenyls (“ PCBs ”),
petroleum product or waste (including crude oil or any fraction
hereof, natural gas, liquefied gas, synthetic gas or other material
defined, regulated, controlled or potentially subject to any
remediation requirement under any environmental law (collectively,
“ Hazardous Materials ”), on, in, under or
affecting any of the Company’s properties,
13
except in
material compliance with applicable laws; except as disclosed in
the Disclosure Package and the Prospectus, the Company’s
properties are in material compliance with all federal, state and
local laws, ordinances, rules, regulations and other governmental
requirements relating to pollution, control of chemicals,
management of waste, (collectively, “ Environmental
Laws ”), and the Company, the Partnership and the
Subsidiaries are in compliance with all licenses, permits,
registrations and government authorizations necessary to operate
under all applicable Environmental Laws in all material respects;
except as otherwise described in the Prospectus, neither the
Company, the Partnership or any Subsidiary has received any written
or oral notice from any governmental entity or any other person and
there is no pending, or, to the knowledge of the Company,
threatened claim, litigation or any administrative agency
proceeding that: alleges a violation of any Environmental Laws by
the Company, the Partnership or any Subsidiary; or that the
Company, the Partnership or any Subsidiary is a liable party or a
potentially responsible party under the Comprehensive Environmental
Response, Compensation and Liability Act, 42 U.S.C.
§ 9601, et. seq., or any state superfund law; has
resulted in or could result in the attachment of an environmental
lien on any of the properties; or alleges that the Company, the
Partnership or any Subsidiary is liable for any contamination of
the environment, contamination of the property, damage to natural
resources, property damage, or personal injury based on their
activities or the activities of their predecessors or third parties
(whether at the properties or elsewhere) involving Hazardous
Materials, whether arising under the Environmental Laws, common law
principles, or other legal standards. In the ordinary course of its
business, the Company, the Partnership and the Subsidiaries conduct
Phase I environmental assessments on each of their properties at
the time such property is acquired and periodic reviews of the
effect of Environmental Laws on the business, operations and
properties of the Company, the Partnership and the Subsidiaries.
None of the entities which prepared appraisals of the properties or
Phase I environmental assessment reports with respect to such
properties was employed for such purpose on a contingent basis or
has any substantial interest in the Company, the Partnership or any
Subsidiary, and none of their directors, officers or employees is
connected with the Company, the Partnership or any Subsidiary as a
promoter, selling agent, director, officer or employee.
(ddd) ERISA
Compliance. None of the following events has occurred or
exists: (i) a failure to fulfill the obligations, if any,
under the minimum funding standards of Section 302 of the
United States Employee Retirement Income Security Act of 1974, as
amended (“ ERISA ”), and the regulations and
published interpretations thereunder with respect to a Plan,
determined without regard to any waiver of such obligations or
extension of any amortization period; (ii) an audit or
investigation by the Internal Revenue Service, the U.S. Department
of Labor, the Pension Benefit Guaranty Corporation or any other
federal or state governmental agency or any foreign regulatory
agency with respect to the employment or compensation of employees
by any member of the Company that could have a material adverse
effect on the Company; (iii) any breach of any contractual
obligation, or any violation of law or applicable qualification
standards, with respect to the employment or compensation of
employees by any member of the Company that could have a Material
Adverse Effect. None of the following events has occurred or is
reasonably likely to occur: (i) a material increase in the
aggregate amount of contributions required to be made to all Plans
in the current fiscal year of the Company compared to the amount of
such contributions made in the Company’s most recently
completed fiscal year; (ii) a material increase in the
Company’s “accumulated post-retirement benefit
obligations” (within the meaning of Statement of
Financial
14
Accounting
Standards 106) compared to the amount of such obligations in the
Company’s most recently completed fiscal year; (iii) any
event or condition giving rise to a liability under Title IV of
ERISA that could have a Material Adverse Effect; or (iv) the
filing of a claim by one or more employees or former employees of
the Company related to their employment that could have a Material
Adverse Effect. For purposes of this paragraph, the term
“Plan” means a plan (within the meaning of
Section 3(3) of ERISA) subject to Title IV of ERISA with
respect to which any member of the Company may have any
liability.
(eee)
Brokers. Except as otherwise disclosed in the Disclosure
Package and the Prospectus, there is no broker, finder or other
party that is entitled to receive from the Company any brokerage or
finder’s fee or other fee or commission as a result of any
transactions contemplated by this Agreement.
(fff) No
Outstanding Loans or Other Indebtedness. There are no
outstanding loans, advances (except normal advances for business
expenses in the ordinary course of business) or guarantees or
indebtedness by the Company to or for the benefit of any of the
officers or directors of the Company or any of the members of any
of them, except as disclosed in the Disclosure Package and the
Prospectus.
(ggg)
Sarbanes-Oxley Compliance. Other than late Section 16
filings, 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 Section 402 related to loans and
Sections 302 and 906 related to certifications.
(hhh) Lending
Relationship. Except as disclosed in the Disclosure Package and
the Prospectus, neither of the Company or the Partnership
(i) has any material lending or other relationship with
any bank or lending affiliate of the Underwriter and
(ii) intend to use any of the proceeds from the sale of the
Common Stock hereunder to repay any outstanding debt owed to any
affiliate of the Underwriter.
(iii)
Statistical and Market Related Data. Nothing has come to the
attention of the Company, or the Partnership that has caused the
Company or the Partnership to believe that the statistical and
market-related data included in the Disclosure Package and the
Prospectus is not based on or derived from sources that are
reliable and accurate in all material respects.
(jjj)
Compliance with Florida Law . Each of the Company, the
Partnership and the Subsidiaries has complied and will comply with
all the provisions of Florida Statutes, Section 517.075
(Chapter 92-198, Laws of Florida); and none of the Company, the
Partnership and the Subsidiaries nor any of their subsidiaries or
affiliates does business with the government of Cuba or with any
person or affiliate located in Cuba.
(kkk) NYSE
Compliance . The Company is in compliance with the rules and
regulations of the NYSE, including without limitation, the
requirements for continued listing of the Common Stock on the NYSE,
and there are no actions, suits or proceedings pending, threatened
or, to the Company’s knowledge, contemplated, and the Company
has not received any notice from the NYSE, regarding the revocation
of such or
15
otherwise
regarding the delisting of the Common Stock from the
NYSE.
(lll) No
Lock-Up Agreements. Other than the lock-up agreements
contemplated by Section 5(h) herein, there are no existing
agreements between the Company and any of its security holders that
prohibit the sale, transfer, assignment, pledge or hypothecation of
any of the Company’s securities.
Any certificate
signed by an officer of the Company or the Partnership,
respectively, and delivered to the Underwriter or to counsel for
the Underwriter after the date of this Agreement and prior to or on
any Closing Date shall be deemed to be a representation and
warranty by the Company or the Partnership, respectively, to the
Underwriter as to the matters set forth therein.
Section 2.
Purchase, Sale and Delivery of the Shares .
(a) The
Firm Shares. The Company agrees to issue and sell to the
Underwriter the Firm Shares upon the terms herein set forth. On the
basis of the representations, warranties and agreements herein
contained, and upon the terms but subject to the conditions herein
set forth, the Underwriter agrees to purchase from the Company the
Firm Shares. The purchase price per Firm Share to be paid by the
Underwriter to the Company shall be $13.56 per share.
(b) The
Closing Date. Delivery of certificates for the Firm Shares to
be purchased by the Underwriter and payment therefor shall be made
at the offices of Hunton & Williams LLP, 951 East Byrd Street,
Richmond, Virginia (or such other place as may be agreed to by the
Company and the Underwriter) at 9:00 a.m. New York time, on
April 27, 2009, or such other time and date not later than
1:30 p.m. New York time, on April 27, 2009, as the Underwriter
shall designate by notice to the Company (the time and date of such
closing are called the “ Closing Date
”).
(c) The
Optional Shares; the Subsequent Closing Date . In addition, on
the basis of the representations, warranties and agreements herein
contained, and upon the terms but subject to the conditions herein
set forth, the Company hereby grants an option to the Underwriter
to purchase up to an aggregate of 937,500 Optional Shares from the
Company at the same price as the purchase price per share to be
paid by the Underwriter for the Firm Shares. The option granted
hereunder may be exercised at any time and from time to time upon
notice by the Underwriter to the Company, which notice may be given
at any time within 30 days from the date of this Agreement.
Such notice shall set forth (i) the aggregate number of
Optional Shares as to which the Underwriter is exercising the
option, (ii) the names and denominations in which the
certificates for the Optional Shares are to be registered and
(iii) the time, date and place at which such certificates will
be delivered (which time and date may be simultaneous with, but not
earlier than, the Closing Date; and in such case the term
“Closing Date” shall refer to the time and date of
delivery of certificates for the Firm Shares and the Optional
Shares). Each time and date of delivery, if subsequent to the
Closing Date, is called a “ Subsequent Closing Date
” and shall be determined by the Underwriter and shall not be
earlier than three nor later than five full business days after
delivery of such notice of exercise.
16
(d)
Public Offering of the Shares. The Underwriter hereby
advises the Company that the Underwriter intend to offer for sale
to the public, as described in the Prospectus, the Shares as soon
after this Agreement has been executed as the Underwriter, in its
sole judgment, has determined is advisable and
practicable.
(e)
Payment for the Shares. Payment for the Shares shall be made
at the Closing Date (and, if applicable, at any Subsequent Closing
Date) by wire transfer of immediately available funds to the order
of the Company.
(f)
Delivery of the Shares. D
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