Exhibit 1.1
INVESTORS REAL ESTATE
TRUST
8,000,000 Common Shares of
Beneficial Interest
Underwriting Agreement
October 5, 2009
Robert W. Baird
& Co. Incorporated
RBC Capital
Markets Corporation
Janney
Montgomery Scott LLC
D.A. Davidson
& Co.
J.J.B.
Hilliard, W.L. Lyons, LLC
c/o Robert W.
Baird & Co. Incorporated
777 East
Wisconsin Avenue
Milwaukee,
Wisconsin 53202
Ladies and
Gentlemen:
Investors Real Estate Trust, a North Dakota real
estate investment trust (the “ Company
”), proposes, subject to the terms and conditions stated
herein, to issue and sell to the several Underwriters named in
Schedule I hereto (the “ Underwriters
”), an aggregate of 8,000,000 shares (the “ Firm
Shares ”) of its common shares of beneficial
interest, no par value per share (the “ Common
Shares ”). In addition, the Company has
agreed to sell to the Underwriters, upon the terms and conditions
stated herein, up to an additional 1,200,000 Common Shares (the
“ Additional Shares ”) to cover
over-allotments by the Underwriters, if any. The Firm Shares and
the Additional Shares are collectively referred to in this
Agreement as the “ Shares
.” Robert W. Baird & Co. Incorporated and RBC
Capital Markets Corporation, the joint book running managers, are
acting as the representatives of the several Underwriters and in
such capacity are referred to in this Agreement as the “
Representatives .” The Company owns
100% of IRET, Inc., which is the sole general partner of IRET
Properties, a North Dakota limited partnership that serves as the
Company’s primary operating partnership subsidiary (the
“ Operating Partnership ”). Certain terms
used herein are defined in Section 20 hereof.
The Company has filed, in accordance with the
provisions of the Securities Act of 1933, as amended, and the rules
and regulations thereunder (collectively, the “
Securities Act ”), with the Securities and
Exchange Commission (the “ Commission ”)
a registration statement on Form S-3 (File No. 333-153715),
including a Base Prospectus, relating to certain securities,
including the Shares, to be issued from time to time by the
Company, and which incorporates by reference documents that the
Company has filed or will file in accordance with the provisions of
the Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder (collectively, the “ Exchange
Act ”). Any reference herein to the Registration
Statement, the Prospectus or any amendment or supplement thereto
shall be deemed to refer to and include the documents incorporated
by reference therein (or deemed to be incorporated by reference
therein), and any reference herein to the terms
“amend,” “amendment” or
“supplement” with respect to the Registration Statement
or the Prospectus shall be deemed to refer to and include the
filing after the execution hereof of any document with the
Commission deemed to be incorporated by reference therein. For
purposes of this Agreement, all references to the Registration
Statement, the Prospectus or to any amendment or supplement thereto
shall be deemed to include any copy filed with the Commission
pursuant to either the Electronic Data Gathering Analysis and
Retrieval System or Interactive Data Electronic Applications
(collectively, “ IDEA ”).
1. Representations
and Warranties of the Company and the Operating Partnership .
The Company and the Operating Partnership jointly and severally
represent and warrant to, and agree with, each Underwriter as of
the date hereof, as of the Closing Date (defined below) and as of
the Option Closing Date (defined below) as follows:
(a) Compliance with
Registration Requirements . The Company satisfies
all of the requirements of the Securities Act for use of Form S-3
for the offering of the Shares contemplated hereby. The
Registration Statement meets, and the offering and sale of the
Shares contemplated hereby complies with, the requirements set
forth in Rule 415(a)(1)(x) of the Securities Act. The Registration
Statement was declared effective by the Commission on October 10,
2008. No stop order suspending the effectiveness of the
Registration Statement has been issued under the Securities Act and
no proceedings for that purpose have been instituted or are pending
or, to the knowledge of the Company, are contemplated by the
Commission, and any request on the part of the Commission for
additional information has been complied with. The
Prospectus delivered to the Underwriters for use in connection with
the offering of Shares will, at the time of such delivery, be
identical in all material respects to the electronically
transmitted copies thereof filed with the Commission pursuant to
IDEA, except to the extent permitted by Regulation
S-T. At the respective times the Registration Statement
and each amendment thereto became effective and as of the date
hereof the Registration Statement complied and will comply in all
material respects with the requirements of the Securities Act, and
did not and will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading.
The preceding sentence does not apply to statements in or omissions
from the Registration Statement or any amendment thereto in
reliance upon and in conformity with written information furnished
to the Company by any Underwriter through the Representatives
specifically for use therein, it being understood and agreed that
the only such information furnished by any Underwriter consists of
the information described as such in Section 8(a)
hereof.
(b) Prospectus and
Disclosure Package . Neither the Prospectus nor any
amendments or supplements thereto, at the time the Prospectus or
any such amendment or supplement was filed with the Commission, as
of the date hereof, and at the Closing Date and any Option Closing
Date, as the case may be, included or will include an untrue
statement of a material fact or omitted or will 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. As of the Applicable Time (defined below),
the Disclosure Package (defined below) did not include 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
foregoing do not apply to statements in or omissions from the
Disclosure Package or the Prospectus, as amended or supplemented,
in reliance upon and in conformity with written information
furnished to the Company by any Underwriter through the
Representatives specifically for use therein, it being understood
and agreed that the only such information furnished by any
Underwriter consists of the information described as such in
Section 8(a) hereof.
(c) Free Writing
Prospectuses . Prior to the execution of this Agreement, the
Company has not, directly or indirectly, offered or sold any Shares
by means of any “prospectus” (within the meaning of the
Securities Act) or used any “prospectus” (within the
meaning of the Securities Act) in connection with the offer or sale
of the Shares, in each case other than the preliminary prospectus
supplement dated September 28, 2009 relating to the Shares and/or
any Free Writing Prospectuses identified on Schedule II .
The Company has not, directly or indirectly, prepared, used or
referred to any other Free Writing Prospectuses, without the prior
written consent of the Representatives. Each Free Writing
Prospectus has been prepared, used or referred to in compliance
with Rules 164 and 433 under the Securities Act and any Free
Writing Prospectus that the Company is required to file pursuant to
Rules 164 and 433 under the Securities Act has been, or will be,
filed with the Commission in accordance with the requirements of
the Securities Act. Each Free Writing Prospectus, as of
its issue date and as of the Applicable Time, did not, does not and
will not include any information that conflicted,
conflicts or will conflict with the information contained in the
Registration Statement or the Prospectus. The preceding
sentence does not apply to statements in or omissions from any Free
Writing Prospectus in reliance upon and in conformity with written
information furnished to the Company by any Underwriter through the
Representatives specifically for use therein, it being understood
and agreed that the only such information furnished by any
Underwriter consists of the information described as such in
Section 8(a) hereof.
(d) Authorization
of Shares . All of the issued and outstanding shares
of beneficial interest of the Company have been duly authorized and
validly issued, are fully paid and nonassessable and have been
issued in compliance with all applicable federal and state
securities laws. None of the Company’s outstanding
Common Shares were issued in violation of any preemptive rights,
rights of first refusal or other similar rights; except as set
forth in the Prospectus, the Company is not a party to or bound by
any outstanding options, warrants or similar rights to subscribe
for, or contractual obligations to issue, sell, transfer or
acquire, any of its shares of beneficial interest or any securities
convertible into or exchangeable for any of such shares of
beneficial interest; the Shares to be issued and sold by the
Company hereunder have been duly authorized and, when issued and
delivered against full payment therefor in accordance with the
terms hereof, will be validly issued, fully paid and nonassessable
and free of any preemptive rights, rights of first refusal or other
or similar rights; the shares of beneficial interest (including the
Shares) of the Company conform to the description thereof contained
in the Prospectus; and the delivery of the Shares being sold by the
Company against payment therefor pursuant to the terms of this
Agreement will pass valid title to the Shares being sold by the
Company, free and clear of any claim, encumbrance or defect in
title, and without notice of any lien, claim or encumbrance. The
certificates used by the Company to evidence the Common Shares are
in valid and sufficient form.
(e) Authorization
of Units . The issuance of Common Units (defined
below) to the Company in exchange for contribution of proceeds from
the sale of the Shares described in the Prospectus has been duly
authorized by the Operating Partnership and when issued and duly
delivered against payment therefor will be validly issued, fully
paid and nonassessable. Immediately after the transactions
contemplated by this Agreement, none of the outstanding common
units of limited partnership interest in the Operating Partnership
(“ Common Units ”) or preferred units of
limited partnership interest in the Operating Partnership (“
Preferred Units ” and collectively with the
Common Units, the “ Units ”) has been or
will be issued or is owned or held in violation of any preemptive
right, right of first refusal or other similar right, and the
outstanding Units have been or will be offered, sold and issued by
the Operating Partnership in compliance with all applicable federal
and state securities laws.
(f) Organization
and Good Standing of the Company and Subsidiaries.
Each of the Company, the Operating Partnership and
their Subsidiaries (as defined in Section 20 hereof) is duly
organized and validly existing in good standing under the laws of
the state of its incorporation or organization with full corporate,
partnership or entity power and authority, as the case may be, to
own, lease and operate its Properties (as defined below) and to
conduct its business as presently conducted and as described in the
Prospectus and is duly registered and qualified to conduct its
business and is in good standing in each jurisdiction or place
where the nature of its Properties or the conduct of its business
requires such registration or qualification, except where the
failure to so register or qualify (i) has not had or would not
have, individually or in the aggregate, a material adverse effect
on the earnings, business, Properties, assets, operations,
condition (financial or otherwise) or prospects of the Company and
its Subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, or (ii) would not
prevent the consummation of the transactions contemplated hereby
(the occurrence of any such effect or any such prevention described
in the foregoing clauses (i) and (ii) being referred to as a
“ Material Adverse Effect
”). The Company owns 100% of IRET, Inc., which is
the sole general partner of the Operating
Partnership. Except for the Subsidiaries and joint
venture arrangements included on Schedule III or disclosed
in the Prospectus, the Company does not own a material interest in
or control, directly or indirectly, any other corporation,
partnership, joint venture, association, trust or other business
organization.
(g) Property
. (1) The Company or its Subsidiaries have fee simple
title or a valid leasehold interest to all of the properties
described in the Prospectus as owned or leased by the Company or
its Subsidiaries, whether owned in fee simple or through a joint
venture or other partnership (the “ Properties
” or “ Property ”), in each case,
free and clear of all liens, encumbrances, claims, security
interests and defects, except such as (i) are disclosed in the
Prospectus or (ii) could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect; (2)
neither the Company nor any Subsidiary thereof has received from
any governmental authority any written notice of any condemnation
of, or zoning change affecting any of, the Properties or any part
thereof, and the Company does not know of any such condemnation or
zoning change which is threatened, which if consummated could
reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect; (3) except as otherwise described in the
Prospectus, neither the Company nor, to the knowledge of the
Company, any tenant of any of the Properties is in default under
(i) any space lease (as lessor or lessee, as the case may be)
relating to any of the Properties (except such tenant defaults that
would not, individually or in the aggregate, have a Material
Adverse Effect), or (ii) any of the mortgages or other security
documents or other agreements encumbering or otherwise recorded
against the Properties, and the Company does not know of any event
which, but for the passage of time or the giving of notice, or
both, would constitute a default under any of such documents or
agreements, except any such default that would not, individually or
in the aggregate, have a Material Adverse Effect; and (4) except as
disclosed in the Prospectus, no tenant under any of the leases at
the Properties has a right of first refusal to purchase the
premises demised under such lease. To the knowledge of
the Company, water, stormwater, electricity and telephone service
are all available at the property lines of each Property over duly
dedicated streets or perpetual easements of record benefiting the
applicable Property and each of the Properties is free of any
material structural defects and all building systems contained
therein are in reasonable working order in all material respects,
subject to ordinary wear and tear or, in each instance, the Company
or any Subsidiary, as the case may be, has created an adequate
reserve or capital budget to effect reasonably required repairs,
maintenance and capital expenditures. Each of the Properties is in
compliance with all presently applicable provisions of the
Americans with Disabilities Act, except for such failures to comply
as could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
(h) Leases
. Each Property with respect to which the Company or one
of the Subsidiaries has a leasehold interest is the subject of a
lease that has been entered into by, or assigned to, the Company or
a Subsidiary, as the case may be, and has been duly and validly
authorized, executed and delivered by or on behalf of the Company
or such Subsidiary, as the case may be, and constitutes a valid and
binding agreement of the Company or such Subsidiary, as the case
may be, enforceable in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting
creditors’ rights generally or by general principles of
equity.
(i) Mortgage; Deed
of Trusts . The mortgages and deeds of trust
encumbering the Properties are not convertible into equity
interests in the Property nor will the Company or the Operating
Partnership hold a participating interest therein and such
mortgages and deeds of trust are not cross-defaulted or
cross-collateralized to any property not to be owned directly or
indirectly by the Company or the Operating Partnership.
(j)
Subsidiaries . The outstanding equity interests of each of
the Company’s Subsidiaries have been duly authorized and
validly issued, are fully paid and nonassessable and are owned by
the Company or the Operating Partnership, directly or through
Subsidiaries, free and clear of any security interests, liens,
encumbrances, equities or claims.
(k) No
Proceedings. Except as described in the Prospectus,
there is no action, suit, inquiry, proceeding or investigation by
or before any court or governmental or other regulatory or
administrative agency
or commission pending or, to the knowledge of the Company,
threatened, against or involving the Company or its Subsidiaries,
which might individually or in the aggregate prevent the
transactions contemplated by this Agreement or result in a Material
Adverse Effect.
(l) Exhibits;
Material Contracts . There are no agreements, contracts,
indentures, leases or other instruments that are required to be
described in the Prospectus or to be filed as an exhibit to the
Registration Statement that are not described, filed or
incorporated by reference in the Registration Statement and the
Prospectus as required by the Securities Act. All such contracts to
which the Company, the Operating Partnership, or any Subsidiary is
a party have been duly authorized, executed and delivered by the
Company, the Operating Partnership or the applicable Subsidiary, as
the case may be, constitute valid and binding agreements of the
Company, the Operating Partnership or the applicable Subsidiary, as
the case may be, and are enforceable against the Company, the
Operating Partnership or the applicable Subsidiary, as the case may
be, in accordance with the terms thereof, except as enforceability
thereof may be limited by (i) the application of bankruptcy,
reorganization, insolvency and other laws affecting
creditors’ rights generally and (ii) equitable principles
being applied at the discretion of a court before which any
proceeding may be brought. Neither the Company nor the applicable
Subsidiary has received notice or been made aware that any other
party is in breach of or default to the Company or its Subsidiaries
under any of such contracts.
(m) Compliance with
Existing Instruments . Neither the Company, the
Operating Partnership, nor any of the Subsidiaries is (i) in
violation of (A) its Organizational Documents, (B) to the
Company’s knowledge, any law, ordinance, administrative or
governmental rule or regulation applicable to the Company, the
Operating Partnership, or any Subsidiary, the violation of which
would have a Material Adverse Effect or (C) any decree of any court
or governmental agency or body having jurisdiction over the Company
or any of its Subsidiaries; or (ii) in default in any material
respect in the performance of any obligation, agreement or
condition contained in (A) any bond, debenture, note or any other
evidence of indebtedness or (B) any agreement, indenture, lease or
other instrument (each of (A) and (B), an “ Existing
Instrument ”) to which the Company, the Operating
Partnership, or any Subsidiary is a party or by which any of their
Properties may be bound, which default would have a Material
Adverse Effect; and, to the Company’s knowledge, there does
not exist any state of facts that constitutes a default or an event
of default on the part of the Company or any of its Subsidiaries as
defined in such documents or that, with notice or lapse of time or
both, would constitute such a default or event of default which
would have a Material Adverse Effect.
(n) Underwriting
Agreement . The Company and the Operating
Partnership have full legal right, power and authority to enter
into and perform this Agreement and to consummate the transactions
contemplated herein, including the issuance, sale and delivery of
the Shares as provided herein and the Operating Partnership’s
issuance of the Common Units to the Company. The execution and
delivery of this Agreement by the Company and the Operating
Partnership and the performance by the Company and the Operating
Partnership of their obligations under this Agreement have been
duly and validly authorized by the Company and the Operating
Partnership and this Agreement has been duly executed and delivered
by the Company and the Operating Partnership, and constitutes a
valid and legally binding agreement of the Company and the
Operating Partnership, enforceable against the Company and the
Operating Partnership in accordance with its terms, except to the
extent enforceability may be limited by (i) the application of
bankruptcy, reorganization, insolvency and other laws affecting
creditors’ rights generally and (ii) equitable principles
being applied at the discretion of a court before which any
proceeding may be brought, and except as rights to indemnity and
contribution hereunder may be limited by federal or state
securities laws.
(o) Partnership
Agreement . The Agreement of Limited Partnership
dated January 31, 1997 of the Operating Partnership, including all
amendments thereto, if any (the “ Partnership
Agreement ”), has been duly and validly authorized,
executed and delivered by the Company and constitutes a valid and
binding agreement, enforceable in accordance with its terms, except
to the extent that enforceability may be limited by
bankruptcy, insolvency, reorganization or other laws of general
applicability relating to or affecting creditors’ rights or
by general equity principles.
(p) No Consent
. No consent, approval, authorization, order, license,
certificate, permit, registration, designation or filing by or with
any governmental agency or body is required for the execution,
delivery and performance by the Company and the Operating
Partnership of their respective obligations under this Agreement
and the consummation by the Company and the Operating Partnership
of the transactions contemplated hereby, including the valid
authorization, issuance, sale and delivery of the Shares, except
such as may be required by the federal securities laws, the NASDAQ,
the securities or Blue Sky laws of the various states and the
Financial Industry Regulatory Association (
“FINRA” ) in connection with the offer
and sale of the Shares, all of which will be, or have been
obtained, in accordance with this Agreement.
(q)
Non-Contravention of Existing Instruments . Neither the
issuance and sale of the Shares by the Company, the execution,
delivery or performance of this Agreement by the Company and the
Operating Partnership nor the consummation by the Company and the
Operating Partnership of the transactions contemplated hereby (i)
conflicts with, or will conflict with, or constitutes, or with the
giving of notice or lapse of time, will constitute a breach of, or
a default under, the Company’s Declaration of Trust or bylaws
(or other applicable Organizational Document), the Operating
Partnership’s certificate of limited partnership or the
Partnership Agreement, or any Existing Instrument to which the
Company or any of its Subsidiaries is a party or by which any of
its or their Properties may be bound, as the case may be, (ii)
violates any statute, law, regulation, ruling, filing, judgment,
injunction, order or decree applicable to the Company or any of its
Subsidiaries or any of their Properties, or (iii) results in a
breach of, or default or Debt Repayment Triggering Event (as
defined below) under, or results in the creation or imposition of
any lien, charge or encumbrance upon any Property or assets of the
Company or any of its Subsidiaries pursuant to, or requires the
consent of any other party to, any Existing Instrument, except for
such conflicts, breaches, defaults, liens, charges or encumbrances
that will not, individually or in the aggregate, result in a
Material Adverse Effect. As used herein, a “ Debt
Repayment Triggering Event ” means any event or
condition that 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 the Company or any of its
Subsidiaries.
(r) No Applicable
Registration Rights . Except as disclosed in the
Prospectus, 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, except for such rights as have been
duly satisfied or waived.
(s) Independent
Accountant . Deloitte & Touche LLP, who have
audited certain financial statements (and the related notes
thereto) incorporated by reference in the Registration Statement
and the Prospectus, are and were, during the periods covered by
their reports incorporated by reference in the Registration
Statement and the Prospectus, independent registered public
accountants as required by the Securities Act, the Exchange Act and
the Public Company Accounting Oversight Board (the “
PCAOB ”); any other public accountants who have
audited the financial statements incorporated by reference in the
Registration Statement and the Prospectus, are and were, during the
periods covered by their reports incorporated by reference in the
Registration Statement and the Prospectus, independent registered
public accountants as required by the Securities Act, the Exchange
Act and the PCAOB.
(t) Financial
Statements . The financial statements, together with related
schedules and notes, included or incorporated by reference in the
Registration Statement and the Prospectus, present fairly the
consolidated financial condition, results of operations, cash flows
and changes in financial position of the Company on the basis
stated in the Registration Statement at the respective dates or for
the respective periods to
which they apply; except as disclosed therein, such statements and
related schedules and notes have been prepared in accordance with
GAAP, have been consistently applied throughout the periods
involved, and the other financial and statistical information and
data set forth in the Registration Statement and Prospectus are
accurately presented and prepared on a basis consistent with such
financial statements and the books and records of the
Company. No other financial statements or schedules
(historical or pro forma) are required by Form S-3 of the
Securities Act or are otherwise to be included, or incorporated by
reference in the Registration Statement or the Prospectus. All pro
forma financial statements or data included or incorporated by
reference in the Registration Statement and the Prospectus, if any,
comply with the requirements of Regulation S-X of the Securities
Act and the Exchange Act, and the assumptions used in the
preparation of such pro forma financial statements and data are
reasonable, the pro forma adjustments used therein are appropriate
to give effect to the transactions or circumstances described
therein and the pro forma adjustments have been properly applied to
the historical amounts in the compilation of those statements and
data. The Company’s consolidated ratios of
earnings to fixed charges set forth in the Registration Statement
and the Prospectus and Exhibit 12.1 to the Company’s
Quarterly Report on Form 10-Q for the quarter ended July 31, 2009
have been calculated in compliance with Item 503(d) of Regulation
S-K under the Securities Act.
(u) Regulation G
Compliance . All disclosures contained in the
Registration Statement and the Prospectus regarding “non-GAAP
financial measures” (as such term is defined by the rules and
regulations of the Commission) comply in all material respects with
Regulation G of the Exchange Act, and Item 10 of Regulation S-K
under the Securities Act, to the extent applicable.
(v) No Material
Change . Except as disclosed in the Registration
Statement and the Prospectus, subsequent to the respective dates as
of which such information is given in the Registration Statement
and the Prospectus, (i) neither the Company nor any of its
Subsidiaries has incurred any material liabilities or obligations,
indirect, direct or contingent (including any off-balance sheet
obligation), or entered into any transaction that is not in the
ordinary course of business, (ii) neither the Company nor any of
its Subsidiaries has sustained any material loss or interference
with its business or Properties from fire, flood, windstorm,
accident or other calamity, whether or not covered by insurance,
(iii) neither the Company nor any of its Subsidiaries has paid or
declared any dividends or other distributions with respect to its
shares of beneficial interest and the Company is not in default
under the terms of any class of shares of beneficial interest of
the Company or any outstanding debt obligations (except for
defaults that were subsequently cured or waived), (iv) there has
not been any material change in the authorized or outstanding
shares of beneficial interest of the Company or any material change
in the indebtedness of the Company (other than in the ordinary
course of business) and (v) there has not been any material adverse
change, or any development involving or that may reasonably be
expected to result in a Material Adverse Effect.
(w) Exchange Act
Registration and Filings; Stock Exchange Listing . The Shares
to be sold under this Agreement have been approved for trading and
listing on NASDAQ, subject to official notice of issuance, and are
registered pursuant to Section 12(b) of the Exchange Act, and the
Company has taken no action designed to, or likely to have the
effect of, terminating the registration of the Shares under the
Exchange Act or delisting any such securities from NASDAQ, nor has
the Company received any notification that the Commission or NASDAQ
is contemplating terminating such registration or
listing.
(x) Distribution of
Offering Material . The Company has not distributed and will
not distribute, and has not authorized the Underwriters to
distribute, any offering material in connection with the offering
and sale of the Shares to be sold hereunder by the Underwriters as
principal or agent for the Company, other than the
Prospectus.
(y) Stabilization
or Manipulation . Other than excepted activity
pursuant to Regulation M under the Exchange Act, the Company has
not taken and will not take, directly or indirectly, any action
that
constituted, or any action designed to, or that might reasonably be
expected to cause or result in or constitute stabilization or
manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares or for any other
purpose.
(z) Tax
Compliance . The Company and each of the
Company’s Subsidiaries have filed all material tax returns
required to be filed or have properly requested extensions thereof,
which returns are complete and correct in all material respects,
and neither the Company nor any Subsidiary is in default in the
payment of any material taxes that were payable pursuant to said
returns or any assessments with respect thereto. Except as
disclosed in the Prospectus (as amended or supplemented), all
material deficiencies asserted as a result of any federal, state,
local or foreign tax audits have been paid or finally settled and
no issue has been raised in any such audit that, by application of
the same or similar principles, reasonably could be expected to
result in a proposed deficiency for any other period not so
audited. There are no outstanding agreements or waivers extending
the statutory period of limitation applicable to any federal,
state, local or foreign tax return for any period.
(aa) Not an
Investment Company . Neither the Company nor any of its
Subsidiaries is required to register as an “investment
company” within the meaning of the Investment Company Act of
1940, as amended (the “ Investment Company Act
”).
(bb) All Necessary
Permits, etc . The Company and its Subsidiaries have
all permits, licenses, franchises, approvals, consents and
authorizations of governmental or regulatory authorities
(hereinafter “ permit ” or “
permits ”) as are necessary to own their
Properties and to conduct their business in the manner described in
the Prospectus, subject to such qualifications as may be set forth
in the Prospectus, except where the failure to have obtained any
such permit has not had and will not have a Material Adverse
Effect; each of the Company and its Subsidiaries has operated and
is operating its business in material compliance with all of its
obligations with respect to each such permit and no event has
occurred that allows, or after notice or lapse of time would allow,
revocation or termination of any such permit and except where such
revocation or termination would not have a Material Adverse Effect
or result in any other material impairment of the rights of any
such permit, subject in each case to such qualification as may be
set forth in the Prospectus.
(cc) Internal
Controls and Procedures . The Company has
established and maintains disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15 and 15d-15) that are designed
to ensure that information required to be disclosed by the Company
in the reports that it files or submits under the Exchange Act is
recorded, processed, summarized and reported, within the time
periods specified in the Commission’s rules and forms and is
accumulated and communicated to the Company’s management,
including its chief executive officer and chief financial officer,
or persons performing similar functions, as appropriate to allow
timely decisions regarding required disclosure; and the Company
maintains a system of internal control over financial reporting
sufficient to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with GAAP and which
includes policies and procedures that (i) pertain to the
maintenance of records that in reasonable detail accurately and
fairly reflect the transactions and dispositions of the assets of
the Company, (ii) provide reasonable assurance that transactions
are recorded as necessary to permit preparation of financial
statements in accordance with GAAP and that receipts and
expenditures of the Company are being made only in accordance with
the authorization of management, and (iii) provide reasonable
assurance regarding prevention or timely detection of unauthorized
acquisitions, use or dispositions of assets that could have a
material effect on the Company’s consolidated financial
statements. The Company’s disclosure controls and procedures
have been evaluated for effectiveness as of the end of the period
covered by the Company’s most recently filed quarterly report
on Form 10-Q which precedes the date of the Prospectus and were
effective in all material respects to perform the functions for
which they were established. Based on the most recent evaluation of
its internal control over financial reporting, the Company was not
aware of (i) any material weaknesses in the design or operation
of
internal control over financial reporting or (ii) any fraud,
whether or not material, that involves management or other
employees who have a significant role in the Company’s
internal control over financial reporting. The Company is not aware
of any change in its internal control over financial reporting that
has occurred during its most recent fiscal quarter that has
materially affected, or is reasonably likely to materially affect,
the Company’s internal control over financial
reporting.
(dd) Unlawful
Contributions or Payments. Neither the Company nor
the Operating Partnership, nor to the Company’s or the
Operating Partnership’s knowledge, any trustee, officer,
agent, employee or other person associated with or acting on behalf
of the Company or the Operating Partnership, has used any funds for
any unlawful contribution, gift, entertainment or other unlawful
expense relating to political activity; made any direct or indirect
unlawful payment to any foreign or domestic government official or
employee from company funds; violated or is in violation of any
provision of the Foreign Corrupt Practices Act of 1977; or made any
bribe, rebate, payoff, influence payment, kickback or other
unlawful payment. No funds of the Company have been set aside to be
used for any payment in violation of any law. Neither the Company,
nor any of its Subsidiaries nor any trustee, officer, agent, or
employee of the Company or any of its 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 the Company will not directly or
indirectly use the proceeds of the offering contemplated by this
Agreement, 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.
(ee) Environmental
Compliance . To the knowledge of the Company, the
Company and its Subsidiaries are (i) in compliance with any and all
applicable federal, state, local and foreign laws and regulations
relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants
or contaminants (“ Environmental Laws ”),
(ii) have received all permits, licenses or other approvals
required of them under applicable Environmental Laws to conduct
their respective businesses and (iii) are in compliance with all
terms and conditions of any such permit, license or approval,
except where such noncompliance with Environmental Laws, failure to
receive required permits, licenses or other approvals or failure to
comply with the terms and conditions of such permits, licenses or
other approvals would not, individually or in the aggregate, have a
Material Adverse Effect. To the knowledge of the Company, neither
the Company nor any of its Subsidiaries has been named as a
“potentially responsible party” under the Comprehensive
Environmental Response Compensation and Liability Act of 1980, as
amended (“ CERCLA ”). The
Properties are not included or, to the best of the Operating
Partnership’s and the Company’s knowledge, proposed for
inclusion on the National Priorities List issued pursuant to CERCLA
by the United States Environmental Protection Agency (the “
EPA ”) or, to the best of the Operating
Partnership’s and the Company’s knowledge, proposed for
inclusion on any similar list or inventory issued pursuant to any
other Environmental Law or issued by any other governmental
authority. Except as disclosed in the Prospectus, to the
knowledge of the Company, there are no costs or liabilities
associated with Environmental Laws (including, without limitation,
any capital or operating expenditures required for clean-up,
closure of Properties or compliance with Environmental Laws or any
permit, license or approval, any related constraints on operating
activities and any potential liabilities to third parties) that
would, individually or in the aggregate, have a Material Adverse
Effect.
(ff) Qualification
as a REIT . The Company has been organized and has operated in
conformity with the requirements for qualification and taxation as
a real estate investment trust (“ REIT ”)
under the Internal Revenue Code of 1986, as amended (the “
Code ”) for its taxable years ended April 30,
2006 through April 30, 2009, and the Company’s current and
proposed method of operation will enable it to continue to meet the
requirements for taxation as a REIT under the Code for its taxable
year ending April 30, 2010 and in the future. The Subsidiaries of
the Company that are partnerships have been and will continue to be
treated as partnerships for federal income tax purposes and not as
corporations, associations taxable as corporations or as publicly
traded partnerships.
(gg) Intellectual
Property . The Company and its Subsidiaries own and
have full right, title and interest in and to, or has valid
licenses to use, each material trade name, trademark, service mark,
patent, copyright, approval, trade secret and other similar rights
(collectively “ Intellectual Property ”)
under which the Company and its Subsidiaries conduct all or any
material part of their business, and none of the Company and its
Subsidiaries has created any lien or encumbrance on, or granted any
right or license with respect to, any such Intellectual Property
except where the failure to own or obtain a license or right to use
any such Intellectual Property has not and will not have a Material
Adverse Effect; there is no claim pending or, to the knowledge of
the Company, threatened, against the Company or any of its
Subsidiaries with respect to any Intellectual Property, and none of
the Company and its Subsidiaries has received notice or otherwise
become aware that any Intellectual Property that it uses or has
used in the conduct of its business infringes upon or conflicts
with the rights of any third party.
(hh) Title
Insurance . Owner or leasehold title insurance in
favor of the Company, the Operating Partnership and the
Subsidiaries has been obtained with respect to each Property owned
by any such entity, except where the failure to do so would not
have a Material Adverse Effect, in an amount at least equal to
amounts that are generally deemed in the Company’s industry
to be commercially reasonable in the market where the Properties
are located. The Company, the Operating Partnership and each of the
Subsidiaries maintains insurance covering its Properties,
operations, personnel and businesses as the Company deems adequate;
such insurance insures against such losses and risks to an extent
which is adequate in accordance with customary industry practice to
protect the Company, the Operating Partnership and the Subsidiaries
and their businesses; such insurance as the Company deems adequate
and that insures against losses and risks to an extent which is
adequate in accordance with customary industry practice is fully in
force on the date hereof. The Company, Operating
Partnership and each of the Subsidiaries do not have any reason to
believe that they will not be able (i) to renew their existing
insurance coverage as and when such policies expire or (ii) to
obtain comparable coverage from similar institutions as may be
necessary or appropriate to conduct their business as now
conducted.
(ii) ERISA
Compliance . The Company and its Subsidiaries and any
“employee benefit plan” (as defined under the Employee
Retirement Income Security Act of 1974, as amended, and the
regulations and published interpretations thereunder (collectively,
“ ERISA ”)) established or maintained by
the Company, its Subsidiaries or their ERISA Affiliates (as defined
below) are in compliance in all material respects with ERISA and
all other applicable state and federal laws. “ ERISA
Affiliate ” means, with respect to the Company or a
Subsidiary, any member of any group or organization described in
Sections 414(b), (c), (m) or (o) of the Code of which the Company
or such Subsidiary is a member. No “reportable event”
(as defined in ERISA) has occurred or is reasonably expected to
occur with respect to any “employee benefit plan”
established or maintained by the Company, its Subsidiaries or any
of their ERISA Affiliates. No “employee benefit plan”
established or maintained by the Company, its Subsidiaries or any
of their ERISA Affiliates, if such “employee benefit
plan” were terminated, would have any “amount of
unfunded benefit liabilities” (as defined in ERISA). Neither
the Company, its Subsidiaries nor any of their ERISA Affiliates has
incurred or reasonably expects to incur any liability under (i)
Title IV of ERISA with respect to termination of, or withdrawal
from, any “employee benefit plan” or (ii) Sections 412,
4971, 4975 or 4980B of the Code. Each “employee benefit
plan” established or maintained by the Company, its
Subsidiaries or any of their ERISA Affiliates that is intended to
be qualified under Section 401(a) of the Code is so qualified and
nothing has occurred, whether by action or failure to act, that
would cause the loss of such qualification.
(jj) Labor and
Employment . The Company and its Subsidiaries have complied and
will comply in all material respects with wage and hour
determinations issued by the U.S. Department of Labor under the
Service Contract Act of 1965 and the Fair Labor Standards Act in
paying its employees’ salaries, fringe benefits and other
compensation for the performance of work or other duties in
connection with contracts
with the U.S. government, except where the failure to do so would
not have a Material Adverse Effect, and have complied and will
comply in all material respects with the requirements of the
Americans with Disabilities Act of 1990, the Family and Medical
Leave Act of 1993, the Civil Rights Act of 1964 (Title VII), the
National Labor Relations Act, the Vietnam Era Veteran’s
Readjustment Act, the Age Discrimination in Employment Act, as
amended by the Older Workers’ Benefit Protection Act, and
federal, state and local labor laws, each as amended except where
the failure to comply with any such requirements has not, and will
not, have a Material Adverse Effect.
(kk) Sarbanes-Oxley
Act . Except with respect to any non-timely filings
of reports pursuant to Section 16(a) of the Exchange Act by certain
of the Company’s officers and/or trustees as described in the
Company’s most recently filed Definitive Proxy Statement
under the caption “Section 16(a) Beneficial Ownership
Reporting Compliance,” there is and has been no failure on
the part of the Company to comply in all material respects with the
provisions of the Sarbanes-Oxley Act of 2002 and the rules and
regulations promulgated thereunder.
(ll) Brokers and
Finders . Other than this Agreement, there are no contracts,
agreements or understandings between the Company or any of its
Subsidiaries and any person that would give rise to a valid claim
against the Company or any of its Subsidiaries or the Underwriters
for a brokerage commission, finder’s fee or other like
payment with respect to the consummation of the transactions
contemplated by this Agreement.
(mm) Money
Laundering . The operations of the Company and its
Subsidiaries are and have been conducted at all times in compliance
with applicable financial record-keeping and reporting requirements
of the Currency and Foreign Transactions Reporting Act of 1970, as
amended, applicable money laundering statutes and applicable rules
and regulations thereunder (collectively, the “ Money
Laundering Laws ”), and no action, suit or proceeding
by or before any court or governmental agency, authority or body or
any arbitrator involving the Company or any or its Subsidiaries
with respect to the Money Laundering Laws is pending or, to the
Company’s knowledge, threatened.
(nn) Related Party
Transactions . Except as set forth in the Prospectus
(as amended or supplemented), there are no transactions with
“affiliates” (as defined in Rule 405 of the Securities
Act) or any officer, trustee or security holder of the Company
(whether or not an affiliate) that are required by the Securities
Act to be disclosed in the Prospectus that have not been disclosed
as required. Additionally, no relationship, direct or indirect,
exists between the Company or any of its Subsidiaries on the one
hand, and the trustees, officers, shareholders, tenants, customers
or suppliers of the Company or any Subsidiary on the other hand
that is required by the Securities Act to be disclosed in the
Prospectus that is not so disclosed.
(oo) Officer’s
Certificates; Opinions . Any certificate signed by
an officer of the Company and delivered to the Representatives or
to counsel for the Underwriters shall be deemed to be a
representation and warranty by the Company and/or the Operating
Partnership, as applicable, to the Representatives as to the
matters set forth therein. The Company and the Operating
Partnership acknowledge that the Representatives and, for purposes
of the opinions to be delivered pursuant to Section 7
hereof, counsel to the Company and counsel to the Underwriters,
will rely upon the accuracy and truthfulness of the foregoing
representations and hereby consents to such reliance.
(a) Subject to the
terms and conditions and in reliance upon the representations and
warranties herein set forth, the Company agrees to sell to each
Underwriter, and each Underwriter agrees, severally and not
jointly, to purchase from the Company, at a purchase price of
$7.8375 per share (representing
a public offering price of $8.25 per share, less an
underwriting discount of $0.4125 per share), the amount of the Firm
Shares set forth opposite such Underwriter’s name in
Schedule I hereto.
(b) Subject to the
terms and conditions and in reliance upon the representations and
warranties herein set forth, the Company hereby grants an option to
the several Underwriters to purchase, severally and not jointly, up
to 1,200,000 Additional Shares in the aggregate at the same
purchase price per share as the Underwriters shall pay for the Firm
Shares, less an amount per share equal to any dividends or
distributions declared by the Company and payable on the Firm
Shares but not payable on the Additional Shares. Said option may be
exercised only to cover over-allotments in the sale of the Firm
Shares by the Underwriters. Said option may be exercised in whole
or in part at any time on or before the 30th day after the date
hereof upon written, telegraphic or electronic mail notice by the
Representatives to the Company setting forth the number of
Additional Shares as to which the several Underwriters are
exercising the option. On each day, if any, that
Additional Shares are to be purchased (an “ Option
Closing Date ”), each Underwriter, acting severally
and not jointly, will purchase that proportion of the total
Additional Shares then being purchased which the number of Firm
Shares set forth on Schedule I opposite the name of such
Underwriter bears to the total number of Firm Shares set forth in
Schedule I hereto (subject to such adjustments to eliminate
fractional shares as the Representatives may determine).
3. Delivery and
Payment . Delivery of and payment for the Firm Shares and the
Additional Shares (if the option provided for in Section
2(b) hereof shall have been exercised before the Business Day
prior to the Closing Date) shall be made at 10:00 a.m., Eastern
time, on October 9, 2009, or at such time on such date not more
than three (3) Business Days after the foregoing date as the
Representatives shall designate, which date and time may be
postponed by agreement between the Representatives and the Company
or as provided in Section 9 hereof (such date and time of
delivery and payment for the Shares being herein called the “
Closing Date” ).
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