Exhibit 10.3

EXECUTION VERSION

 

 

 

CHAMBERS STREET PROPERTIES

Up to $250,000,000 Common Shares of Beneficial Interest

EQUITY DISTRIBUTION AGREEMENT

Dated: November 6, 2013

 

 

 

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TABLE OF CONTENTS

 

     Page  

SECTION 1. Description of Securities

     1   

SECTION 2. Placements

     2   

SECTION 3. Sale of Placement Securities by BAML

     3   

SECTION 4. Suspension of Sales

     4   

SECTION 5. Representations and Warranties

     4   

SECTION 6. Sale and Delivery to BAML; Settlement

     22   

SECTION 7. Covenants of the Company

     24   

SECTION 8. Payment of Expenses

     31   

SECTION 9. Conditions of BAML’s Obligations

     32   

SECTION 10. Indemnification

     34   

SECTION 11. Contribution

     36   

SECTION 12. Representations, Warranties and Agreements to Survive Delivery

     37   

SECTION 13. Termination of Agreement

     37   

SECTION 14. Notices

     39   

SECTION 15. Parties

     39   

SECTION 16. Adjustments for Stock Splits

     39   

SECTION 17. Governing Law and Time

     39   

SECTION 18. Effect of Headings

     39   

SECTION 19. Counterparts

     39   

SECTION 20. Interpretation

     39   

SECTION 21. Permitted Free Writing Prospectuses

     40   

SECTION 22. Absence of Fiduciary Relationship

     40   

 

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EXHIBITS

 

Exhibit A    –    Form of Placement Notice Exhibit B    –    Authorized
Individuals for Placement Notices and Acceptances Exhibit C    –    Compensation
Exhibit D-1    –    Form of Opinion of Company Counsel Exhibit D-2    –    Form
of Opinion of Company Counsel – Tax Exhibit D-3    –    Form of Opinion of
General Counsel to the Company Exhibit E    –    Officer Certificate Exhibit F
   –    Issuer Pricing Free Writing Prospectus

 

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Chambers Street Properties

Up to $250,000,000 Common Shares of Beneficial Interest

EQUITY DISTRIBUTION AGREEMENT

November 6, 2013

Merrill Lynch, Pierce, Fenner & Smith Incorporated

One Bryant Park New York,

New York 10036

Ladies and Gentlemen:

Chambers Street Properties, a Maryland real estate investment trust (the
“Company”), and CSP Operating Partnership, LP, a Delaware limited partnership
(the “Operating Partnership”), each confirms its agreement (this “Agreement”)
with Merrill Lynch, Pierce, Fenner & Smith Incorporated (“BAML”), as follows:

SECTION 1. Description of Securities.

Each of the Company and the Operating Partnership agrees that, from time to time
during the term of this Agreement, on the terms and subject to the conditions
set forth herein, the Company may issue and sell through BAML, acting as agent
and/or principal, common shares of beneficial interest, par value $0.01 per
share, of the Company (the “Common Shares”), having an aggregate sale price of
up to $250,000,000 (the “Maximum Amount”) (such Common Shares, the
“Securities”). Notwithstanding anything to the contrary contained herein, the
parties hereto agree that compliance with the limitations set forth in this
Section 1 regarding the number and aggregate sale price of the Securities issued
and sold under this Agreement or any Alternative Distribution Agreements (as
defined below) shall be the sole responsibility of the Company, and BAML shall
have no obligation in connection with such compliance. The issuance and sale of
the Securities through BAML will be effected pursuant to the Registration
Statement (as defined below) filed by the Company and which became effective
upon filing under Rule 462(e) (“Rule 462(e)”) under the Securities Act of 1933,
as amended, and the rules and regulations thereunder (the “Securities Act”),
although nothing in this Agreement shall be construed as requiring the Company
to use the Registration Statement to issue the Securities. The Company agrees
that whenever it determines to sell Securities directly to BAML as principal it
will enter into a separate written agreement containing the terms and conditions
of such sale.

The Company has filed, in accordance with the provisions of the Securities Act,
with the Commission an automatic shelf registration statement on Form S-3ASR
(File No. 333-192137), including a base prospectus, relating to certain
securities, including the Securities 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 of the Commission
thereunder (the “Exchange Act”). The Company has prepared a prospectus
supplement specifically relating to the Securities (the “Prospectus Supplement”)
to the base prospectus included as part of such automatic shelf registration
statement. The Company will furnish to BAML, for use by BAML, copies of the
prospectus included as part of such registration statement, as supplemented by
the

 

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Prospectus Supplement, relating to the Securities. Except where the context
otherwise requires, such automatic shelf registration statement, as amended when
it became effective, including all documents filed as part thereof or
incorporated by reference therein, and including any information contained in a
Prospectus (as defined below) subsequently filed with the Commission pursuant to
Rule 424(b) under the Securities Act (Rule 424(b)”) or deemed to be a part of
such automatic shelf registration statement pursuant to Rule 430B under the
Securities Act (“Rule 430B”), is herein called the “Registration Statement.” The
Registration Statement at the time it originally became effective is herein
called the “Original Registration Statement.” The base prospectus, including all
documents incorporated therein by reference, included in the Registration
Statement, as it may be supplemented by the Prospectus Supplement, in the form
in which such prospectus and/or Prospectus Supplement have most recently been
filed by the Company with the Commission pursuant to Rule 424(b) is herein
called the “Prospectus.” 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, 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 Securities
and Exchange Commission (the “Commission”) pursuant to the Commission’s
Electronic Data Gathering, Analysis and Retrieval system (“EDGAR”).

The Company and the Operating Partnership have also entered into three
(3) additional separate equity distribution agreements (each an “Alternative
Distribution Agreement” and, collectively, the “Alternative Distribution
Agreements”), each dated as of even date herewith, with Citigroup Global Markets
Inc., Wells Fargo Securities, LLC and RBC Capital Markets, LLC, respectively
(each, an “Alternative Placement Agent” and together with BAML, the “Placement
Agents”). The aggregate offering price of the Securities that may be sold
pursuant to this Agreement and the Alternative Distribution Agreements shall not
exceed the Maximum Amount.

The Company agrees that whenever it determines to sell Securities directly to an
Alternative Placement Agent as principal it will enter into a separate written
agreement in form and substance satisfactory to both the Company and the
Alternative Placement Agent covering such sale.

SECTION 2. Placements.

Each time that the Company wishes to issue and sell the Securities hereunder
(each, a “Placement”), it will notify BAML by email notice (or other method
mutually agreed to in writing by the parties) containing the parameters in
accordance with which it desires the Securities to be sold, which shall at a
minimum include the number of Securities to be issued (the “Placement
Securities”), the time period during which sales are requested to be made, any
limitation on the number of Securities that may be sold in any one day and any
minimum price below which sales may not be made (a “Placement Notice”), a form
of which containing such minimum sales parameters necessary is attached hereto
as Exhibit A. The Placement Notice shall originate from any of the individuals
from the Company set forth on Exhibit B (with a copy

 

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to each of the other individuals from the Company listed on such schedule), and
shall be addressed to each of the individuals from BAML set forth on Exhibit B,
as such Exhibit B may be amended from time to time. If BAML wishes to accept
such proposed terms included in the Placement Notice (which it may decline to do
so for any reason in its sole discretion) or, following discussion with the
Company, wishes to accept amended terms, BAML will, prior to 4:30 p.m. (New York
City time) on the Business Day (as defined below) following the Business Day on
which such Placement Notice is delivered to BAML, issue to the Company a notice
by email (or other method mutually agreed to in writing by the parties)
addressed to all of the individuals from the Company and BAML (set forth on
Exhibit B) setting forth the terms that BAML is willing to accept. Where the
terms provided in the Placement Notice are amended as provided for in the
immediately preceding sentence, such terms will not be binding on the Company or
BAML until the Company delivers to BAML an acceptance by email (or other method
mutually agreed to in writing by the parties) of all of the terms of such
Placement Notice, as amended (the “Acceptance”), which email shall be addressed
to all of the individuals from the Company and BAML set forth on Exhibit B. The
Placement Notice (as amended by the corresponding Acceptance, if applicable)
shall be effective upon receipt by the Company of BAML’s acceptance of the terms
of the Placement Notice or upon receipt by BAML of the Company’s Acceptance, as
the case may be, unless and until (i) the entire amount of the Placement
Securities has been sold, (ii) in accordance with the notice requirements set
forth in the second sentence of this paragraph, the Company terminates the
Placement Notice, (iii) the Company issues a subsequent Placement Notice with
parameters superseding those on the earlier dated Placement Notice, (iv) this
Agreement has been terminated under the provisions of Section 13 or (v) either
party shall have suspended the sale of the Placement Securities in accordance
with Section 4 below. The amount of any discount, commission or other
compensation to be paid by the Company to BAML in connection with the sale of
the Placement Securities shall be calculated in accordance with the terms set
forth in Exhibit C. It is expressly acknowledged and agreed that neither the
Company nor BAML will have any obligation whatsoever with respect to a Placement
or any Placement Securities unless and until the Company delivers a Placement
Notice to BAML and either (i) BAML accepts the terms of such Placement Notice or
(ii) where the terms of such Placement Notice are amended, the Company accepts
such amended terms by means of an Acceptance pursuant to the terms set forth
above, and then only upon the terms specified in the Placement Notice (as
amended by the corresponding Acceptance, if applicable) and herein. In the event
of a conflict between the terms of this Agreement and the terms of a Placement
Notice (as amended by the corresponding Acceptance, if applicable), the terms of
the Placement Notice (as amended by the corresponding Acceptance, if applicable)
will control. For the purposes hereof, “Business Day” means any day other than a
Saturday, a Sunday or a legal holiday or a day on which banks are required to be
closed in New York City.

SECTION 3. Sale of Placement Securities by BAML.

Subject to the provisions of Section 6(a), BAML, for the period specified in the
Placement Notice, will use its commercially reasonable efforts consistent with
its normal trading and sales practices to sell the Placement Securities up to
the amount specified, and otherwise in accordance with the terms of such
Placement Notice (as amended by the corresponding Acceptance, if applicable).
BAML will provide written confirmation to the Company no later than the opening
of the Trading Day (as defined below) immediately following the Trading Day on
which it has made sales of Placement Securities hereunder setting forth the
number of

 

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Placement Securities sold on such day, the compensation payable by the Company
to BAML pursuant to Section 2 with respect to such sales, and the Net Proceeds
(as defined below) payable to the Company, with an itemization of the deductions
made by BAML (as set forth in Section 6(b)) from the gross proceeds that it
receives from such sales. Subject to the terms of the Placement Notice (as
amended by the corresponding Acceptance, if applicable), BAML may sell Placement
Securities by any method permitted by law deemed to be an “at the market”
offering as defined in Rule 415 under the Securities Act (“Rule 415”), including
without limitation sales made directly on the New York Stock Exchange (The
“NYSE”), on any other existing trading market for the Common Shares or to or
through a market maker. Subject to the terms of the Placement Notice (as amended
by the corresponding Acceptance, if applicable), BAML may also sell Placement
Securities by any other method permitted by law, including but not limited to in
privately negotiated transactions. For the purposes hereof, “Trading Day” means
any day on which Common Shares are purchased and sold on the principal market on
which the Common Shares are listed or quoted.

SECTION 4. Suspension of Sales. The Company or BAML may, upon notice to the
other party in writing (including by email correspondence to each of the
individuals of the other party set forth on Exhibit B, if receipt of such
correspondence is actually acknowledged by any of the individuals to whom the
notice is sent, other than via auto-reply) or by telephone (confirmed
immediately by verifiable facsimile transmission or email correspondence to each
of the individuals of the other party set forth on Exhibit B), suspend any sale
of Placement Securities; provided, however, that such suspension shall not
affect or impair either party’s obligations with respect to any Placement
Securities sold hereunder prior to the receipt of such notice or any Placement
Securities sold under an Alternative Distribution Agreement. Each of the parties
agrees that no such notice under this Section 4 shall be effective against the
other unless it is made to one of the individuals of the other party named on
Exhibit B hereto, as such Exhibit may be amended from time to time.

SECTION 5. Representations and Warranties.

(a)        Representations and Warranties by the Company and the Operating
Partnership.    Each of the Company and the Operating Partnership, jointly and
severally, represents and warrants to BAML as of the date hereof and as of each
Representation Date (as defined below) on which a certificate is required to be
delivered pursuant to Section 7(o) of this Agreement, as of the time of each
sale of any Securities or any securities pursuant to this Agreement (each such
time, an “Applicable Time”) and as of each Settlement Date (as defined below),
and agrees with BAML, as follows:

(1)        Compliance with Registration Requirements.    The Company meets the
requirements for use of Form S-3ASR under the Securities Act, and the offering
and sale of the Securities as contemplated hereby, complies with, the
requirements of Rule 415. The Original Registration Statement was filed by the
Company with the Commission not earlier than three years prior to the date
hereof. The Original Registration Statement became effective under the
Securities Act upon filing with the Commission. The Registration Statement is an
“automatic shelf registration statement,” as defined in Rule 405 under the
Securities Act (“Rule 405”), and the Securities have been and remain eligible
for registration by the Company on an automatic shelf registration statement. No

 

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stop order suspending the effectiveness of the Registration Statement or any
part thereof 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. No order preventing or suspending
the use of any preliminary prospectus or the Prospectus has been issued and no
proceeding for that purpose has been instituted or, to the knowledge of the
Company, threatened or contemplated by the Commission or the securities
authority of any jurisdiction. Any request on the part of the Commission for
additional information has been complied with.

At the respective times the Original Registration Statement and any
post-effective amendments thereto became effective, at each deemed effective
date with respect to BAML and the Securities pursuant to Rule 430B(f)(2) and at
each Settlement Date, the Original Registration Statement and any amendments and
supplements thereto complied, complies and will comply in all material respects
with the requirements under the Securities Act, and did not, does not and will
not contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading. Neither the Prospectus nor any amendments or supplements
thereto, as of their respective dates, and at each Applicable Time and
Settlement 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.

The representations and warranties set forth in the immediately preceding
paragraph shall not apply to statements in or omissions from the Original
Registration Statement, or any post-effective amendment thereby or the
Prospectus, as amended or supplemented, made in reliance upon and in conformity
with the Agent Information (as hereinafter defined).

Any preliminary prospectus (including the base prospectus filed as part of the
Original Registration Statement or any amendment thereto) complied when so filed
in all material respects with the Securities Act and any such preliminary
prospectus and the Prospectus and any amendments or supplements thereto
delivered and to be delivered to BAML (electronically or otherwise) in
connection with the offering of the Securities were and will be identical to the
electronically transmitted copies thereof filed with the Commission pursuant to
EDGAR, except to the extent permitted by Regulation S-T.

Each Issuer Free Writing Prospectus (as defined below) relating to the
Securities, as of its issue date and as of the relevant Applicable Time and
Settlement Date, or until any earlier date that the issuer notified or notifies
BAML as described in Section 7(d) hereof, did not, does not and will not
(i) include any information that conflicted, conflicts or will conflict with the
information contained in the Registration Statement or the Prospectus, including
any incorporated document deemed to be a part thereof that has not been
superseded or modified, or (ii) include an untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements
therein, in light of the circumstances, prevailing at that subsequent time, not
misleading. The foregoing sentence does not apply to statements in or omissions
from any Issuer Free Writing Prospectus

 

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based upon and in conformity with written information furnished to the Company
by BAML specifically for use therein. As used herein, “Issuer Free Writing
Prospectus” means any “issuer free writing prospectus,” as defined in Rule 433
under the Securities Act (“Rule 433”), relating to the Securities that (i) is
required to be filed with the Commission by the Company, (ii) is a “road show”
that is a “written communication” within the meaning of Rule 433(d)(8)(i)
whether or not required to be filed with the Commission, or (iii) is exempt from
filing pursuant to Rule 433(d)(5)(i) because it contains a description of the
Securities or of the offering that does not reflect the final terms, and all
free writing prospectuses that are listed in Exhibit F hereto, in each case in
the form furnished (electronically or otherwise) to BAML for use in connection
with the offering of the Securities.

At the effectiveness of the Original Registration Statement, at the time of the
most recent amendment thereto for the purposes of complying with
Section 10(a)(3) of the Securities Act (whether such amendment was by
post-effective amendment, incorporated report filed pursuant to Section 13 or
15(d) of the Exchange Act or form of prospectus), at the time the Company or any
person acting on its behalf (within the meaning, for this clause only, of Rule
163(c) under the Securities Act (“Rule 163(c)”)) made any offer relating to the
Securities in reliance on the exemption of Rule 163, and as of the execution of
this Agreement, the Company was and is a “well-known seasoned issuer,” as
defined in Rule 405.

At the effectiveness of the Original Registration Statement, at the earliest
time after the effectiveness of the Original Registration Statement that the
Company or another offering participant made a bona fide offer (within the
meaning of Rule 164(h)(2) under the Securities Act) of the Securities and as of
the execution of this Agreement (with such time of execution being used as the
determination date for purposes of this clause), the Company was not and is not
an “ineligible issuer,” as defined in Rule 405, without taking account of any
determination by the Commission pursuant to Rule 405 that it is not necessary
that the Company be considered an ineligible issuer.

Each document incorporated by reference in the Registration Statement or the
Prospectus heretofore filed, when it was filed (or, if any amendment with
respect to any such document was filed, when such amendment was filed),
conformed in all material respects with the requirements of the Exchange Act,
and any further documents so filed and incorporated after the date of this
Agreement will, when they are filed, conform in all material respects with the
requirements of the Exchange Act; no such document when it was filed (or, if an
amendment with respect to any such document was filed, when such amendment was
filed), contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make the
statements therein not misleading; and no such document, when it is filed, will
contain an untrue statement of a material fact or will omit to state a material
fact required to be stated therein or necessary in order to make the statements
therein not misleading.

(2)        Prior Written Communications.    Any offer that is a written
communication relating to the Securities made prior to the initial filing of the
Registration Statement by the Company or any person acting on its behalf (within
the meaning, for this paragraph

 

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only, of Rule 163(c)) has been filed with the Commission in accordance with the
exemption provided by Rule 163 under the Securities Act and otherwise complied
with the requirements of Rule 163 of the Securities Act, including without
limitation the legending requirement.

(3)        Independent Accountants.    Deloitte & Touche LLP and KPMG LLP, the
accountants whose reports appear in the Registration Statement, Prospectus or
are incorporated by reference therein, are, and during the periods covered by
such reports were, registered independent public accountants as required by the
Securities Act, the Exchange Act and the Public Company Accounting Oversight
Board (“PCAOB”).

(4)        Financial Statements.    The financial statements of the Company
included or incorporated by reference in the Registration Statement and the
Prospectus, together with the related schedules (if any) and notes, present
fairly in all material respects the consolidated financial position of the
entities to which they relate at the dates indicated and the consolidated
statements of operations, statements of comprehensive loss and statements of
cash flows of the Company and its consolidated subsidiaries for the periods
specified; the financial statements of any other entities or businesses included
or incorporated by reference in the Registration Statement or the Prospectus,
together with the related schedules (if any) and notes, present fairly in all
material respects the financial position of each such entity or business, as the
case may be, and its consolidated subsidiaries (if any) at the dates indicated
and the consolidated statements of operations, statements of equity and
statements of cash flows of such entity or business, as the case may be, and its
consolidated subsidiaries (if any) for the periods specified; and all such
financial statements have been prepared in conformity with generally accepted
accounting principles (“GAAP”) applied on a consistent basis throughout the
periods involved and comply with all applicable accounting requirements under
the Securities Act (except as may be indicated in the notes thereto) and have
been prepared on a consistent basis with the books and records of the Company.
The supporting schedules, if any, included or incorporated by reference in the
Registration Statement and the Prospectus present fairly in all material
respects and in accordance with GAAP, the information required to be stated
therein. The financial statements of the businesses or properties acquired or
proposed to be acquired, if any, included in the Registration Statement and the
Prospectus present fairly in all material respects the information set forth
therein, have been prepared in conformity with GAAP applied on a consistent
basis (except as may be indicated in the notes thereto) and otherwise have been
prepared in accordance with, in the case of businesses acquired or to be
acquired, the applicable financial statement requirements of Rule 3-05 in all
material respects or, in the case of real estate operations acquired or to be
acquired, Rule 3-14 in all material respects of Regulation S-X. The supporting
schedules, if any, present fairly in all material respects and in accordance
with GAAP the information required to be stated therein. The summary financial
data and selected financial data included in the Registration Statement and the
Prospectus presents fairly in all material respects the information shown
therein and has been compiled on a basis consistent with that of the audited
financial statements of the Company included in the Registration Statement and
the Prospectus. The pro forma financial statements and the related notes and the
pro forma and pro forma as adjusted financial information and related notes
included in the Registration Statement

 

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and the Prospectus present fairly in all material respects the information shown
therein, have been prepared in accordance with the Commission’s rules and
guidelines with respect to pro forma financial statements and have been properly
compiled on the bases described therein, and the assumptions used in the
preparation thereof are reasonable and the adjustments used therein are
appropriate to give effect to the transactions and circumstances referred to
therein. Any information contained in the Registration Statement or the
Prospectus regarding “non-GAAP financial measures” (as defined in Regulation G
of the Commission) complies in all material respects with Regulation G and
Item 10 of Regulation S-K of the Commission, to the extent applicable. No other
financial statements or schedules are required by Form S-3 or otherwise to be
included in the Registration Statement or the Prospectus. The interactive data
in eXtensible Business Reporting Language incorporated by reference in the
Registration Statement and the Prospectus fairly presents the information called
for in all material respects and has been prepared in accordance with the
Commission’s rules and guidelines applicable thereto.

(5)        No Material Adverse Change in Business.    Since the respective dates
as of which information is given in the Registration Statement and the
Prospectus (in each case exclusive of any amendments or supplements thereto
subsequent to the date of this Agreement), except as otherwise stated therein,
(A) there has been no material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Company, the Operating Partnership and the Company’s subsidiaries considered as
one enterprise, whether or not arising in the ordinary course of business (a
“Material Adverse Effect”), (B) there have been no transactions entered into by
the Company, the Operating Partnership or any of the Company’s subsidiaries
which are material with respect to the Company, the Operating Partnership and
the Company’s subsidiaries considered as one enterprise, and (C) except for
regular quarterly or monthly dividends on the Common Shares in amounts per share
that are consistent with past practice, there has been no dividend or
distribution of any kind declared, paid or made by the Company on any class of
its Common Shares, preferred shares or other capital shares of the Company
(“Capital Stock”).

(6)        Good Standing of the Company.    The Company has been duly organized
and is validly existing as a real estate investment trust in good standing under
the laws of the State of Maryland and has power and authority to own, lease and
operate its properties and to conduct its business as described in the
declaration of trust and in the Registration Statement and the Prospectus and to
enter into and perform its obligations under this Agreement; and the Company is
duly qualified as a foreign corporation to transact business and is in good
standing in New Jersey and each other jurisdiction in which such qualification
is required, whether by reason of the ownership or leasing of property or the
conduct of business, except (solely in the case of jurisdictions other than the
State of New Jersey) in each case where the failure so to qualify or to be in
good standing would not result in a Material Adverse Effect.

(7)        Good Standing of the Operating Partnership.    The Operating
Partnership has been duly formed and is validly existing as a limited
partnership in good standing under the laws of the State of Delaware, is duly
qualified to do business and is in good standing as a foreign limited
partnership in each jurisdiction in which its ownership or

 

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leasing of property or the operation of its properties or the conduct of its
business requires such qualification, except where the failure so to qualify or
to be in good standing would not result in a Material Adverse Effect, and has
full power and authority necessary to own or lease, as the case may be, its
properties and to operate its properties and conduct its business as described
in the partnership agreement and the Registration Statement and the Prospectus
and to enter into and perform its obligations under this Agreement; except as
otherwise disclosed in the Registration Statement and the Prospectus, the issued
and outstanding equity interests of the Operating Partnership (the “OP Units”)
have been duly authorized and validly issued and have been offered and sold or
exchanged in compliance in all material respects with all applicable laws
(including, without limitation, federal or state securities laws) and the OP
Units owned by the Company are owned free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity (a “Lien”); none of the
outstanding equity interests of the Operating Partnership were issued in
violation of the preemptive or similar rights of any securityholder of the
Operating Partnership. Except (A) as set forth in the Registration Statement and
the Prospectus, (B) for subsequent unregistered issuances that would not be
required to be disclosed pursuant to the Exchange Act, the Securities Act or any
regulation promulgated thereunder, assuming such securities were equity
securities of the Company and (C) for securities convertible into or
exchangeable for OP Units and outstanding options, rights (preemptive or
otherwise) and warrants to purchase or subscribe for OP Units issued to the
Company in connection with the Company’s issuance of securities convertible into
or exchangeable for Common Shares and outstanding options, rights (preemptive or
otherwise) and warrants to purchase or subscribe for Common Shares, there are no
outstanding OP Units or securities convertible into or exchangeable for any OP
Units and no outstanding options, rights (preemptive or otherwise) or warrants
to purchase or subscribe for OP Units or other securities of the Operating
Partnership. The terms of the OP Units conform in all material respects to
statements and descriptions related thereto contained in the Registration
Statement and the Prospectus. The Company is the sole general partner of the
Operating Partnership. As of the date given in the Prospectus, the aggregate
percentage interest of the Company in the Operating Partnership is as set forth
in the Prospectus.

(8)        Units to be Issued.    The OP Units to be issued by the Operating
Partnership to the Company in connection with the Company’s contribution of the
proceeds from the sale of the Securities to the Operating Partnership have been
duly authorized for issuance by the Operating Partnership to the Company, and at
each Settlement Date, will be validly issued and fully paid. Such OP Units will
be exempt from registration or qualification under the Securities Act and
applicable state securities laws. None of the OP Units will be issued in
violation of the preemptive or other similar rights of any securityholder of the
Operating Partnership.

(9)        Tax Status of Operating Partnership.    The Operating Partnership has
not been and is not treated as a corporation, association taxable as a
corporation or a publicly traded partnership for purposes of the Internal
Revenue Code of 1986, as amended (the “Code”); and neither the Company nor the
Operating Partnership knows of any event that

 

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would cause or is likely to cause the Operating Partnership to be treated as a
corporation, association taxable as a corporation or a publicly traded
partnership.

(10)        Good Standing of Subsidiaries.    Each direct or indirect subsidiary
of the Company, including those on Exhibit 21.1 to the Company’s most recent
annual report on Form 10-K as of its date, other than the Operating Partnership,
has been duly formed and is validly existing as a corporation, limited or
partnership or limited liability company, as the case may be (or the foreign
equivalent thereof), in good standing under the laws of the jurisdiction of its
organization, with full power and authority (corporate and other) to own, lease
and operate its properties and to conduct its business as described in the
Registration Statement and the Prospectus and is duly qualified as a foreign
corporation, limited or general partnership or limited liability company, as the
case may be, to transact business and is in good standing in each jurisdiction
in which such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure so to
qualify or to be in good standing would not result in a Material Adverse Effect;
except as otherwise disclosed in the Registration Statement and the Prospectus
and, in relation to joint ventures, the interest in each such joint venture not
held by the Company, all of the issued and outstanding capital stock of each
such subsidiary that is a corporation, all of the issued and outstanding
partnership interests of each such subsidiary that is a limited partnership and
all of the issued and outstanding limited liability company interests,
membership interests or other similar interests of each such subsidiary that is
a limited liability company have been duly authorized and validly issued, are
fully paid and (except in the case of general partnership interests)
non-assessable and are owned by the Company, directly or through subsidiaries,
free and clear of any Lien, except where such Liens would not have, or
reasonably be expected to have, a Material Adverse Effect; and none of the
outstanding shares of capital stock, partnership interests or limited liability
company interests, membership interests or other similar interests of any such
subsidiary was issued in violation of any preemptive rights, rights of first
refusal or other similar rights of any securityholder of such subsidiary or any
other person. As of the date hereof, none of the Subsidiaries are “significant
subsidiaries” of the Company (as such term is defined in Rule 1-02 of Regulation
S X under the Securities Act). After the date hereof, except as disclosed to
BAML in writing, none of the Company’s subsidiaries will be “significant
subsidiaries” of the Company (as such term is defined in Rule 1-02 of Regulation
S X under the Securities Act).

(11)        Capitalization.    The Company has an authorized capitalization as
set forth in the Prospectus, and all of the issued and outstanding shares of
Capital Stock of the Company have been duly authorized and validly issued, are
fully paid and non-assessable and have been issued in compliance with 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 Capital Stock or any securities convertible into
or exchangeable for any of such Capital Stock.

 

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(12)        Authorization of Agreement.    This Agreement has been duly
authorized, executed and delivered by the Company and the Operating Partnership.

(13)        Authorization of Securities.    The Securities to be sold by the
Company pursuant to this Agreement have been duly authorized for issuance and
sale to BAML pursuant to this Agreement and, when issued and delivered by the
Company pursuant to this Agreement against payment of the consideration set
forth herein, will be validly issued, fully paid and non-assessable; no holder
of the Securities is or will be subject to personal liability by reason of being
such a holder; the issuance and sale of the Securities to be sold by the Company
pursuant to this Agreement is not subject to any preemptive rights, rights of
first refusal or other similar rights of any securityholder of the Company or
any other person; and the delivery of the Securities being sold by the Company
against payment therefor pursuant to the terms of this Agreement will pass valid
title to the Securities 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 to be used by the Company to evidence the Common
Shares will be in substantially the form filed as an exhibit to the Original
Registration Statement and will, on each Settlement Date, be in valid and
sufficient form.

(14)        Description of Securities.    The capital shares of the Company, and
the Company’s charter and bylaws conform in all material respects to all of the
respective statements relating thereto contained in the Registration Statement
and the Prospectus and such statements conform to the rights set forth in the
respective instruments and agreements defining the same.

(15)        Absence of Defaults and Conflicts.    None of the Company, the
Operating Partnership or any of the Company’s subsidiaries is in violation of
its Organizational Documents (as defined below) or in default in the performance
or observance of any obligation, agreement, covenant or condition contained in
any Company Document, except (solely in the case of Company Documents other than
Subject Instruments) for such defaults that would not result in a Material
Adverse Effect. The execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated herein and in the Registration
Statement and the Prospectus (including the issuance and sale of the Securities
and the use of the proceeds from the sale of the Securities as described in the
Prospectus under the caption “Use of Proceeds”) and compliance by the Company
and the Operating Partnership with their obligations under this Agreement do not
and will not, whether with or without the giving of notice or passage of time or
both, conflict with or constitute a breach of, or default or any event or
condition which gives the holder of any bond, note, debenture or other evidence
of indebtedness (or any person acting on such holder’s behalf) the right to
require the repurchase, redemption or repayment of all or a portion of such
indebtedness by the Company or any subsidiary of the Company under, or result in
the creation or imposition of any Lien upon any property or assets of the
Company, the Operating Partnership or any of the Company’s subsidiaries pursuant
to, any Company Documents, except (solely in the case of Company Documents other
than Subject Instruments) for such conflicts, breaches, defaults or Liens that
would not result in a Material Adverse Effect, nor will such action result in
any violation of the provisions of the Organizational Documents of

 

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the Company, the Operating Partnership or any of the Company’s subsidiaries or
any applicable law, statute, rule, regulation, judgment, order, writ or decree
of any government, government instrumentality or court, domestic or foreign,
having jurisdiction over the Company, the Operating Partnership or any of the
Company’s subsidiaries or any of their respective assets, properties or
operations. As used herein, “Subject Instruments” means the Existing Credit
Agreement and all other instruments, agreements and documents filed or
incorporated by reference as exhibits to the Registration Statement pursuant to
Rule 601(b)(10) of Regulation S-K of the Commission; provided that if any
instrument, agreement or other document filed or incorporated by reference as an
exhibit to the Registration Statement as aforesaid has been redacted or if any
portion thereof has been deleted or is otherwise not included as part of such
exhibit (whether pursuant to a request for confidential treatment or otherwise),
the term “Subject Instruments” shall nonetheless mean such instrument, agreement
or other document, as the case may be, in its entirety, including any portions
thereof which shall have been so redacted, deleted or otherwise not filed. As
used herein, “Company Documents” means any contracts, indentures, mortgages,
deeds of trust, loan or credit agreements, bonds, notes, debentures, evidences
of indebtedness, leases or other instruments or agreements to which the Company,
the Operating Partnership or any of the Company’s subsidiaries is a party or by
which the Company, the Operating Partnership or any of the Company’s
subsidiaries is bound or to which any of the property or assets of the Company,
the Operating Partnership or any of the Company’s subsidiaries is subject
including, without limitation, all Subject Instruments, “Organizational
Documents” means (a) in the case of a corporation, its charter and by laws;
(b) in the case of a limited or general partnership, its partnership
certificate, certificate of formation or similar organizational document and its
partnership agreement; (c) in the case of a limited liability company, its
articles of organization, certificate of formation or similar organizational
documents and its operating agreement, limited liability company agreement,
membership agreement or other similar agreement; (d) in the case of a trust, its
certificate of trust, certificate of formation or similar organizational
document and its trust agreement or other similar agreement; and (e) in the case
of any other entity, the organizational and governing documents of such entity
and “Existing Credit Agreement” means the Amended, Restated and Consolidated
Credit Agreement dated as of September 26, 2013 among the Company, a group of
lenders set forth therein, as amended, supplemented or restated, if applicable,
including any promissory notes, pledge agreements, security agreements,
mortgages, guarantees and other instruments or agreements entered into by the
Company, the Operating Partnership or any of the Company’s subsidiaries in
connection therewith or pursuant thereto, in each case as amended, supplemented
or restated, if applicable.

(16)        Absence of Labor Dispute.    No labor dispute with the employees of
the Company, the Operating Partnership or any subsidiary of the Company exists
or, to the knowledge of the Company and the Operating Partnership, is imminent
that would, individually or in the aggregate, have a Material Adverse Effect,
except as set forth in or contemplated in the Registration Statement and the
Prospectus.

(17)        Absence of Proceedings.    There is no action, suit, proceeding,
inquiry or investigation before or brought by any court or governmental agency
or body, domestic

 

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or foreign, now pending, or, to the knowledge of the Company and the Operating
Partnership, threatened, against or affecting the Company, the Operating
Partnership or any of the Company’s subsidiaries which is required to be
disclosed in the Registration Statement or the Prospectus (other than as
disclosed therein), or which might reasonably be expected to result in a
Material Adverse Effect, or which might reasonably be expected to materially and
adversely affect the properties or assets of the Company, the Operating
Partnership and the Company’s subsidiaries, considered as one enterprise, or the
consummation of the transactions contemplated in this Agreement or the
performance by the Company or the Operating Partnership of its respective
obligations under this Agreement; the aggregate of all pending legal or
governmental proceedings to which the Company, the Operating Partnership or any
of the Company’s subsidiaries is a party or of which any of their respective
property or assets is the subject which are not described in the Registration
Statement and the Prospectus, including ordinary routine litigation incidental
to the business, could not reasonably be expected to result in a Material
Adverse Effect.

(18)        Accuracy of Descriptions and Exhibits.    The information in the
Prospectus under the captions “Risk Factors – Risks Related to our Organization
and Structure,” “Description of Securities of Chambers Street Properties,”
“Description of Certain Provisions of the Maryland General Corporation Law and
Our Declaration of Trust and Bylaws,” “U.S. Federal Income Tax Considerations”
and the information in the Registration Statement under Item 15, in each case to
the extent that it constitutes matters of law, summaries of legal matters,
summaries of provisions of the Company’s declaration of trust or bylaws or other
instruments or agreements, summaries of legal proceedings, or legal conclusions,
is correct in all material respects; all descriptions in the Registration
Statement and the Prospectus of any Company Documents are accurate in all
material respects; and there are no franchises, contracts, indentures,
mortgages, deeds of trust, loan or credit agreements, bonds, notes, debentures,
evidences of indebtedness, leases or other instruments, agreements or documents
required to be described or referred to in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement which have
not been so described and filed as required.

(19)        Possession of Intellectual Property.    The Company, the Operating
Partnership and the Company’s subsidiaries own or possess or have the right to
use on reasonable terms all patents, patent rights, patent applications,
licenses, inventions, copyrights, know-how (including trade secrets and other
unpatented and/or unpatentable proprietary or confidential information, systems
or procedures), trademarks, service marks, trade names, service names and other
intellectual property (collectively, “Intellectual Property”) reasonably
necessary to carry on their respective businesses as described in the Prospectus
and as proposed to be conducted; and to the knowledge of the Company none of the
Company, the Operating Partnership or any of the Company’s subsidiaries has
received any notice or is otherwise aware of any infringement of or conflict
with asserted rights of others with respect to any Intellectual Property or of
any facts or circumstances which would render any Intellectual Property invalid
or inadequate to protect the interests of the Company, the Operating Partnership
or any of the Company’s subsidiaries therein, and which infringement or conflict
(if the subject of any unfavorable decision, ruling or finding) or invalidity or
inadequacy, individually or in the

 

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aggregate, might result in a Material Adverse Effect. To the knowledge of the
Company and the Operating Partnership, there is no unauthorized use,
infringement or misappropriation of any of the Intellectual Property by any
third party, employee or former employee. Each agreement and instrument (each, a
“License Agreement”) pursuant to which any Intellectual Property is licensed to
the Company, the Operating Partnership or any of the Company’s subsidiaries is
in full force and effect, has been duly authorized, executed and delivered by,
and is a valid and binding agreement of, the Company, the Operating Partnership
or the applicable subsidiary of the Company, as the case may be, enforceable
against the Company or such Company’s subsidiary in accordance with its terms,
except as enforcement thereof may be subject to bankruptcy, insolvency or other
similar laws relating to or affecting creditors’ rights generally or by general
equitable principles; the Company, the Operating Partnership and the Company’s
subsidiaries are in compliance with their respective obligations under all
License Agreements and, to the knowledge of the Company and the Operating
Partnership, all other parties to any of the License Agreements are in
compliance with all of their respective obligations thereunder; no event or
condition has occurred or exists that gives or would give any party to any
License Agreement the right, either immediately or with notice or passage of
time or both, to terminate or limit (in whole or in part) any such License
Agreement or any rights of the Company, the Operating Partnership or any of the
Company’s subsidiaries thereunder, to exercise any of such party’s remedies
thereunder, or to take any action that would adversely affect any rights of the
Company, the Operating Partnership or any of the Company’s subsidiaries
thereunder or that might have a Material Adverse Effect and neither the Company
nor the Operating Partnership is aware of any facts or circumstances that would
result in any of the foregoing or give any party to any License Agreement any
such right; and none of the Company, the Operating Partnership or any of the
Company’s subsidiaries has received any notice of default, breach or
noncompliance under any License Agreement.

(20)        Absence of Further Requirements.    (A) No filing with, or
authorization, approval, consent, license, order, registration, qualification or
decree of, any court or governmental authority or agency, domestic or foreign,
(B) no authorization, approval, vote or other consent of any holder of Capital
Stock or other securities of the Company or any creditor of the Company, (C) no
waiver or consent under any Subject Instrument, and (D) no authorization,
approval, vote or other consent of any other person or entity, is necessary or
required for the execution, delivery or performance by the Company of this
Agreement, for the offering, issuance, sale or delivery of the Securities
hereunder, or for the consummation of any of the other transactions contemplated
by this Agreement, in each case on the terms contemplated by the Registration
Statement and the Prospectus, except such as have been obtained under the
Securities Act and the Exchange Act or such as may be required under state
securities laws.

(21)        Possession of Licenses and Permits.    The Company, the Operating
Partnership and the Company’s subsidiaries possess such permits, licenses,
approvals, consents and other authorizations (collectively, “Governmental
Licenses”) issued by the appropriate federal, state, local or foreign regulatory
agencies or bodies necessary to conduct the business now operated by them
(except, solely in the case of Government Licenses issued by local regulatory
agencies or bodies, for such Governmental Licenses

 

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the failure to possess would not, individually or in the aggregate, have a
Material Adverse Effect); the Company, the Operating Partnership and the
Company’s subsidiaries are in compliance with the terms and conditions of all
such Governmental Licenses, except where the failure so to comply would not,
individually or in the aggregate, have a Material Adverse Effect; all of the
Governmental Licenses are valid and in full force and effect, except when the
invalidity of such Governmental Licenses or the failure of such Governmental
Licenses to be in full force and effect would not, individually or in the
aggregate, have a Material Adverse Effect; and none of the Company, the
Operating Partnership or any of the Company’s subsidiaries has received any
notice of proceedings relating to the revocation or modification of any such
Governmental Licenses which, individually or in the aggregate, if the subject of
an unfavorable decision, ruling or finding, would result or reasonably be
expected to result in a Material Adverse Effect.

(22)        Title to Property.    The Company, the Operating Partnership, and
the Company’s subsidiaries have good and marketable title in fee simple to all
real property owned by any of them and good title to all other properties and
assets owned by any of them, in each case, free and clear of all Liens except
such as (a) are described in the Registration Statement and the Prospectus or
(b) do not, individually or in the aggregate, have a Material Adverse Effect and
do not interfere with the use made and proposed to be made of such property by
the Company, the Operating Partnership or any of the Company’s subsidiaries and
all Liens that are required to be disclosed in the Registration Statement and
Prospectus are disclosed therein; all real property, buildings and other
improvements, and equipment and other property held under lease or sublease by
the Company, the Operating Partnership or any of the Company’s subsidiaries are
held by them under valid, subsisting and enforceable leases or subleases, as the
case may be, with, solely in the case of leases or subleases relating to real
property and buildings or other improvements, such exceptions as are not
material and do not interfere with the use made or proposed to be made of such
property and buildings or other improvements by the Company, the Operating
Partnership and the Company’s subsidiaries, and all such leases and subleases
are in full force and effect; and none of the Company, the Operating Partnership
or any of the Company’s subsidiaries has any notice of any claim of any sort
that has been asserted by anyone adverse to the rights of the Company, the
Operating Partnership or any of the Company’s subsidiaries under any of the
leases or subleases mentioned above or affecting or questioning the rights of
the Company, the Operating Partnership or any of the Company’s subsidiaries to
the continued possession of the leased or subleased premises under any such
lease or sublease except for such claims which, if successfully asserted against
the Company, the Operating Partnership or any of the Company’s subsidiaries,
would not, individually or in the aggregate, have a Material Adverse Effect.
Except as otherwise described in the Registration Statement or the Prospectus,
(i) none of the Company, the Operating Partnership or any of the Company’s
subsidiaries or any tenant of any of such property is in default under (A) any
space leases (as lessor or lessee, as the case may be) relating to such
properties, (B) any of the mortgages or other security documents or other
agreements encumbering or otherwise recorded against such properties, or (C) any
ground lease, sublease or operating sublease relating to any of such properties,
and neither the Company nor the Operating Partnership knows 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 with

 

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respect to (A), (B) and (C) immediately above any such default that would not
have a Material Adverse Effect; (ii) no tenant under any of the leases at any
such property has a right of first refusal or option to purchase the premises
demised under such lease except for rights or options that would not have a
Material Adverse Effect if exercised; (iii) to the knowledge of the Company and
the Operating Partnership, each such property complies with all applicable
codes, laws and regulations (including, without limitation, building and zoning
codes, laws and regulations and laws relating to access to such properties),
except for such failures to comply that would not have a Material Adverse
Effect; (iv) neither the Company nor the Operating Partnership has knowledge of
any pending or threatened condemnation proceedings, zoning change or other
proceeding or action that will in any material manner affect the size of, use
of, improvements on, construction on or access to such properties; (v) the
mortgages and deeds of trust that encumber such properties are not convertible
into equity securities of the entity owning such property and said mortgages and
deeds of trust are not cross-defaulted or cross-collateralized with any property
other than other properties described in the Prospectus as owned or leased by
the Company or its subsidiaries; and (vi) the Company, the Operating Partnership
or a subsidiary of the Company, as applicable, has obtained title insurance on
the fee or leasehold interests, as the case may be, in each such properties, in
an amount at least equal to the greater of (x) the mortgage indebtedness of each
such property or (y) the purchase price of each such property.

(23)        Investment Company Act.    Neither the Company nor the Operating
Partnership is, and upon the sale of the Securities to BAML as herein
contemplated and the application of the net proceeds therefrom as described in
the Prospectus under the caption “Use of Proceeds,” will be, an “investment
company” as such terms are defined in the Investment Company Act of 1940,
amended (the “Investment Company Act”).

(24)        Environmental Laws.    Except as described in the Registration
Statement and the Prospectus and except as would not, individually or in the
aggregate, result in a Material Adverse Effect, (A) none of the Company, the
Operating Partnership or any of the Company’s subsidiaries is in violation of
any federal, state, local or foreign statute, law, rule, regulation, ordinance,
code, policy or rule of common law or any judicial or administrative
interpretation thereof, including any judicial or administrative order, consent,
decree or judgment, relating to pollution or protection of human health, the
environment (including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata) or wildlife, including, without
limitation, laws and regulations relating to the release or threatened release
of chemicals, pollutants, contaminants, wastes, toxic substances, hazardous
substances, petroleum or petroleum products (collectively, “Hazardous
Materials”) or to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Hazardous Materials (collectively,
“Environmental Laws”), (B) the Company, the Operating Partnership and the
Company’s subsidiaries have all permits, authorizations and approvals required
under any applicable Environmental Laws and are each in compliance with their
requirements, (C) there are no pending or threatened administrative, regulatory
or judicial actions, suits, demands, demand letters, claims, liens, notices of
noncompliance or violation, investigation or proceedings relating to any
Environmental Law against the Company, the Operating Partnership or any of the

 

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Company’s subsidiaries and (D) there are no events or circumstances that might
reasonably be expected to form the basis of an order for clean-up or
remediation, or an action, suit or proceeding by any private party or
governmental body or agency, against or affecting the Company, the Operating
Partnership or any of the Company’s subsidiaries relating to Hazardous Materials
or any Environmental Laws.

(25)        Absence of Registration Rights.    Except as disclosed in the
Registration Statement and the Prospectus, there are no persons with
registration rights or other similar rights to have any securities (debt or
equity) registered pursuant to the Registration Statement or included in the
offering contemplated by this Agreement or otherwise registered by the Company
under the Securities Act, and there are no persons with co-sale rights,
tag-along rights or other similar rights to have any securities (debt or equity)
included in the offering contemplated by this Agreement or sold in connection
with the sale of Securities pursuant to this Agreement, except in each case for
such rights that have been duly waived in writing; and the Company has given all
notices required by, and has otherwise complied with its obligations under, all
registration rights agreements, co-sale agreements, tag-along agreements and
other similar agreements in connection with the transactions contemplated by
this Agreement.

(26)        NYSE.    The outstanding Common Shares and the Securities to be sold
by the Company hereunder have been approved for listing, subject only to
official notice of issuance, on the NYSE, 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
Securities under the Exchange Act or delisting any such securities from the
NYSE, nor has the Company received any notification that the Commission or the
NYSE is contemplating terminating such registration or listing.

(27)        Taxes.    The Company, the Operating Partnership and the Company’s
subsidiaries have filed in a timely manner all foreign, federal, state and local
tax returns that are required to be filed through the date hereof or have
properly requested and been granted extensions thereof, for which adequate
reserves have been provided and reflected in the Registration Statement and the
Prospectus, except where the failure so to file would not, individually or in
the aggregate, have a Material Adverse Effect, and have paid all taxes required
to be paid by them and any other assessment, fine or penalty levied against any
of them, to the extent that any of the foregoing is due and payable, except for
any such tax, assessment, fine or penalty that is currently being contested in
good faith by appropriate actions and except for such taxes, assessments, fines
or penalties the nonpayment of which would not, individually or in the
aggregate, have a Material Adverse Effect; and, except as disclosed in the
Registration Statement and the Prospectus, there is no tax deficiency that, to
the Company’s knowledge, has been, or could reasonably be expected to be,
asserted against the Company, the Operating Partnership or any of the Company’s
subsidiaries or any of their respective properties or assets, which, if
determined adversely to any such entity, could reasonably be expected to have a
Material Adverse Effect.

(28)        Insurance.    The Company, the Operating Partnership and the
Company’s subsidiaries are insured by insurers of recognized financial
responsibility against such

 

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losses and risks and in such amounts as are customary in the businesses in which
they are engaged; all policies of insurance and any fidelity or surety bonds
insuring the Company, the Operating Partnership or any of the Company’s
subsidiaries or their respective businesses, assets, employees, officers,
trustees and directors are in full force and effect; the Company, the Operating
Partnership and the Company’s subsidiaries are in compliance with the terms of
such policies and instruments in all material respects; there are no material
claims by the Company, the Operating Partnership or any of the Company’s
subsidiaries under any such policy or instrument as to which any insurance
company is denying liability or defending under a reservation of rights clause;
none of the Company, the Operating Partnership, or any such subsidiary of the
Company has been refused any insurance coverage sought or applied for; and none
of the Company, the Operating Partnership or any subsidiary of the Company has
any reason to believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its business at a cost that
would not have a Material Adverse Effect.

(29)        Accounting Controls and Disclosure Controls.    The Company, the
Operating Partnership and the Company’s subsidiaries maintain and have
maintained effective internal control over financial reporting as defined in
Rule 13a-15 under the Exchange Act and 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. Except as described in the
Registration Statement and the Prospectus, since the end of the Company’s most
recent audited fiscal year, there has been (1) no material weakness in the
Company’s internal control over financial reporting (whether or not remediated)
and (2) 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. The Company, the Operating
Partnership and the Company’s subsidiaries employ and have employed disclosure
controls and procedures as defined in Rule 13a-15 under the Exchange Act 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 principal executive officer or officers and
principal financial officer or officers, as appropriate, to allow timely
decisions regarding disclosure.

(30)        Compliance with the Sarbanes-Oxley Act.    There is and has been no
failure on the part of the Company or any of the Company’s trustees 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 thereunder or implementing
the provisions thereof (“Sarbanes-Oxley Act”) with which any of them is required
to comply, including Section 402 related to loans and Sections 302 and 906
related to certifications.

 

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(31)        Permitted Free Writing Prospectus.    The Company has not
distributed and will not distribute any offering material in connection with the
offering and sale of the Securities to be sold hereunder by BAML as principal or
agent for the Company, other than the Prospectus and any Permitted Free Writing
Prospectus reviewed and consented to by BAML.

(32)        Actively Traded Security.    The Common Shares qualify as an
“actively traded security” excepted from the requirements of Rule 101 of
Regulation M under the Exchange Act by subsection (c)(1) of such rule.

(33)        Absence of Manipulation.    Other than excepted activity pursuant to
Regulation M under the Exchange Act, neither the Company nor the Operating
Partnership has taken or will take, directly or indirectly, any action designed
to or that would constitute or that might reasonably be expected to cause or
result in the stabilization or manipulation of the price of any security to
facilitate the sale or resale of the Securities.

(34)        Statistical, Demographic or Market-Related Data.    Any statistical,
demographic or market-related data included in the Registration Statement or the
Prospectus is based on or derived from sources that the Company believes to be
reliable and accurate, all such data included in the Registration Statement or
the Prospectus accurately reflects the materials upon which it is based or from
which it was derived.

(35)        Foreign Corrupt Practices Act.    None of the Company, the Operating
Partnership or any of the Company’s subsidiaries nor, to the knowledge of the
Company and the Operating Partnership, any trustee, director, officer, agent,
employee, affiliate or other person acting on behalf of the Company, the
Operating Partnership or any of the Company’s subsidiaries, is aware of or has
taken any action, directly or indirectly, that has resulted or would result in a
violation by such persons of the Foreign Corrupt Practices Act of 1977, as
amended, and the rules and regulations thereunder (collectively, 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 the Company, the Operating
Partnership and the Company’s subsidiaries and, to the knowledge of the Company
and the Operating Partnership, the Company’s other affiliates have conducted
their businesses in compliance with the FCPA and have instituted and maintain
policies and procedures designed to ensure, and which are reasonably expected to
continue to ensure, continued compliance therewith.

(36)        Money Laundering Laws.    The operations of the Company, the
Operating Partnership and the Company’s 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

 

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any related or similar applicable rules, regulations or guidelines, issued,
administered or enforced by any governmental agency (collectively, “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,
the Operating Partnership or any of the Company’s subsidiaries with respect to
the Money Laundering Laws is pending or, to the knowledge of the Company and the
Operating Partnership, threatened.

(37)        OFAC.    None of the Company, the Operating Partnership or any of
the Company’s subsidiaries nor, to the knowledge of the Company and the
Operating Partnership, any trustee, director, officer, agent, employee,
affiliate or person acting on behalf of the Company, the Operating Partnership
or any of the Company’s 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 neither the Company nor the Operating Partnership will
directly or indirectly use any of the proceeds received by the Company or the
Operating Partnership from the sale of Securities contemplated by this
Agreement, or lend, contribute or otherwise make available any 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.

(38)        Lending Relationship.    Except as disclosed in the Registration
Statement and the Prospectus, the Company does not intend to use any of the
proceeds from the sale of the Securities to repay any debt owed to BAML or any
affiliate thereof.

(39)        Transfer Taxes.    There are no stock or other transfer taxes, stamp
duties, capital duties or other similar duties, taxes or charges payable in
connection with the execution or delivery of this Agreement by the Company and
the Operating Partnership or the issuance or sale by the Company of the
Securities to be sold by the Company to BAML hereunder.

(40)        Related Party Transactions.    There are no business relationships
or related party transactions involving the Company, the Operating Partnership
or any of the Company’s subsidiaries or, to the knowledge of the Company and the
Operating Partnership, any other person that are required to be described in the
Registration Statement or the Prospectus that have not been described to the
extent required.

(41)        ERISA.    In each case, except as would not reasonably be expected
to have a Material Adverse Effect, (i) each “employee benefit plan” (within the
meaning of Section 3(3) of the Employee Retirement Security Act of 1974, as
amended (“ERISA”), for which the Company, the Operating Partnership or any
member of its “Controlled Group” (defined as an organization which is a member
of a controlled group of corporations within the meaning of Section 414 of the
Code) would have any liability (each a “Plan”) has been maintained in compliance
with its terms and with the requirements of all applicable statutes, rules and
regulations including ERISA and the Code; (ii) with respect to each Plan subject
to Title IV of ERISA (a) no “reportable event” (within the meaning of
Section 4043(c) of ERISA) has occurred or is reasonably expected to occur,
(b) no “accumulated funding deficiency” (within the meaning of Section 302 of
ERISA or Section 412 of the Code), whether or not waived, has occurred

 

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or is reasonably expected to occur, (c) the fair market value of the assets
under each Plan exceeds the present value of all benefits accrued under such
Plan (determined based on those assumptions used to fund such Plan) and (d) none
of the Company, the Operating Partnership or any member of its Controlled Group
has incurred, or reasonably expects to incur, any liability under Title IV of
ERISA (other than contributions to the Plan or premiums to the Pension Benefit
Guaranty Corporation in the ordinary course and without default) in respect of a
Plan (including a “multiemployer plan,” within the meaning of Section 4001(c)(3)
of ERISA); and (iii) each Plan that is intended to be qualified under
Section 401(a) of the Code is so qualified and nothing has occurred, whether by
action or by failure to act, which would cause the loss of such qualification.

(42)        No Other Contracts.    Except as disclosed in the Registration
Statement and the Prospectus, there are no contracts, agreements or
understandings other than the Alternative Distribution Agreements, between the
Company and the Operating Partnership and any person that would give rise to a
valid claim against the Company, the Operating Partnership or BAML for a
brokerage commission, finder’s fee or other like payment with respect to the
consummation of the transactions contemplated by this Agreement.

(43)        Proprietary Trading by BAML.    The Company acknowledges and agrees
that BAML has informed the Company that BAML may, to the extent permitted under
the Securities Act and the Exchange Act, purchase and sell Common Shares for its
own account while this Agreement is in effect, and shall be under no obligation
to purchase Securities on a principal basis pursuant to this Agreement, except
as otherwise agreed by BAML in the Placement Notice (as amended by the
corresponding Acceptance, if applicable); provided, that no such purchase or
sales shall take place while a Placement Notice is in effect (except (i) as
agreed by BAML in the Placement Notice (as amended by the corresponding
Acceptance, if applicable) or (ii) to the extent BAML may engage in sales of
Placement Securities purchased or deemed purchased from the Company as a
“riskless principal” or in a similar capacity).

(44)        No Prohibition on Dividends by Subsidiaries.    Except as described
in the Registration Statement and the Prospectus, none of the Operating
Partnership or the Company’s subsidiaries are currently prohibited, directly or
indirectly, from paying any dividends or making any other distributions on such
subsidiary’s capital stock, from repaying any debt owed to the Company or any of
its other subsidiaries, or from transferring any of its property or assets to
the Company or any of its other subsidiaries.

(45)        REIT Status.    The Company has been organized and operated in
conformity with the requirements for qualification and taxation as a real estate
investment trust (a “REIT”) under the Code for each taxable year commencing with
its taxable year ended December 31, 2004, and its organization and method of
operation (as described in the Registration Statement and the Prospectus) will
enable the Company to continue to meet the requirements for qualification and
taxation as a REIT under the Code for its taxable year ending December 31, 2013
and thereafter.

 

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(b)        Certificates.    Any certificate signed by any officer of the Company
or the Operating Partnership and delivered to BAML or to counsel for BAML in
connection with the offering of Securities as contemplated by this Agreement
shall be deemed a representation and warranty by the Company and the Operating
Partnership, as the case may be, to BAML as to the matters covered thereby.

SECTION 6. Sale and Delivery to BAML; Settlement.

(a)        Sale of Placement Securities.    On the basis of the representations
and warranties herein contained and subject to the terms and conditions herein
set forth, upon BAML’s acceptance of the terms of a Placement Notice or upon
receipt by BAML of an Acceptance, as the case may be, and unless the sale of the
Placement Securities described therein has been declined, suspended, or
otherwise terminated in accordance with the terms of this Agreement, BAML, for
the period specified in the Placement Notice (as amended by the corresponding
Acceptance, if applicable), will use its commercially reasonable efforts
consistent with its normal trading and sales practices to sell such Placement
Securities up to the amount specified, and otherwise in accordance with the
terms of such Placement Notice (as amended by the corresponding Acceptance, if
applicable). The Company acknowledges and agrees that (i) there can be no
assurance that BAML will be successful in selling Placement Securities,
(ii) BAML will incur no liability or obligation to the Company or any other
person or entity if it does not sell Placement Securities for any reason other
than a failure by BAML to use its commercially reasonable efforts consistent
with its normal trading and sales practices to sell such Placement Securities as
required under this Section 6 and (iii) BAML shall be under no obligation to
purchase Securities on a principal basis pursuant to this Agreement.

(b)        Settlement of Placement Securities.    Unless otherwise specified in
the applicable Placement Notice (as amended by the corresponding Acceptance, if
applicable), settlement for sales of Placement Securities will occur on the
third (3rd) Trading Day (or such earlier day as is industry practice for
regular-way trading) following the date on which such sales are made (each, a
“Settlement Date”). The amount of proceeds to be delivered to the Company on a
Settlement Date against receipt of the Placement Securities sold (the “Net
Proceeds”) will be equal to the aggregate sales price received by BAML at which
such Placement Securities were sold, after deduction for (i) BAML’s commission,
discount or other compensation for such sales payable by the Company pursuant to
Section 2 hereof, (ii) any other amounts due and payable by the Company to BAML
hereunder pursuant to Section 8(a) hereof, and (iii) any transaction fees
imposed by any governmental or self-regulatory organization in respect of such
sales.

(c)        Delivery of Placement Securities.    On or before each Settlement
Date, the Company will, or will cause its transfer agent to, electronically
transfer the Placement Securities being sold by crediting BAML’s or its
designee’s account (provided BAML shall have given the Company written notice of
such designee prior to the Settlement Date) at The Depository Trust Company
through its Deposit and Withdrawal at Custodian System or by such other means of
delivery as may be mutually agreed upon by the parties hereto which in all cases
shall be freely tradable, transferable, registered shares in good deliverable
form. On each Settlement Date, BAML will deliver the related Net Proceeds in
same day funds to an account designated by the Company on, or prior to, the
Settlement Date. The Company agrees that if the Company, or its transfer agent
(if applicable), defaults in its obligation to deliver Placement Securities on a

 

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Settlement Date in accordance with the terms of this Agreement, the Company
agrees that in addition to and in no way limiting the rights and obligations set
forth in Section 10(a) and Section 10(d) hereto, it will (i) hold BAML harmless
against any loss, liability, claim, damage, or expense whatsoever (including
reasonable legal fees and expenses), as incurred, arising out of or in
connection with such default by the Company or its transfer agent and (ii) pay
to BAML any commission, discount, or other compensation to which it would
otherwise have been entitled absent such default.

(d)        Denominations; Registration.    Certificates for the Securities shall
be in such denominations and registered in such names as BAML may request in
writing at least one full Business Day before the Settlement Date. The Company
shall deliver the Securities, if any, through the facilities of The Depository
Trust Company unless BAML shall otherwise instruct.

(e)        Limitations on Offering Size.    Under no circumstances shall the
Company cause or request the offer or sale of any Securities, if after giving
effect to the sale of such Securities, the aggregate offering price of the
Securities sold pursuant to this Agreement would exceed the lesser of
(A) together with all sales of Securities under this Agreement and each of the
Alternative Distribution Agreements, the Maximum Amount, (B) the amount
available for offer and sale under the currently effective Registration
Statement and (C) the amount authorized from time to time to be issued and sold
under this Agreement by the Company and notified to BAML in writing. Under no
circumstances shall the Company cause or request the offer or sale of any
Securities pursuant to this Agreement at a price lower than the minimum price
authorized from time to time by the Company and notified to BAML in writing.
Further, under no circumstances shall the aggregate offering price of Securities
sold pursuant to this Agreement and the Alternative Distribution Agreements,
including any separate underwriting or similar agreement covering principal
transactions described in Section 1 of this Agreement and the Alternative
Distribution Agreements, exceed the Maximum Amount.

(f)        Black-out Limitations.    Notwithstanding any other provision of this
Agreement, the Company and BAML agree that no sales of Placement Securities
shall take place, and the Company shall not request the sale of any Placement
Securities that would be sold, and BAML shall not be obligated to sell,
(i) during any period in which the Company is in possession of material
non-public information or (ii) except as provided in Section 6(f)(1) hereof, at
any time from and including the date the Company issues a press release
containing, or shall otherwise publicly announce, its earnings, revenues or
other operating results for a fiscal period or periods (each, an “Earnings
Announcement”) through and including the time that is 24 hours after the time
that the Company files a Quarterly Report on Form 10-Q or an Annual Report on
Form 10-K (a “Filing Time”) that includes consolidated financial statements as
of and for the same fiscal period or periods, as the case may be, covered by
such Earnings Announcement.

(1) If the Company wishes to offer or sell Securities to BAML as agent at any
time during the period from and including an Earnings Announcement through and
including the time that is 24 hours after the corresponding Filing Time, the
Company shall first (i) prepare and deliver to BAML (with a copy to counsel to
BAML) a Current Report on Form 8-K that includes substantially the same
financial and related information that was included in such Earnings
Announcement (other than any earnings projections and similar forward-looking
data and officers’ quotations) (each, an “Earnings 8-K”), in

 

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form and substance reasonably satisfactory to BAML, (ii) provide BAML with the
officers’ certificate, opinions and letters of counsel and accountants’ letter
specified in Section 7(o), (p) and (q), respectively, hereof, (iii) afford BAML
the opportunity to conduct a due diligence review in accordance with
Section 7(m) hereof and (iv) file such Earnings 8-K with the Commission, then
the provision of clause (ii) of Section 6(f) shall not be applicable for the
period from and after the time at which the foregoing conditions shall have been
satisfied (or, if later, the time that is 24 hours after the time that the
relevant Earnings Announcement was first publicly released) through and
including the time that is 24 hours after the Filing Time of the relevant
Quarterly Report on Form 10-Q or Annual Report on Form 10-K, as the case may be.
For purposes of clarity, the parties hereto agree that (A) the delivery of any
officers’ certificate, opinion or letter of counsel or accountants’ letter
pursuant to this Section 6(f) shall not relieve the Company from any of its
obligations under this Agreement with respect to any Quarterly Report on Form
10-Q or Annual Report on Form 10-K, as the case may be, including, without
limitation, the obligation to deliver officers’ certificates, opinions and
letters of counsel and accountants’ letters as provided in Section 7(o), (p) and
(q), respectively, hereof, and (B) this Section 6(f)(1) shall in no way affect
or limit the operation of clause (i) of Section 6(f) hereof, which shall have
independent application.

SECTION 7. Covenants of the Company. The Company covenants with BAML as follows:

(a)        Registration Statement Amendments; Payment of Fees.    After the date
of this Agreement and during any period in which a Prospectus relating to any
Placement Securities is required to be delivered by BAML under the Securities
Act (including in circumstances where such requirement may be satisfied pursuant
to Rule 172 under the Securities Act (“Rule 172”)), (i) the Company will notify
BAML promptly of the time when any subsequent amendment to the Registration
Statement, other than documents incorporated by reference, has been filed with
the Commission and/or has become effective or any subsequent supplement to the
Prospectus has been filed and of any comment letter from the Commission or any
request by the Commission for any amendment or supplement to the Registration
Statement or Prospectus or for additional information provided, however, if any
such supplement to the Prospectus does not relate to the Placement Securities
and no Placement Notice is pending, the Company may satisfy this Section 7(a)(i)
by notifying BAML, of such supplement to the Prospectus no later than the close
of business on the date of first use of such supplement; (ii) the Company will
prepare and file with the Commission, promptly upon BAML’s request, any
amendments or supplements to the Registration Statement or Prospectus that, in
BAML’s reasonable opinion, may be necessary or advisable in connection with the
distribution of the Placement Securities by BAML (provided, however, that the
failure of BAML to make such request shall not relieve the Company of any
obligation or liability hereunder, or affect BAML’s right to rely on the
representations and warranties made by the Company in this Agreement); (iii) the
Company will not file any amendment or supplement to the Registration Statement
or Prospectus, other than documents incorporated by reference, relating to the
Placement Securities or a security convertible into the Placement Securities
unless a copy thereof has been submitted to BAML within a reasonable period of
time before the filing and BAML has not reasonably objected thereto (provided,
however, that the failure of BAML to make such objection shall not relieve the
Company of any obligation or liability hereunder, or affect BAML’s right to rely
on the representations and

 

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warranties made by the Company in this Agreement) and the Company will furnish
to BAML at the time of filing thereof a copy of any document that upon filing is
deemed to be incorporated by reference into the Registration Statement or
Prospectus, except for those documents available via EDGAR; and (iv) the Company
will cause each amendment or supplement to the Prospectus, other than documents
incorporated by reference, to be filed with the Commission as required pursuant
to the applicable paragraph of Rule 424(b) under the Securities Act (without
reliance on Rule 424(b)(8) under the Securities Act).

(b)        Notice of Commission Stop Orders.    The Company will advise BAML,
promptly after it receives notice or obtains knowledge thereof, of the issuance
or threatened issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of any other order preventing or
suspending the use of the Prospectus or any Issuer Free Writing Prospectus, or
of the suspension of the qualification of the Placement Securities for offering
or sale in any jurisdiction or of the loss or suspension of any exemption from
any such qualification, or of the initiation or threatening of any proceedings
for any of such purposes, or of any examination pursuant to Section 8(e) of the
Securities Act concerning the Registration Statement or if the Company becomes
the subject of a proceeding under Section 8A of the Securities Act in connection
with the offering of the Securities. The Company will make every reasonable
effort to prevent the issuance of any stop order, the suspension of any
qualification of the Securities for offering or sale and any loss or suspension
of any exemption from any such qualification, and if any such stop order is
issued or any such suspension or loss occurs, to obtain the lifting thereof as
soon as reasonably practicable.

(c)        Delivery of Registration Statement and Prospectus.    The Company
will furnish to BAML and its counsel (at the expense of the Company) copies of
the Registration Statement, the Prospectus (including all documents incorporated
by reference therein) and all amendments and supplements to the Registration
Statement or Prospectus, and any Issuer Free Writing Prospectuses, that are
filed with the Commission during any period in which a Prospectus relating to
the Placement Securities is required to be delivered under the Securities Act
(including all documents filed with the Commission during such period that are
deemed to be incorporated by reference therein), in each case as soon as
reasonably practicable and in such quantities and at such locations as BAML may
from time to time reasonably request; provided, however, that the Company shall
not be required to furnish any document (other than the Prospectus) to BAML to
the extent such document is available on EDGAR. The copies of the Registration
Statement and the Prospectus and any supplements or amendments thereto furnished
to BAML will be identical to the electronically transmitted copies thereof filed
with the Commission pursuant to EDGAR, except to the extent permitted by
Regulation S-T.

(d)        Continued Compliance with Securities Laws.    If at any time when a
Prospectus is required by the Securities Act or the Exchange Act to be delivered
in connection with a pending sale of the Placement Securities (including,
without limitation, pursuant to Rule 172), any event shall occur or condition
shall exist as a result of which it is necessary, in the opinion of counsel for
BAML or for the Company, to amend the Registration Statement or amend or
supplement the Prospectus in order that the Prospectus will not include any
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein not misleading in the light of the
circumstances existing at the time it is delivered to a purchaser, or if it
shall be necessary, in the opinion of such counsel, at any such time to amend
the Registration Statement

 

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or amend or supplement the Prospectus in order to comply with the requirements
of the Securities Act, the Company will promptly notify BAML to suspend the
offering of Placement Securities during such period and the Company will
promptly prepare and file with the Commission such amendment or supplement as
may be necessary to correct such statement or omission or to make the
Registration Statement or the Prospectus comply with such requirements, and the
Company will furnish to BAML such number of copies of such amendment or
supplement as BAML may reasonably request. 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 conflicts with the information contained in the Registration Statement or the
Prospectus or included or includes an untrue statement of a material fact or
omitted or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances, prevailing at that
subsequent time, not misleading, the Company will promptly notify BAML to
suspend the offering of Placement Securities during such period and the Company
will, subject to Section 7(a) hereof, promptly amend or supplement such Issuer
Free Writing Prospectus to eliminate or correct such conflict, untrue statement
or omission.

(e)        Blue Sky and Other Qualifications.    The Company will use its best
efforts, in cooperation with BAML, to qualify the Placement Securities for
offering and sale, or to obtain an exemption for the Securities to be offered
and sold, under the applicable securities laws of such states and other
jurisdictions (domestic or foreign) as BAML may designate and to maintain such
qualifications and exemptions in effect for so long as required for the
distribution of the Securities (but in no event for less than one year from the
date of this Agreement); provided, however, that the Company shall not be
obligated to file any general consent to service of process or to qualify as a
foreign corporation or as a dealer in securities in any jurisdiction in which it
is not so qualified or to subject itself to taxation in respect of doing
business in any jurisdiction in which it is not otherwise so subject. In each
jurisdiction in which the Placement Securities have been so qualified or exempt,
the Company will file such statements and reports as may be required by the laws
of such jurisdiction to continue such qualification or exemption, as the case
may be, in effect for so long as required for the distribution of the Placement
Securities.

(f)        Rule 158.    The Company will timely file such reports pursuant to
the Exchange Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earnings statement for the purposes
of, and to provide to BAML the benefits contemplated by, the last paragraph of
Section 11(a) of the Securities Act.

(g)        Use of Proceeds.    The Company will use the net proceeds received by
it from the sale of the Securities in the manner specified in the Prospectus
under “Use of Proceeds.”

(h)        Listing.    During any period in which the Prospectus relating to the
Placement Securities is required to be delivered by BAML under the Securities
Act with respect to a pending sale of the Placement Securities (including in
circumstances where such requirement may be satisfied pursuant to Rule 172), the
Company will use its commercially reasonable efforts to cause the Placement
Securities to be listed on the NYSE.

 

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(i)        Filings with the NYSE.    The Company will timely file with the NYSE
all material documents and notices required by the NYSE of companies that have
or will issue securities that are traded on the NYSE.

(j)        Reporting Requirements.    The Company, during any period when the
Prospectus is required to be delivered under the Securities Act and the Exchange
Act (including in circumstances where such requirement may be satisfied pursuant
to Rule 172), will file all documents required to be filed with the Commission
pursuant to the Exchange Act within the time periods required by the Exchange
Act.

(k)        Notice of Other Sales.    During each period commencing on the date
of each Placement Notice and ending after the close of business on the
Settlement Date for the related transaction, the Company will not, without
(i) giving BAML at least three (3) Business Days’ prior written notice
specifying the nature of the proposed sale and the date of such proposed sale
and (ii) BAML suspending activity under this program for such period of time as
requested by the Company, (A) offer, pledge, announce the intention to sell,
sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to purchase, or
lend or otherwise transfer or dispose of, directly or indirectly, any Common
Shares or securities convertible into or exchangeable or exercisable for or
repayable with Common Shares, or file any registration statement under the
Securities Act with respect to any of the foregoing (other than a shelf
registration statement under Rule 415, a registration statement on Form S-8 or
Form S-4 or a post-effective amendment to the Registration Statement) or
(B) enter into any swap or other agreement or any transaction that transfers in
whole or in part, directly or indirectly, any of the economic consequence of
ownership of the Common Shares, or any securities convertible into or
exchangeable or exercisable for or repayable with Common Shares, whether any
such swap or transaction described in clause (A) or (B) above is to be settled
by delivery of Common Shares or such other securities, in cash or otherwise. The
foregoing sentence shall not apply to (w) the Common Shares to be offered and
sold through BAML pursuant to this Agreement or the Common Shares to be offered
and sold through any Alternative Placement Agent pursuant to their respective
Alternative Distribution Agreements, (x) the issuance of securities in
connection with an acquisition, merger or sale or purchase of assets described
in the Prospectus, (y) Common Shares issuable pursuant to the Company’s dividend
reinvestment plan as it may be amended or replaced from time to time and (z) the
issuance, grant or sale of any equity incentive awards approved by the Board of
Trustees or the compensation committee thereof or the issuance or sale of Common
Shares upon exercise thereof (including upon redemption of OP Units).

(l)        Change of Circumstances.    The Company will, at any time during a
fiscal quarter in which the Company intends to tender a Placement Notice or sell
Placement Securities, advise BAML promptly after it shall have received notice
or obtained knowledge thereof, of any information or fact that would alter or
affect in any material respect any opinion, certificate, letter or other
document provided to BAML pursuant to this Agreement.

(m)        Due Diligence Cooperation.    The Company will cooperate with any
reasonable due diligence review conducted by BAML or its agents in connection
with the transactions contemplated hereby, including, without limitation,
providing information and making available

 

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documents and senior officers, during regular business hours and at the
Company’s principal offices, as BAML may reasonably request after consultation
with the Company.

(n)        Disclosure of Sales.    The Company will disclose in its quarterly
reports on Form 10-Q and in its annual report on Form 10-K the number of
Placement Securities sold pursuant to this Agreement and the Alternative
Distribution Agreements, the Net Proceeds to the Company and the compensation
payable by the Company to BAML with respect to such Placement Securities
pursuant to the Agreement and the Alternative Distribution Agreements.

(o)        Representation Dates; Certificate.    On or prior to the date that
the first Securities are sold pursuant to the terms of this Agreement and:

(1) each time the Company:

(i) files the Prospectus relating to the Placement Securities or amends or
supplements the Registration Statement or the Prospectus relating to the
Placement Securities by means of a post-effective amendment, sticker, or
supplement but not by means of incorporation of documents by reference into the
Registration Statement or the Prospectus relating to the Placement Securities;

(ii) files an Annual Report on Form 10-K under the Exchange Act;

(iii) files a Quarterly Report on Form 10-Q under the Exchange Act; or

(iv) files a Current Report on Form 8-K containing amended financial information
(other than an Earnings Announcement, to “furnish” information pursuant to Items
2.02 or 7.01 of Form 8-K) under the Exchange Act; and

(2) at any other time reasonably requested by BAML (each such date of filing of
one or more of the documents referred to in clauses (1)(i) through (iv) and any
time of request pursuant to this Section 7(o) shall be a “Representation Date”),
the Company shall furnish BAML with a certificate, in the form attached hereto
as Exhibit E within three (3) Trading Days of any Representation Date. The
requirement to provide a certificate under this Section 7(o) shall be waived for
any Representation Date occurring at a time at which no Placement Notice (as
amended by the corresponding Acceptance, if applicable) is pending, which waiver
shall continue until the earlier to occur of the date the Company delivers a
Placement Notice hereunder (which for such calendar quarter shall be considered
a Representation Date) and the next occurring Representation Date; provided,
however, that such waiver shall not apply for any Representation Date on which
the Company files its annual report on Form 10-K. Notwithstanding the foregoing,
if the Company subsequently decides to sell Placement Securities following a
Representation Date when the Company relied on such waiver and did not provide
BAML with a certificate under this Section 7(o), then before the Company
delivers the Placement Notice or BAML sells any Placement Securities, the
Company shall provide BAML with a certificate, in the form attached hereto as
Exhibit E, dated the date of the Placement Notice.

(p)        Legal Opinions.    On or prior to the date that the first Securities
are sold pursuant to the terms of this Agreement, within three (3) Trading Days
of each Representation Date with

 

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respect to which the Company is obligated to deliver a certificate in the form
attached hereto as Exhibit E for which no waiver is applicable, the Company
shall cause to be furnished to BAML written opinions of (i) Clifford Chance US
LLP and (ii) the general counsel to the Company (together, “Company Counsel”),
or other counsel satisfactory to BAML, in form and substance reasonably
satisfactory to BAML and its counsel, dated the date that the opinions are
required to be delivered, substantially similar to the form attached hereto as
Exhibit D-1, D-2 and D-3, modified, as necessary, to relate to the Registration
Statement and the Prospectus as then amended or supplemented; provided, however,
that in lieu of such opinions for subsequent Representation Dates, counsel may
furnish BAML with a letter (a “Reliance Letter”) to the effect that BAML may
rely on a prior opinion delivered under this Section 7(p) to the same extent as
if it were dated the date of such letter (except that statements in such prior
opinion shall be deemed to relate to the Registration Statement and the
Prospectus as amended or supplemented at such Representation Date).

(q)        Comfort Letter.    On or prior to the date that the first Securities
are sold pursuant to the terms of this Agreement, within three (3) Trading Days
of each Representation Date with respect to which the Company is obligated to
deliver a certificate in the form attached hereto as Exhibit E for which no
waiver is applicable, the Company shall cause its independent accountants (and
any other independent accountants whose report is included in the Registration
Statement or the Prospectus) to furnish BAML letters (the “Comfort Letters”),
dated the date the Comfort Letters are delivered, in form and substance
satisfactory to BAML, (i) confirming that they are an independent registered
public accounting firm within the meaning of the Securities Act, the Exchange
Act and the PCAOB, (ii) stating, as of such date, the conclusions and findings
of such firm with respect to the financial information and other matters
ordinarily covered by accountants’ “comfort letters” to underwriters in
connection with registered public offerings (the first such letter, the “Initial
Comfort Letter”) and (iii) updating the Initial Comfort Letter with any
information that would have been included in the Initial Comfort Letter had it
been given on such date and modified as necessary to relate to the Registration
Statement and the Prospectus, as amended and supplemented to the date of such
letter.

(r)        Opinion of Counsel for BAML.    On or prior to the date that the
first Securities are sold pursuant to the terms of this Agreement, within three
(3) Trading Days of each Representation Date with respect to which the Company
is obligated to deliver a certificate in the form attached hereto as Exhibit E
for which no waiver is applicable, BAML shall have received the favorable
written opinion or opinions of Hogan Lovells US, LLP, counsel for BAML and the
Alternative Placement Agents, dated such date, with respect to such matters as
the Placement Agents may reasonably request.

(s)        Market Activities.    Neither the Company nor the Operating
Partnership will, directly or indirectly, (i) take any action designed to cause
or result in, or that constitutes or 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 the Securities or (ii) sell, bid for, or
purchase the Securities to be issued and sold pursuant to this Agreement, or pay
anyone any compensation for soliciting purchases of the Securities to be issued
and sold pursuant to this Agreement other than BAML; provided, however, that the
Company may bid for and purchase its Common Shares in accordance with
Rule 10b-18 under the Exchange Act.

 

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(t)        Insurance.    The Company, the Operating Partnership and the
Company’s subsidiaries shall use its commercially reasonable efforts to
maintain, or cause to be maintained, insurance in such amounts and covering such
risks as is reasonable and customary for companies engaged in similar businesses
in similar industries.

(u)        Compliance with Laws.    The Company, the Operating Partnership and
each of the Company’s subsidiaries shall maintain, or cause to be maintained,
all material environmental permits, licenses and other authorizations required
by federal, state and local law in order to conduct their businesses as
described in the Prospectus, and the Company, the Operating Partnership and each
of the Company’s subsidiaries shall conduct their businesses, or cause their
businesses to be conducted, in substantial compliance with such permits,
licenses and authorizations and with applicable environmental laws, except where
the failure to maintain or be in compliance with such permits, licenses and
authorizations would not reasonably be expected to have a Material Adverse
Effect.

(v)        Investment Company Act.    Each of the Company and the Operating
Partnership are familiar with the Investment Company Act, and the rules and
regulations thereunder, and will, in the future, use its best efforts to ensure
that none of the Company, the Operating Partnership nor any of the Company’s
subsidiaries will be or become, at any time prior to the termination of this
Agreement, required to register as an “investment company,” as such term is
defined in the Investment Company Act, assuming no change in the Commission’s
current interpretation as to entities that are not considered an investment
company.

(w)        Securities Act and Exchange Act.    The Company will use its best
efforts to comply with all requirements imposed upon it by the Securities Act
and the Exchange Act as from time to time in force, so far as necessary to
permit the continuance of sales of, or dealings in, the Placement Securities as
contemplated by the provisions hereof and the Prospectus.

(x)        No Offer to Sell.    Other than a free writing prospectus (as defined
in Rule 405) approved in advance in writing by the Company and BAML in its
capacity as principal or agent hereunder, the Company (including its agents and
representatives, other than BAML in its capacity as such) will not, directly or
indirectly, make, use, prepare, authorize, approve or refer to any free writing
prospectus relating to the Securities to be sold by BAML as principal or agent
hereunder.

(y)        Sarbanes-Oxley Act.    The Company, the Operating Partnership and the
Company’s subsidiaries will use their best efforts to comply with all effective
applicable provisions of the Sarbanes-Oxley Act of 2002.

(z)        Regulation M.    If the Company has reason to believe that the
exemptive provisions set forth in Rule 101(c)(1) of Regulation M under the
Exchange Act are not satisfied with respect to the Company or the Common Shares,
it shall promptly notify BAML and sales of the Placement Securities under this
Agreement shall be suspended until that or other exemptive provisions have been
satisfied in the judgment of each party.

(aa)        REIT Treatment.    The Company currently intends to continue to
qualify as a REIT under the Code and will use its best efforts to enable the
Company to continue to meet the

 

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requirements for qualification and taxation as a REIT under the Code for
subsequent tax years that include any portion of the term of this Agreement;
unless the Company’s board of directors determines in good faith by resolution
that it is in the best interests of the Company’s stockholders not to continue
to so qualify.

SECTION 8. Payment of Expenses.

(a)        Expenses.    The Company agrees to pay the costs, expenses and fees
relating to the following matters: (i) the preparation, printing and filing of
the Registration Statement (including financial statements and exhibits) as
originally filed and of each amendment and supplement thereto, (ii) the word
processing, printing and delivery to BAML of this Agreement and such other
documents as may be required in connection with the offering, purchase, sale,
issuance or delivery of the Placement Securities, (iii) the preparation,
issuance and delivery of the certificates for the Placement Securities to BAML,
including any stock or other transfer taxes and any capital duties, stamp duties
or other duties or taxes payable upon the sale, issuance or delivery of the
Placement Securities to BAML, (iv) the fees and disbursements of the counsel,
accountants and other advisors to the Company, (v) the qualification or
exemption of the Placement Securities under securities laws in accordance with
the provisions of Section 7(e) hereof, including filing fees and the reasonable
fees and disbursements of counsel for BAML and the Alternative Placement Agents
in connection therewith and in connection with the preparation of the Blue Sky
Survey and any supplements thereto, (vi) the printing and delivery to BAML of
copies of any permitted Free Writing Prospectus and the Prospectus and any
amendments or supplements thereto and any costs associated with electronic
delivery of any of the foregoing by BAML to investors, (vii) the preparation,
printing and delivery to BAML of copies of the Blue Sky Survey and any Canadian
“wrapper” and any supplements or wrappers required in connection with offers or
sales in other jurisdictions and any supplements thereto, (viii) the fees and
expenses of the Custodian and the transfer agent and registrar for the
Securities, (ix) the filing fees incident to, and the reasonable fees and
disbursements of counsel to BAML and the Alternative Placement Agents in
connection with, any review by the Financial Industry Regulatory Authority, Inc.
(“FINRA”) of the terms of the sale of the Securities (x) the fees and expenses
incurred in connection with the listing of the Placement Securities on the NYSE,
and (xi) the disbursements of counsel for BAML in connection with the copying
and delivery of closing documents delivered by the Company or the Company’s
accountants or counsel (including any local counsel) and (xii) if Securities
having an aggregate offering price of $25,000,000 or more have not been offered
and sold under this Agreement and the Alternative Distribution Agreements by
first anniversary of this Agreement (or such earlier date at which the Company
terminates this Agreement) (the “Determination Date”), the Company shall
reimburse BAML for all of its reasonable out-of-pocket expenses, including the
reasonable fees and disbursements of counsel for BAML incurred by BAML in
connection with the transactions contemplated by this Agreement (the “BAML
Expenses”), and together with the similar expenses incurred by the Alternative
Placement Agents as defined in the Alternative Distribution Agreements, the
“Expenses”; provided, however that the aggregate of such Expenses for all
Placement Agents shall not exceed $150,000). The Expenses shall be due and
payable by the Company to BAML within five (5) Business Days of the
Determination Date.

(b)        Termination of Agreement.    If this Agreement is terminated by BAML
in accordance with the provisions of Section 9 or Section 13(a)(i) hereof, the
Company shall reimburse BAML for all of their out-of-pocket expenses, including
the reasonable fees and disbursements of counsel for BAML and the Alternative
Placement Agents.

 

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SECTION 9. Conditions of BAML’s Obligations. The obligations of BAML hereunder
with respect to a Placement will be subject to the continuing accuracy and
completeness of the representations and warranties of the Company and the
Operating Partnership contained in this Agreement or in certificates of any
officer of the Company or the Operating Partnership or any subsidiary of the
Company delivered pursuant to the provisions hereof, to the performance by the
Company or the Operating Partnership of its covenants and other obligations
hereunder, and to the following further conditions:

(a)        Effectiveness of Registration Statement; Payment of Filing
Fee.    The Registration Statement shall have become effective and shall be
available for (i) all sales of Placement Securities issued pursuant to all prior
Placement Notices (each as amended by a corresponding Acceptance, if
applicable) and (ii) the sale of all Placement Securities contemplated to be
issued by any Placement Notice (each as amended by a corresponding Acceptance,
if applicable). The Company shall have paid the required Commission filing fees
relating to the Securities within the time required by Rule 456(b)(1)(i) under
the Securities Act without regard to the proviso therein and otherwise in
accordance with Rules 456(b) and 457(r) under the Securities Act (including, if
applicable, by updating the “Calculation of Registration Fee” table in
accordance with Rule 456(b)(1)(ii) either in a post-effective amendment to the
Registration Statement or on the cover page of the Prospectus).

(b)        No Material Notices.    None of the following events shall have
occurred and be continuing: (i) receipt by the Company, the Operating
Partnership or any of the Company’s subsidiaries of any request for additional
information from the Commission or any other federal or state governmental
authority during the period of effectiveness of the Registration Statement, the
response to which would require any post-effective amendments or supplements to
the Registration Statement or the Prospectus; (ii) the issuance by the
Commission or any other federal or state governmental authority of any stop
order suspending the effectiveness of the Registration Statement or the
initiation of any proceedings for that purpose; (iii) receipt by the Company of
any notification with respect to the suspension of the qualification or
exemption from qualification of any of the Placement Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose; (iv) the occurrence of any event that makes any material statement made
in the Registration Statement or the Prospectus, or any Issuer Free Writing
Prospectus, or any material document incorporated or deemed to be incorporated
therein by reference untrue in any material respect or that requires the making
of any changes in the Registration Statement, related Prospectus, or any Issuer
Free Writing Prospectus, or such documents so that, in the case of the
Registration Statement, it will not contain any materially 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 and, that in the case
of the Prospectus and any Issuer Free Writing Prospectus, it will not contain
any materially 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,
in the light of the circumstances under which they were made, not misleading.

 

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(c)        No Misstatement or Material Omission.    BAML shall not have advised
the Company that the Registration Statement or Prospectus, or any Issuer Free
Writing Prospectus, or any amendment or supplement thereto, contains an untrue
statement of fact that in BAML’s reasonable opinion is material, or omits to
state a fact that in BAML’s opinion is material and is required to be stated
therein or is necessary to make the statements therein not misleading.

(d)        Material Changes.    Except as contemplated in the Prospectus, or
disclosed in the Company’s reports filed with the Commission, there shall not
have been any Material Adverse Effect.

(e)        Opinions of Counsel for Company.    BAML shall have received the
favorable opinions of Company Counsel, required to be delivered pursuant to
Section 7(p) on or before the date on which such delivery of such opinion is
required pursuant to Section 7(p).

(f)        Representation Certificate.    BAML shall have received the
certificate required to be delivered pursuant to Section 7(o) on or before the
date on which delivery of such certificate is required pursuant to Section 7(o).

(g)        Accountant’s Comfort Letter.    BAML shall have received the Comfort
Letter required to be delivered pursuant Section 7(q) on or before the date on
which such delivery of such comfort letter is required pursuant to Section 7(q).

(h)        Approval for Listing.    The Placement Securities shall either have
been (i) approved for listing on NYSE, subject only to notice of issuance, or
(ii) the Company shall have filed an application for listing of the Placement
Securities on NYSE at, or prior to, the issuance of any Placement Notice.

(i)        No Suspension.    Trading in the Securities shall not have been
suspended on the NYSE.

(j)        Additional Documents.    On each date on which the Company is
required to deliver a certificate pursuant to Section 7(o), counsel for BAML
shall have been furnished with such documents and opinions as they may
reasonably request for the purpose of enabling them to deliver the opinion
herein contemplated, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the conditions,
contained in this Agreement.

(k)        Securities Act Filings Made.    All filings with the Commission
required by Rule 424 under the Securities Act to have been filed prior to the
issuance of any Placement Notice hereunder shall have been made within the
applicable time period prescribed for such filing by Rule 424.

(l)        Termination of Agreement.    If any condition specified in this
Section 9 shall not have been fulfilled when and as required to be fulfilled,
this Agreement may be terminated by BAML by written notice to the Company to
each of the individuals set forth on Exhibit B, and such termination shall be
without liability of any party to any

 

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other party except as provided in Section 8 hereof and except that, in the case
of any termination of this Agreement, Sections 5, 10, 11, 12, 13 and 22 hereof
shall survive such termination and remain in full force and effect.

SECTION 10. Indemnification.

(a)        Indemnification by the Company and the Operating Partnership.    The
Company and the Operating Partnership, jointly and severally, agree to indemnify
and hold harmless BAML, its affiliates (as such term is defined in Rule 405),
and each person, if any, who controls BAML within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act as follows:

(i)        against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement (or any
amendment thereto), including any information deemed to be a part thereof
pursuant to Rule 430B, or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or arising out of any untrue statement or alleged untrue
statement of a material fact included (A) in any Issuer Free Writing Prospectus
or the Prospectus (or any amendment or supplement thereto), or (B) in any
materials or information provided to investors by, or with the approval of, the
Company in connection with the marketing of any offering of Securities
(“Marketing Materials”), including any roadshow or investor presentations made
to investors by the Company (whether in person or electronically), or the
omission or alleged omission therefrom of a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading;

(ii)        against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim whatsoever
based upon any such untrue statement or omission, or any such alleged untrue
statement or omission; provided that (subject to Section 10(d) below) any such
settlement is effected with the written consent of the Company; and

(iii)        against any and all expense whatsoever, as incurred (including the
fees and disbursements of counsel chosen by BAML), reasonably incurred in
investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, to the extent that
any such expense is not paid under (i) or (ii) above,

provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with the Agent Information).

 

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(b)        Indemnification by BAML.    BAML agrees to indemnify and hold
harmless each of the Company and the Operating Partnership and each of the
Company’s trustees and each of the Company’s officers who signed the
Registration Statement, each person who controls the Company and the Operating
Partnership within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act and each affiliate of the Company and the
Operating Partnership within the meaning of Rule 405 against any and all loss,
liability, claim, damage and expense described in the indemnity contained in
subsection (a) of this Section 10, as incurred, but only with respect to untrue
statements or omissions, or alleged untrue statements or omissions, made in the
Registration Statement (or any amendment thereto), any Issuer Free Writing
Prospectus or the Prospectus (or any amendment or supplement thereto) in
reliance upon and in conformity with the Agent Information. The Company
acknowledges that the legal name of BAML as set forth under the caption “Plan of
Distribution” beginning on page S-8 of the Prospectus Supplement constitutes the
only information furnished in writing by or on behalf of BAML for inclusion in
the Prospectus (collectively, the “Agent Information”).

(c)        Actions against Parties; Notification.    Each indemnified party
shall give notice as promptly as reasonably practicable to each indemnifying
party of any action commenced against it in respect of which indemnity may be
sought hereunder, but failure to so notify an indemnifying party shall not
relieve such indemnifying party from any liability hereunder to the extent it is
not materially prejudiced as a result thereof and in any event shall not relieve
it from any liability which it may have otherwise than on account of this
indemnity agreement. Counsel to the indemnified parties shall be selected as
follows: counsel to BAML and each person, if any, who controls BAML within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act
shall be selected by BAML; and counsel to the Company, its trustees, each of its
officers who signed the Registration Statement and each person, if any, who
controls the Company within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act shall be selected by the Company. An indemnifying
party may participate at its own expense in the defense of any such action;
provided, however, that counsel to the indemnifying party shall not (except with
the consent of the indemnified party) also be counsel to the indemnified party.
In no event shall the indemnifying parties be liable for the fees and expenses
of more than one counsel (in addition to any local counsel) separate from their
own counsel for BAML and each person, if any, who controls BAML within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act,
and the fees and expenses of more than one counsel (in addition to any local
counsel) separate from their own counsel for the Company, its trustees, each of
its officers who signed the Registration Statement and each person, if any, who
controls the Company within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, in each case in connection with any one action
or separate but similar or related actions in the same jurisdiction arising out
of the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 10 or
Section 11 hereof (whether or not the indemnified parties are actual or
potential parties thereto), unless such settlement, compromise or consent
(i) includes an unconditional release of each indemnified party from all
liability arising out of such litigation, investigation, proceeding or claim and
(ii) does not include a statement as to or an admission of fault, culpability or
a failure to act by or on behalf of any indemnified party.

 

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(d)        Settlement Without Consent if Failure to Reimburse.    If at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 10(a)(ii) effected without its written consent if (i) such settlement is
entered into more than 60 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 45 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.

(e)        Other Agreements with Respect to Indemnification and
Contribution.    The provisions of this Section 10 and in Section 11 hereof
shall not affect any agreements among the Company and BAML with respect to
indemnification of each other or contribution between themselves.

SECTION 11. Contribution. If the indemnification provided for in Section 10
hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Operating Partnership on the one hand and BAML on the other hand from the
offering of the Securities pursuant to this Agreement or (ii) if the allocation
provided by clause (i) is not permitted by applicable law, in such proportion as
is appropriate to reflect not only the relative benefits referred to in
clause (i) above but also the relative fault of the Company and the Operating
Partnership on the one hand and of BAML on the other hand in connection with the
statements or omissions.

The relative benefits received by the Company and the Operating Partnership on
the one hand and BAML on the other hand in connection with the offering of the
Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the
Securities pursuant to this Agreement (before deducting expenses) received by
the Company and the Operating Partnership on the one hand and the total
commissions received by BAML on the other hand, in each case as set forth on the
cover of the Prospectus, bear to the aggregate public offering price of the
Securities as set forth on such cover.

The relative fault of the Company and the Operating Partnership on the one hand
and BAML on the other hand shall be determined by reference to, among other
things, whether any such untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact relates to information
supplied by the Company and the Operating Partnership or by BAML and the
parties’ relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.

The Company, the Operating Partnership and BAML agree that it would not be just
and equitable if contribution pursuant to this Section 11 were determined by pro
rata allocation or by any other method of allocation which does not take account
of the equitable considerations referred to above in this Section 11. The
aggregate amount of losses, liabilities, claims, damages

 

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and expenses incurred by an indemnified party and referred to above in this
Section 11 shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any governmental
agency or body, commenced or threatened, or any claim whatsoever based upon any
such untrue or alleged untrue statement or omission or alleged omission.

Notwithstanding the provisions of this Section 11, BAML shall not be required to
contribute any amount in excess of the amount by which the total price at which
the Securities underwritten by it and distributed to the public were offered to
the public exceeds the amount of any damages which BAML has otherwise been
required to pay by reason of any such untrue or alleged untrue statement or
omission or alleged omission.

No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.

For purposes of this Section 11, each person, if any, who controls BAML within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act shall have the same rights to contribution as BAML, and each director of the
Company, each officer of the Company who signed the Registration Statement, and
each person, if any, who controls the Company or the Operating Partnership
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act shall have the same rights to contribution as the Company and the
Operating Partnership.

SECTION 12. Representations, Warranties and Agreements to Survive Delivery. The
respective representations, warranties, indemnities, agreements and other
statements of the Company and the Operating Partnership and of BAML set forth in
or made pursuant to this Agreement, shall remain operative and in full force and
effect, regardless of any investigation made by or on behalf of BAML or
controlling person, or by or on behalf of the Company and the Operating
Partnership, and shall survive delivery of the Securities to BAML.

SECTION 13. Termination of Agreement.

(a)        Termination; General.    BAML may terminate this Agreement, by notice
to the Company, as hereinafter specified at any time (i) if there has been,
since the time of execution of this Agreement or since the date as of which
information is given in the Prospectus, any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company, the Operating Partnership and the Company’s
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, or (ii) if there has occurred any material adverse
change in the financial markets in the United States or the international
financial markets, any outbreak of hostilities or escalation thereof or other
calamity or crisis or any change or development involving a prospective change
in national or international political, financial or economic conditions, in
each case the effect of which is such as to make it, in the judgment of BAML,
impracticable or inadvisable to market the Securities or to enforce contracts
for the sale of the Securities, or (iii) if trading in the Placement Securities
has been suspended or materially limited by the Commission or the NYSE, or if
trading generally on the NYSE MKT LLC (the successor market to the American
Stock Exchange

 

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(AMEX)), the NYSE or the Nasdaq Global Market has been suspended or limited, or
minimum or maximum prices for trading have been fixed, or maximum ranges for
prices have been required, by any of said exchanges or by order of the
Commission, the FINRA or any other governmental authority, or (iv) a material
disruption has occurred in commercial banking or securities settlement or
clearance services in the United States or in Europe, or (v) if a banking
moratorium has been declared by either Federal or New York authorities.

(b)        Termination by the Company.    The Company shall have the right, by
giving five (5) days’ notice as hereinafter specified to terminate this
Agreement in its sole discretion at any time after the date of this Agreement.

(c)        Termination by BAML.    BAML shall have the right, by giving five
(5) days’ notice as hereinafter specified to terminate this Agreement in its
sole discretion at any time after the date of this Agreement.

(d)        Automatic Termination.    Unless earlier terminated pursuant to this
Section 13, this Agreement shall automatically terminate upon the issuance and
sale of all of the Placement Securities through BAML or the Alternative
Placement Agents on the terms and subject to the conditions set forth herein and
in the Alternative Distribution Agreements with an aggregate sale price equal to
the amount to the Maximum Amount or upon three years having elapsed since the
Registration Statement became effective pursuant to Rule 462(e) under the
Securities Act.

(e)        Continued Force and Effect.    This Agreement shall remain in full
force and effect unless terminated pursuant to Sections 13(a), (b), (c), or
(d) above or otherwise by mutual agreement of the parties.

(f)        Effectiveness of Termination.    Any termination of this Agreement
shall be effective on the date specified in such notice of termination;
provided, however, that such termination shall not be effective until the close
of business on the date of receipt of such notice by BAML or the Company, as the
case may be. If such termination shall occur prior to the Settlement Date for
any sale of Placement Securities, such Placement Securities shall settle in
accordance with the provisions of this Agreement.

(g)        Liabilities.    If this Agreement is terminated pursuant to this
Section 13, such termination shall be without liability of any party to any
other party except as provided in Section 8 hereof, and except that, in the case
of any termination of this Agreement, Section 5, Section 10, Section 11,
Section 12, and Section 22 hereof shall survive such termination and remain in
full force and effect.

 

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SECTION 14. Notices. Except as otherwise provided in this Agreement, all notices
and other communications hereunder shall be in writing and shall be deemed to
have been duly given if mailed or transmitted by any standard form of
telecommunication. Notices to BAML shall be directed to BAML at Merrill Lynch,
Pierce, Fenner & Smith Incorporated, One Bryant Park, New York, New York 10036,
fax no. (646) 855-3073, Attention: Syndicate Department, with a copy to fax no.
(212) 230-8730, Attention: ECM Legal; notices to the Company and the Operating
Partnership shall be directed to it at 47 Hulfish Street, Suite 210, Princeton,
New Jersey 08542, fax no. (609) 806-2666, Attention: Christopher Allen and Hugh
O’Beirne, Esq.

SECTION 15. Parties. This Agreement shall inure to the benefit of and be binding
upon BAML, the Company, the Operating Partnership and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than BAML, the
Company, the Operating Partnership and their respective successors and the
controlling persons and officers, trustees and directors, employees or agents
referred to in Sections 10 and 11 and their heirs and legal representatives, any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision herein contained. This Agreement and all conditions and
provisions hereof are intended to be for the sole and exclusive benefit of BAML,
the Company, the Operating Partnership and their respective successors, and said
controlling persons and officers, trustees and directors employees or agents and
their heirs and legal representatives, and for the benefit of no other person,
firm or corporation. No purchaser of Securities from BAML shall be deemed to be
a successor by reason merely of such purchase.

SECTION 16. Adjustments for Stock Splits. The parties acknowledge and agree that
all stock-related numbers contained in this Agreement shall be adjusted to take
into account any stock split, stock dividend or similar event effected with
respect to the Securities.

SECTION 17. Governing Law and Time. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SPECIFIED TIMES
OF DAY REFER TO NEW YORK CITY TIME.

SECTION 18. Effect of Headings. The Section and Exhibit headings herein are for
convenience only and shall not affect the construction hereof.

SECTION 19. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Delivery of an executed
Agreement by one party to the other may be made by facsimile or e-mail
transmission.

SECTION 20. Interpretation. As used in this Agreement, the following terms have
the respective meanings set forth below:

All references in this Agreement to financial statements and schedules and other
information that is “contained,” “included” or “stated” in the Registration
Statement or the Prospectus (and all other references of like import) shall be
deemed to mean and include all such financial statements and schedules and other
information that is incorporated by reference in the Registration Statement or
the Prospectus, as the case may be.

 

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All references in this Agreement to the Registration Statement, the Prospectus
or any amendment or supplement to any of the foregoing shall be deemed to
include the copy filed with the Commission pursuant to EDGAR; all references in
this Agreement to any Issuer Free Writing Prospectus (other than any Issuer Free
Writing Prospectuses that, pursuant to Rule 433, are not required to be filed
with the Commission) shall be deemed to include the copy thereof filed with the
Commission pursuant to EDGAR; and all references in this Agreement to
“supplements” to the Prospectus shall include, without limitation, any
supplements, “wrappers” or similar materials prepared in connection with any
offering, sale or private placement of any Placement Securities by BAML outside
of the United States.

SECTION 21. Permitted Free Writing Prospectuses. The Company represents,
warrants and agrees that, unless it obtains the prior consent of BAML, and BAML
represents, warrants and agrees that, unless it obtains the prior written
consent of the Company, it has not made and will not make any offer relating to
the Securities that would constitute an Issuer Free Writing Prospectus, or that
would otherwise constitute a “free writing prospectus,” as defined in Rule 405,
required to be filed with the Commission. Any such free writing prospectus
consented to by BAML or by the Company, as the case may be, is hereinafter
referred to as a “Permitted Free Writing Prospectus.” The Company represents and
warrants that it has treated and agrees that it will treat each Permitted Free
Writing Prospectus as an “issuer free writing prospectus,” as defined in
Rule 433, and has complied and will comply with the requirements of Rule 433
applicable to any Permitted Free Writing Prospectus, including timely filing
with the Commission where required, legending and record keeping. For the
purposes of clarity, the parties hereto agree that all free writing
prospectuses, if any, listed in Exhibit F hereto are Permitted Free Writing
Prospectuses.

SECTION 22. Absence of Fiduciary Relationship. Each of the Company and the
Operating Partnership acknowledges and agrees that:

(a)        BAML is acting solely as agent and/or principal in connection with
the public offering of the Securities and in connection with each transaction
contemplated by this Agreement and the process leading to such transactions, and
no fiduciary or advisory relationship among the Company, the Operating
Partnership or any of their respective affiliates, shareholders (or other equity
holders), creditors or employees or any other party, on the one hand, and BAML,
on the other hand, has been or will be created in respect of any of the
transactions contemplated by this Agreement, irrespective of whether or not BAML
has advised or is advising the Company and/or the Operating Partnership on other
matters, and BAML has no obligation to the Company or the Operating Partnership
with respect to the transactions contemplated by this Agreement except the
obligations expressly set forth in this Agreement;

(b)        the public offering price of the Securities sold pursuant to this
Agreement was not established by BAML;

(c)        it is capable of evaluating and understanding, and understands and
accepts, the terms, risks and conditions of the transactions contemplated by
this Agreement;

 

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(d)        BAML has not provided any legal, accounting, regulatory or tax advice
with respect to the transactions contemplated by this Agreement and it has
consulted its own legal, accounting, regulatory and tax advisors to the extent
it has deemed appropriate;

(e)        it is aware that BAML and its respective affiliates are engaged in a
broad range of transactions which may involve interests that differ from those
of the Company and BAML has no obligation to disclose such interests and
transactions to the Company by virtue of any advisory or agency relationship or
otherwise, except or required by applicable law; and

(f)        it waives, to the fullest extent permitted by law, any claims it may
have against BAML for breach of fiduciary duty or alleged breach of fiduciary
duty in connection with the sale of Securities under this Agreement and agrees
that BAML shall not have any liability (whether direct or indirect, in contract,
tort or otherwise) to it in respect of such a fiduciary duty claim or to any
person asserting a fiduciary duty claim on its behalf or in right of it or the
Company, employees or creditors of Company.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

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If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement between
BAML and the Company in accordance with its terms.

[Signature Page Follows]

 

  Very truly yours, CHAMBERS STREET PROPERTIES   By  

/s/ Jack A. Cuneo

    Name:    Jack A. Cuneo     Title:   President and Chief Executive Officer
CSP OPERATING PARTNERSHIP, LP

By:

 

Chambers Street Properties

Its:

 

General Partner

  By   /s/ Jack A. Cuneo     Name:   Jack A. Cuneo     Title:   President and
Chief Executive Officer

[Signature Page to Equity Distribution Agreement]

 

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CONFIRMED AND ACCEPTED, as of the
date first above written:

 

MERRILL LYNCH, PIERCE, FENNER

& SMITH INCORPORATED

By   /s/ Jack Vissicchio   Authorized Signatory

[Signature Page to Equity Distribution Agreement]