EXHIBIT 10.52

 

PRENTISS PROPERTIES TRUST

 

DOCS® Financing Program

 

2,000,000 Shares of Beneficial Interest,

$0.01 par value

 

SALES AGREEMENT

 

May 28, 2004

 

DOCS® is a registered service mark of Brinson Patrick Securities Corporation

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TABLE OF CONTENTS

 

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ARTICLE I. REPRESENTATIONS AND WARRANTIES OF THE COMPANY

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ARTICLE II. SALE AND DELIVERY OF SECURITIES

   8

ARTICLE III. COVENANTS OF THE COMPANY

   10

ARTICLE IV. CONDITIONS OF THE SALES MANAGER’S OBLIGATIONS

   13

ARTICLE V. INDEMNIFICATION AND CONTRIBUTION

   15

ARTICLE VI. REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY

   18

ARTICLE VII. TERMINATION

   18

ARTICLE VIII. NOTICES

   20

ARTICLE IX. MISCELLANEOUS

   20

Schedule A Opinion of Counsel

    

Schedule 1.1(f) List of Significant Subsidiaries

    

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THIS SALES AGREEMENT (the “Agreement”) dated as of May 28, 2004 between Brinson
Patrick Securities Corporation, having its principal office at 330 Madison
Avenue, 9th Floor, New York, New York 10017 (the “Sales Manager”) and Prentiss
Properties Trust, a Maryland real estate investment trust (the ”Company”).

 

WHEREAS, the Company and the Sales Manager have previously entered into that
certain sales agreement, dated as of June 10, 2002 for the issuance and sale of
up to 3,000,000 of the Company’s common shares of beneficial interest, par value
$0.01 per share (the “Original Sales Agreement”);

 

WHEREAS, after issuance and sale of all shares issuable under the Original Sales
Agreement, the Company desires to issue and sell through the Sales Manager up to
an additional 2,000,000 shares (the “Maximum Amount”) of its common shares of
beneficial interest, par value $0.01 per share (the ”Shares”), on the terms and
subject to the conditions set forth in this Agreement. The Maximum Amount shall
be appropriately shall be adjusted for share splits and reverse splits; and

 

WHEREAS, this Agreement shall govern solely the issuance and sale of the
additional 2,000,0000 Shares that are the subject of this Agreement, and does
not relate to or govern the issuance and sale of the Company’s common shares
pursuant to the Original Sales Agreement.

 

IN CONSIDERATION of the mutual covenants contained in this Agreement, the
Company and the Sales Manager agree as follows:

 

ARTICLE I.

 

REPRESENTATIONS AND WARRANTIES

OF THE COMPANY

 

1.1 For purposes of this Agreement, unless the context requires to the contrary,
the term “Significant Subsidiary” includes all significant subsidiaries (as
defined by Section 1-02 of Regulation S-X) of the Company. The Company makes all
of the representations, warranties and agreements set forth below as of the date
the Registration Statement (as defined below) is declared effective, and as of
each date that the Sales Manager is selling shares pursuant to this Agreement.
In addition, the Company makes the representations, warranties and agreement in
paragraphs f, g, h, i, j, m, n, o, r, s, t, v, w, x, y, z, aa and bb below, as
of the date of this Agreement.

 

(a) The Company meets the requirements for use of Form S-3 under the Securities
Act of 1933, as amended (the “Act”), and the rules and regulations thereunder
(“Rules and Regulations”). A registration statement on Form S-3 with respect to,
among other securities, the Shares, including a form of prospectus, will be
prepared by the Company in conformity with the requirements of the Act and the
Rules and Regulations and will be filed with the Securities and Exchange
Commission (the “Commission”) as provided in Section 3.1 hereto. Copies of such
registration statement and prospectus, any such amendment or supplement thereto
and all documents incorporated by reference therein that are filed with the
Commission shall be

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delivered to the Sales Manager or will be made available to the Sales Manager on
the Commission’s internet website. Such registration statement, as of the date
it is declared effective by the Commission, and as it may thereafter be amended,
is referred to herein as the “Registration Statement,” and the final form of
prospectus included in the Registration Statement for purposes of offers and
sales of the Shares contemplated herein, as amended or supplemented from time to
time, is referred to herein as the “Prospectus.” The preliminary registration
statement as filed with the Commission on the date hereof is referred herein as
the “Preliminary Registration Statement.” Any reference herein to the
Registration Statement, the Prospectus, Preliminary Registration Statement or
any amendment or supplement thereto shall be deemed to refer to and include the
documents incorporated (or deemed to be incorporated) by reference therein, and
any reference herein to the terms “amend,” “amendment” or “supplement” with
respect to the Registration Statement or 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.

 

(b) Each part of the Registration Statement, when such part becomes effective,
and the Prospectus and any amendment or supplement thereto, on the date such
amendment or supplement is filed with the Commission and at each Settlement Date
(as hereinafter defined), will conform in all material respects with the
requirements of the Act and the Rules and Regulations; each part of the
Registration Statement, when such part becomes effective, will not contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading; and the Prospectus
and any amendment or supplement thereto, on the date such amendment or
supplement is filed with the Commission and at each Settlement Date, will not
include an untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; except that the foregoing shall not
apply to statements in or omissions from any such document in reliance upon, and
in conformity with, written information furnished to the Company by or on behalf
of the Sales Manager, specifically for use in the Registration Statement, the
Prospectus or any amendment or supplement thereto.

 

(c) The documents incorporated by reference in the Registration Statement or the
Prospectus, or any amendment or supplement thereto, when such amendment or
supplement is filed with the Commission under the Securities Exchange Act of
1934, as amended (the “Exchange Act”), will conform in all material respects
with the requirements of the Act or the Exchange Act, as applicable, and the
rules and regulations of the Commission thereunder.

 

(d) The financial statements of the Company, together with the related schedules
and notes thereto, set forth or included in the Registration Statement or the
Prospectus, fairly present in all material respects the financial condition of
the Company as of the dates indicated and the results of operations, changes in
financial position, stockholders’ equity, and cash flows for the periods therein
specified, and have been prepared in conformity with generally accepted
accounting principles consistently applied throughout the periods involved
(except as otherwise stated therein). The summary and selected financial and
statistical data included in the Registration Statement or the Prospectus
present fairly the information shown therein and, to the extent based upon or
derived from the financial statements, have been compiled on a basis consistent
with the financial statements presented therein.

 

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(e) PricewaterhouseCoopers L.L.P., who will certify the financial statements
included in the Registration Statement are and, during the periods covered by
their reports, were qualified and independent public accountants as required by
Rule 2-01 of Regulation S-X.

 

(f) 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. The
Company is duly qualified and in good standing in each jurisdiction in which the
character or location of its assets or properties (owned, leased or licensed) or
the nature of its business makes such qualification necessary (including every
jurisdiction in which it owns or leases real property), except for such
jurisdictions where the failure to so qualify would not have a Material Adverse
Effect. For purposes of this Agreement, “Material Adverse Effect” means any
adverse effect on the business, operations, properties or financial condition of
the Company and all of its subsidiaries taken as a whole that is material to the
Company and all of its subsidiaries taken as a whole, and any material adverse
effect on the transactions contemplated under this Agreement or any other
agreement or document contemplated hereby or thereby. Each Significant
Subsidiary is validly existing as a corporation, limited liability company or
partnership, as applicable, in its respective jurisdiction of formation.
Schedule 1.1(f) hereto identifies each of the Company’s subsidiaries that is a
“Significant Subsidiary” (as defined in Section 1-02 of Regulation S-X) of the
Company. All of the issued and outstanding capital stock, limited liability
company interests or partnership interests, as applicable, of each Significant
Subsidiary has been duly authorized and validly issued, is fully paid and
nonassessable and (except as otherwise disclosed or incorporated by reference in
the Registration Statement or the Prospectus or the Preliminary Registration
Statement) is owned by the Company, directly or indirectly, free and clear of
any security interest, mortgage, pledge, lien, encumbrance, claim or equity.
Except as disclosed or incorporated by reference in the Registration Statement
or the Prospectus or Preliminary Registration Statement, the Company does not
own, lease or license any asset or property or conduct any business outside the
United States of America. The Company has all requisite power and authority and
all necessary authorizations, approvals, consents, orders, licenses,
certificates and permits of and from all governmental orders or regulatory
bodies or any other person or entity having jurisdiction over the Company, to
own, lease, license and operate its assets and properties and conduct its
business as now being conducted and as described or incorporated by reference in
the Registration Statement or the Prospectus or the Preliminary Registration
Statement; except for such authorizations, approvals, consents, orders,
licenses, certificates and permits the absence of which would not have a
Material Adverse Effect; and no such authorization, approval, consent, order,
license, certificate or permit contains a materially burdensome restriction
other than as disclosed in the Registration Statement or the Prospectus or the
Preliminary Registration Statement.

 

(g) The Company has good and marketable title to, or leasehold interests in, all
properties and assets (including, without limitation, mortgaged assets) as
described in the Registration Statement or the Prospectus or the Preliminary
Registration Statement owned by the Company, free and clear of all liens,
charges, encumbrances or restrictions, except such as are described or
incorporated by reference in the Registration Statement or the Prospectus or the
Preliminary Registration Statement and except such as would not have a Material
Adverse Effect. The Company has such consents, easements, rights-of-way or
licenses (collectively, “rights-of-way”) from any person as are necessary to
conduct its business in the manner described in the Registration Statement or
the Preliminary Registration Statement, except for

 

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those which if not obtained would not, singly or in the aggregate, have a
Material Adverse Effect, and, except as otherwise disclosed or incorporated by
reference in the Registration Statement or the Prospectus or Preliminary
Registration Statement, none of such rights-of-way contains any restriction that
is materially burdensome to the Company.

 

(h) The debt financing employed by the Company is not convertible into common
shares of the Company or other equity interests in the Company, except as
otherwise disclosed or incorporated by reference in the Registration Statement
or the Prospectus or Preliminary Registration Statement.

 

(i) There is no litigation or governmental or other proceeding or investigation
before any court or before or by any public body or board pending to which the
Company or any Significant Subsidiary is a party or, to the knowledge of the
Company, threatened against, or involving the assets, properties or businesses
of the Company that would have a Material Adverse Effect except as described or
incorporated by reference in the Registration Statement or Prospectus or
Preliminary Registration Statement.

 

(j) Except as otherwise disclosed or incorporated by reference in the
Registration Statement or the Prospectus or Preliminary Registration Statement,
the Company maintains insurance (issued by insurers of recognized financial
responsibility) of the types and in the amounts generally deemed adequate for
its businesses and, to the knowledge of the Company, consistent with insurance
coverage maintained by similar companies in similar businesses, including, but
not limited to, insurance covering real and personal property owned or leased by
the Company against theft, damage, destruction, acts of vandalism and all other
risks customarily insured against, all of which insurance is in full force and
effect.

 

(k) Subsequent to the respective dates as of which information is given in the
Registration Statement or the Prospectus, except as described or incorporated by
reference therein, (i) there has not been any material adverse change in the
assets or properties, business, results of operations, or condition (financial
or otherwise) of the Company and all of its subsidiaries taken as a whole (a
“Material Adverse Change”), whether or not arising from transactions in the
ordinary course of business; (ii) the Company has not sustained any material
loss or interference with its assets, businesses or properties (whether owned or
leased) from fire, explosion, earthquake, flood or other calamity, whether or
not covered by insurance, or from any labor dispute or any court or legislative
or other governmental action, order or decree; (iii) since the date of the
latest balance sheet, included or incorporated by reference in the Registration
Statement or the Prospectus, except as reflected therein, the Company has not
undertaken any material liability or obligation, direct or contingent, except
such liabilities or obligations undertaken in the ordinary course of business;
and (iv) there has not been any transaction that is material to the Company,
except transactions in the ordinary course of business or as otherwise disclosed
or incorporated by reference in the Registration Statement or the Prospectus.

 

(l) There is no document or contract of a character required by the Exchange Act
or by the rules and regulations thereunder to be described in the Registration
Statement or the Prospectus or to be filed as an exhibit to the Registration
Statement (a “Material Contract”) that is not described or filed as required.
Each document, instrument, contract and agreement of the Company described in
the Registration Statement or the Prospectus or incorporated by reference

 

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therein or listed as an exhibit to the Registration Statement is in full force
and effect and is valid and enforceable by and against the Company in accordance
with its terms, assuming the due authorization, execution and delivery thereof
by each of the other parties thereto except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization or other similar
laws affecting creditor’s rights generally and by general equitable principals
(regardless of whether enforceability is considered in a proceeding in equity or
at law) or except as otherwise disclosed or incorporated by reference in the
Registration Statement or Prospectus. Neither the Company nor, to the knowledge
of the Company, any other party is in default in the observance or performance
of any material term or obligation to be performed under any such agreement, and
no event has occurred which with notice or lapse of time or both would
constitute such a default, which default or event would have a Material Adverse
Effect. No default exists, and no event has occurred which with notice or lapse
of time or both would constitute a default, in the due performance and
observance of any term, covenant or condition, by the Company of any other
agreement or instrument to which the Company is a party or by which it or its
properties or business may be bound or affected, which default or event would
have a Material Adverse Effect.

 

(m) The Company is not in violation of its charter, by-laws or operating
agreement, as applicable. The Company is not in violation of any franchise,
license, permit, judgment, decree, order, statute, rule or regulation to which
it or its properties or assets may be subject, where the consequences of such
violation would have a Material Adverse Effect.

 

(n) Neither the execution, delivery and performance of this Agreement by the
Company nor the consummation by the Company of any of the transactions
contemplated hereby (including, without limitation, the issuance and sale by the
Company of the Shares) will give rise to a right to terminate or accelerate the
due date of any payment due under, or conflict with or result in the breach of
any material term or provision of, or constitute a default (or an event which
with notice or lapse of time or both would constitute a default) under, or
require any consent or waiver under, or result in the execution or imposition of
any lien, charge, encumbrance, claim, security interest, restriction or defect
upon any properties or assets of the Company pursuant to the terms of, any
Material Contract, or any of its material properties or businesses are bound, or
any material franchise, license, permit, judgment, decree, order, statute, rule
or regulation applicable to the Company or violate any provision of the charter
or by-laws of the Company, except for such consents or waivers (i) that have
already been obtained and are in full force and effect, (ii) that are required
by the listing requirements of the Trading Market (as defined below), (iii) that
are required by applicable state securities laws in connection with the purchase
and distribution of the Shares, and (iv) the Registration Statement contemplated
by Section 3.1(a) below.

 

(o) All of the outstanding shares of beneficial interest of the Company have
been duly authorized and validly issued and are fully paid and nonassessable and
none of the shares were issued in violation of any preemptive or other similar
right. The Shares, when issued and sold pursuant to this Agreement, will be duly
authorized and validly issued, fully paid and nonassessable and will not be
issued in violation of any preemptive or other similar right. Except as
disclosed or incorporated by reference in the Registration Statement or the
Prospectus or Preliminary Registration Statement, there is no outstanding
option, warrant or other right calling for the issuance of, and there is no
commitment, plan or arrangement to issue, any capital

 

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stock of the Company or any security convertible into or exercisable or
exchangeable for such capital stock, except for standard dividend reinvestment
plans. The Shares conform in all material respects to all statements relating
thereto contained in the Registration Statement or the Prospectus.

 

(p) Subsequent to the respective dates as of which information is given in the
Registration Statement or the Prospectus, (x) except as described or referred to
or incorporated by reference therein, (y) except as are not material and are
consistent with past practice, and (z) other than (i) regular quarterly
dividends and dividends declared and paid in accordance with the terms of any
series of preferred shares or units of the Company’s or its Material
Subsidiaries, (ii) shares issued pursuant to the Company’s dividend reinvestment
plan existing as of the date the Registration Statement is declared effective by
the Commission, (iii) shares or options or similar rights to acquire shares
issued pursuant to the Company’s employee or trustee stock option or benefit
plans or share purchase plans existing as of the date the date the Registration
Statement is declared effective by the Commission (iv) shares issued pursuant to
the Company’s dividend reinvestment plan existing as of the date of the
Registration Statement is declared effective by the Commission, and (v)
securities issued pursuant to any other agreement with the Sales Manager, the
Company has not (A) issued any securities or (B) declared or paid any dividend
or made any distribution on any shares of its capital stock or redeemed,
purchased or otherwise acquired or agreed to redeem, purchase or otherwise
acquire any shares of its capital stock; provided, however, that the parties
acknowledge that included in the Registration Statement or the Prospectus and/or
incorporated by reference therein are shares purchased pursuant to a Company
share buyback program.

 

(q) Except as disclosed or incorporated by reference in the Registration
Statement or the Prospectus and other than as provided in the third amended and
restated agreement of limited partnership of Prentiss Properties Acquisition
Partners, L.P., dated as of October 1, 2001 (as amended, the “Partnership
Agreement”), no holder of any security of the Company has the right, which has
not been waived, to have any security owned by such holder included in the
Registration Statement.

 

(r) All necessary trust action has been duly and validly taken by the Company to
authorize the execution, delivery and performance of this Agreement and the
issuance and sale of the Shares by the Company. This Agreement has been duly and
validly authorized, executed and delivered by the Company and, assuming the due
authorization, execution and delivery by the Sales Manager, constitutes and will
constitute the legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, except as such enforceability
may be limited by applicable bankruptcy, insolvency, reorganization or other
similar laws affecting creditor’s rights generally and by general equitable
principals (regardless of whether enforceability is considered in a proceeding
in equity or at law). Except for the Registration Statement contemplated by
Section 3.1(a) below (and any “blue sky” filings or Trading Market listing
applications to be filed pursuant hereto), each approval, consent, order,
authorization, designation, declaration or filing by or with any regulatory,
administrative or other governmental body necessary in connection with the
execution and delivery by the Company of this Agreement and the consummation of
the transactions contemplated hereby and the issuance and sale of the Shares by
the Company has been obtained or made and is in full force and effect. The
Company will use its best reasonable efforts to cause the Shares to be listed on
the Trading

 

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Market. For purposes of this Agreement, the “Trading Market” is (i) the New York
Stock Exchange, Inc., and (ii) each other securities exchange on which the
common shares of the Company trade or are admitted for trading.

 

(s) The Company has not incurred any liability for a fee, commission or other
compensation on account of the employment of a broker or finder in connection
with the transactions contemplated by this Agreement other than as contemplated
hereby or as described in the Registration Statement or Preliminary Registration
Statement.

 

(t) The Company is conducting its business in compliance with all applicable
laws, rules and regulations of the jurisdictions in which it is conducting
business, except where the failure to be so in compliance would not have a
Material Adverse Effect and except as otherwise disclosed or incorporated by
reference in the Registration Statement or the Prospectus or Preliminary
Registration Statement.

 

(u) No transaction has occurred between or among the Company and any of its
officers or directors or any affiliate or affiliates of any such officer or
director that is required to be described, but is not described in, the
Registration Statement or the Prospectus.

 

(v) The Company has not taken, and will not take, directly or indirectly, any
action designed to or which might reasonably be expected to cause or result in,
or which has constituted or which might reasonably be expected to constitute,
the stabilization or manipulation of the price of the common shares of the
Company to facilitate the sale or resale of any of the Shares. The repurchase by
the Company of common shares from time to time pursuant to a share repurchase
program, shall be conducted in accordance with Rule 10(b)-18 and Regulation M
under the Exchange Act.

 

(w) The Company has filed all federal, state, local and foreign tax returns that
are required to be filed through the date hereof (and will file all such tax
returns when and as required to be filed after the date hereof), or has received
extensions thereof, and has paid all taxes shown on such returns to be due on or
prior to the date hereof (and will pay all taxes shown on such returns to be
filed when due after the date hereof) and all assessments received by it to the
extent that the same are material and have become due except where the failure
to file such a return or pay such amount would not have a Material Adverse
Effect.

 

(x) The Company has met the qualification requirements for a “real estate
investment trust” during its taxable years ending on or after December 31, 1999
and its proposed method of operations will enable it to continue to meet the
requirements for qualification and taxation as a “real estate investment trust”
under the Internal Revenue Code of 1986, as amended (the “Code”), assuming no
change in the applicable underlying law. The Company does not know of the
occurrence of any event that would cause or is likely to cause the Company to
fail to qualify as a “real estate investment trust” at any time.

 

(y) The Company is not an “investment company” within the meaning of the
Investment Company Act of 1940, as amended.

 

(z) The Company’s system of internal accounting controls complies in all
material respects with the listing requirements of the New York Stock Exchange
and the Sarbanes-Oxley

 

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Act of 2002 and the rules promulgated thereunder (provided, that the Company
shall not be required to comply with phased-in regulations prior to the date
compliance is required by the foregoing rules) and to the best of the Company’s
knowledge, neither the Company nor any employee or agent thereof has made any
payment of funds of the Company or received or retained any funds, and no funds
of the Company have been set aside to be used for any payment, in each case in
violation of any law, rule or regulation.

 

(aa) The Company is not involved in any labor dispute and, to the knowledge of
the Company, no such dispute has been threatened, except for such disputes as
would not have a Material Adverse Effect.

 

(bb) Except as disclosed or incorporated by reference in the Registration
Statement or the Prospectus or the Preliminary Registration Statement, (i) there
has been no storage, disposal, generation, manufacture, refinement,
transportation, handling or treatment of substances by the Company or any of its
subsidiaries (or to the knowledge of the Company, any of their predecessors in
interest) at, upon or from any of the property now or previously owned by the
Company or its subsidiaries in violation of any applicable law, ordinance, rule,
regulation, order, judgment, decree or permit or which would require remedial
action under any applicable law, ordinance, rule, regulation, order, judgment,
decree or permit, except for any violation or remedial action which would not
have a Material Adverse Effect; (ii) there has been no material spill,
discharge, leak, emission, injection, escape, dumping or release of any kind
onto such property or into the environment surrounding such property of any
hazardous substances due to or caused by the Company or any of its subsidiaries,
except for any such spill, discharge, leak emission, injection, escape, dumping
or release which would not have a Material Adverse Effect; and (iii) the term
“hazardous substances” shall have the meanings specified in the federal
Comprehensive Environmental Response, Compensation, and Liability Act and
similar local, state, federal and foreign laws or regulations with respect to
environmental protection.

 

ARTICLE II.

 

SALE AND DELIVERY OF SECURITIES

 

2.1 Sale and Delivery of Securities.

 

(a) On the basis of the representations, warranties and agreements herein
contained, but subject to the terms and conditions herein set forth, the Company
agrees to issue and sell through the Sales Manager, as agent, and the Sales
Manager agrees to sell, as agent for the Company, on a best efforts basis, up to
the Maximum Amount of the Shares during the term of this Agreement on the terms
set forth herein. The Shares will be sold from time to time as described in the
Registration Statement and Prospectus in amounts and at prices as directed by
the Company and as agreed to by the Sales Manager.

 

(b) The Sales Manager may, if it reasonably believes one of the conditions under
7.2(a) below exists, upon notice to the Company by telephone (confirmed promptly
by telecopy), at any time and from time to time suspend the offering of Shares;
provided, however, that such suspension shall not affect or impair the parties’
respective obligations with respect to the Shares sold hereunder prior to the
giving of such notice and that such suspension shall last no more than

 

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ten (10) business days, at which time the Sales Manager shall either cease such
suspension or notify the Company that this Agreement is being terminated
pursuant to Article VII below, subject to the terms and conditions therein. The
Company may, upon notice to the Sales Manager by telephone (confirmed promptly
by telecopy), at any time and from time to time suspend the offering of Shares;
provided, however, that such suspension shall not affect or impair the parties’
respective obligations with respect to the Shares sold hereunder prior to the
giving of such notice.

 

(c) The compensation to the Sales Manager for sales of Shares shall be at a
fixed commission rate of 1.5% of the gross sales price per share for the Shares
sold under this Agreement. The remaining proceeds, after further deduction for
any transaction fees imposed by any governmental or self-regulatory organization
in respect to such sale shall constitute the net proceeds to the Company for
such Shares (the “Net Proceeds”).

 

(d) The Company shall open and maintain a trading account (the “Trading
Account”) at a clearing agent designated by the Sales Manager to facilitate the
transactions contemplated by this Agreement. The Net Proceeds from the sale of
the Shares shall be available in the Trading Account on the third business day
(or such other day as is industry practice for regular-way trading) following
each sale of the Shares (each, a “Settlement Date”). The Company shall effect
the delivery of the applicable number of shares of Shares to an account
designated by the Sales Manager at The Depository Trust Company on or before the
Settlement Date of each sale hereunder. The Sales Manager’s compensation shall
be withheld from the sales proceeds on each Settlement Date and shall be paid to
the Sales Manager.

 

(e) Subject to Section 4.1(f) below, at each Settlement Date, the Company shall
be deemed to have affirmed each representation, warranty, covenant and other
agreement contained in this Agreement. Any obligation of the Sales Manager under
this Agreement shall be subject to the continuing accuracy of the
representations and warranties of the Company herein, to the performance by the
Company of its obligations hereunder and to the continuing satisfaction of the
additional conditions specified in Article IV below.

 

(f) If the Company shall default on its obligation to deliver Shares on any
Settlement Date, the Company shall (i) hold the Sales Manager harmless against
any loss, claim or damage arising from or as a result of such default by the
Company and (ii) pay the Sales Manager any commission to which it would
otherwise be entitled absent such default.

 

(g) No Shares shall be sold by the Sales Manager pursuant to this Agreement
until all 3,000,000 of the Company’s common shares available for issuance
pursuant to the Original Sales Agreement have been sold pursuant to the Original
Sales Agreement.

 

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ARTICLE III.

 

COVENANTS OF THE COMPANY

 

3.1 The Company covenants and agrees with the Sales Manager that:

 

(a) On or as promptly as practicable after the date of this Agreement, the
Company will file a registration statement on Form S-3 naming the Sales Manager
as an underwriter, to permit sales of the Shares under the Act. The Company will
use all commercially reasonable efforts to cause such registration statement to
become effective as promptly as possible thereafter. The Sales Manager will have
a reasonable opportunity to review and comment upon the registration statement
before it is filed with the Commission.

 

(b) During the period in which a prospectus relating to the Shares is required
to be delivered under the Act, the Company will notify the Sales Manager
promptly of the time when any subsequent amendment to the Registration Statement
has become effective or any subsequent supplement to the Prospectus has been
filed and of any request by the Commission for any amendment or supplement to
the Registration Statement or the Prospectus or for additional information; the
Company will prepare and file with the Commission, promptly upon the Sales
Manager’s reasonable request, any amendments or supplements to the Registration
Statement or Prospectus that, in the Sales Manager’s reasonable opinion based
upon advice of counsel, may be necessary in connection with the sale of the
Shares pursuant to this Agreement; the Company will not file any amendment or
supplement to the Registration Statement or Prospectus (other than a supplement
to the Prospectus that (i) relates solely to the issuance of securities other
than shares of Shares of the Company and (ii) does not materially change the
information about the Company or its business, operations, properties or
financial condition disclosed in the Registration Statement or Prospectus
previously thereto (an “Excluded Supplement”)) unless a copy thereof has been
submitted to the Sales Manager a reasonable period of time before the filing and
the Sales Manager has not reasonably objected thereto; and it will notify the
Sales Manager at the time of filing of any document that upon filing is deemed
to be incorporated by reference in the Registration Statement or Prospectus. The
Company will cause each amendment or supplement to the Prospectus to be filed
with the Commission as required pursuant to the applicable paragraph of Rule
424(b) of the Rules and Regulations or, in the case of any document to be
incorporated therein by reference, to be filed with the Commission as required
pursuant to the Exchange Act, within the time period prescribed.

 

(c) The Company will advise the Sales Manager, promptly after it shall receive
notice or obtain knowledge thereof, of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement, of the
suspension of the qualification of the Shares for offering or sale in any
jurisdiction, or of the initiation or threatening of any proceeding for any such
purpose; and it will promptly use commercially reasonable efforts to prevent the
issuance of any stop order or to obtain its withdrawal if such a stop order
should be issued.

 

(d) Within the time during which a prospectus relating to the Shares is required
to be delivered under the Act, the Company will comply with all requirements
imposed upon it by the Act and by the Rules and Regulations, as from time to
time in force, so far as necessary to permit the continuance of sales of or
dealings in the Shares as contemplated by the provisions hereof and the
Prospectus. If during such period any event occurs as a result of which the
Prospectus, as then amended or supplemented, would include an untrue statement
of a material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances then existing, not
misleading, or if during such period it is necessary to amend or supplement the
Registration Statement or Prospectus to comply with the Act, the Company will
promptly notify

 

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the Sales Manager to suspend the offering of Shares during such period and the
Company will amend or supplement the Registration Statement or Prospectus (at
the expense of the Company) so as to correct such statement or omission or
effect such compliance and will use its best reasonable efforts to have any
amendment or supplement to the Registration Statement or Prospectus declared
effective as soon as possible, unless the Company has reasonable business
reasons to defer public disclosure of the relevant information.

 

(e) The Company will use commercially reasonable efforts to qualify the Shares
for sale under the securities laws of such jurisdictions as the Sales Manager
designates and to continue such qualifications in effect so long as required for
the sale of the Shares, except that the Company shall not be required in
connection therewith to qualify as a foreign corporation or to execute a general
consent to service of process in any jurisdiction or to qualify or register as a
dealer in securities in any jurisdiction in which it is not so qualified or
registered, or provide any undertaking or make any change in its charter or
by-laws that the Board of Trustees of the Company reasonably determines to be
contrary to the best interests of the Company and its shareholders or to subject
itself to taxation in respect of doing business in any jurisdiction in which it
is not otherwise so subject.

 

(f) The Company will furnish to the Sales Manager and its counsel (at the
expense of the Company) copies of the Registration Statement or the Prospectus
during the period in which a prospectus relating to the Shares is required to be
delivered under the Act, in each case as soon as available and in such
quantities as the Sales Manager may from time to time reasonably request and, in
the case when the Trading Market is a national securities exchange, the Company
will also furnish copies of the Prospectus to such exchange in accordance with
Rule 153 of the Rules and Regulations.

 

(g) The Company will make generally available to its security holders as soon as
practicable, but in any event not later than 15 months after the end of the
Company’s current fiscal quarter, an earnings statement (which need not be
audited) covering a 12-month period that satisfies the provisions of Section
11(a) of the Act and Rule 158 of the Rules and Regulations.

 

(h) The Company, whether or not the transactions contemplated hereunder are
consummated or this Agreement is terminated, will pay all of its expenses
incident to the performance of its obligations hereunder (including, but not
limited to, any transaction fees imposed by any governmental or self-regulatory
organization with respect to transactions contemplated by this Agreement and any
blue sky fees) and will pay the expenses of printing all documents relating to
the offering. The Company will reimburse the Sales Manager for its reasonable
out-of-pocket costs and expenses incurred in connection with entering into this
Agreement, including, without limitation, reasonable travel, reproduction,
ongoing due diligence, printing and similar expenses, as well as the reasonable
fees and disbursements of its legal counsel, upon presentation of appropriate
invoices thereof (provided that such total costs and expenses shall not exceed
$25,000).

 

(i) The Company shall use commercially reasonable efforts to list, subject to
official notice of issuance, the Shares on the applicable Trading Market so long
as the Company’s common shares are trading on such Trading Market or the
Company’s common shares are then admitted for trading on such Trading Market.

 

11

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(j) The Company will apply the Net Proceeds from the sale of the Shares as set
forth in the Prospectus.

 

(k) The Company will not, directly or indirectly, offer or sell any common
shares (other than the Shares) or securities convertible into or exchangeable
for, or any rights to purchase or acquire, common shares, during the period from
the date the Registration Statement is declared effective by the Commission of
this Agreement through the final Settlement Date for the sale of Shares
hereunder without (i) giving the Sales Manager at least one business day prior
written notice specifying the nature of the proposed sale and the date of such
proposed sale and (ii) suspending activity under this program for such period of
time as may reasonably be determined by agreement of the Company and the Sales
Manager; provided, however, that no such notice and suspension shall be required
in connection with the Company’s issuance or sale of (i) common shares pursuant
to any employee or trustee stock option or benefits plan, stock ownership plan,
dividend reinvestment plan, as such plans may be amended from time to time, (ii)
common shares issuable upon conversion of securities or the exercise of
warrants, options or other rights in effect or outstanding as of the date the
Registration Statement is declared effective by the Commission, (iii) common
shares issuable upon exchange of units pursuant to the Partnership Agreement
(iv) securities issued in connection with the acquisition of real estate in the
ordinary course of the Company’s business, and (v) securities issued pursuant to
the Original Sales Agreement or any other agreement with the Sales Manager.
Notwithstanding the foregoing, this paragraph (k) shall not apply during periods
that the Company is neither selling Shares through the Sales Manager nor has
requested the Sales Manager to sell Shares.

 

(l) The Company will, at any time during the term of this Agreement, as
supplemented from time to time, advise the Sales Manager promptly after it shall
have received notice or obtain knowledge thereof, of any information or fact
that would alter or affect any opinion, certificate, letter and other document
provided to the Sales Manager pursuant to Article IV below. The Sales Manager
acknowledges it shall be deemed to have been advised of such information or
facts that have been made publicly available by means of the Company’s filings
under the Act or the Exchange Act. Notwithstanding the foregoing, this paragraph
(l) shall not apply during periods that the Company is neither selling Shares
through the Sales Manager nor has requested the Sales Manager to sell Shares.

 

(m) Each time that the Registration Statement or the Prospectus shall be amended
or supplemented (other than an Excluded Supplement), the Company shall (unless
the Company is not then selling Shares through the Sales Manager and has not
requested the Sales Manager to sell Shares) furnish or cause to be furnished to
the Sales Manager forthwith a certificate dated the date of filing with the
Commission of such amendment, supplement or other document, the date of
effectiveness of amendment, as the case may be, in form satisfactory to the
Sales Manager to the effect that the statements contained in the certificates
referred to in Section 4.1(f) below that were last furnished to the Sales
Manager are true and correct at the time of such amendment, supplement, filing,
as the case may be, as though made at and as of such time (except that such
statements shall be deemed to relate to the Registration Statement or the
Prospectus as amended and supplemented to such time) or, in lieu of such
certificates, certificates of the same tenor as the certificates referred to in
said Section 4.1(f) below, modified as necessary to relate to the Registration
Statement or the Prospectus as amended and supplemented to the time of delivery
of such certificate.

 

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(n) (i) Each time that (1) the Registration Statement shall be amended by the
filing of a post-effective amendment thereto or (2) the Company files a Form
10-K; and (ii) at such other times, as may be reasonably requested by the Sales
Manager, when the Prospectus is supplemented and/or any document or report is
filed with the Commission and is deemed to be incorporated into the Registration
Statement or the Prospectus; the Company (unless the Company is neither selling
Shares through the Sales Manager nor has requested the Sales Manager to sell
Shares) shall furnish or cause to be furnished forthwith to the Sales Manager
and to the Sales Manager’s counsel a written opinion of Akin, Gump, Strauss,
Hauer & Feld, L.L.P., counsel to the Company (“Company Counsel”), or other
counsel satisfactory to the Sales Manager, dated the date of filing with the
Commission of such amendment, supplement or other document and the date of
effectiveness of such amendment, as the case may be, in form and substance
satisfactory to the Sales Manager, of the same tenor as the opinion referred to
in Section 4.1(d) below, but modified as necessary to relate to the Registration
Statement and the Prospectus as amended and supplemented to the time of delivery
of such opinion.

 

(o) Each time that the Registration Statement or the Prospectus shall be amended
or supplemented (other than an Excluded Supplement) to include additional
financial information, the Company shall (unless (1) otherwise agreed to by the
Sales Manager or (2) the Company is not then selling Shares through the Sales
Manager and has not requested the Sales Manager to sell Shares) cause
PricewaterhouseCoopers LLP, or other independent public accountants then
retained by the Company, forthwith to furnish to the Sales Manager a letter,
dated the date of effectiveness of such amendment, or the date of filing of such
supplement or other document with the Commission, as the case may be, in form
satisfactory to the Sales Manager, of the same tenor as the letter referred to
in Section 4.1(e) below but modified to relate to the Registration Statement or
the Prospectus, as amended and supplemented to the date of such letter.

 

ARTICLE IV.

 

CONDITIONS OF THE SALES MANAGER’S OBLIGATIONS

 

4.1 The obligations of the Sales Manager to sell the Shares as provided herein
shall be subject to the accuracy in all material respects, as of the date
hereof, and as of each Settlement Date contemplated under this Agreement, of the
representations and warranties of the Company herein, to the performance by the
Company of its obligations hereunder and to the following additional conditions:

 

(a) The Registration Statement contemplated by Section 3.1(a) above shall have
been declared effective. No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceeding for that purpose
shall have been instituted or, to the knowledge of the Company or the Sales
Manager, threatened by the Commission, and any request of the Commission for
additional information (to be included in the Registration Statement or the
Prospectus or otherwise) shall have been complied with to the Sales Manager’s
reasonable satisfaction.

 

(b) The Sales Manager shall not have advised the Company that the disclosures in
the Registration Statement or the Prospectus, or any amendment or supplement
thereto, contains a material untrue statement of fact, or omits to state a fact
that is material and is required to be stated therein or is necessary to make
the statements therein not misleading in light of the circumstances in which
they were made.

 

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(c) Except as contemplated in the Prospectus, subsequent to the respective dates
as of which information is given in the Registration Statement or the
Prospectus, there shall not have been any Material Adverse Change.

 

  (d) (i) The Sales Manager shall have received at the date of the first sale of
Shares hereunder (the “Commencement Date”) and at every other date specified in
Section 3.1(n) above, opinions of Company Counsel, dated as of the Commencement
Date and dated as of such other date, substantially in the form of Schedule A
hereto.

 

(ii) The Sales Manager shall have received a letter from Company Counsel
authorizing the Sales Manager to rely on the opinion on tax matters delivered by
Company Counsel as Exhibit 8.1 to the Registration Statement.

 

(e) At the Commencement Date and at such other dates specified in Section 3.1(o)
above, the Sales Manager shall have received a “comfort letter” from
PricewaterhouseCoopers LLP, independent public accountants for the Company, or
other independent accountants then retained by the Company, dated the date of
delivery thereof, in form and substance satisfactory to the Sales Manager.

 

(f) The Sales Manager shall have received from the Company a certificate, or
certificates, signed by the Chief Financial Officer and President or Chief
Executive Officer or any Vice President the Company, dated as of the
Commencement Date and (unless the Company is not then selling Shares through the
Sales Manager and has not requested the Sales Manager to sell Shares) dated as
of the first business day of each calendar month thereafter (each, a
“Certificate Date”), to the effect that, to the best of their knowledge based
upon reasonable investigation:

 

(i) The representations and warranties of the Company in this Agreement are true
and correct in all material respects, as if made at and as of the Commencement
Date or the Certificate Date (as the case may be), and the Company has complied
in all material respects with all the agreements and satisfied all the
conditions on its part to be performed or satisfied at or prior to the
Commencement Date and each such Certificate Date (as the case may be);

 

(ii) No stop order suspending the effectiveness of the Registration Statement
has been issued, and no proceeding for that purpose has been instituted or, to
the knowledge of such officer after due inquiry, is threatened, by the
Commission;

 

(iii) Since the date the Registration Statement was declared effective by the
Commission there has occurred no event required to be set forth in an amendment
or supplement to the Registration Statement or Prospectus that has not been so
set forth and there has been no document required to be filed under the Exchange
Act and the rules and regulations of the Commission thereunder that upon such
filing would be deemed to be incorporated by reference in the Prospectus that
has not been so filed; and

 

14

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(iv) Since the date the Registration Statement was declared effective by the
Commission, there has not been any material adverse change in the assets or
properties, business, results of operations, or condition (financial or
otherwise) of the Company and all of its subsidiaries taken as a whole, which
has not been described in an amendment or supplement to the Registration
Statement or Prospectus (directly or by incorporation).

 

(g) At the Commencement Date and on each Settlement Date, the Company shall have
furnished to the Sales Manager such appropriate further information,
certificates and documents as the Sales Manager may reasonably request.

 

All such opinions, certificates, letters and other documents will be in
compliance with the provisions hereof only if they are reasonably satisfactory
in form and substance to the Sales Manager. The Company will furnish the Sales
Manager with such conformed copies of such opinions, certificates, letters and
other documents as the Sales Manager shall reasonably request.

 

ARTICLE V.

 

INDEMNIFICATION AND CONTRIBUTION

 

5.1 (a) The Company agrees to indemnify and hold harmless the Sales Manager and
each person, if any, who controls the Sales Manager within the meaning of
Section 15 of the 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 representations in this Agreement or contained
in the Registration Statement (or any amendment thereto), or the omission or
alleged omission therefrom of a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact contained in any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto) 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 expense whatsoever, (including, subject to Section
5.1(c) below, the reasonable fees and disbursements of counsel chosen by the
Sales Manager), 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) 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 written information furnished to the Company by or
on behalf of the Sales Manager expressly for use in the Registration Statement
(or any amendment thereto) or any preliminary prospectus or the Prospectus (or
any amendment or supplement thereto).

 

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(b) The Sales Manager agrees to indemnify and hold harmless the Company and its
directors or trustees and each officer and employee of the Company, and each
person, if any, who controls the Company within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act against any and all loss, liability,
claim, damage and expense described in the indemnity contained in Section 5.1(a)
above, as incurred, but only with respect to untrue statements or omissions, or
alleged untrue statements or omissions, made in the Registration Statement (or
any amendments thereto) or any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto) in reliance upon and in conformity with written
information furnished to the Company by or on behalf of the Sales Manager
expressly for use in the Registration Statement (or any amendment thereto) or
such preliminary prospectus or the Prospectus (or any amendment or supplement
thereto). The total liability of the Sales Manager under this Section 5.1 (b)
shall not exceed the total actual sales price of Shares sold by the Sales
Manager that is the subject of the dispute.

 

(c) Any indemnified party that proposes to assert the right to be indemnified
under this Article V will, promptly after receipt of notice of commencement of
any action against such party in respect of which a claim is to be made against
an indemnifying party or parties under this Article V, notify each such
indemnifying party of the commencement of such action, enclosing a copy of all
papers served, but the omission so to notify such indemnifying party will not
relieve the indemnifying party from any liability that it might have to any
indemnified party to the extent it is not materially prejudiced as a result
thereof. If any such action is brought against any indemnified party and it
notifies the indemnifying party of its commencement, the indemnifying party will
be entitled to participate in and, to the extent that it elects by delivering
written notice to the indemnified party promptly after receiving notice of the
commencement of the action from the indemnified party, jointly with any other
indemnifying party similarly notified, to assume the defense of the action, with
counsel reasonably satisfactory to the indemnified party, and after notice from
the indemnifying party to the indemnified party of its election to assume the
defense, the indemnifying party will not be liable to the indemnified party for
any legal or other expenses except as provided below. The indemnified party will
have the right to employ its own counsel in any such action, but the fees,
expenses and other charges of such counsel will be at the expense of such
indemnified party unless (1) the employment of counsel by the indemnified party
has been authorized in writing by the indemnifying party, (2) the indemnified
party has reasonably concluded (based on the written advice of counsel) that
there may be legal defenses available to it or other indemnified parties that
are different from or in addition to those available to the indemnifying party,
(3) a conflict or potential conflict exists (based on the written advice of
counsel to the indemnified party) between the indemnified party and the
indemnifying party (in which case the indemnifying party will not have the right
to direct the defense of such action on behalf of the indemnified party) or (4)
the indemnifying party has not in fact employed counsel to assume the defense of
such action within a reasonable time after receiving notice of the commencement
of the action, in each of which cases the reasonable fees, disbursements and
other charges of counsel will be at the expense of the indemnifying party or
parties. It is understood that the indemnifying party or parties shall not, in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the reasonable fees, disbursements and other charges of more than
one separate firm admitted to practice in such

 

16

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jurisdiction at any one time for all such indemnified party or parties. All such
fees, disbursements and other charges will be reimbursed by the indemnifying
party promptly as they are incurred. An indemnifying party will not be liable
for any settlement of any action or claim effected without its written consent
(which consent will not be unreasonably withheld).

 

(d) In order to provide for just and equitable contribution in circumstances in
which the indemnification provided for in the foregoing paragraphs of this
Article V is applicable in accordance with its terms but for any reason is held
to be unavailable from the Company or the Sales Manager, the Company and the
Sales Manager will contribute to the total losses, claims, liabilities, expenses
and damages (including any investigative, legal and other expenses reasonably
incurred in connection with, and any amount paid in settlement of, any action,
suit or proceeding or any claim asserted, but after deducting any contribution
received by the Company from persons other than the Sales Manager, such as
persons who control the Company within the meaning of the Act, officers of the
Company and directors or trustees of the Company, who also may be liable for
contribution) to which the Company and the Sales Manager may be subject in such
proportion as shall be appropriate to reflect the relative fault of the Company,
on the one hand, and the Sales Manager, on the other, with respect to the
statements or omission which resulted in such loss, claim, liability, expense or
damage, or action in respect thereof, as well as any other relevant equitable
considerations with respect to such offering. Such relative fault shall be
determined by reference to whether the 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 or the Sales Manager, the intent of the
parties and their relative knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company and the Sales Manager
agree that it would not be just and equitable if contributions pursuant to this
Section 5.1(d) were to be determined by pro rata allocation or by any other
method of allocation which does not take into account the equitable
considerations referred to herein. The amount paid or payable by an indemnified
party as a result of the loss, claim, liability, expense or damage, or action in
respect thereof, referred to above in this Section 5.1(d) shall be deemed to
include, for the purpose of this Section 5.1(d), subject to the limitations on
such amounts in Section 5.1(a), (b), and (c) above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the foregoing provisions
of this Section 5.1(d), the Sales Manager shall not be required to contribute
any amount in excess of the amount by which the total actual sales price at
which Shares sold under this Agreement by the Sales Manager since the date
hereof exceeds the amount of any damages that the Sales Manager has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission and no person found guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) will be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 5.1(d), any person who controls
a party to this Agreement within the meaning of the Act will have the same
rights to contribution as that party, and each officer and director or trustee
of the Company will have the same rights to contribution as the Company, subject
in each case to the provisions hereof. Any party entitled to contribution,
promptly after receipt of notice of commencement of any action against such
party in respect of which a claim for contribution may be made under this
Section 5.1(d), will notify any such party or parties from whom contribution may
be sought, but the omission so to notify will not relieve that party or parties
from whom contribution may be sought from any other obligation it or they may
have under this Section 5.1(d). No party will be liable for contribution with
respect to any action or claim settled without its written consent (which
consent will not be unreasonably withheld).

 

17

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(e) The indemnity and contribution provided by this Article V shall not relieve
the Company and the Sales Manager from any liability the Company and the Sales
Manager may otherwise have (including, without limitation, any liability the
Sales Manager may have for a breach of its obligations under Article II above).

 

ARTICLE VI.

 

REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY

 

6.1 All representations, warranties and agreements of the Company herein or in
certificates delivered pursuant hereto, and the agreements of the Sales Manager
contained in Article V above, shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of the Sales Manager
or any controlling persons, or the Company (or any of their officers, directors
or controlling persons), and shall survive delivery of and payment for the
Shares.

 

ARTICLE VII.

 

TERMINATION

 

7.1 The Company may terminate this Agreement only as follows:

 

(a) The Company shall have the right by giving notice as hereinafter specified
at any time to terminate this Agreement if (i) the Sales Manager shall have
failed, refused or been unable, to perform any agreement on its part to be
performed hereunder, (ii) any other condition of the Company’s obligations
hereunder is not fulfilled completely, (iii) any suspension or limitation of
trading in the Shares on the Trading Market, or any setting of minimum prices
for trading of the Shares on such Trading Market, shall have occurred, (iv) any
banking moratorium shall have been declared by federal or New York authorities
or (v) an outbreak or material escalation of major hostilities in which the
United States is involved, a declaration of war by Congress, any other
substantial national or international calamity or any other event or occurrence
of a similar character shall have occurred since the execution of this Agreement
that, in the reasonable discretion of the Company, makes it impractical or
inadvisable to proceed with the completion of the sale of and payment for the
Shares to be sold by the Sales Manager on behalf of the Company.

 

(b) The Company shall have the right, by giving notice as hereinafter specified,
to terminate this Agreement in its sole discretion at any time and for any
reason on or after the third anniversary of the date of this Agreement.

 

(c) Notwithstanding anything contained in this Section 7.1 to the contrary, the
Company shall have the right, by giving notice as hereinafter specified, to
terminate this Agreement in its sole discretion at any time before the third
anniversary of the date of this Agreement provided that the Company shall
reimburse the Sales Manager for its reasonable

 

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costs and expenses (including, without limitation, legal fees and disbursements
of counsel and ongoing due diligence costs and expenses) incurred in connection
with the negotiation and consummation of this Agreement and the transactions
contemplated thereby (unless already reimbursed by the Company to the Sales
Manager pursuant to Section 3.1(h) above). Such total expenses to be paid
hereunder and pursuant to Section 3.1(h) shall not together exceed $25,000

 

7.2 The Sales Manager may terminate this Agreement only as follows:

 

(a) The Sales Manager shall have the right by giving notice as hereinafter
specified at any time to terminate this Agreement if (i) an event occurs that is
a Material Adverse Change which, in the sole discretion of the Sales Manager,
materially impairs the investment quality of the Shares, (ii) the Company shall
have failed, refused or been unable to perform any agreement on its part to be
performed hereunder, (iii) any other condition of the Sales Manager’s
obligations hereunder is not fulfilled completely, (iv) any suspension or
limitation of trading in the Shares on the Trading Market, or any setting of
minimum prices for trading of the Shares on such Trading Market, shall have
occurred, (v) any banking moratorium shall have been declared by federal or New
York authorities, (vi) an outbreak or material escalation of major hostilities
in which the United States is involved, a declaration of war by Congress, any
other substantial national or international calamity or any other event or
occurrence of a similar character shall have occurred since the execution of
this Agreement that, in the reasonable discretion of the Sales Manager, makes it
impractical or inadvisable to proceed with the completion of the sale of and
payment for the Shares to be sold by the Sales Manager on behalf of the Company,
or (vii) any of the representations or warranties of the Company herein becomes
untrue or inaccurate.

 

(b) The Sales Manager shall have the right, by giving notice as hereinafter
specified, to terminate this Agreement in its sole discretion at any time and
for any reason on or after the third anniversary of the date of this Agreement.

 

(c) Notwithstanding anything contained in this Section 7.2 to the contrary, the
Sales Manager shall have the right, by giving notice as hereinafter specified,
to terminate this Agreement in its sole discretion at any time before the third
anniversary of the date of this Agreement provided that the Sales Manager shall
reimburse the Company for its reasonable legal fees and disbursements of counsel
in an amount equal to the lesser of (A) $75,000 plus the total reimbursements by
the Company to the Sales Manager pursuant to Section 3.1(h) above or (B) the
Company’s total reasonable legal fees and disbursements of counsel incurred in
connection with the negotiation and consummation of this Agreement and the
transactions contemplated thereby, including, without limitation, the legal fees
of the Sales Manager reimbursed by the Company pursuant to Section 3.1(h) above
and the legal fees associated with the preparation of any registration statement
and any amendment or supplement thereto required by this Agreement.

 

7.3 This Agreement shall remain in full force and effect unless terminated
pursuant to Sections 7.1 or 7.2 above or otherwise by mutual agreement of the
parties; provided, however, that any termination pursuant to Sections 7.1 or 7.2
above shall be without liability of any party to any other party except that the
provisions of Section 3.1(h), Article V and Article VI above shall remain in
full force and effect notwithstanding such termination; and provided further
that any termination by mutual agreement shall in all cases be deemed to provide
that Section 3.1(h), Article V and Article VI above shall remain in full force
and effect notwithstanding such termination.

 

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7.4 Any termination of this Agreement shall be effective on the date specified
in such notice of termination; provided that such termination shall not be
effective until the close of business on the date of receipt of such notice by
the Sales Manager or the Company, as the case may be. If such termination shall
occur during a period when sales of Shares are being made pursuant to this
Agreement, any sales of Shares made prior to the termination of this Agreement
shall settle in accordance with the provisions of this Agreement.

 

ARTICLE VIII.

 

NOTICES

 

8.1 All notices or communications hereunder shall be in writing and if sent to
the Sales Manager shall be mailed, delivered or telecopied and confirmed to the
Sales Manager at Brinson Patrick Securities Corporation, 330 Madison Avenue, 9th
Floor, New York, New York 10017, facsimile number (212) 453-5555, Attention:
Corporate Finance, or if sent to the Company, shall be mailed, delivered or
telecopied and confirmed to the Company at Prentiss Properties Trust, 3890 W.
Northwest Highway, Suite 400, Dallas, Texas 75220, Attention: Gregory Imhoff
(Fax: 214-358-6443); with a copy to Michael E. Dillard, Esq., Akin, Gump,
Strauss, Hauer & Feld, L.L.P., 1700 Pacific Avenue, Suite 4100, Dallas, Texas
75201 (Fax: 214-969-4343). Each party to this Agreement may change such address
for notices by sending to the parties to this Agreement written notice of a new
address for such purpose.

 

ARTICLE IX.

 

MISCELLANEOUS

 

9.1 This Agreement shall inure to the benefit of and be binding upon the Company
and the Sales Manager and their respective successors and the controlling
persons, officers and directors or trustees referred to in Article V above, and
no other person will have any right or obligation hereunder.

 

9.2 This Agreement constitutes the entire agreement and supersedes all other
prior and contemporaneous agreements and undertakings, both written and oral,
between the parties hereto with regard to the subject matter hereof.

 

9.3 THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE PRINCIPLES OF
CONFLICTS OF LAWS.

 

9.4 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. The parties agree that this Agreement will be considered
signed when the signature of a party is delivered by facsimile transmission.
Such facsimile transmission shall be treated in all respects as having the same
effect as an original signature.

 

[Signature page to follow]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the date first set forth
above.

 

PRENTISS PROPERTIES TRUST

By:  

/s/ Michael A. Ernst

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Name:   Michael A. Ernst Title:   Executive Vice President and Chief Financial
Officer BRINSON PATRICK SECURITIES CORPORATION By:  

/s/ Todd Wyche

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Name:   Todd Wyche Title:   Managing Director

 

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