Sales Agreement, dated August 30, 2013, by and among the Company, the Operating Partnership and Robert W. Baird & Co. Incorporated

1.            Issuance and Sale of Shares.  The Company agrees that, from time to time during the term of this Agreement, on the terms and subject to the conditions set forth herein, it may issue and sell through Baird, acting as agent and/or principal, the Company's common shares of beneficial interest, no par value per share (the "Common Shares"), with an aggregate offering price of up to $75,000,000 (the "Shares").  The Company agrees that if it determines that Baird will purchase any Shares on a principal basis, then it will enter into a separate underwriting, term or similar agreement in form and substance satisfactory to both the Company and Baird covering such purchase.  Notwithstanding anything to the contrary contained herein, the parties hereto agree that compliance with the limitation set forth in this Section 1 on the number of Shares issued and sold under this Agreement shall be the sole responsibility of the Company, and Baird shall have no obligation in connection with such compliance.  The issuance and sale of Shares through Baird will be effected pursuant to the Registration Statement (as defined below).

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2.            Placements.  Each time that the Company wishes to issue and sell the Shares hereunder (each issuance and sale, a "Placement"), it will notify Baird by email notice (or other method mutually agreed to in writing by the parties), a form of which is attached hereto as Schedule 1 (a "Placement Notice"), containing the parameters in accordance with which it desires the Shares to be sold, which shall at a minimum include the number of Shares to be issued and sold (the "Placement Shares"), the time period during which sales are requested to be made, any limitation on the number of Shares that may be sold in any one Trading Day (as defined in Section 3) and any minimum per-Share price below which sales may not be made.  The Placement Notice shall originate from any of the individuals from the Company whose names are set forth on Schedule 2 (with a copy to each of the other individuals from the Company whose names are set forth on such schedule), and shall be addressed to each of the individuals from Baird whose names are set forth on Schedule 2, as such schedule may be amended from time to time.

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3.            Sale of Placement Shares by Baird.  Subject to the terms and conditions herein set forth, upon Baird's acceptance of a Placement Notice or upon receipt by Baird of an Acceptance, as the case may be, and unless the sale of the Placement Shares described therein has been declined, suspended or otherwise terminated in accordance with the terms of this Agreement, Baird, for the period specified in the Placement Notice, will use its commercially reasonable efforts consistent with its normal trading and sales practices, and applicable state and federal laws, and the rules and regulations of the New York Stock Exchange (the "NYSE"), to sell such Placement Shares in accordance with the terms of such Placement Notice.  Baird will provide written confirmation to the Company (including by email correspondence to each of the individuals of the Company whose names are set forth on Schedule 2, if receipt of such correspondence is actually acknowledged by any of the individuals to whom the notice is sent, other than via auto-reply) 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 Shares hereunder setting forth the number of Placement Shares sold on such day, the compensation payable by the Company to Baird pursuant to Section 2 hereof with respect to such sales, and the Net Proceeds (as defined below) payable to the Company, with an itemization of the deductions made by Baird (as set forth in Section 5(a) hereof) from the gross proceeds that it receives from such sales.  After consultation with the Company and subject to the terms of the Placement Notice, Baird may sell Placement Shares by any method permitted by law deemed to be an "at the market" offering as defined in Rule 415 of the Securities Act, including without limitation sales made directly on the NYSE, on any other existing trading market for the Common Shares

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or to or through a market maker.  After consultation with the Company and subject to the terms of the Placement Notice, Baird may also sell Placement Shares by any other method permitted by law, including, but not limited to, privately negotiated transactions.  The Company acknowledges and agrees that (i) there can be no assurance that Baird will be successful in selling Placement Shares, and (ii) Baird will incur no liability or obligation to the Company or any other person or entity if it does not sell Placement Shares for any reason other than a failure by Baird to use its commercially reasonable efforts consistent with its normal trading and sales practices to sell such Placement Shares as required under this Section 3.  In this Agreement, "Trading Day" means any day on which Common Shares are permitted to be purchased and sold on the principal market on which the Common Shares are listed or quoted.

4.            Suspension of Sales.  (a) The Company or Baird 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 Schedule 2, 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 Schedule 2), suspend any sale of Placement Shares; provided, however, that such suspension shall not affect or impair either party's obligations with respect to any Placement Shares sold hereunder prior to the receipt of such notice.  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 named on Schedule 2 hereto, as such schedules may be amended from time to time.

5.	Settlement.

(a)        Settlement of Placement Shares.  Unless otherwise specified in the applicable Placement Notice, settlement for sales of Placement Shares will occur on the third 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 Shares sold (the "Net Proceeds") will be equal to the aggregate sales price received by Baird at which such Placement Shares were sold, after deduction for (i) Baird's commission, discount or other

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 compensation for such sales payable by the Company pursuant to Section 2 hereof, (ii) any other amounts due and payable by the Company to Baird hereunder pursuant to Section 7(h) (Expenses) hereof, and (iii) any transaction fees imposed by any governmental or self-regulatory organization in respect of such sales.

 

(b)        Delivery of Placement Shares.  On or before each Settlement Date, the Company will, or will cause its transfer agent to, electronically transfer the Placement Shares being sold by crediting Baird's or its designee's account (provided Baird shall have given the Company written notice of such designee not less than one Trading Day 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 tradeable, transferable, registered shares in good deliverable form.  On each Settlement Date, Baird will deliver the related Net Proceeds in same day funds to an account designated by the Company on, or prior to, the Settlement Date.  If the Company, or its transfer agent (if applicable), defaults in its obligation to deliver Placement Shares on a Settlement Date, the Company agrees that in addition to and in no way limiting the rights and obligations set forth in Section 9(a) (Indemnification and Contribution) hereof, it will (i) hold Baird harmless against any loss, claim, damage or expense (including reasonable legal fees and expenses), as incurred, arising out of or in connection with such default by the Company and (ii) pay to Baird any commission, discount or other compensation to which it would otherwise have been entitled absent such default.

6.            Representations and Warranties of the Company and the Operating Partnership. The Company and the Operating Partnership jointly and severally represent and warrant to, and agree with, Baird that as of each Applicable Time (as defined in Section 20(a)):

 

(a)        Compliance with Registration Requirements.  The Company satisfies all of the requirements of the Securities Act for use of Form S-3 for the offering of the Shares contemplated hereby. The Registration Statement meets, and the offering and sale of the Shares contemplated hereby complies with, the requirements set forth in Rule 415(a)(1)(x) of the Securities Act. The Registration Statement became effective upon filing under Rule 462(e) of the Securities Act on June 27, 2013.  At the time of the initial filing of the 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) of the Securities Act) made any offer relating to the Shares in reliance on the exemption of Rule 163 of the Securities Act and at the date hereof, the Company was and is a "well-known seasoned issuer" as defined in Rule 405 of the Securities Act, including not having been and not being an "ineligible issuer," as defined in Rule 405 of the Securities Act. The Registration Statement is an "automatic shelf registration statement," as defined in Rule 405 of the Securities Act, and the Shares, since their registration on the Registration Statement, have been and remain eligible for registration by the Company on a Rule 405 "automatic shelf registration statement." The Company has not received from the Commission any notice pursuant to Rule 401(g)(2) of the Securities Act objecting to the use of the automatic shelf registration statement form.  No stop order suspending the effectiveness of

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the Registration Statement has been issued under the Securities Act and no proceedings for that purpose have been instituted or are pending or, to the knowledge of the Company, are contemplated by the Commission, and any request on the part of the Commission for additional information has been complied with.  The Registration Statement and Prospectus delivered to Baird for use in connection with the offering of Shares will, at the time of such delivery, be identical in all material respects to the electronically transmitted copies thereof filed with the Commission on EDGAR, except to the extent permitted by Regulation S-T.  At the respective times the Registration Statement and each amendment thereto became or will become effective, the Registration Statement complied or will comply in all material respects with the requirements of the Securities Act, and did not and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. The representations and warranties made in the preceding sentence do not apply to statements in or omissions from the Registration Statement or any amendment thereto in reliance upon and in conformity with written information relating to Baird furnished to the Company in writing by Baird expressly for inclusion in any of the aforementioned documents.  For purposes of this Agreement, the only information so furnished shall be Baird's name and the third paragraph under the caption "Plan of Distribution" in the Prospectus Supplement (collectively, the "Baird-Furnished Information").

 

(b)        Prospectus.  Neither the Prospectus nor any amendments or supplements thereto, at the time the Prospectus or any such amendment or supplement was filed with the Commission, as of the date hereof, and at each Representation 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 made in the preceding sentence do not apply to statements in or omissions from the Prospectus or any amendment thereto in reliance upon and in conformity with the Baird-Furnished Information.

 

(c)        Free Writing Prospectuses. Each Free Writing Prospectus, as of its issue date and as of each Applicable Time (as defined in Section 20 hereof), did not, does not and will not include any information that conflicted, conflicts or will conflict with the information contained in the Registration Statement or the Prospectus, includes or will include an untrue statement of a material fact or omitted, omits or will omit to state a material fact necessary in order to make the statements therein, in light of the circumstances, prevailing at that time, not misleading.  The foregoing sentence does not apply to statements in or omissions from any Free Writing Prospectus based upon and in conformity with the Baird-Furnished Information.  Without limitation to anything contained herein, the Company has at all relevant times met, meets and will at all relevant times meet the requirements of Rule 164 of the Securities Act for the use of a free writing prospectus (as defined in Rule 405 of the Securities Act) in connection with the offering contemplated hereby.  The Company has not made and will not make any offer relating to the Shares that would constitute an issuer Free Writing Prospectus without the prior written consent of Baird.  The Company has retained, and will retain, in accordance with the Securities Act all issuer Free Writing Prospectuses that are not required to be filed pursuant to the Securities Act.  The Company has taken all commercially reasonable actions necessary so that any "road show" (as defined in Rule 433 of the Securities Act) in connection with the offering of the Shares will not be required to be filed pursuant to the Securities Act.

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(d)        Authorization of Shares.  All of the issued and outstanding shares of beneficial interest of the Company have been duly authorized and validly issued, are fully paid and nonassessable and have been issued in compliance with applicable federal and state securities laws.  None of the Company's outstanding Common Shares were issued in violation of any preemptive rights, rights of first refusal or other similar rights; except as set forth in the Prospectus, the Company is not a party to or bound by any outstanding options, warrants or similar rights to subscribe for, or contractual obligations to issue, sell, transfer or acquire, any of its shares of beneficial interest or any securities convertible into or exchangeable for any of such shares of beneficial interest; the Shares to be issued and sold by the Company hereunder have been duly authorized and, when issued and delivered against full payment therefor in accordance with the terms hereof, will be validly issued, fully paid and nonassessable and free of any preemptive rights, rights of first refusal or other or similar rights; the shares of beneficial interest (including the Shares) of the Company conform to the description thereof contained in the Prospectus; and the delivery of the Shares being sold by the Company against payment therefor pursuant to the terms of this Agreement will pass valid title to the Shares being sold by the Company, free and clear of any claim, encumbrance or defect in title, and without notice of any lien, claim or encumbrance. The certificates, if any, used by the Company to evidence the Common Shares are in valid and sufficient form.

 

(e)        Authorization of Units.  The issuance of Common Units (as defined below) to the Company in exchange for contribution of proceeds from the sale of the Shares described in the Prospectus has been duly authorized by the Operating Partnership and when issued and duly delivered against payment therefor will be validly issued, fully paid and nonassessable. Immediately after the transactions contemplated by this Agreement, none of the outstanding common units of limited partnership interest in the Operating Partnership ("Common Units") or preferred units of limited partnership interest in the Operating Partnership ("Preferred Units" and, collectively with the Common Units, the "Units") has been or will be issued or is owned or held in violation of any preemptive right, right of first refusal or other similar right; and the outstanding Units have been or will be offered, sold and issued by the Operating Partnership in compliance with applicable federal and state securities laws.  Except as disclosed in the Prospectus, no Common Units are reserved for any purpose and there are no outstanding securities convertible into or exchangeable for any Common Units.

 

(f)        Organization and Good Standing of the Company and Subsidiaries.  Each of the Company, the Operating Partnership and each Subsidiary (as defined in Section 20 hereof) is duly organized and validly existing in good standing under the laws of the state of its incorporation or organization with full corporate, partnership or entity power and authority, as the case may be, to own, lease and operate its Properties (as defined herein) and to conduct its business as presently conducted and as described in the Prospectus and is duly registered and qualified to conduct its business and is in good standing in each jurisdiction or place where the nature of its Properties or the conduct of its business requires such registration or qualification, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure to so register or qualify (i) has not had or would not have, individually or in the aggregate, a material adverse effect on the earnings, business, Properties, assets, operations, condition (financial or otherwise) or prospects of the Company and the Subsidiaries, taken as a whole,

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whether or not arising from transactions in the ordinary course of business, or (ii) would not prevent the consummation of the transactions contemplated hereby (the occurrence of any such effect or any such prevention described in the foregoing clauses (i) and (ii) being referred to as a "Material Adverse Effect").  The Company owns 100% of IRET, Inc., which is the sole general partner of the Operating Partnership.

 

(g)        Property.  (1) The Company or the Subsidiaries have fee simple title or a valid leasehold interest to all of the properties described in the Prospectus as owned or leased by the Company or the Subsidiaries, whether owned in fee simple or through a joint venture or other partnership (the "Properties" or "Property"), in each case, free and clear of all liens, encumbrances, mortgages, claims, security interests, restrictions and defects of any kind, except such as (i) are disclosed in the Prospectus or (ii) could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; (2) neither the Company nor any Subsidiary thereof has received from any governmental authority any written notice of any condemnation of, or zoning change affecting any of, the Properties or any part thereof, and the Company does not know of any such condemnation or zoning change which is threatened, which if consummated could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect; (3) except as otherwise described in the Prospectus, neither the Company nor, to the knowledge of the Company, any tenant of any of the Properties is in default under (i) any space lease (as lessor or lessee, as the case may be) relating to any of the Properties (except such tenant defaults that would not, individually or in the aggregate, have a Material Adverse Effect), or (ii) any of the mortgages or other security documents or other agreements encumbering or otherwise recorded against the Properties, and the Company does not know of any event which, but for the passage of time or the giving of notice, or both, would constitute a default under any of such documents or agreements, except any such default that would not, individually or in the aggregate, have a Material Adverse Effect; (4) neither the Company nor any of the Subsidiaries owns any real property that is material to the Company other than the Properties; and (5) except as disclosed in the Prospectus, no tenant under any of the leases at the Properties has a right of first refusal to purchase the premises demised under such lease.  To the knowledge of the Company, water, stormwater, electricity and telephone service are all available at the property lines of each Property over duly dedicated streets or perpetual easements of record benefiting the applicable Property and each of the Properties is free of any material structural defects and all building systems contained therein are in reasonable working order in all material respects, subject to ordinary wear and tear, except for defects or deficiencies that would not, singly or in the aggregate, have a Material Adverse Effect, or, in each instance, the Company or any Subsidiary, as the case may be, has created an adequate reserve or capital budget to effect reasonably required repairs, maintenance and capital expenditures. Each Property is in compliance with all presently applicable provisions of the Americans with Disabilities Act, except for such failures to comply as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.  None of the outstanding shares of capital stock of any Subsidiary was issued in violation of the preemptive or similar rights of any security holder of such Subsidiary. As of the date of this Agreement, the only subsidiaries of the Company are the subsidiaries listed on Exhibit 21 to the Company's Form 10-K for the year ended April 30, 2013 and any additional subsidiaries set forth on Schedule 4 of this Agreement.

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(h)        Leases.  Each Property with respect to which the Company or one of the Subsidiaries has a leasehold interest is the subject of a lease that has been entered into by, or assigned to, the Company or a Subsidiary, as the case may be, and has been duly and validly authorized, executed and delivered by or on behalf of the Company or such Subsidiary, as the case may be, and constitutes a valid and binding agreement of the Company or such Subsidiary, as the case may be, enforceable in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors' rights generally or by general principles of equity.

 

(i)        Mortgage; Deed of Trusts.  The mortgages and deeds of trust encumbering the Properties are not convertible into equity interests in the Property nor will the Company or the Operating Partnership hold a participating interest therein and such mortgages and deeds of trust are not cross-defaulted or cross collateralized to any property not to be owned directly or indirectly by the Company or the Operating Partnership.

 

(j)        Subsidiaries. The outstanding equity interests of each of the Subsidiaries have been duly authorized and validly issued, are fully paid and nonassessable and are owned by the Company or the Operating Partnership, directly or through Subsidiaries, free and clear of any security interests, liens, encumbrances, equities or claims.

 

(k)        No Proceedings.  Except as described in the Prospectus, there is no action, suit, inquiry, proceeding or investigation by or before any court or governmental or other regulatory or administrative agency or commission pending or, to the knowledge of the Company, threatened, against or affecting the Company or the Subsidiaries, which is required to be disclosed in the Registration Statement (other than as disclosed therein) or which might individually or in the aggregate prevent the transactions contemplated by this Agreement or result in a Material Adverse Effect; and the aggregate of all pending legal or governmental proceedings to which the Company or any of the Subsidiaries is a party or of which any of their respective Properties or assets is the subject which are not described in the Prospectus, including ordinary routine litigation incidental to the business, would not reasonably be expected to result in a Material Adverse Effect.

 

(l)        Exhibits; Material Contracts. There are no agreements, contracts, indentures, leases or other instruments that are required to be described in the Prospectus or to be filed as an exhibit to the Registration Statement that are not so described, filed or incorporated by reference in the Registration Statement and the Prospectus as required by the Securities Act. All such contracts to which the Company, the Operating Partnership, or any Subsidiary is a party have been duly authorized, executed and delivered by the Company, the Operating Partnership or the applicable Subsidiary, as the case may be, constitute valid and binding agreements of the Company, the Operating Partnership or the applicable Subsidiary, as the case may be, and are enforceable against the Company, the Operating Partnership or the applicable Subsidiary, as the case may be, in accordance with the terms thereof, except as enforceability thereof may be limited by (i) the application of bankruptcy, reorganization, insolvency and other laws affecting creditors' rights generally and (ii) equitable principles being applied at the discretion of a court before which any proceeding may be brought. Neither the Company nor the applicable Subsidiary

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has received notice or been made aware that any other party is in breach of or default to the Company or the Subsidiaries under any of such contracts.

 

(m)        Compliance with Existing Instruments.  Neither the Company, the Operating Partnership (as defined in Section 20 hereof), nor any of the Subsidiaries is (i) in violation of (A) its Organizational Documents, (B) to the Company's knowledge any law, ordinance, administrative or governmental rule or regulation applicable to the Company, the Operating Partnership, or any Subsidiary, the violation of which would have a Material Adverse Effect or (C) any decree of any court or governmental agency or body having jurisdiction over the Company or any of the Subsidiaries; or (ii) in default in the performance of any obligation, agreement or condition contained in (A) any bond, debenture, note or any other evidence of indebtedness or (B) any agreement, indenture, lease or other instrument (each of (A) and (B), an "Existing Instrument") to which the Company, the Operating Partnership, or any Subsidiary is a party or by which any of their Properties may be bound, which default would have a Material Adverse Effect; and, to the Company's knowledge, there does not exist any state of facts that constitutes a default or an event of default on the part of the Company or any of the Subsidiaries as defined in such documents or that, with notice or lapse of time or both, would constitute such a default or event of default which would have a Material Adverse Effect.

 

(n)        Sales Agreement.  The Company and the Operating Partnership have full legal right, power and authority to enter into and perform this Agreement and to consummate the transactions contemplated herein, including the issuance, sale and delivery of the Shares as provided herein and the Operating Partnership's issuance of the Common Units to the Company. The execution and delivery of this Agreement by the Company and the Operating Partnership and the performance by the Company and the Operating Partnership of their obligations under this Agreement have been duly and validly authorized by the Company and the Operating Partnership and this Agreement has been duly executed and delivered by the Company and the Operating Partnership, and constitutes a valid and legally binding agreement of the Company and the Operating Partnership, enforceable against the Company and the Operating Partnership in accordance with its terms, except to the extent enforceability may be limited by (i) the application of bankruptcy, reorganization, insolvency and other laws affecting creditors' rights generally and (ii) equitable principles being applied at the discretion of a court before which any proceeding may be brought, and except as rights to indemnity and contribution hereunder may be limited by federal or state securities laws.

 

(o)        Partnership Agreement.  The Agreement of Limited Partnership dated January 31, 1997 of the Operating Partnership, including all amendments and restatements thereto, if any (collectively, the "Partnership Agreement"), has been duly and validly authorized, executed and delivered by the Company and constitutes a valid and binding agreement, enforceable in accordance with its terms against the Company and the Operating Partnership (and, to the knowledge of the Company and the Operating Partnership, against each other party thereto), except to the extent that enforceability may be limited by bankruptcy, insolvency, reorganization or other laws of general applicability relating to or affecting creditors' rights or by general equity principles.

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(p)            No Consent.  No consent, approval, authorization, order, license, certificate, permit, registration, designation or filing by or with any governmental agency or body is required for the execution, delivery and performance by the Company and the Operating Partnership of their respective obligations under this Agreement and the consummation by the Company and the Operating Partnership of the transactions contemplated hereby, including the valid authorization, issuance, sale and delivery of the Shares, except such as may be required by the federal securities laws, the NYSE, the securities or Blue Sky laws of the various states and the Financial Industry Regulatory Association ("FINRA") in connection with the offer and sale of the Shares, all of which will be, or have been obtained, in accordance with this Agreement.

 

(q)            Non-Contravention of Existing Instruments. Neither the issuance and sale of the Shares by the Company, the execution, delivery or performance of this Agreement by the Company and the Operating Partnership nor the consummation by the Company and the Operating Partnership of the transactions contemplated hereby (i) conflicts with, or will conflict with, or constitutes, or with the giving of notice or lapse of time, will constitute a breach of, or a default under, the Company's Declaration of Trust or bylaws (or other applicable Organizational Document), the Operating Partnership's certificate of limited partnership or the Partnership Agreement, or any Existing Instrument to which the Company or any of the Subsidiaries is a party or by which any of its or their Properties may be bound, (iii) violates any statute, law, regulation, ruling, filing, judgment, injunction, order or decree applicable to the Company or any of the Subsidiaries or any of their Properties, or (iv) results in a breach of, or default or Debt Repayment Triggering Event (as defined below) under, or results in the creation or imposition of any lien, charge or encumbrance upon any Property or assets of the Company or any of the Subsidiaries pursuant to, or requires the consent of any other party to, any Existing Instrument, except for such conflicts, breaches, defaults, liens, charges or encumbrances that will not, individually or in the aggregate, result in a Material Adverse Effect. As used herein, a "Debt Repayment Triggering Event" means any event or condition that gives, or with the giving of notice or lapse of time would give, the holder of any note, debenture or other evidence of indebtedness (or any person acting on such holder's behalf) the right to require the repurchase, redemption or repayment of all or a portion of such indebtedness by the Company or any of the Subsidiaries.

 

(r)            No Applicable Registration Rights.  Except as disclosed in the Prospectus, there are no persons with registration or other similar rights to have any equity or debt securities registered for sale under the Registration Statement or included in the offering contemplated by this Agreement, except for such rights as have been duly satisfied or waived.

 

(s)            Independent Accountants.  Grant Thornton LLP and Deloitte & Touche LLP, each of whom has audited certain financial statements (and the related notes thereto) incorporated by reference in the Registration Statement and the Prospectus, are and were, during the periods covered by their respective reports incorporated by reference in the Registration Statement and the Prospectus, independent registered public accountants as required by the Securities Act, the Exchange Act and the Public Company Accounting Oversight Board ("PCAOB"); any other public accountants who have audited the financial statements incorporated by reference in the Registration Statement and the Prospectus, are and were, during the periods covered by their reports incorporated by reference in the Registration Statement and

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the Prospectus, independent registered public accountants as required by the Securities Act, the Exchange Act and the PCAOB.

 

(t)            Financial Statements. The financial statements of the Company and its consolidated subsidiaries included or incorporated by reference in the Registration Statement and the Prospectus, together with the related schedules and notes, comply in all material respects with the applicable requirements of the Securities Act and present fairly the financial position of the Company and its consolidated subsidiaries as of the dates indicated and the statement of operations, shareholders' equity and cash flows of the Company and its consolidated subsidiaries for the periods specified; said financial statements have been prepared in conformity with generally accepted accounting principles in the United States ("GAAP") applied on a consistent basis throughout the periods involved. The supporting schedules, if any, present fairly in all material respects in accordance with GAAP the information required to be stated therein. The selected financial data and the summary financial information included in the Prospectus present fairly in all material respects the information shown therein and have been compiled on a basis consistent with that of the audited financial statements included in the Registration Statement. The pro forma financial statements and the related notes thereto included in the Registration Statement and the Prospectus present fairly the information shown therein, have been prepared in all material respects 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 subject to such rules and guidelines, 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. Except as included therein, no historical or pro forma financial statements or supporting schedules are required to be included or incorporated by reference in the Registration Statement or the Prospectus under the Securities Act.  The statistical and market-related data included or incorporated by reference in the Prospectus Supplement are based on or derived from sources that the Company believes to be reliable in all material respects. 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.  The Company's consolidated ratios of earnings to fixed charges set forth in the Registration Statement and the Prospectus and the Exhibit 12.1 to the Registration Statement have been calculated in compliance with Item 503(d) of Regulation S-K under the Securities Act.

 

(u)            Regulation G Compliance.  All disclosures contained in the Registration Statement and the Prospectus regarding "non-GAAP financial measures" (as such term is defined by the rules and regulations of the Commission) comply in all material respects with Regulation G of the Exchange Act, and Item 10 of Regulation S-K under the Securities Act, to the extent applicable.

 

(v)            No Material Change.  Except as disclosed in the Registration Statement and the Prospectus, subsequent to the respective dates as of which such information is given in the Registration Statement and the Prospectus, (i) neither the Company nor any of the Subsidiaries has incurred any material liabilities or obligations, indirect, direct or contingent (including any off-balance sheet obligation), or entered into any transaction that is not in the

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ordinary course of business, (ii) neither the Company nor any of the Subsidiaries has sustained any material loss or interference with its business or Properties from fire, flood, windstorm, accident or otherwise, whether or not covered by insurance, that is material to the Company and the Subsidiaries, taken as a whole, (iii) neither the Company nor any of the Subsidiaries has paid or declared any dividends or other distributions with respect to its shares of beneficial interest except for regular quarterly distributions in amounts per share or per unit that are consistent with past practice, and the Company is not in default under the terms of any class of shares of beneficial interest of the Company or any outstanding debt obligations (except for defaults that were subsequently cured or waived), (iv) there has not been any material change in the authorized or outstanding shares of beneficial interest of the Company or any material change in the indebtedness of the Company (other than in the ordinary course of business) and (v) there has not been any material adverse change, or any development involving or that may reasonably be expected to result in a Material Adverse Effect with respect to the Company and the Subsidiaries or the Properties, taken as a whole.

 

(w)            Exchange Act Registration and Filings; Stock Exchange Listing. The Shares to be sold under this Agreement have been approved for trading and listing on the NYSE, subject to official notice of issuance, and are registered pursuant to Section 12(b) of the Exchange Act, and the Company has taken no action designed to, or likely to have the effect of, terminating the registration of the Shares under the Exchange Act or delisting any such securities from the NYSE, nor has the Company received any notification that the Commission or the NYSE is contemplating terminating such registration or listing.

 

(x)          Distribution of Offering Material. The Company has not distributed and will not distribute, and has not authorized Baird to distribute, any offering material in connection with the offering and sale of the Shares to be sold hereunder by Baird as principal or agent for the Company, other than the Prospectus.

 

(y)            Stabilization or Manipulation.  Other than excepted activity pursuant to Regulation M under the Exchange Act, the Company has not taken and will not take, directly or indirectly, any action that constituted, or any action designed to, or that might reasonably be expected to cause or result in or constitute stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Shares or for any other purpose.

(z)            Tax Compliance.  The Company and each of the Company's Subsidiaries have filed all material tax returns required to be filed or have properly requested extensions thereof, which returns are complete and correct in all material respects, and neither the Company nor any Subsidiary is in default in the payment of any material taxes that were payable pursuant to said returns or any assessments with respect thereto. Except as disclosed in the Prospectus (as amended or supplemented), all material deficiencies asserted as a result of any federal, state, local or foreign tax audits have been paid or finally settled and no issue has been raised in any such audit that, by application of the same or similar principles, reasonably could be expected to result in a proposed deficiency for any other period not so audited. There are no outstanding agreements or waivers extending the statutory period of limitation applicable to any federal, state, local or foreign tax return for any period.

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(aa)            Not an Investment Company. Neither the Company nor any of the Subsidiaries is required, and upon the issuance and sale of the Placement Shares as herein contemplated and the application of the net proceeds therefrom as described in the Prospectus neither will be required, to register as an "investment company" within the meaning of the Investment Company Act of 1940, as amended (the "Investment Company Act").

(bb)            All Necessary Permits, etc.  The Company and the Subsidiaries have all permits, licenses, franchises, approvals, consents and authorizations of governmental or regulatory authorities (hereinafter "permit" or "permits") as are necessary to own their Properties and to conduct their business in the manner described in the Prospectus, subject to such qualifications as may be set forth in the Prospectus, except where the failure to have obtained any such permit has not had and will not have a Material Adverse Effect; each of the Company and the Subsidiaries has operated and is operating its business in material compliance with all of its obligations with respect to each such permit and no event has occurred that allows, or after notice or lapse of time would allow, revocation or termination of any such permit and except where such revocation or termination would not have a Material Adverse Effect or result in any other material impairment of the rights of any such permit, subject in each case to such qualification as may be set forth in the Prospectus.  All of the permits are valid and in full force and effect, except when the invalidity of such permits or the failure of such permits to be in full force and effect would not, singly or in the aggregate, result in a Material Adverse Effect.  Except as described in the Prospectus, neither the Company nor any of the Subsidiaries has received any notice of proceedings relating to the revocation or modification of any permits that, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would result in a Material Adverse Effect.

 

(cc)            Internal Controls and Procedures.  The Company and each of the Subsidiaries maintain effective internal control over financial reporting (as defined under Rule 13a-15 and Rule 15d-15 under the Exchange Act) and a system of internal accounting controls sufficient to provide reasonable assurances that (A) transactions are executed in accordance with management's general or specific authorization; (B) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain accountability for assets; (C) access to assets is permitted only in accordance with management's general or specific authorization; and (D) the recorded 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 Prospectus, since 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's auditors and the audit committee of the board of trustees of the Company have been advised of: (i) all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting that have adversely affected or are reasonably likely to adversely affect the Company's ability to record, process, summarize and report financial information; and (ii) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company's internal controls over financial reporting. The Company and the Subsidiaries maintain an effective system of disclosure controls and procedures (as defined in

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Rule 13a-15 and Rule 15d-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.

 

(dd)            Unlawful Contributions or Payments.  Neither the Company nor the Operating Partnership, nor to the Company's or the Operating Partnership's knowledge, any trustee, officer, agent, employee or other person associated with or acting on behalf of the Company or the Operating Partnership, has used any funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity; made any direct or indirect unlawful payment to any foreign or domestic government official or employee from company funds; violated or is in violation of any provision of the Foreign Corrupt Practices Act of 1977, as amended (the "FCPA"); or made any bribe, rebate, payoff, influence payment, kickback or other unlawful payment. The Company and the Operating Partnership have instituted and maintain policies and procedures designed to ensure, and which are reasonably expected to continue to ensure, continued compliance with the FCPA.  No funds of the Company have been set aside to be used for any payment in violation of any law. Neither the Company, nor any of the Subsidiaries nor any trustee, officer, agent, or employee of the Company or any of the Subsidiaries is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department ("OFAC"); and the Company will not directly or indirectly use the proceeds of the offering contemplated by this Agreement, or lend, contribute or otherwise make available such proceeds to any Subsidiary, joint venture partner or other person or entity, for the purpose of financing the activities of any person currently subject to any U.S. sanctions administered by OFAC.

 

(ee)            Environmental Compliance.  To the knowledge of the Company, the Company and the Subsidiaries are (i) in compliance with any and all applicable federal, state, local and foreign laws and regulations relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants ("Environmental Laws"), (ii) have received all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses and (iii) are in compliance with all terms and conditions of any such permit, license or approval, except where such noncompliance with Environmental Laws, failure to receive required permits, licenses or other approvals or failure to comply with the terms and conditions of such permits, licenses or other approvals would not, individually or in the aggregate, have a Material Adverse Effect. To the knowledge of the Company, neither the Company nor any of the Subsidiaries has been named as a "potentially responsible party" under the Comprehensive Environmental Response Compensation and Liability Act of 1980, as amended ("CERCLA").  The Properties are not included or, to the best of the Operating Partnership's and the Company's knowledge, proposed for inclusion on the National Priorities List issued pursuant to CERCLA by the United States Environmental Protection Agency (the "EPA") or, to the best of the Operating Partnership's and the Company's knowledge, proposed for inclusion on any similar list or inventory issued pursuant to any other Environmental Law or issued by any other governmental authority.  Except as disclosed in the Prospectus, to the knowledge of the Company, there are no costs or liabilities

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associated with Environmental Laws (including, without limitation, any capital or operating expenditures required for clean-up, closure of Properties or compliance with Environmental Laws or any permit, license or approval, any related constraints on operating activities and any potential liabilities to third parties) that would, individually or in the aggregate, have a Material Adverse Effect.

 

(ff)            Qualification as a REIT. The Company has been organized and has operated in conformity with the requirements for qualification and taxation as a real estate investment trust ("REIT") under the Internal Revenue Code of 1986, as amended (the "Code") for its taxable years ended April 30, 2006 through April 30, 2013, and the Company's current and proposed method of operation will enable it to continue to meet the requirements for taxation as a REIT under the Code for its taxable year ending April 30, 2014 and in the future. The Subsidiaries of the Company that are partnerships have been and will continue to be treated as partnerships for federal income tax purposes and not as corporations, associations taxable as corporations or as publicly traded partnerships.

 

(gg)            Intellectual Property.  The Company and the Subsidiaries own and have full right, title and interest in and to, or has valid licenses to use, each material trade name, trademark, service mark, patent, copyright, approval, trade secret and other similar rights (collectively "Intellectual Property") under which the Company and the Subsidiaries conduct all or any material part of their business, and none of the Company and the Subsidiaries has created any lien or encumbrance on, or granted any right or license with respect to, any such Intellectual Property except where the failure to own or obtain a license or right to use any such Intellectual Property has not and will not have a Material Adverse Effect; there is no claim pending against the Company or any of the Subsidiaries with respect to any Intellectual Property, and none of the Company and the Subsidiaries has received notice or otherwise become aware that any Intellectual Property that it uses or has used in the conduct of its business infringes upon or conflicts with the rights of any third party.

 

(hh)            Title Insurance.  Owner or leasehold title insurance in favor of the Company, the Operating Partnership and the Subsidiaries has been obtained with respect to each Property owned by any such entity in an amount at least equal to amounts that are generally deemed in the Company's industry to be commercially reasonable in the market where the Properties are located, except where the failure to maintain such title insurance would not have a Material Adverse Effect. The Company, the Operating Partnership and each of the Subsidiaries maintains insurance covering its Properties, operations, personnel and businesses as the Company deems adequate; such insurance insures against such losses and risks to an extent which is adequate in accordance with customary industry practice to protect the Company, the Operating Partnership and the Subsidiaries and their businesses; such insurance as the Company deems adequate and that insures against losses and risks to an extent which is adequate in accordance with customary industry practice is fully in force on the date hereof. Neither the Company nor the Operating Partnership has any reason to believe that it or any of the Subsidiaries will not be able (A) to renew, if desired, its existing insurance coverage as and when such policies expire or (B) to obtain comparable coverage from similar institutions as may be necessary or appropriate to conduct its business as now conducted and at a cost that would not result in a Material Adverse Effect.

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7.            Covenants of the Company.  The Company and the Operating Partnership, jointly and severally, covenant and agree with Baird that:

 

(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 Shares is

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required to be delivered by Baird under the Securities Act (including in circumstances where such requirement may be satisfied pursuant to Rule 172 under the Securities Act), (i) the Company will notify Baird as promptly as reasonably practicable 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; (ii) the Company will prepare and file with the Commission, as promptly as reasonably practicable upon Baird's request, any amendments or supplements to the Registration Statement or Prospectus that, in Baird's reasonable opinion, may be necessary or advisable in connection with the distribution of the Placement Shares by Baird (provided, however, that the failure of Baird to make such request shall not relieve the Company of any obligation or liability hereunder, or affect Baird'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 Shares or a security convertible into the Placement Shares unless a copy thereof has been submitted to Baird within a reasonable period of time before the filing and Baird has not reasonably objected thereto (provided, however, that the failure of Baird to make such objection shall not relieve the Company of any obligation or liability hereunder, or affect Baird's right to rely on the representations and warranties made by the Company in this Agreement);  (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 Securities Act; and (v) the Company has paid or will pay the required Commission filing fees relating to the Shares within the time required by Rule 456(b)(1)(i) of the Securities Act and otherwise in accordance with Rules 456(b) and 457(r) of the Securities Act (including, if applicable, by updating the "Calculation of Registration Fee" table in accordance with Rule 456(b)(1)(ii) of the Securities Act).

 

(b)            Notice of Commission; Stop Orders.  The Company will advise Baird, as promptly as reasonably practicable 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 any other order preventing or suspending the use of the Prospectus, of the suspension of the qualification of the Placement Shares for offering or sale in any jurisdiction, or of the initiation or threatening of any proceeding for any such purpose or any examination pursuant to Section 8(e) of the Securities Act, or if the Company becomes the subject of a proceeding under Section 8A of the Securities Act in connection with the offering of the Shares; and it will promptly use its commercially reasonable efforts to prevent the issuance of any stop or other order or to obtain its withdrawal if such a stop or other order should be issued.

 

(c)            Subsequent Changes to Registration Statement or Prospectus.  During any period in which a Prospectus relating to the Placement Shares is required to be delivered by Baird under the Securities Act with respect to a pending sale of the Placement Shares, (including in circumstances where such requirement may be satisfied pursuant to Rule 172 under the Securities Act), the Company will comply with all requirements imposed upon it by the Securities Act, as from time to time in force, and to file on or before their respective due dates all

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reports and any definitive proxy or information statements required to be filed by the Company with the Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) or any other provision of or under the Exchange Act.  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 Securities Act, the Company will promptly notify Baird to suspend the offering of Placement Shares during such period, and the Company will as promptly as reasonably practicable 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.

 

(d)            Listing of Placement Shares.  During any period in which the Prospectus relating to the Placement Shares is required to be delivered by Baird under the Securities Act with respect to a pending sale of the Placement Shares (including in circumstances where such requirement may be satisfied pursuant to Rule 172 under the Securities Act), the Company will use its commercially reasonable efforts to cause the Placement Shares to be listed on the NYSE and to qualify the Placement Shares for sale under the securities laws of such jurisdictions as Baird reasonably designates and to continue such qualifications in effect so long as required for the distribution of the Placement Shares; provided, however, that the Company shall not be required in connection therewith to qualify as a foreign entity or dealer in securities or file a general consent to service of process in any jurisdiction.

 

(e)            Filings with 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.

 

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8.            Conditions to Baird's Obligations. The obligations of Baird hereunder with respect to a Placement will be subject to the continuing accuracy and completeness of the representations and warranties made by the Company and the Operating Partnership herein, to the due performance by the Company and the Operating Partnership of their respective obligations hereunder, to the completion by Baird of a due diligence review satisfactory to Baird in its reasonable judgment, and to the continuing satisfaction (or waiver by Baird in its sole discretion) of the following additional conditions:

 

(a)            Registration Statement Effective.  The Registration Statement shall be effective and shall be available for (i) all sales of Placement Shares issued pursuant to all prior Placement Notices and (ii) the sale of all Placement Shares contemplated to be issued by any Placement Notice.

 

(b)            No Material Notices.  None of the following events shall have occurred and be continuing:  (i) receipt by the Company or any of the 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 Shares 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 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 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

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the statements therein not misleading and, that in the case of the 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.

 

(c)            No Misstatement or Material Omission.  Baird shall not have advised the Company that the Registration Statement or Prospectus, or any amendment or supplement thereto, contains an untrue statement of fact that in Baird's reasonable opinion is material, or omits to state a fact that in Baird'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 change, on a consolidated basis, in the authorized shares of beneficial interest of the Company or any Material Adverse Effect, or any development that could reasonably be expected to cause a Material Adverse Effect, or any downgrading in or withdrawal of the rating assigned to any of the Company's or the Operating Partnership's securities (other than asset backed securities) by any rating organization or a public announcement by any rating organization that it has under surveillance or review its rating of any of the Company's or the Operating Partnership's securities (other than asset backed securities), the effect of which, in the case of any such action by a rating organization described above, in the reasonable judgment of Baird (without relieving the Company or the Operating Partnership of any obligation or liability it may otherwise have), is so material as to make it impracticable or inadvisable to proceed with the offering of the Placement Shares on the terms and in the manner contemplated in the Prospectus.

 

(e)            Legal Opinion.  Baird shall have received the opinions of Company Counsel required to be delivered pursuant Section 7(o) hereof on or before the date on which such delivery of such opinion is required pursuant to Section 7(o) hereof.

 

(f)            Comfort Letter.  Baird shall have received the Comfort Letters required to be delivered pursuant Section 7(p) hereof on or before the date on which such delivery of such opinions is required pursuant to Section 7(p) hereof.

 

(g)            Representation Certificate.  Baird shall have received the certificate required to be delivered pursuant to Section 7(n) hereof on or before the date on which delivery of such certificate is required pursuant to Section 7(n) hereof.

 

(h)            No Suspension.  Trading in the Shares shall not have been suspended on the NYSE.

 

(i)            Other Materials.  On each date on which the Company is required to deliver a certificate pursuant to Section 7(n) hereof, the Company and the Operating Partnership shall have furnished to Baird such appropriate further information, certificates and documents as Baird may have reasonably requested. All such opinions, certificates, letters and other documents shall have been in compliance with the provisions hereof. The Company and the Operating Partnership shall have furnished Baird with such conformed copies of such opinions, certificates, letters and other documents as Baird shall have reasonably requested.

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(j)            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 under the Securities Act.

 

(k)            Approval for Listing.  Prior to the date that the first Shares are sold pursuant to the terms of this Agreement, the Placement Shares shall have been approved for listing on the NYSE, subject only to notice of issuance.

 

(l)            No Termination Event.  There shall not have occurred any event that would permit Baird to terminate this Agreement pursuant to Section 11(a) hereof.

 

9.            Indemnification and Contribution.

 

(a)            Company and Operating Partnership Indemnification.  The Company and the Operating Partnership, jointly and severally, agree to indemnify and hold harmless Baird, the directors, officers, partners, employees and agents of Baird and each person, if any, who (i) controls Baird within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, or (ii) is controlled by or is under common control with Baird (a "Baird Affiliate") from and against any and all losses, claims, liabilities, expenses and damages (including, but not limited to, any and all reasonable investigative, legal and other expenses  incurred in connection with, and any and all amounts paid in settlement (in accordance with Section 9(c) hereof) of, any action, suit or proceeding between any of the indemnified parties and any indemnifying parties or between any indemnified party and any third party, or otherwise, or any claim asserted), as and when incurred, to which Baird, or any such person, may become subject under the Securities Act, the Exchange Act or other federal or state statutory law or regulation, at common law or otherwise, insofar as such losses, claims, liabilities, expenses or damages arise out of or are based, directly or indirectly, on (x) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or the Prospectus or any amendment or supplement to the Registration Statement or the Prospectus, or in any application or other document executed by or on behalf of the Company or the Operating Partnership or based on written information furnished by or on behalf of the Company or the Operating Partnership filed in any jurisdiction in order to qualify the Shares under the securities laws thereof or filed with the Commission or (y) the omission or alleged omission to state in any such document a material fact required to be stated in it or necessary to make the statements in it not misleading; provided, however, that this indemnity agreement shall not apply to the extent that such loss, claim, liability, expense or damage arises from the sale of the Placement Shares pursuant to this Agreement and is caused directly or indirectly by an untrue statement or omission made in reliance upon and in conformity with the Baird-Furnished Information, which was furnished to the Company by Baird expressly for inclusion in any document as described in clause (x) of this Section 9(a). This indemnity agreement will be in addition to any liability that the Company or the Operating Partnership might otherwise have.

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