DEVELOPERS DIVERSIFIED REALTY CORPORATION (an Ohio corporation) 11,599,134 Common Shares UNDERWRITING AGREEMENT
DEVELOPERS DIVERSIFIED REALTY CORPORATION
(an Ohio corporation)
(an Ohio corporation)
11,599,134 Common Shares
December 4, 2006
Xxxxxxx, Xxxxx & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Developers Diversified Realty Corporation, an Ohio corporation (the “Company”), and Deutsche
Bank Securities Inc. as agent for one of its affiliates (“Deutsche Bank”), Xxxxxxx Lynch, Pierce,
Xxxxxx & Xxxxx Incorporated as agent for one of its affiliates (“Xxxxxxx Xxxxx”) and X.X. Xxxxxx
Securities Inc. as agent for one of its affiliates (“JPMorgan” and, together with Deutsche Bank and
Xxxxxxx Xxxxx, the “Forward Sellers”), at the Company’s request in connection with the letter
agreement dated the date hereof between the Company and Deutsche Bank AG London, acting through
Deutsche Bank as agent (the “Deutsche Bank Forward Agreement”), the letter agreement dated the
date hereof between the Company and Xxxxxxx Xxxxx International, acting through Xxxxxxx Xxxxx as
agent (the “Xxxxxxx Xxxxx Forward Agreement”) and the letter agreement dated the date hereof
between the Company and JPMorgan Chase Bank, National Association, acting through JPMorgan as agent
(the “JPMorgan Forward Agreement” and, together with the Deutsche Bank Forward Agreement and the
Xxxxxxx Xxxxx Forward Agreement, the “Forward Agreements”), each relating to the forward sale by
the Company, of a number of common shares, without par value, of the Company (“Common Shares”)
equal to the number of Common Shares to be borrowed and sold by each of the Forward Sellers
pursuant to this Agreement, confirm their respective agreements with Xxxxxxx, Sachs & Co. (the
“Underwriter”) with respect to the sale by the Forward Sellers and the purchase by the Underwriter
of the respective numbers of Common Shares set forth in Schedule I. Deutsche Bank AG London,
Xxxxxxx Xxxxx International and JPMorgan Chase Bank, National Association are hereinafter referred
to as the “Forward Counterparties.” The 11,599,134 Common Shares to be borrowed and sold by the
Forward Sellers to the Underwriter are referred to as the “Underwritten Securities.” The
Underwritten Securities to be purchased by the Underwriter and any Common Shares to be issued and
sold by the Company to the Underwriter pursuant to Section 13 hereof are hereinafter called,
collectively, the “Securities.”
1. Representations and Warranties. The Company represents and warrants to the
Underwriter, each Forward Seller and each Forward Counterparty, as of the date hereof, at the
Applicable Time referred to in Section 1(c) and as of the Closing Date that:
(a) The Company has filed with the Securities and Exchange Commission (the
“Commission”) an automatic shelf registration statement on Form S-3 (No. 333-139118),
including the related preliminary prospectus or prospectuses, which registration
statement became effective upon filing under Rule 462(e) of the rules and regulations
of the Commission (the “1933 Act Regulations”) under the Securities Act of 1933, as amended
(the “1933 Act”). Such registration statement covers the registration of the Securities
under the 1933 Act. The Company will prepare and file a prospectus supplement relating to
the offering of Securities (“Prospectus Supplement”) in accordance with the provisions of
Rule 430B (“Rule 430B”) of the 1933 Act Regulations and paragraph (b) of Rule 424 (“Rule
424(b)”) of the 1933 Act Regulations. Any information included in such Prospectus
Supplement that was omitted from such registration statement at the time it became effective
but that is deemed to be part of and included in such registration statement pursuant to
Rule 430B is referred to as “Rule 430B Information.” Each prospectus used in connection
with the offering of Securities that omitted Rule 430B Information is herein called a
“preliminary prospectus.” Such registration statement, at any given time, including the
amendments thereto to such time, the exhibits and any schedules thereto at such time, the
documents incorporated by reference therein pursuant to Item 12 of Form S-3 under the 1933
Act at such time and the documents otherwise deemed to be a part thereof or included therein
by 1933 Act Regulations, is herein called the “Registration Statement.” The Registration
Statement at the time it originally became effective is herein called the “Original
Registration Statement.” The final prospectus and the applicable Prospectus Supplement in
the form first furnished to the Underwriter for use in connection with the offering of
Securities, including the documents incorporated by reference therein pursuant to Item 12 of
Form S-3 under the 1933 Act as of the date thereof and any preliminary prospectuses that
form a part thereof, is herein called the “Prospectus;” provided, however, that a Prospectus
Supplement shall be deemed to have supplemented the Prospectus only with respect to the
offering of the Securities to which it relates.
All references in this Agreement to financial statements and schedules and other
information which is “contained,” “included” or “stated” in the Registration Statement, any
preliminary prospectus or the Prospectus (and all other references of like import) shall be
deemed to mean and include all such financial statements and schedules and other information
which is or is deemed to be incorporated by reference in or otherwise deemed by the 1933 Act
Regulations to be a part of or included in the Registration Statement, any preliminary
prospectus or the Prospectus, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement, any preliminary prospectus or the
Prospectus shall be deemed to mean and include, without limitation, the filing of any
document under the Securities Exchange Act of 1934, as amended (the “1934 Act”), which is or
is deemed to be incorporated by reference in or otherwise deemed by the 1933 Act Regulations
to be a part of or included in the Registration Statement, such preliminary prospectus or
the Prospectus, as the case may be.
(b) (A) At the time of filing the Original Registration Statement, (B) at the time of
the most recent amendment thereto for the purposes of complying with Section 10(a)(3) of the
1933 Act (whether such amendment was by post-effective amendment, incorporated report filed
pursuant to Section 13 or 15(d) of the 1934 Act or form of prospectus), (C) 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 1933 Act Regulations) made any
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offer relating to the Securities in reliance on the exemption of Rule 163 of the 1933
Act Regulations, and (D) at the date hereof, the Company was and is a “well-known seasoned
issuer” as defined in Rule 405 of the 1933 Act Regulations (“Rule 405”). The Registration
Statement is an “automatic shelf registration statement,” as defined in Rule 405, that
initially became effective within three years of the date hereof, and the Securities 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.”
If immediately prior to the third anniversary (the “Renewal Deadline”) of the filing of
the Original Registration Statement, any of the Underwritten Securities remain unsold by the
Underwriter, the Company will prior to the Renewal Deadline (i) promptly notify you and (ii)
promptly file, if it has not already done so and is eligible to do so, a new automatic shelf
registration statement relating to the Securities, in a form satisfactory to you. If the
Company is no longer eligible to file an automatic shelf registration statement, the Company
will prior to the Renewal Deadline (i) promptly notify you, (ii) promptly file, if it has
not already done so, a new registration statement or post-effective amendment on the proper
form relating to the Securities, in a form satisfactory to you, (iii) use its best efforts
to cause such registration statement or post-effective amendment to be declared effective as
soon as practicable and (iv) promptly notify you of such effectiveness. In addition, the
Company has not received from the Commission any notice pursuant to Rule 401(g)(2) of the
1933 Act Regulations objecting to the use of the automatic shelf registration statement
form. If at any time when Securities remain unsold by the Underwriter the Company receives
from the Commission a notice pursuant to Rule 401(g)(2) or otherwise ceases to be eligible
to use the automatic shelf registration statement form, the Company will (i) promptly notify
you, (ii) promptly file a new registration statement or post-effective amendment on the
proper form relating to the Securities, in a form satisfactory to you, (iii) use its best
efforts to cause such registration statement or post-effective amendment to be declared
effective as soon as practicable, and (iv) promptly notify you of such effectiveness. The
Company will take all other action necessary or appropriate to permit the public offering
and sale of the Securities to continue as contemplated in the expired registration
statement, or the registration statement that was the subject of the Rule 401(g)(2) notice
or for which the Company has otherwise become ineligible, as the case may be. References
herein to the Registration Statement relating to the Securities shall include such new
automatic shelf registration statement or such new registration statement or post-effective
amendment, as the case may be.
At the time of filing the Original Registration Statement, at the earliest time
thereafter that the Company or another offering participant made a bona fide offer (within
the meaning of Rule 164(h)(2) of the 1933 Act Regulations) of the Securities, at the date
hereof, the Company was not and is not an “ineligible issuer,” as defined in Rule 405.
(c) The Original Registration Statement became effective upon filing under Rule 462(e)
of the 1933 Act Regulations (“Rule 462(e)”) on December 4, 2006, and any post-effective
amendment thereto also became effective upon filing under Rule 462(e). No stop order
suspending the effectiveness of the Registration Statement has been issued
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under the 1933 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.
If applicable, any offer that is a written communication relating to the Securities
made prior to the filing of the Original Registration Statement by the Company or any person
acting on its behalf (within the meaning, for this paragraph only, of Rule 163(c) of the
1933 Act Regulations) has been filed with the Commission in accordance with Rule 163 of the
1933 Act Regulations (“Rule 163”) and otherwise complied with the requirements of Rule 163,
including without limitation the legending requirement, to qualify such offer for the
exemption from Section 5(c) of the 1933 Act provided by Rule 163.
At the respective times the Original Registration Statement and each amendment thereto
(including amendments filed for the purpose of complying with Section 10(a)(3) of the 0000
Xxx) became effective, at each deemed effective date with respect to the Underwriter
pursuant to Rule 430B(f)(2) of the 1933 Act Regulations, at the date hereof, at the
Applicable Time and at the Closing Date, the Registration Statement complied, complies and
will comply in all material respects with the requirements of the 1933 Act and the 1933 Act
Regulations, and the Registration Statement did not, does not and will not contain an untrue
statement of a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading.
Any preliminary prospectus (including the prospectus filed as part of the Registration
Statement or any amendment thereto) complied when so filed in all material respects with the
1933 Act and the 1933 Act Regulations and any such preliminary prospectus and the Prospectus
delivered or made available to the Underwriter for use in connection with this offering was
and will, at the time of such delivery, be identical to the electronically transmitted
copies thereof filed with the Commission pursuant to XXXXX, except to the extent permitted
by Regulation S-T.
As of the Applicable Time, any Issuer Free Writing Prospectus (as defined below) issued
at or prior to the Applicable Time and listed on Schedule II, the Statutory Prospectus (as
defined below) and the information agreed to in writing by the Company and the Underwriter
as the information to be conveyed orally by the Underwriter to purchasers of the Securities
at the Applicable Time, as set forth on Schedule II, and including the information contained
in the Preliminary Prospectus Supplement of the Company, dated the date hereof, all
considered together (collectively, the “General Disclosure Package”) did not include any
untrue statement of a material fact or omit to state any material fact necessary in order to
make the statements therein, in the light of the circumstances under which they were made,
not misleading.
The representations and warranties in the preceding three paragraphs shall not apply to
statements in or omissions from the Registration Statement or any post-effective amendment
thereto or the Prospectus or any amendments or supplements thereto, or the General
Disclosure Package made in reliance upon and in conformity with information
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furnished to the Company in writing by the Underwriter, any Forward Seller or any
Forward Counterparty expressly for use in the Registration Statement or any post-effective
amendment thereto, or the Prospectus, or any amendments or supplements thereto, or the
General Disclosure Package.
As used in this subsection and elsewhere in this Agreement:
“Applicable Time” means 5:30 p.m. (New York City time) on December 4, 2006 or such
other time as agreed by the Company and the Underwriter.
“Issuer Free Writing Prospectus” means any “issuer free writing prospectus,” as defined
in Rule 433 of the 1933 Act Regulations (“Rule 433”), relating to the Securities (including
any identified on Schedule II hereto) that (i) is required to be filed with the Commission
by the Company, (ii) is a “road show that is a written communication” within the meaning of
Rule 433(d)(8)(i), whether or not required to be filed with the Commission or (iii) is
exempt from filing pursuant to Rule 433(d)(5)(i) because it contains a description of the
Securities or of the offering that does not reflect the final terms, in each case in the
form filed or required to be filed with the Commission or, if not required to be filed, in
the form retained in the Company’s records pursuant to Rule 433(g).
“Statutory Prospectus” as of any time means the prospectus relating to the Securities
that is included in the Registration Statement immediately prior to that time, including the
documents incorporated by reference therein and any preliminary or other prospectus deemed
to be a part thereof.
(d) The documents incorporated or deemed to be incorporated by reference in the
Registration Statement and the Prospectus, at the time they were or hereafter are filed with
the Commission, complied and will comply in all material respects with the requirements the
1934 Act and the rules and regulations of the Commission thereunder (the “1934 Act
Regulations”), as applicable, and, when read together with the other information in the
Prospectus, (a) at the time the Original Registration Statement became effective, (b) at the
Applicable Time and (c) at the Closing Date 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 in order to make the statements therein, in light of the circumstances under which
they were made, not misleading.
(e) Each Issuer Free Writing Prospectus identified on Schedule II hereto, as of its
issue date and at all subsequent times through the Closing Date or until any earlier date
that the Company notified or notifies the Underwriter as described in Section 6(b), did not,
does not and will not include any information that conflicted, conflicts or will conflict
with the information contained in the Registration Statement, the General Disclosure Package
or the Prospectus, including any document incorporated by reference therein and any
preliminary or other prospectus deemed to be a part thereof that has not been superseded or
modified. The foregoing sentence does not apply to statements in or omissions from any such
Issuer Free Writing Prospectus based upon and in conformity
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with written information furnished to the Company by the Underwriter, Forward Seller or
Forward Counterparty specifically for use therein.
(f) Since the respective dates as of which information is given in the Registration
Statement, the General Disclosure Package and the Prospectus, except as otherwise stated
therein, (A) there has not occurred any material adverse change or any development that is
reasonably likely to involve a material adverse change in the condition, financial or
otherwise, or in the earnings, business or business prospects of the Company and its
subsidiaries considered as one enterprise from that set forth in the Prospectus (exclusive
of any amendments or supplements thereto subsequent to the date of this Agreement), (B)
there have been no transactions entered into by the Company or its subsidiaries which are
material with respect to the Company and its subsidiaries considered as one enterprise other
than those in the ordinary course of business and (C) except for regular quarterly
distributions on the Common Shares, and regular distributions declared, paid or made in
accordance with the terms of any class or series of the Company’s preferred shares, there
has been no dividend or distribution of any kind declared, paid or made by the Company on
any class of its capital shares.
(g) The consolidated financial statements and supporting schedules of the Company
included in, or incorporated by reference into, the Registration Statement, the General
Disclosure Package and the Prospectus present fairly the financial position of the Company
and its consolidated subsidiaries as of the dates indicated and the results of their
operations for the periods specified; except as otherwise stated in the Registration
Statement, the General Disclosure Package and the Prospectus, said financial statements have
been prepared in conformity with generally accepted accounting principles (“GAAP”) applied
on a consistent basis; and the supporting schedules, if any, included in, or incorporated by
reference into, the Registration Statement, the General Disclosure Package and the
Prospectus present fairly in all material respects the information required to be stated
therein. To the best of the Company’s knowledge, the consolidated financial statements and
supporting schedules of Inland Retail Real Estate Trust, Inc. (“IRRETI”) included in, or
incorporated by reference into, the Registration Statement, the General Disclosure Package
and the Prospectus present fairly the financial position of IRRETI and its consolidated
subsidiaries as of the dates indicated and the results of their operations for the periods
specified; except as otherwise stated in the Registration Statement, the General Disclosure
Package and the Prospectus, said financial statements have been prepared in conformity with
generally accepted accounting principles (“GAAP”) applied on a consistent basis and the
supporting schedules, if any, included in the Registration Statement, the General Disclosure
Package and the Prospectus present fairly in all material respects the information required
to be stated therein. The selected financial data and the summary financial information
included in, or incorporated by reference into, the Registration Statement, the General
Disclosure Package and the Prospectus present fairly the information shown therein and have
been compiled on a basis consistent with that of the audited financial statements included
in, or incorporated by reference into, the Registration Statement, the General Disclosure
Package and the Prospectus. The statements of certain revenues and expenses of the
properties acquired or proposed to be acquired, if any, included in, or incorporated by
reference into, the Registration Statement, the General Disclosure Package and the
Prospectus present fairly
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in all material respects the information set forth therein, have been prepared in
conformity with GAAP applied on a consistent basis and otherwise have been prepared in
accordance with the applicable financial statement requirements of Rule 3-14 of the 1934 Act
with respect to real estate operations acquired or to be acquired. The pro forma financial
statements and other pro forma financial information (including the notes thereto), included
in, or incorporated by reference into, the Registration Statement, the General Disclosure
Package and the Prospectus present fairly in all material respects the information set forth
therein, have been prepared in accordance with the Commission’s rules and guidelines with
respect to pro forma financial statements and have been properly compiled on the basis
described therein and the assumptions used in the preparation of such pro forma financial
statements and other pro forma financial information (including the notes thereto) are
reasonable and the adjustments used therein are appropriate to give effect to the
transactions or circumstances referred to therein. All disclosures contained in the
Registration Statement, the General Disclosure Package and the Prospectus regarding
“non-GAAP financial measures” (as such term is defined by the rules and regulations of the
Commission), if any, comply with Regulation G under the 1934 Act and Item 10 of Regulation
S-K of the 1933 Act Regulations, to the extent applicable.
(h) PricewaterhouseCoopers llp, who has expressed its opinion on the audited
financial statements and related schedules included in, or incorporated by reference into,
the Registration Statement, is an independent registered public accounting firm within the
meaning of the 1933 Act and the applicable 1933 Act Regulations.
(i) The Company has been duly organized and is validly existing and in good standing as
a corporation under the laws of the State of Ohio, with power and authority (corporate and
other) to own, lease and operate its properties and to conduct its business as described in
the Registration Statement and the Prospectus; the Company is in possession of and operating
in compliance with all material franchises, grants, authorizations, licenses, permits,
easements, consents, certificates and orders required for the conduct of its business, all
of which are valid and in full force and effect; and the Company is duly qualified to do
business and in good standing as a foreign corporation in all other jurisdictions where its
ownership or leasing of properties or the conduct of its business requires such
qualification, except where failure to qualify and be in good standing would not have a
material adverse effect on the condition, financial or otherwise, or on the earnings,
business affairs or business prospects of the Company and its subsidiaries considered as one
enterprise.
(j) Each Significant Subsidiary, as defined herein, has been duly incorporated or
formed and is validly existing as a corporation, partnership or limited liability company in
good standing or in full force and effect under the laws of the jurisdiction of its
incorporation or formation, has corporate, partnership or limited liability company power
and authority to own, lease and operate its properties and to conduct its business and is
duly qualified as a foreign corporation, partnership or limited liability company to
transact business and is in good standing in each jurisdiction in which such qualification
is required, whether by reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify would not have a material adverse effect
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on the condition, financial or otherwise, or the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one enterprise.
(k) The issued and outstanding capital shares of the Company have been duly authorized
and validly issued and are fully paid and non-assessable and are not subject to preemptive
or other similar rights; and all of the issued and outstanding capital stock of the
Company’s subsidiaries has been duly authorized and validly issued, is fully paid and
non-assessable and is owned directly by the Company, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity, except for such security
interests, mortgages, pledges, liens, encumbrances, claims or equities that would not have a
material adverse effect on the condition, financial or otherwise, or the earnings, business
affairs or business prospects of the Company and its subsidiaries considered as one
enterprise.
(l) Any Common Shares to be issued and sold by the Company pursuant to Section 13
hereof have been duly authorized by the Company for issuance and sale pursuant to this
Agreement and, when issued and delivered pursuant to this Agreement against payment of the
consideration therefor specified herein, will be validly issued, fully paid and
non-assessable. Any Common Shares being sold pursuant to this Agreement or the Forward
Agreements, as the case may be, conform in all material respects to all statements relating
thereto contained in the General Disclosure Package and the Prospectus. The issuance of any
Common Shares pursuant to Section 13 hereof is not subject to preemptive or other similar
rights.
(m) There is no action, suit or proceeding before or by any court or governmental
agency or body, domestic or foreign, now pending, or, to the knowledge of the Company,
threatened against or affecting the Company or its subsidiaries, which is required to be
disclosed in the Prospectus (other than as disclosed therein), or which might result in any
material adverse change in the condition, financial or otherwise, business affairs or
business prospects of the Company and its subsidiaries considered as one enterprise, or
might materially and adversely affect the properties or assets thereof or which might
materially and adversely affect the consummation of this Agreement or the Forward Agreements
or the transactions contemplated herein or therein; all pending legal or governmental
proceedings to which the Company or any of its subsidiaries is a party or of which any of
their respective property is the subject which are not described in the General Disclosure
Package and the Prospectus, including routine litigation incidental to the business, are,
considered in the aggregate, not material; and there are no material contracts or documents
of the Company or its subsidiaries which are required to be filed as exhibits to the
Registration Statement by the 1933 Act or by the 1933 Act Regulations which have not been so
filed.
(n) Neither the Company nor any of its subsidiaries is in violation of its respective
Articles of Incorporation or other organizational document, or its Code of Regulations or
bylaws, as the case may be (the “Code of Regulations”), or in default in the performance or
observance of any material obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement, note, lease or other instrument to which it
is a party or by which it or its properties may be bound,
8
where such defaults in the aggregate would have a material adverse effect on the
condition, financial or otherwise, or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one enterprise; and the
execution and delivery of this Agreement and the Forward Agreements and the consummation of
the transactions contemplated herein and therein, have been duly authorized by all necessary
corporate action, and compliance by the Company with its obligations hereunder will not
conflict with or constitute a breach of, or default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of the Company or
its subsidiaries pursuant to, any contract, indenture, mortgage, loan agreement, note, lease
or other instrument to which the Company or any of its subsidiaries is a party or by which
it may be bound or to which any of the property or assets of the Company or any of its
subsidiaries is subject, nor will such action result in any violation of the provisions of
the Articles of Incorporation or Code of Regulations or, to the best of its knowledge, any
law, administrative regulation or administrative or court order or decree; and no consent,
approval, authorization or order of any court or governmental authority or agency is
required for the consummation by the Company of the transactions contemplated by this
Agreement and the Forward Agreements, except such as has been obtained or as may be required
under the 1933 Act, the 1934 Act, state securities or Blue Sky laws or real estate
syndication laws in connection with the purchase and distribution of the Securities by the
Underwriter.
(o) The Company has the full right, power and authority to execute and deliver each of
this Agreement and each Forward Agreement (collectively, the “Transaction Documents”) to
which it is a party and perform its respective obligations thereunder; and all corporate
action required to be taken for the due and proper authorization, execution and delivery of
each of the Transaction Documents and the consummation of the transactions contemplated
thereby has been duly and validly taken.
(p) The Common Shares (if any) to be purchased by the Forward Counterparties from the
Company pursuant to the Forward Agreements have been duly and validly authorized and
reserved for issuance and sale to the Forward Counterparties pursuant thereto and, when
issued and delivered by the Company, in accordance with the provisions of the Forward
Agreements against payment of the consideration set forth therein, will be duly and validly
issued, fully paid and non-assessable; and the issuance of such Common Shares will not be
subject to any preemptive or similar rights.
(q) Each of the Forward Agreements has been duly authorized, executed and delivered by
the Company and constitutes a valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency or similar laws affecting the enforcement of creditors’
rights generally or by equitable principles relating to enforceability; and the Forward
Agreements conform in all material respects to the descriptions thereof in the Prospectus.
(r) Starting with its taxable year ended December 31, 1993, the Company has elected
under Section 856(c) of the Internal Revenue Code of 1986, as amended (the “Code”), to be
taxed as a real estate investment trust (“REIT”), and such election has not
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been revoked or terminated. The Company has qualified as a REIT for its taxable years
ended December 31, 1993 through December 31, 2005 and the Company has operated and intends
to continue to operate so as to qualify as a REIT thereafter.
(s) Starting with its taxable year ended December 31, 1996 and through its taxable year
ended May 10, 2006, JDN Realty Corporation (“JDN”) has elected under Section 856(c) of the
Code to be taxed as a REIT. JDN has qualified as a REIT for its taxable years ended
December 31, 1994 through its taxable year ended May 10, 2006. To the best of the Company’s
knowledge, starting with its taxable year ended December 31, 1995 IRRETI has elected under
Section 856(c) of the Code to be taxed as a REIT. To the best of the Company’s knowledge,
IRRETI has qualified as a REIT for its taxable years ended December 31, 1995 through
December 31, 2005 and IRRETI has operated so as to qualify as a REIT thereafter.
(t) Neither the Company nor any of its subsidiaries is, or will be after the
consummation of the transactions contemplated by this Agreement and the Forward Agreements,
required to be registered as an investment company under the Investment Company Act of 1940,
as amended (the “1940 Act”).
(u) Neither the Company nor any of its subsidiaries is, or will be after the
consummation of the transactions contemplated by this Agreement and the Forward Agreements,
required to own or possess any trademarks, service marks, trade names or copyrights in order
to conduct the business now operated by them.
(v) There are no persons with registration or other similar rights to have any
securities registered pursuant to the Registration Statement.
(w) None of the Company or any of its subsidiaries or any of the officers, directors,
trustees or partners thereof acting on the Company’s or such subsidiaries’ behalf has taken
nor will any of them take, directly or indirectly, any action resulting in a violation of
Regulation M under the 1934 Act or designed to cause or result in, or which has constituted
or which reasonably might be expected to constitute, the stabilization or manipulation of
the price of the Securities.
(x) (A) The Company or its subsidiaries have good and marketable title or leasehold
interest, as the case may be, to the portfolio properties (the “Portfolio Properties”)
described in the Registration Statement, the General Disclosure Package and the Prospectus
as being owned by the Company or its subsidiaries (except with respect to properties
described in the Registration Statement, the General Disclosure Package and the Prospectus
as being held by the Company through joint ventures), in each case free and clear of all
liens, encumbrances, claims, security interests and defects (collectively, “Defects”),
except such as do not materially adversely affect the value of such property or interests
and do not materially interfere with the use made and proposed to be made of such property
or interests by the Company or such subsidiaries, as the case may be; (B) the joint venture
interest in each property described in the Registration Statement, the General Disclosure
Package and the Prospectus, as being held by the Company through a joint venture, is owned
free and clear of all Defects except for such Defects that will not
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have a material adverse effect on the business, earnings or business prospects of the
Company and its subsidiaries considered as one enterprise; (C) all liens, charges,
encumbrances, claims or restrictions on or affecting the properties and assets of the
Company or its subsidiaries are disclosed in the Registration Statement, the General
Disclosure Package and the Prospectus, except for any such interests that will not have a
material adverse effect on the business, earnings or business prospects of the Company and
its subsidiaries considered as one enterprise; (D) none of the Company, its subsidiaries or,
to the best of the Company’s knowledge, any lessee of any of the Portfolio Properties is in
default under any of the leases governing the Portfolio 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 leases, except such defaults that would not have a
material adverse effect on the condition, financial or otherwise, or on the earnings,
business affairs or business prospects of the Company and its subsidiaries considered as one
enterprise; (E) no tenant under any of the leases pursuant to which the Company or its
subsidiaries leases any of the Portfolio Properties has an option or right of first refusal
to purchase the premises demised under such lease except (i) as otherwise described in the
Registration Statement, the General Disclosure Package and the Prospectus and (ii) for such
options or rights of first refusal that, if exercised, would not have a material adverse
effect on the condition, financial or otherwise, or on the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one enterprise; (F)
each of the Portfolio Properties complies with all applicable codes and zoning laws and
regulations, except for such failures to comply which would not individually or in the
aggregate have a material adverse effect on the condition, financial or otherwise, or on the
earnings, business affairs or business prospects of the Company and its subsidiaries
considered as one enterprise; and (G) the Company does not have knowledge of any pending or
threatened condemnation, zoning change or other proceeding or action that will in any manner
affect the size of, use of, improvements on, construction on or access to the Portfolio
Properties, except such proceedings or actions that would not have a material adverse effect
on the condition, financial or otherwise, or on the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one enterprise.
(y) The Company or its subsidiaries have title insurance on each of the Portfolio
Properties (except with respect to each property described in the Prospectus (or documents
incorporated by reference therein) as held by the Company through a joint venture) in an
amount at least equal to the greater of (A) the cost of acquisition of such Portfolio
Property and (B) the cost of construction of the improvements located on such Portfolio
Property except, in each case, where the failure to maintain such title insurance would not
have a material adverse effect on the condition, financial or otherwise, or on the earnings,
business affairs or business prospects of the Company and its subsidiaries considered as one
enterprise; the joint venture owning each property described in the Prospectus (or documents
incorporated by reference therein) as held by the Company through a joint venture has title
insurance on such property in an amount at least equal to the greater of (A) the cost of
acquisition of such Portfolio Property by such joint venture and (B) the cost of
construction of the improvements located on such Portfolio Property, except in each case,
where the failure to maintain such title insurance would not have a material adverse effect
on the condition, financial or otherwise, or on the earnings,
11
business affairs or business prospects of the Company and its subsidiaries considered
as one enterprise.
(z) The mortgages and deeds of trust encumbering the Portfolio Properties are not
convertible and neither the Company nor any of its subsidiaries hold a participating
interest therein and said mortgages and deeds of trust are not cross-defaulted or
cross-collateralized to any property not owned by the Company or its subsidiaries.
(aa) The Company has no knowledge of (a) the unlawful presence of any hazardous
substances, hazardous materials, toxic substances or waste materials (collectively,
“Hazardous Materials”) on any of the Portfolio Properties or of (b) any unlawful spills,
releases, discharges or disposals of Hazardous Materials that have occurred or are presently
occurring from the Portfolio Properties as a result of any construction on or operation and
use of the Portfolio Properties, which presence or occurrence would materially adversely
affect the condition, financial or otherwise, or the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one enterprise. In connection
with the construction on or operation and use of the Portfolio Properties, the Company
represents that, as of the date of this Agreement, the Company has no knowledge of any
material failure to comply with all applicable local, state and federal environmental laws,
regulations, ordinances and administrative and judicial orders relating to the generation,
recycling, reuse, sale, storage, handling, transport and disposal of any Hazardous Materials
that would have a material adverse effect on the condition, financial or otherwise, or on
the earnings, business affairs or business prospects of the Company and its subsidiaries
considered as one enterprise.
(bb) No relationship, direct or indirect, exists between or among any of the Company or
its subsidiaries, on the one hand, and any director, officer, shareholder, customer or
supplier of the Company or its subsidiaries, on the other hand, which is required by the
1933 Act, the 1934 Act, the 1933 Act Regulations or the 1934 Act Regulations to be described
in the Registration Statement or the Prospectus which is not so described or is not
described as required. There are no outstanding loans, advances (except normal advances for
business expenses in the ordinary course of business) or guarantees of indebtedness by the
Company to or for the benefit of any of the officers or directors of the Company or any of
their respective family members, except as disclosed in the Registration Statement, the
General Disclosure Package and the Prospectus.
(cc) The Company and its subsidiaries maintain a system of internal accounting and
other controls sufficient to provide reasonable assurances that (i) transactions are
executed in accordance with management’s general or specific authorizations, (ii)
transactions are recorded as necessary to permit preparation of financial statements in
conformity with GAAP and to maintain accountability for assets, (iii) access to assets is
permitted only in accordance with management’s general or specific authorization, (iv) the
recorded accounting for assets is compared with existing assets at reasonable intervals and
appropriate action is taken with respect to any differences and (v) the principal executive
officers (or their equivalents) and principal financial officers (or their equivalents) of
the Company have made all certifications required by Sections 302 and 906 of the
Xxxxxxxx-Xxxxx Act of 2002 (the “Sarbanes-
12
Oxley Act”) and any related rules and regulations promulgated by the Commission, and
the statements contained in any such certification are complete and correct. Except as
described in the Prospectus, with respect to stock options or other equity incentive grants
(collectively, “Awards”) granted subsequent to the adoption of the Xxxxxxxx-Xxxxx Act on
July 31, 2002 pursuant to the equity-based compensation plans of the Company and its
subsidiaries (the “Equity Plans”), (i) no stock options have been granted with an exercise
price based upon a price of the Common Shares on a date occurring prior to the date of
approval of such grant, (ii) each such grant was made in accordance with the material terms
of the Equity Plans, the 1934 Act and all other applicable laws and regulatory rules or
requirements, including the rules of the New York Stock Exchange, Inc. (the “NYSE”), and
(iii) each such grant has been properly accounted for in accordance with GAAP in the
financial statements (including the related notes) of the Company and disclosed in the
Company’s filings with the Commission.
(dd) Except as described in the General Disclosure Package and the Prospectus, since
the end of the Company’s most recent audited fiscal year, there has been 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 has established and maintains disclosure controls and procedures (as
such term is defined in Rule 13a-15 and 15d-15 under the 0000 Xxx) in accordance with the
rules and regulations under the Xxxxxxxx-Xxxxx Act, the 1933 Act and the 0000 Xxx.
(ee) The Agreement and Plan of Merger, dated October 20, 2006 (the “IRRETI Agreement”),
among IRRETI, the Company and DDR IRR Acquisition LLC has been duly authorized, executed and
delivered by the Company, and constitutes a valid and binding agreement of the Company
enforceable in accordance with its terms, except as enforcement thereof may be limited by
bankruptcy, insolvency or other similar laws relating to or affecting creditors’ rights
generally and by general equity principles (regardless of whether enforcement is considered
in a proceeding in equity or at law); compliance by the Company with its obligations
thereunder will not conflict with or constitute a breach of, or default under, or result in
the creation or imposition of any lien, charge or encumbrance upon any property or assets of
the Company or its subsidiaries pursuant to, any contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which the Company or any of its subsidiaries
is a party or by which it may be bound or to which any of the property or assets of the
Company or any of its subsidiaries is subject, nor will such action result in any violation
of the provisions of the Articles of Incorporation or Code of Regulations or, to the best of
its knowledge, any law, administrative regulation or administrative or court order or
decree; no consent, approval, authorization or order of any court or governmental authority
or agency is required for the consummation by the Company of the transactions contemplated
by the IRRETI Agreement, except such as has been obtained or are contemplated; and
statements in the Registration Statement, the General Disclosure Package and the Prospectus
relating to the IRRETI Agreement are correct in all material respects.
(ff) There are no transfer taxes or other similar fees or charges under Federal law or
the laws of any state, or any political subdivision thereof, required to be paid in
13
connection with the execution and delivery of this Agreement or the sale of the
Securities hereunder.
(gg) The Company has not distributed, or prior to the later of the Closing Date and the
completion of the distribution of the Securities, will not distribute, any offering material
in connection with the offering or sale of the Securities other than the Registration
Statement, the General Disclosure Package and the Prospectus (including any supplement
thereto) or any other materials, if any, permitted by the 1933 Act (which were disclosed to
the Underwriter and their counsel) (it being understood that no representation is made with
respect to any other materials distributed by the Underwriter).
(hh) No labor problem or dispute with the employees of the Company or the Subsidiaries
exists or, to the knowledge of the Company, is threatened or imminent, that would have a
material adverse effect on the condition, financial or otherwise, or the earnings, business
affairs or business prospects of the Company and its subsidiaries considered as one
enterprise, except as set forth in or contemplated in the Registration Statement, the
General Disclosure Package and the Prospectus (exclusive of any supplement thereto).
Any certificate signed by any officer or representative of the Company and delivered to the
Underwriter or counsel for the Underwriter in connection with the offering of the Securities shall
be deemed a representation and warranty by the Company, as to matters covered thereby, to the
Underwriter, each Forward Seller and each Forward Counterparty.
2. Representations and Warranties by the Forward Sellers. Each of the Forward Sellers
severally represents and warrants to the Underwriter and the Company as of the date hereof, as of
the Applicable Time and as of the Closing Date as follows:
(a) This Agreement has been duly authorized, executed and delivered by such Forward
Seller and, at the Closing Date, such Forward Seller will have full right, power and
authority to sell, transfer and deliver the Underwritten Securities.
(b) The Forward Agreement between the Company and the Forward Counterparty affiliated
with such Forward Seller has been duly authorized, executed and delivered by such affiliated
Forward Counterparty and constitutes a valid and binding agreement of such Forward
Counterparty, enforceable against such Forward Counterparty in accordance with its terms,
except as enforcement thereof may be limited by bankruptcy, insolvency or other similar laws
relating to or affecting creditors’ rights generally and by general equity principles
(regardless of whether enforcement is considered in a proceeding in equity or at law).
(c) Such Forward Seller will, at the Closing Date, have the free and unqualified right
to transfer the Underwritten Securities to be sold by such Forward Seller, free and clear of
any security interest, mortgage, pledge, lien, charge, claim, equity or encumbrance of any
kind; and upon delivery of such Underwritten Securities and payment of the purchase price
therefor as herein contemplated, assuming the Underwriter
14
has no notice of any adverse claim, the Underwriter will have the free and unqualified
right to transfer the Underwritten Securities purchased by it from such Forward Seller, free
and clear of any security interest, mortgage, pledge, lien, charge, claim, equity or
encumbrance of any kind.
3. Purchase and Sale. (a) On the basis of the representations and warranties
contained in this Agreement, and subject to its terms and conditions, each Forward Seller and the
Company (with respect to any Common Shares issued and sold by the Company pursuant to Section 13
hereto), severally and not jointly, hereby agrees to sell to the Underwriter, and the Underwriter
agrees to purchase from each Forward Seller and the Company (with respect to any Common Shares
issued and sold by the Company pursuant to Section 13 hereto) the respective numbers of
Underwritten Securities set forth in Schedule I hereto (or the proportionate number of Common
Shares to be issued and sold by the Company pursuant to Section 13, as the case may be) at $64.66
per share (the “Purchase Price”).
(b) If all of the conditions to effectiveness set forth in Section 3 of the Forward
Agreements are not satisfied on or prior to the Closing Date, each Forward Seller,
individually, in its sole judgment, may choose not to borrow and deliver for sale the number
of Common Shares set forth in Schedule I opposite the name of such Forward Seller under the
column captioned “Number of Underwritten Securities to be Sold.” In addition, in the event
that, in the sole judgment of any of the Forward Counterparties, its affiliated Forward
Seller is unable to borrow and deliver for sale under this Agreement the full number of
Common Shares set forth in Schedule I opposite the name of such affiliated Forward Seller or
if, in such Forward Counterparty’s sole judgment, it would be impracticable to do so or
would entail a stock loan cost in excess of a rate equal to 60 basis points per annum, then
such Forward Seller shall only be required to deliver for sale the aggregate number of
Common Shares that such Forward Seller is able, or determines is practicable, to so borrow
at or below such cost.
(c) If, pursuant to Section 3(b), a Forward Seller does not borrow and deliver for sale
the number of Underwritten Securities set forth in Schedule I opposite the name of such
Forward Seller under the column captioned “Number of Underwritten Securities to Be Sold”,
such Forward Seller will use its best efforts to notify the Company no later than 5:00 p.m.,
New York City time, on the first business day prior to the Closing Date.
4. Delivery and Payment. Payment for the Underwritten Securities shall be made to
each Forward Seller (or, in the case of delivery of any Common Shares to be issued and sold by the
Company in accordance with Section 13, to the Company) in Federal or other funds immediately
available in New York City against delivery of such Underwritten Securities (or any Common Shares
to be issued and sold by the Company pursuant to Section 13, as the case may be) for the account of
the Underwriter at 10:00 a.m., New York City time, on December 7, 2006. Delivery of the
Underwritten Securities, as well as any Common Shares issued and sold by the Company pursuant to
Section 13 in lieu of such Underwritten Securities, shall be made at 10:00 a.m., New York City
time, at the offices of Sidley Austin llp, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
on December 7, 2006, or at such time on such later date not more than three business days after the
foregoing date as the Underwriter shall designate, which date and time may be postponed by
agreement between the Underwriter and the Company or as provided in
15
Section 13 hereof (such date and time of delivery and payment for the Securities being herein
called the “Closing Date”). Delivery of the Underwritten Securities, as well as any Common Shares
issued and sold by the Company pursuant to Section 13 in lieu of such Underwritten Securities,
shall be made, and the Underwritten Securities, as well as any Common Shares issued and sold by the
Company pursuant to Section 13 in lieu of such Underwritten Securities, shall be registered in such
names and denominations, as the Underwriter shall have requested at least one full business day
prior to the Closing Date.
5. Offering by Underwriter. (a) It is understood that the Underwriter proposes to
offer the Securities for sale to the public as set forth in the General Disclosure Package and the
Prospectus.
(b) The Underwriter hereby represents and agrees that:
(i) (a) it has not made or will not make an offer of Common Shares to the
public in the United Kingdom within the meaning of section 102B of the Financial
Services and Markets Xxx 0000 (as amended) (“FSMA”) except to legal entities which
are authorised or regulated to operate in the financial markets or, if not so
authorised or regulated, whose corporate purpose is solely to invest in securities
or otherwise in circumstances which do not require the publication by the Company of
a prospectus pursuant to the Prospectus Rules of the Financial Services Authority
(“FSA”);
(ii) it has only communicated or caused to be communicated and will only
communicate or cause to be communicated an invitation or inducement to engage in
investment activity (within the meaning of section 21 of FSMA) to persons who have
professional experience in matters relating to investments falling within Article
19(5) of the Financial Services and Markets Xxx 0000 (Financial Promotion) Order
2005 or in circumstances in which section 21 of FSMA does not apply to the Company;
and
(iii) it has complied with, and will comply with all applicable provisions of
FSMA with respect to anything done by it in relation to the Common Shares in, from
or otherwise involving the United Kingdom.
(iv) in relation to each Member State of the European Economic Area which has
implemented the Prospectus Directive (each, a “Relevant Member State”), with effect
from and including the date on which the Prospectus Directive is implemented in that
Relevant Member State (the “Relevant Implementation Date”) it has not made and will
not make an offer of Common Shares to the public in that Relevant Member State prior
to the publication of a prospectus in relation to the Common Shares which has been
approved by the competent authority in that Relevant Member State or, where
appropriate, approved in another Relevant Member State and notified to the competent
authority in that Relevant Member State, all in accordance with the Prospectus
Directive, except that it may, with effect from and including the Relevant
Implementation Date, make an offer of shares to the public in that Relevant Member
State at any time:
16
| (a) | to legal entities which are authorised or regulated to operate in the financial markets or, if not so authorised or regulated, whose corporate purpose is solely to invest in securities; | ||
| (b) | to any legal entity which has two or more of (1) an average of at least 250 employees during the last financial year; (2) a total balance sheet of more than €43,000,000 and (3) an annual net turnover of more than €50,000,000, as shown in its last annual or consolidated accounts; or | ||
| (c) | in any other circumstances which do not require the publication by the Company of a prospectus pursuant to Article 3 of the Prospectus Directive. |
For the purposes of this provision, the expression an “offer of shares to the
public” in relation to any Common Shares in any Relevant Member State means the
communication in any form and by any means of sufficient information on the terms of
the offer and the Common Shares to be offered so as to enable an investor to decide
to purchase or subscribe the Common Shares, as the same may be varied in that
Relevant Member State by any measure implementing the Prospectus Directive in that
Relevant Member State, and the expression Prospectus Directive means Directive
2003/71/EC and includes any relevant implementing measure in each Relevant Member
State.
(v) the securities have not been and will not be registered under the
Securities and Exchange Law of Japan (the “Securities and Exchange Law”) and the
Underwriter has agreed that it will not offer or sell any securities, directly or
indirectly, in Japan or to, or for the benefit of, any resident of Japan (which term
as used herein means any person resident in Japan, including any corporation or
other entity organized under the laws of Japan), or to others for re-offering or
resale, directly or indirectly, in Japan or to a resident of Japan, except pursuant
to an exemption from the registration requirements of, and otherwise in compliance
with, the Securities and Exchange Law and any other applicable laws, regulations and
ministerial guidelines of Japan.
6. Agreements. The Company agrees with the Forward Sellers, the Forward
Counterparties and the Underwriter that:
(a) The Company will comply with the requirements of Rule 430B. Prior to the
termination of the offering of the Securities, the Company will not file any amendment of
the Registration Statement or supplement to the Prospectus or any 462(b) Registration
Statement (including any amendment or supplement through incorporation by reference of any
report filed under the 0000 Xxx) unless the Company has furnished to the Underwriter and the
Forward Sellers a copy for their review prior to filing and will not file any such proposed
amendment or supplement to which the Underwriter or the Forward Sellers, as the case may be,
reasonably object. The Company has given the Underwriter and the Forward Sellers notice of
any filings made pursuant to the 1934 Act
17
or 1934 Act Regulations within 48 hours prior to the Applicable Time; the Company will
give the Underwriter and the Forward Sellers notice of its intention to make any such filing
from the Applicable Time to the Closing Date and will furnish the Underwriter and the
Forward Sellers with copies of any such documents a reasonable amount of time prior to such
proposed filing and will not file or use any such document to which the Underwriter or the
Forward Sellers, as the case may be, or counsel for the Underwriter or counsels to the
Forward Sellers, as the case may be, shall reasonably object. The Company will cause the
Prospectus, properly completed, and any supplement thereto to be filed in a form approved by
the Underwriter with the Commission pursuant to the applicable paragraph of 424(b) within
the time period prescribed and will provide evidence satisfactory to the Underwriter and the
Forward Sellers of such timely filing. The Company will promptly advise the Underwriter and
the Forward Sellers (a) of the effectiveness of any amendment to the Registration Statement,
(b) of the transmittal to the Commission for filing of any supplement or amendment to the
Prospectus or any document to be filed pursuant to the 1934 Act, (c) of the receipt of any
comments from the Commission with respect to the Registration Statement or Prospectus or
documents incorporated or deemed to be incorporated by reference therein, (d) of any request
by the Commission for any amendment to the Registration Statement or any amendment or
supplement to the Prospectus with respect to the Securities or for additional information
relating thereto, (e) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the institution or threatening of any
proceedings for that purpose, and (f) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Securities for sale in any
jurisdiction or the institution or threatening of any proceeding for such purpose. The
Company will use its best efforts to prevent the issuance of any such stop order or the
suspension of any such qualification, and, if issued, to obtain as soon as possible, the
withdrawal thereof.
(b) If, at any time when a prospectus relating to the Securities is required to be
delivered under the 1933 Act, any event occurs as a result of which the Prospectus as then
supplemented would include any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein in the light of the circumstances
under which they were made not misleading, or if it shall be necessary to amend the
Registration Statement or supplement the Prospectus to comply with the 1933 Act, the Company
promptly will (1) notify the Underwriter and the Forward Sellers of any such event, (2)
prepare and file with the Commission, subject to paragraph (a) of this Section 6, an
amendment or supplement which will correct such statement or omission or effect such
compliance; and (3) supply any supplemented Prospectus to the Underwriter and the Forward
Sellers in such quantities as they may reasonably request. If at any time after the date
hereof, an event or development occurs as a result of which the General Disclosure Package
contains an untrue statement of a material fact or omits to state a material fact necessary
in order to make the statements therein, in the light of the circumstances existing at the
time it is used, not misleading, the Company will promptly notify the Underwriter and the
Forward Sellers and will promptly amend or supplement in a manner reasonably satisfactory to
the Underwriter and the Forward Sellers, at its own expense, the General Disclosure Package
to eliminate or correct such untrue statement or omission. If at any time following
issuance of an Issuer Free Writing Prospectus there
18
occurred or occurs an event or development as a result of which such Issuer Free
Writing Prospectus conflicted or would conflict with the information contained in the
Registration Statement (or any other registration statement relating to the Securities) or
the Statutory Prospectus or any preliminary prospectus or included or would include an
untrue statement of a material fact or omitted or would omit to state a material fact
necessary in order to make the statements therein, in the light of the circumstances
prevailing at that subsequent time, not misleading, the Company will promptly notify the
Underwriter and the Forward Sellers and will promptly amend or supplement, at its own
expense, such Issuer Free Writing Prospectus to eliminate or correct such conflict, untrue
statement or omission. The Underwriter’s delivery of any such amendment or supplement shall
not constitute a waiver of any of the conditions in Section 7 hereof.
(c) As soon as practicable, the Company will make generally available to its security
holders and to the Underwriter and the Forward Sellers an earnings statement or statements
of the Company and its subsidiaries which will satisfy the provisions of Section 11(a) of
the 1933 Act and Rule 158 under the 1933 Act.
(d) The Company will furnish to the Underwriter and the Forward Sellers and counsel for
the Underwriter and counsels for the Forward Sellers signed copies of the Registration
Statement (including exhibits thereto) a copy of the Registration Statement and, so long as
delivery of a prospectus by the Underwriter or dealer may be required by the 1933 Act, as
many copies of any preliminary prospectus and the Prospectus as the Underwriter or the
Forward Sellers, as the case may be, may reasonably request.
(e) During the period from the date of this Agreement through the five year anniversary
hereof or, in the case of the Forward Sellers, until the expiration or termination of the
Forward Agreements, the Company will furnish upon request to the Underwriter and the Forward
Sellers, as the case may be, as soon as practicable after the end of each fiscal year, a
copy of its annual report to shareholders for such year; and the Company will furnish upon
request to the Underwriter and the Forward Sellers, as the case may be, as soon as
available, a copy of each report and any definitive proxy statement of the Company filed
with the Commission under the 1934 Act or mailed to shareholders.
(f) The Company represents and agrees that, unless it obtains the prior written consent
of the Underwriter and the Forward Sellers, and the Underwriter agrees that, unless it
obtains the prior written consent of the Company and the Forward Sellers, it has not made
and will not make any offer relating to the Securities that would constitute an “issuer free
writing prospectus”, as defined in Rule 433, or that would otherwise constitute a “free
writing prospectus,” as defined in Rule 405; provided, however, that prior to the
preparation of the Prospectus in accordance with Section 6(a), the Underwriter is authorized
to use the information with respect to the final terms of the Securities set forth on
Schedule II in communications orally conveying such information or other information
contained in the General Disclosure Package to investors. Any such free writing prospectus
consented to by the Company and the Underwriter is hereinafter referred to as a “Permitted
Free Writing Prospectus.” The Company represents that is has treated or agrees that it will
treat each Permitted Free Writing Prospectus as an “issuer
19
free writing prospectus,” as defined in Rule 433, and has complied and will comply with
the requirements of Rule 433 applicable to any Permitted Free Writing Prospectus, including
timely filing with the Commission where required, legending and record keeping.
(g) The Company will arrange, if necessary, for the qualification of the Securities for
sale under the laws of such jurisdictions as the Underwriter may designate and will maintain
such qualifications in effect so long as required for the distribution of the Securities;
provided, however, that in no event shall the Company be obligated to
qualify to do business in any jurisdiction where it is not now so qualified or to take any
action that would subject it to service of process in suits, other than those arising out of
the offering or sale of the Securities, in any jurisdiction where it is not now so subject.
(h) For a period from the date of the Prospectus through and including the 60 day
following the date of the Prospectus (the “Lock-up Period”), the Company will not, without
the prior written consent of the Underwriter, issue, offer, sell, contract to sell,
hypothecate, pledge, grant or sell any option, right or warrant to purchase, or otherwise
dispose of, or contract to dispose of, any Common Shares, any securities substantially
similar to the Securities or the Common Shares or any other securities convertible into or
exercisable or exchangeable for Common Shares or the Securities. However, these
restrictions do not apply to (A) borrowings under the Company’s credit facilities, (B) the
issuance of Common Shares upon conversion of the Company’s 3.50% Convertible Senior Notes
due 2011, (C) any debt or equity securities issued in connection with acquisition
transactions, including the acquisition of real property or interests therein, including
mortgage or leasehold interests or in conjunction with any joint venture transaction to
which the Company is or becomes a party, (D) securities issued in connection with the
Company’s employee benefit plans, share option plans, long-term incentive plan and/or
distribution reinvestment plans existing at the date of this Agreement, (E) securities
issued pursuant to currently outstanding options, warrants or rights, (F) securities issued
to IRRETI stockholders in connection with the IRRETI Agreement (as defined below) or (G) the
delivery of Common Shares pursuant to the Forward Agreements.
In the event that either (x) during the last 17 days of the Lock-up Period referred to
above, the Company issues an earnings release or a press release announcing a significant
event or (y) prior to the expiration of such Lock-up Period, the Company announces that it
will release earnings results or issue a press release announcing a significant event during
the 17-day period beginning on the last day of such Lock-up Period, the restrictions
described above shall continue to apply until the expiration of the 17-day period beginning
on the first day following the date of the earnings release or press release.
(i) The Company will use its reasonable best efforts to meet the requirements to
qualify, for the taxable year ended December 31, 2006 and for each of its succeeding taxable
years for so long as the Board of Directors of the Company deems it in the best interests of
the Company’s shareholders to remain so qualified, for taxation as a REIT under the Code.
20
(j) The Company will use its best efforts to cause (i) the Common Shares to be
issued pursuant to Physical Settlement (as such term is defined in the Forward Agreements)
of each Forward Agreement and (ii) the Common Shares (if any) to be issued and sold by the
Company pursuant to Section 13 hereto to be approved for listing on the New York Stock
Exchange (the “NYSE”) as of the date such Common Shares are issued upon such Physical
Settlement, the Closing Date.
(k) Neither the Company nor the Subsidiaries will take, directly or indirectly, any
action designed to or that would constitute or that might reasonably be expected to cause or
result in, under the 1934 Act or otherwise, stabilization or manipulation of the price of
any of their securities to facilitate the sale or resale of the Securities.
(l) The Company agrees to pay the costs and expenses relating to the following matters:
(i) the preparation, printing or reproduction and filing with the Commission of the
Registration Statement (including financial statements and exhibits thereto), any
preliminary prospectus, the Prospectus, any Permitted Free Writing Prospectus, and each
amendment or supplement to any of them; (ii) the printing (or reproduction) and delivery
(including postage, air freight charges and charges for counting and packaging) of such
copies of the Registration Statement, any preliminary prospectus, the Prospectus, and all
amendments or supplements to any of them, as may, in each case, be reasonably requested for
use in connection with the offering and sale of the Securities; (iii) the preparation,
printing, authentication, issuance and delivery of certificates for the Securities,
including any stamp or transfer taxes in connection with the original issuance and sale of
the Securities; (iv) the printing (or reproduction) and delivery of this Agreement, any blue
sky memorandum or any supplement thereto and all other agreements or documents printed (or
reproduced) and delivered in connection with the offering of the Securities; (v) the
registration of the Securities under the 1934 Act and the listing of the Securities on NYSE;
(vi) any registration or qualification of the Securities for offer and sale under the
securities or blue sky laws of the several states (including filing fees and the reasonable
fees and expenses of counsel for the Underwriter relating to such registration and
qualification); (vii) any filings required to be made with the NASD (including filing fees
and the reasonable fees and expenses of counsel for the Underwriter relating to such
filings); (viii) the fees and expenses of the Company’s accountants, counsel (including
local and special counsel) and transfer agent and registrar; (ix) any travel expenses of the
Company’s officers and employees and any other expenses of the Company in connection with
attending or hosting meetings with prospective purchasers of the Securities; and (x) all
other costs and expenses incident to the performance by the Company of its obligations
hereunder. It is understood, however, that except as provided in this Section 6 and Section
8, and as otherwise provided in the Forward Agreement, the Underwriter, Forward Sellers and
Forward Counterparties will pay all of their costs and expenses, including fees and
disbursements of their counsel.
(m) During the period when the Prospectus is required to be delivered by the
Underwriter under the 1933 Act or the 1934 Act, the Company will file all documents required
to be filed with the Commission pursuant to the 1934 Act within the time periods required by
the 1934 Act.
21
7. Conditions to the Obligations of the Underwriter. The obligations of the
Underwriter to purchase the Underwritten Securities (or any Common Shares to be issued and sold by
the Company pursuant to Section 13 in lieu thereof) shall be subject to the accuracy of the
representations and warranties on the part of the Company contained herein as of the date hereof,
the Applicable Time and the Closing Date pursuant to Section 3 hereof, to the accuracy of the
statements of the Company made in any certificates pursuant to the provisions hereof, to the
performance by the Company of its obligations hereunder and to the following additional conditions:
(a) On the Closing Date, (i) the Registration Statement has become effective and no
stop order suspending the effectiveness of the Registration Statement shall have been issued
under the 1933 Act or proceedings therefor initiated or, to the knowledge of the Company,
threatened by the Commission, and any request on the part of the Commission for additional
information shall have been complied with to the reasonable satisfaction of counsel to the
Underwriter, (ii) each preliminary prospectus and the Prospectus containing the Rule 430B
Information shall have been filed with the Commission in the manner and within the time
period required by Rule 424(b) without reliance on Rule 424(b)(8) (or a post-effective
amendment providing such information shall have been filed and become effective in
accordance with the requirements of Rule 430B), (iii) any material required to be filed by
the Company pursuant to Rule 433(d) of the 1933 Act Regulations shall have been filed with
the Commission within the applicable time periods prescribed for such filings under such
Rule 433, (iv) the Company shall have paid the required Commission filing fees relating to
the Securities within the time period required by Rule 456(b)(1)(i) of the 1933 Act
Regulations without regard to the proviso therein and otherwise in accordance with Rules
456(b) and 457(r) of the 1933 Act Regulations, and (v) there shall not have come to your
attention any facts that would cause you to believe that the Prospectus, at the time it was
required to be delivered or made available to purchasers of the Securities, included an
untrue statement of a material fact or omitted to state a material fact necessary in order
to make the statements therein, in light of the circumstances existing at such time, not
misleading.
(b) At the time of execution of this Agreement, the Underwriter and the Forward Sellers
shall have received from PricewaterhouseCoopers llp a letter, addressed to the
Underwriter, the Forward Sellers and the Forward Counterparties, dated the date hereof, in
form and substance satisfactory to the Underwriter and the Forward Sellers, to the effect
that:
(i) they are independent accountants with respect to the Company and its
subsidiaries within the meaning of the 1933 Act and the 1933 Act Regulations; (ii)
it is their opinion that the consolidated financial statements and supporting
schedules of the Company included or incorporated by reference in the Registration
Statement and the Prospectus and covered by their opinions therein comply in form in
all material respects with the applicable accounting requirements of the 1933 Act
and the 1934 Act, and the related published rules and regulations; (iii) it is their
opinion that the financial statements of the properties acquired or proposed to be
acquired by the Company included in or incorporated by reference in the Company’s
Registration Statement and covered
22
by their opinions therein comply as to form with the applicable financial
statement requirements of Rule 3-14 of the 1934 Act with respect to real estate
operations acquired or to be acquired; (iv) they have performed limited procedures,
not constituting an audit, including a reading of the latest available unaudited
interim consolidated financial statements of the Company and its subsidiaries, a
reading of the minute books of the Company and its subsidiaries, inquiries of
certain officials of the Company and its subsidiaries who have responsibility for
financial and accounting matters and such other inquiries and procedures as may be
specified in such letter, and on the basis of such limited review and procedures
nothing came to their attention that caused them to believe that (A) the unaudited
interim consolidated financial statements and financial statement schedules, if any,
of the Company included or incorporated by reference in the Registration Statement
and the Prospectus do not comply as to form in all material respects with the
applicable accounting requirements of the 1934 Act and the related published rules
and regulations thereunder or that any material modification should be made to the
unaudited condensed interim financial statements included in or incorporated by
reference in the Registration Statement and the Prospectus for them to be in
conformity with GAAP, (B) the unaudited pro forma condensed financial statements
included in or incorporated by reference in the Company’s Registration Statement do
not comply as to form in all material respects with the applicable accounting
requirements of Rule 11-02 of Regulation S-X under the 1933 Act or that the pro
forma adjustments have not been properly applied to the historical amounts in the
compilation of such statements, (C) the information included or incorporated by
reference in the Registration Statement and the applicable Prospectus under the
caption “Selected Consolidated Financial Data” did not conform in all material
respects with the disclosure requirements of item 301 of Regulation S-K, or (D) at a
specified date not more than three days prior to the date hereof, there has been any
change in the capital shares of the Company or increase in the consolidated total
debt of the Company or any decrease in total consolidated shareholders’ equity of
the Company, as compared with the amounts shown in the most recent consolidated
balance sheet included or incorporated by reference in the Registration Statement
and the Prospectus or, during the period from the date of the most recent
consolidated statement of operations of the Company included or incorporated by
reference in the Registration Statement and the Prospectus to a specified date not
more than three days prior to the date hereof, there were any decreases, as compared
with the corresponding period in the preceding year, in total consolidated revenues,
or in consolidated net income of the Company, except in all instances for changes,
increases or decreases which the Registration Statement and the Prospectus disclose
have occurred or may occur; and (v) in addition to the audit referred to in their
opinions and the limited procedures referred to in clause (iv) above, they have
carried out certain specified procedures, not constituting an audit, with respect to
certain amounts, percentages and financial information which are included or
incorporated by reference in the Registration Statement and the Prospectus and which
are specified by you, and have found such amounts, percentages and financial
information to be in agreement with the relevant
23
accounting, financial and other records of the Company and its subsidiaries
identified in such letter.
(c) At the time of execution of this Agreement, the Underwriter and the Forward Sellers
shall have received from KPMG llp a letter, addressed to the Underwriter, the
Forward Sellers and the Forward Counterparties, dated the date of such execution, in form
and substance satisfactory to you, containing statements and information of the type
ordinarily included in accountants’ “comfort letters” to underwriters with respect to the
audited financial statements of IRRETI included in the Company’s Current Report on Form 8-K,
as filed with the Commission on December 4, 2006 and such other information included or
incorporated by reference in the Prospectus as may reasonably be requested by the
Underwriter and the Forward Sellers.
(d) On the Closing Date, the Underwriter and the Forward Sellers shall have received
from PricewaterhouseCoopers llp a letter, addressed to the Underwriter, the Forward
Sellers and the Forward Counterparties, dated the Closing Date, to the effect that such
accountants reaffirm, as of the Closing Date, and as though made on the Closing Date, the
statements made in the letter furnished by such accountants pursuant to paragraph (b) of
this Section 7, except that the specified date will be a date not more than three days prior
to the Closing Date.
(e) On the Closing Date, the Underwriter and the Forward Sellers shall have received
from KPMG llp a letter, addressed to the Underwriter, the Forward Sellers and the
Forward Counterparties, dated the Closing Date, to the effect that such accountants
reaffirm, as of the Closing Date, and as though made on the Closing Date, the statements
made in the letter furnished by such accountants pursuant to paragraph (c) of this Section
7.
(f) On the Closing Date, there shall not have been, since the date hereof or since the
respective dates as of which information is given in the Registration Statement, the General
Disclosure Package and the Prospectus, any material adverse change or any development that
is reasonably likely to involve a material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the ordinary course of
business, and you shall have received a certificate of the Chairman and Chief Executive
Officer or the President and Chief Operating Officer and the Chief Financial Officer of the
Company, dated as of the Closing Date, to the effect that (i) there has been no such
material adverse change or development, (ii) the representations and warranties in Section 1
hereof are true and correct with the same force and effect as though expressly made at and
as of the Closing Date, and (iii) the conditions precedent set forth in this Section 7 have
been satisfied or waived.
(g) On the Closing Date, the Underwriter and the Forward Sellers shall have received
from Xxxxx & Xxxxxxxxx llp, counsel for the Company, an opinion, addressed to the
Underwriter, the Forward Sellers and the Forward Counterparties, dated as of the Closing
Date, to the effect that:
24
(i) The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Ohio.
(ii) The Company has all requisite corporate power and authority to own, lease
and operate its properties and to conduct its business as described in the
Prospectus.
(iii) The Company is duly qualified to transact business and is in good
standing in each jurisdiction in which it owns real property except where the
failure to qualify and be in good standing would not have a material adverse effect
on the condition, financial or otherwise, or on the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one enterprise.
(iv) If the Company has one or more significant subsidiaries, as defined in
Rule 405 of the 1933 Act (each a “Significant Subsidiary”), each Significant
Subsidiary has been duly incorporated or formed and is validly existing as a
corporation, partnership, limited liability company or real estate investment trust
in good standing or in full force and effect under the laws of the jurisdiction of
its incorporation or formation, has corporate, partnership, limited liability
company or real estate investment trust power and authority to own, lease and
operate its properties and to conduct its business, and is duly qualified as a
foreign corporation, partnership, limited liability company or real estate
investment trust to transact business and is in good standing or full force and
effect in each jurisdiction in which it owns real property, except where the failure
to so qualify and be in good standing would not have a material adverse effect on
the condition, financial or otherwise, of the Company and its subsidiaries
considered as one enterprise.
(v) The outstanding capital shares of the Company, including the Securities
(other than any Securities to be sold by the Company pursuant to Section 13) have
been duly authorized, validly issued, and are fully paid and non-assessable. All of
the issued and outstanding capital stock of the Company’s subsidiaries have been
duly authorized and validly issued, are fully paid and non-assessable and, to the
best of such counsel’s knowledge, are owned by the Company free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim or equity, except for
such security interests, mortgages, pledges, liens, encumbrances, claims or equities
that would not have a material adverse effect on the condition, financial or
otherwise, or the earnings, business affairs or business prospects of the Company
and its subsidiaries considered as one enterprise.
(vi) Any Securities to be sold by the Company pursuant to Section 13 have been
duly and validly authorized by all necessary corporate action and such Securities
have been duly authorized for issuance and sale pursuant to this Agreement and such
Securities, when issued and delivered pursuant to this
25
Agreement against payment of the consideration therefor specified herein will
be validly issued, fully paid and non-assessable.
(vii) None of the Securities will have been issued or sold in violation of or
be subject to any preemptive or other similar rights of any shareholder of the
Company arising by operation of law or under the Articles of Incorporation or Code
of Regulations or, to the best of their knowledge, otherwise.
(viii) The Common Shares, if any, to be purchased by the Forward Counterparties
pursuant to the Forward Agreements from the Company have been duly authorized by the
Company for issuance and sale pursuant to the Forward Agreements and, when issued
and delivered by the Company to the Forward Counterparties pursuant to the Forward
Agreements against payment of the consideration set forth in the Forward Agreements,
will be validly issued, fully paid and non-assessable and will not have been issued
or sold in violation of or be subject to any preemptive or other similar rights of
any shareholder of the Company arising by operation of law or under the Articles of
Incorporation or Code of Regulations.
(ix) Each of the Forward Agreements has been duly authorized, executed and
delivered by the Company and constitutes a valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms, except as
enforcement thereof may be limited by bankruptcy, insolvency, re-organization,
moratorium or similar laws affecting enforcement of creditors’ rights generally and
except as enforcement thereof is subject to general principles of equity (regardless
of whether enforcement is considered in a proceeding in equity or at law).
(x) The Registration Statement is effective under the 1933 Act and, to the best
of their knowledge, no stop order suspending the effectiveness of the Registration
Statement has been issued under the 1933 Act or proceedings therefor initiated or
threatened by the Commission.
(xi) The Registration Statement and the Prospectus (other than the financial
statements, related schedules and other financial and statistical data included or
incorporated by reference in the Registration Statement or the Prospectus, as to
which no opinion need be rendered) as of their respective effective or issue dates,
comply as to form in all material respects with the requirements for registration
statements on Form S-3 under the 1933 Act and the 1933 Act Regulations.
(xii) Each document filed pursuant to the 1934 Act (other than the financial
statements, related schedules and other financial and statistical data included or
incorporated by reference therein, as to which no opinion need be rendered) and
incorporated or deemed to be incorporated by reference in the Prospectus complied
when so filed as to form in all material respects with the 1934 Act and the 1934 Act
Regulations.
26
(xiii) The Securities conform in all material respects to the statements
relating thereto contained in the Prospectus.
(xiv) No facts have come to such counsel’s attention that have caused such
counsel to believe that (i) the Registration Statement or any amendment thereto, at
the time of filing of the Company’s Annual Report or as of the “new effective date”
with respect to the Underwriter of the Securities pursuant to, and within the
meaning of, Rule 430B(f)(2) of the 1933 Act Regulations, contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading; (ii) the
General Disclosure Package, at the Applicable Time, included an untrue statement of
a material fact or omitted 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; or (iii) the Prospectus, or any amendment or supplement thereto, as
of its date or on the Closing Date, included or includes an untrue statement of a
material fact or omitted or omits to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they were
made, not misleading (in each case, other than the financial statements, related
notes and schedules and other financial and statistical information included or
incorporated by reference therein or omitted therefrom, as to which such counsel
need express no statement). With respect to statements contained in the General
Disclosure Package, any statement contained in any of the constituent documents
shall be deemed to be modified or superseded to the extent that any information
contained in subsequent constituent documents modifies or replaces such statement
(xv) To the best of their knowledge, there are no legal or governmental
proceedings pending or threatened which are required to be disclosed in the
Prospectus, other than those disclosed therein, and, to the best of their knowledge,
all pending legal or governmental proceedings to which the Company or its
Significant Subsidiaries is a party or of which any of the property of the Company
or its subsidiaries is the subject that are not described in the Registration
Statement, including ordinary routine litigation incidental to the business, are,
considered in the aggregate, not material to the business of the Company and its
subsidiaries considered as one enterprise.
(xvi) To the best of their knowledge, there are no contracts, indentures,
mortgages, loan agreements, notes, leases or other instruments required to be
described or referred to in the Registration Statement or to be filed as exhibits
thereto other than those described or referred to therein or filed as exhibits
thereto, the descriptions thereof or references thereto are correct in all material
respects.
(xvii) No authorization, approval or consent of any court or governmental
authority or agency is required that has not been obtained in connection with the
consummation by the Company of the transactions contemplated by this Agreement or
the Forward Agreements, except such as may be required under the 1933 Act, the 1934
Act, and state securities laws or Blue
27
Sky laws or real estate syndication laws; to the best of their knowledge, the
execution and delivery of this Agreement and the Forward Agreements and the
consummation of the transactions contemplated herein and therein and compliance by
the Company with its obligations hereunder and thereunder will not (A) constitute a
breach of, or default under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any Significant
Subsidiary pursuant to, any contract, indenture, mortgage, loan agreement, note,
lease or other instrument to which the Company or any Significant Subsidiary is a
party or by which they are bound or to which any of the property or assets of the
Company or any Significant Subsidiary is subject, except where such breach, default,
creation or imposition would not have a material adverse effect on the condition,
financial or otherwise, of the Company and its subsidiaries considered as one
enterprise, nor will such action (B) result in violation of the provisions of the
Articles of Incorporation, Code of Regulations or other organizational document of
the Company or any Significant Subsidiary or any applicable law, administrative
regulation or administrative or court order or decree.
(xviii) Neither the Company nor any Significant Subsidiary is, or will be after
the consummation of the transactions contemplated by this Agreement and the Forward
Agreements, required to be registered under the 1940 Act.
(xix) The information in the Prospectus under the captions “Description of
Common Shares,” “Certain Anti-Takeover Provisions of Ohio Law” and “Certain Federal
Income Tax Considerations,” and, if applicable, any similar matters set forth in the
Prospectus Supplement under a caption or captions to be set forth in such opinion,
to the extent that it constitutes matters of law or legal conclusions, has been
reviewed by them and is correct in all material respects.
(xx) The Company has qualified as a REIT for each of its taxable years ended
December 31, 1993 through 2005 and the Company is organized in conformity with the
requirements for qualification as a REIT, and the Company’s current and proposed
method of operation will enable it to continue to meet the requirements for
qualification and taxation as a REIT under the Code.
(xxi) The IRRETI Agreement has been duly authorized, executed and delivered by
the Company, and constitutes a valid and binding agreement of the Company
enforceable in accordance with its terms, except as enforcement thereof may be
limited by bankruptcy, insolvency or other similar laws relating to or affecting
creditors’ rights generally and by general equity principles (regardless of whether
enforcement is considered in a proceeding in equity or at law); to the best of their
knowledge, compliance by the Company with its obligations thereunder will not
conflict with or constitute a breach of, or default under, or result in the creation
or imposition of any lien, charge or encumbrance upon any property or assets of the
Company or its subsidiaries pursuant to, any contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which the Company or any of its
subsidiaries is a party or by which it may be bound or to which any
28
of the property or assets of the Company or any of its subsidiaries is subject,
nor will such action result in any violation of the provisions of the Articles of
Incorporation or Code of Regulations or, to the best of such counsel’s knowledge,
any law, administrative regulation or administrative or court order or decree; no
consent, approval, authorization or order of any court or governmental authority or
agency is required for the consummation by the Company of the transactions
contemplated by the IRRETI Agreement, except such as has been obtained or are
contemplated; and statements in the Prospectus relating to the IRRETI Agreement are
correct in all material respects.
(h) On the Closing Date, the Underwriter and the Forward Seller shall have received
from Sidley Austin llp, counsel for the Underwriter, addressed to the Underwriter,
the Forward Sellers and the Forward Counterparties, their opinion or opinions dated the
Closing Date with respect to the matters set forth in (i), (vi) (only as to the second
sentence), (vii) (only as to operation of law and only with respect to Securities to be sold
by the Company pursuant to Section 13), (viii) (only as to operation of law), (ix), (x),
(xi), (xiii), and (xiv) of subsection (g) of this Section, and the Company shall have
furnished to such counsel such documents as they may request for the purpose of enabling
them to pass upon such matters.
In giving their opinions, Sidley Austin llp may rely as to matters involving the laws
of the State of Ohio upon the opinion of Xxxxx & Xxxxxxxxx llp, and Xxxxx & Xxxxxxxxx
llp may rely as to matters involving the laws of the State of New York upon the opinion of
Sidley Austin llp. Xxxxx & Xxxxxxxxx llp and Sidley Austin llp may rely
(i) as to the qualification of the Company or its subsidiaries to do business in any state or
jurisdiction, upon certificates of appropriate government officials, telephonic confirmation by
representatives of such states or confirmation from information contained on the websites of such
states and (ii) as to matters of fact, upon certificates and written statements of officers and
employees of and accountants for the Company or its subsidiaries.
(i) Subsequent to the date hereof or, if earlier, the dates as of which information is
given in the Registration Statement, the General Disclosure Package or the Prospectus, there
shall not have been (i) any change, or any development involving a prospective change, in
the condition (financial or otherwise), earnings, business or operations of the Company and
its subsidiaries taken as a whole, except as set forth in or contemplated in the
Registration Statement, the General Disclosure Package or the Prospectus the effect of which
is, in the sole judgment of the Underwriter, so material and adverse as to make it
impractical or inadvisable to proceed with the offering or delivery of the Securities as
contemplated by the Registration Statement (exclusive of any supplement thereto), the
General Disclosure Package and the Prospectus (exclusive of any supplement thereto), or (ii)
any downgrading, nor shall any notice have been given of any intended or potential
downgrading or of any review for a possible change that does not indicate the direction of
the possible change, in the rating accorded any of the Company’s securities by any
“nationally recognized statistical rating organization,” as such term is defined for
purposes of Rule 436(g)(2) under the 1933 Act;
29
(j) On or prior to the Closing Date, the Underwriter shall have received lock-up
agreements substantially in the form of Exhibit C hereto (the “Lock-up Agreements”)
from each of the executive officers and directors listed on Schedule III hereof.
(k) The Common Shares reserved for listing upon issuance following Physical Settlement
(as such term is defined in the Forward Agreements) of each Forward Agreement and the Common
Shares (if any) to be sold by the Company pursuant to Section 13 hereto shall have been
approved for listing on the NYSE, subject only to official notice of issuance.
(l) The Company shall have furnished to the Underwriter and the Forward Sellers, as the
case may be, such additional certificates as the Underwriter or the Forward Sellers, as the
case may be, may have reasonably requested as to the accuracy, at and as of the Closing
Date, of the representations and warranties made herein by them, as to compliance, at and as
of the Closing Date, by them with their covenants and agreements herein contained and other
provisions hereof to be satisfied at or prior to the Closing Date, and as to other
conditions to the obligations of the Underwriter hereunder.
Any certificate or document signed by any officer or representative of the Company and
delivered to the Underwriter, the Forward Sellers or the Forward Counterparties, as the case may
be, or to counsel for the Underwriter or counsels to the Forward Counterparties, as the case may
be, shall be deemed a representation and warranty by the Company to the Underwriter, the Forward
Sellers or the Forward Counterparties, as the case may be, as to the statements made therein.
The Company will furnish the Underwriter, the Forward Sellers and the Forward Counterparties
with such conformed copies of such opinions, certificates, letters and documents as the
Underwriter, the Forward Sellers or the Forward Counterparties, as the case may be, reasonably
request. The Underwriter and the Forward Sellers may in their sole discretion waive compliance with
any conditions to the obligations of the Underwriter or the Forward Seller, as the case may be,
hereunder, whether in respect of the Closing Date or otherwise.
If any of the conditions specified in this Section 7 shall not have been fulfilled when and as
provided in this Agreement, this Agreement and all obligations of the Underwriter hereunder may be
canceled at, or at any time prior to, the Closing Date by the Underwriter. Notice of such
cancellation shall be given to the Company in writing or by telephone or facsimile confirmed in
writing.
The documents required to be delivered by this Section 7 shall be delivered at the offices of
Sidley Austin llp, counsel for the Underwriter, at 000 Xxxxxxx Xxxxxx, Xxx Xxxx, XX 00000,
on the Closing Date.
8. Reimbursement of Underwriter’s Expenses. If the sale of the Securities provided
for herein is not consummated because of any termination pursuant to Section 7 or Section 11
hereof, the Company will reimburse the Underwriter, the Forward Sellers and the Forward
Counterparties severally through the Underwriter or the Forward Sellers, as the case may be, on
demand for all reasonable out-of-pocket expenses (including reasonable fees and
30
disbursements of counsel) that shall have been incurred by them in connection with the
proposed purchase and sale of the Securities.
9. Indemnification and Contribution. (a) The Company agrees to indemnify and hold
harmless the Underwriter (including, for this purpose, any affiliated broker-dealer of the
Underwriter participating as an initial seller in the offering of the Securities) and each person
who controls the Underwriter within the meaning of either Section 15 of the 1933 Act or Section 20
of the 1934 Act, and each Forward Seller and Forward Counterparty and each person, if any, who
controls any Forward Seller or Forward Counterparty within the meaning of either Section 15 of the
1933 Act or Section 20 of the 1934 Act, against any and all losses, claims, damages or liabilities
to which they or any of them may become subject under the 1933 Act, the 1934 Act or other Federal
or state statutory law or regulation, at common law or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) are caused by any untrue statement or
alleged untrue statement of a material fact contained in the Registration Statement, or in any
amendment thereof, including the Rule 430B Information, or in the General Disclosure Package, any
preliminary prospectus, the Prospectus, any Issuer Free Writing Prospectus or in any amendment
thereof or supplement thereto, or are caused by the omission or alleged omission to state therein a
material fact required to be stated therein (with respect to the Prospectus only, in light of the
circumstances under which they were made) or necessary to make the statements therein not
misleading, and agrees to reimburse each such indemnified party, as incurred, for any legal or
other expenses reasonably incurred by them in connection with investigating or defending any such
loss, claim, damage, liability or action; provided, however, the Company will not
be liable in any such case to the extent that any such loss, claim, damage or liability arises out
of or is based upon any such untrue statement or alleged untrue statement or omission or alleged
omission made therein in reliance upon and in conformity with written information furnished to the
Company relating to the Underwriter, Forward Seller or Forward Counterparty furnished to the
Company in writing by the Underwriter. This indemnity agreement will be in addition to any
liability which the Company may otherwise have.
(b) The Underwriter agrees to indemnify and hold harmless the Company and each of the
Company’s directors and each of the Company’s officers who signed the Registration
Statement, and each person who controls the Company within the meaning of either Section 15
of the 1933 Act or Section 20 of the 1934 Act, and each Forward Seller and Forward
Counterparty and each person, if any, who controls any Forward Seller or Forward
Counterparty within the meaning of either Section 15 of the 1933 Act or Section 20 of the
1934 Act to the same extent as the foregoing indemnity from the Company to the Underwriter,
but only with reference to written information relating to the Underwriter furnished to the
Company by the Underwriter specifically for inclusion in the documents referred to in the
foregoing indemnity. This indemnity agreement will be in addition to any liability which
the Underwriter may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section 9 of notice of
the commencement of any action, such indemnified party will, if a claim in respect thereof
is to be made against the indemnifying party under this Section 9, notify the indemnifying
party in writing of the commencement thereof; but the failure so to notify the indemnifying
party (i) will not relieve it from liability under paragraph (a) or (b) above unless and to
the extent it did not otherwise learn of such action and the
31
indemnifying party is materially prejudiced by such failure and (ii) will not, in any
event, relieve the indemnifying party from any obligations to any indemnified party other
than the indemnification obligation provided in paragraphs (a) or (b) above. The
indemnifying party shall be entitled to appoint counsel of the indemnifying party’s choice
at the indemnifying party’s expense to represent the indemnified party in any action for
which indemnification is sought (in which case the indemnifying party shall not thereafter
be responsible for the fees and expenses of any separate counsel retained by the indemnified
party or parties except as set forth below); provided, however, that such
counsel shall be reasonably satisfactory to the indemnified party. Notwithstanding the
indemnifying party’s election to appoint counsel to represent the indemnified party in an
action, the indemnified party shall have the right to employ separate counsel (including
local counsel), and the indemnifying party shall bear the reasonable fees, costs and
expenses of such separate counsel if (i) the use of counsel chosen by the indemnifying party
to represent the indemnified party would present such counsel with a conflict of interest,
(ii) the actual or potential defendants in, or targets of, any such action include both the
indemnified party and the indemnifying party and the indemnified party shall have reasonably
concluded that there may be legal defenses available to it and/or other indemnified parties
which are different from or additional to those available to the indemnifying party, (iii)
the indemnifying party shall not have employed counsel satisfactory to the indemnified party
to represent the indemnified party within a reasonable time after notice of the institution
of such action or (iv) the indemnifying party shall authorize the indemnified party to
employ separate counsel at the expense of the indemnifying party. An indemnifying party
will not, without the prior written consent of the indemnified parties, which consent shall
not be unreasonably withheld, settle or compromise or consent to the entry of any judgment
with respect to any pending or threatened claim, action, suit or proceeding in respect of
which indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action) unless such
settlement, compromise or consent includes an unconditional release of each indemnified
party from all liability arising out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or (b) of this Section 9
is unavailable to or insufficient to hold harmless an indemnified party for any reason, the
Company, the Forward Sellers and the Underwriter severally agree to contribute to the
aggregate losses, claims, damages and liabilities (including legal or other expenses
reasonably incurred in connection with investigating or defending same) (collectively
“Losses”) to which the Company and one or more of the Forward Sellers or Underwriter may be
subject in such proportion as is appropriate to reflect the relative benefits received by
the Company on the one hand and by the Forward Sellers and the Underwriter on the other from
the offering of the Securities; provided, however, that in no case shall the
Underwriter be responsible for any amount in excess of the underwriting discount or
commission applicable to the Securities purchased by such Underwriter hereunder. If the
allocation provided by the immediately preceding sentence is unavailable for any reason, the
Company, the Forward Sellers and the Underwriter severally shall contribute in such
proportion as is appropriate to reflect not only such relative benefits, but also the
relative fault of the Company on the one hand and of the Forward Sellers or of the
Underwriter on the other in connection with the statements or
32
omissions which resulted in such Losses as well as any other relevant equitable
considerations. The relative benefits received by the Company, the Forward Sellers and the
Underwriter in connection with the offering of the Securities shall be deemed to be in the
same respective proportions as the net proceeds from the offering of the Securities (before
deducting expenses) received by the Company (which benefits shall be deemed equal to the
proceeds that would be received by the Company upon Physical Settlement of the Forward
Agreements assuming a Forward Price (as such term is defined in the Forward Agreements)
equal to the Purchase Price of all of the Securities, the proceeds received by the
Underwriter from the sale of the Securities less the Purchase Price of all of the Securities
and the Spread (as such term is defined in the Forward Agreements) that would be received by
the Forward Counterparty affiliated with such Forward Seller net of any costs incurred by
such Forward Counterparty under the relevant Forward Agreement, respectively, bear to the
sum of the aggregate public offering price of the Securities and the amount of such Spread.
The relative fault of the Company, the Forward Sellers and the Underwriter shall be
determined by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or by the Underwriter and the parties’
relative intent, knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company, the Forward Sellers and the Underwriter agree that it
would not be just and equitable if contribution were determined by pro rata allocation or
any other method of allocation which does not take account of the equitable considerations
referred to above. Notwithstanding the provisions of this paragraph (d), no person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the 0000 Xxx) shall
be entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 9, each person who controls the
Underwriter, a Forward Seller or a Forward Counterparty within the meaning of either Section
15 of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to contribution
as the Underwriter, Forward Seller or Forward Counterparty, and each person who controls the
Company within the meaning of either Section 15 of the 1933 Act or Section 20 of the 1934
Act, each officer of the Company who shall have signed the Registration Statement and each
director of the Company shall have the same rights to contribution as the Company subject in
each case to the applicable terms and conditions of this paragraph (d).
10. Termination. This Agreement shall be subject to termination in the absolute
discretion of the Underwriter, by notice given to the Company and each Forward Seller prior to
delivery of and payment for the Securities, (a) if at any time prior to such time: (i) trading
generally shall have been suspended or materially limited on or by, as the case may be, any of the
NYSE, the American Stock Exchange, the National Association of Securities Dealers, Inc., the
Chicago Board of Options Exchange, the Chicago Mercantile Exchange or the Chicago Board of Trade,
(ii) trading of any securities of the Company shall have been suspended on any exchange or in any
over-the-counter market, (iii) a general moratorium on commercial banking activities in New York
shall have been declared by either Federal or New York State authorities or a material disruption
in commercial banking or securities settlement or clearance services has occurred in the United
States or (iv) there shall have occurred any outbreak or escalation of hostilities, declaration by
the United States of a national emergency or war, or other calamity or crisis or any change in
national or international political, financial or economic condition, the
33
effect of which on financial markets is such as to make it, in the sole judgment of the
Underwriter, impractical or inadvisable to proceed with the offering or delivery of the Securities
as contemplated by the Prospectus (exclusive of any supplement thereto), or (iv) if there has been,
since the date hereof or since the respective dates as of which information is given in the
Prospectus or the General Disclosure Package, any material adverse change or any development that
is reasonably likely to involve a material adverse change in the condition, financial or otherwise,
of the Company and its subsidiaries considered as one enterprise or in its earnings, business
affairs or business prospects, whether or not arising in the ordinary course of business or (b) as
provided in Sections 7 and 11 of this Agreement.
11. Representations and Indemnities to Survive. The respective agreements,
representations, warranties, indemnities and other statements of the Company or any officer of any
of the Company, the Forward Sellers and the Underwriter set forth in or made pursuant to this
Agreement will remain in full force and effect, regardless of any investigation made by or on
behalf of the Underwriter, Forward Seller or Forward Counterparty or the Company or any of their
respective officers, directors, employees, agents or controlling persons referred to in Section 9
hereof, and will survive delivery of and payment for the Securities. The provisions of Sections 8
and 9 hereof shall survive the termination or cancellation of this Agreement.
12. Additional Issuance and Sale by the Company. (a) In the event that (i) all of the
conditions to effectiveness set forth in Section 3 of the applicable Forward Agreement are not
satisfied on or prior to the Closing Date, and a Forward Seller elects, pursuant to Section 3(b),
not to deliver its portion of the Underwritten Securities, or (ii) in the sole judgment of a
Forward Counterparty, its affiliated Forward Seller is unable to borrow and deliver for sale under
this Agreement the full number of Common Shares set forth in Schedule I opposite the name of such
affiliated Forward Seller or if, in such Forward Counterparty’s sole judgment, it would be
impracticable to do so or would entail a stock loan cost in excess of 60 basis points per annum,
the Company shall issue and sell in whole but not in part a number of Common Shares equal to the
number of shares that such Forward Seller does not deliver. The Underwriter shall have the right
to postpone the Closing Date for a period not exceeding one (1) business day in order to effect any
required changes in any documents or arrangements.
A Forward Seller shall have no liability whatsoever for any Securities it does not deliver to
the Underwriter or any other party if such Forward Seller (i) elects, pursuant to Section 3(b) not
to deliver Securities because all of the conditions to effectiveness set forth in Section 3 of the
applicable Forward Agreement have not been satisfied or (ii) is unable to borrow and deliver for
sale under this Agreement all of the Securities it is required to deliver hereunder or, in the
relevant Forward Counterparty’s sole judgment, it would be impracticable to do so or would entail a
stock loan cost in excess of a rate equal to 60 basis points per annum.
13. No Fiduciary Relationship. The Company acknowledges and agrees that the
Underwriter are acting solely in the capacity of an arm’s length contractual counterparty to the
Company with respect to the offering of Securities contemplated hereby (including in connection
with determining the terms of the offering) and not as a financial advisor or a fiduciary to, or an
agent of, the Company or any other person. Additionally, none of the Underwriter are advising the
Company or any other person as to any legal, tax, investment, accounting or regulatory matters in
any jurisdiction. The Company shall consult with its own
34
advisors concerning such matters and shall be responsible for making its own independent
investigation and appraisal of the transactions contemplated hereby, and the Underwriter shall have
no responsibility or liability to the Company with respect thereto. Any review by the Underwriter
of the Company, the transactions contemplated hereby or other matters relating to such transactions
will be performed solely for the benefit of the Underwriter and shall not be on behalf of the
Company.
14. Notices. All communications hereunder will be in writing and effective only on
receipt, and, if sent to the Underwriter, will be mailed to 00 Xxxxx Xxxxxx, Xxx Xxxx, XX 00000,
Attention: Registration Department, and, if sent to the Forward Sellers, will be mailed to (i)
Deutsche Bank at 00 Xxxx Xxxxxx, Xxx Xxxx, XX 00000, Attention: Xxxxxx Xxxxxx and Xxx
Xxxxxxxxxxxx; Telephone Nos. (000) 000-0000 and (000) 000-0000; Facsimile No. (000) 000-0000, (ii)
Xxxxxxx Xxxxx at Four World Xxxxxxxxx Xxxxxx, Xxxxx Xxxxx, Xxx Xxxx, XX 00000, Attention: Xxxx
Xxxxxxxx and (iii) JPMorgan, c/o JPMorgan Chase Bank, National Association, 000 Xxxx Xxxxxx,
0xx Xxxxx, Xxx Xxxx, XX 00000, Attention: Equity Derivatives Group; Telephone No. (000)
000-0000; Facsimile No. (000) 000-0000. Notices to the Company shall be directed to it at 0000
Xxxxxxxxxx Xxxxxxx, Xxxxxxxxx, Xxxx 00000, Attention: Xxxxx X. Xxxxxxxx, Chairman and Chief
Executive Officer.
15. Successors. This Agreement will inure to the benefit of and be binding upon the
parties hereto and their respective successors and the controlling persons and directors referred
to in Section 9 hereof, and no other person will have any right or obligation hereunder.
16. Applicable Law. This Agreement will be governed by and construed in accordance
with the laws of the State of New York applicable to contracts made and to be performed within the
State of New York.
17. WAIVER OF JURY TRIAL. THE COMPANY, THE FORWARD SELLERS AND THE UNDERWRITER HEREBY
IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY
JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
18. Counterparts. This Agreement may be signed in one or more counterparts (including
by facsimile), each of which shall constitute an original and all of which together shall
constitute one and the same agreement.
19. Headings. The section headings used herein are for convenience only and shall not
affect the construction hereof.
35
If the foregoing is in accordance with your understanding of our agreement, please sign
and return to us the enclosed duplicate hereof, whereupon this letter and your acceptance shall
represent a binding agreement among the Company, the Forward Sellers and the Underwriter.
| Very truly yours, DEVELOPERS DIVERSIFIED REALTY CORPORATION |
||||
| By: | /s/ Xxxxxxx X. Xxxxxxx | |||
| Name: | Xxxxxxx X. Xxxxxxx | |||
| Title: | Executive Vice President and Chief Financial Officer | |||
| DEUTSCHE BANK SECURITIES INC., Acting in its capacity as Forward Seller and as agent for Deutsche Bank AG London |
||||
| By: | /s/ Xxxx Xxxxx | |||
| Name: | Xxxx Xxxxx | |||
| Title: | Managing Director | |||
| By: | /s/ Xxxxxxxx Xxxxxx | |||
| Name: | Xxxxxxxx Xxxxxx | |||
| Title: | Director | |||
| DEUTSCHE BANK AG LONDON, Acting in its capacity as Forward Counterparty, solely as the recipient and/or beneficiary of certain representations, warranties, covenants and indemnities set forth in this Agreement |
||||
| By: | /s/ Xxxxx Xxxxxxx | |||
| Name: | Xxxxx Xxxxxxx | |||
| Title: | Attorney-in-Fact | |||
| By: | /s/ Xxxxxxx Xxxxxxx | |||
| Name: | Xxxxxxx Xxxxxxx | |||
| Title: | Attorney-in-Fact | |||
| XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED, Acting in its capacity as Forward Seller and as agent for Xxxxxxx Xxxxx International |
||||
| By: | /s/ Xxxxxxx Xxxxxxx | |||
| Name: | Xxxxxxx Xxxxxxx | |||
| Title: | Head of Americas Equity Derivative Originiation | |||
| XXXXXXX XXXXX INTERNATIONAL Acting in its capacity as Forward Counterparty, solely as the recipient and/or beneficiary of certain representations, warranties, covenants and indemnities set forth in this Agreement |
||||
| By: | /s/ Xxxxxxx Xxxxxxx | |||
| Name: | Xxxxxxx Xxxxxxx | |||
| Title: | Authorized Person | |||
| X.X. XXXXXX SECURITIES INC., Acting in its capacity as Forward Seller and as agent for JPMorgan Chase Bank, National Association |
||||
| By: | /s/ Xxxx Xxxxxxxx | |||
| Name: | Xxxx Xxxxxxxx | |||
| Title: | Managing Director | |||
| JPMORGAN CHASE BANK, NATIONAL ASSOCIATION Acting in its capacity as Forward Counterparty, solely as the recipient and/or beneficiary of certain representations, warranties, covenants and indemnities set forth in this Agreement |
||||
| By: | /s/ Xxxx Xxxxxxxx | |||
| Name: | Xxxx Xxxxxxxx | |||
| Title: | Managing Director | |||
The foregoing Agreement is hereby confirmed and accepted as of the date first above written. |
||
/s/ Xxxxxxx, Xxxxx & Co.
|
||
(Xxxxxxx, Sachs & Co.) |
SCHEDULE I
| Number of Underwritten | ||||
| Name | Securities to be sold | |||
Deutsche Bank Securities Inc. |
5,799,568 | |||
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated |
2,899,783 | |||
JPMorgan Chase Bank, National Association |
2,899,783 | |||
SCHEDULE II
SPECIFY EACH ISSUER FREE WRITING PROSPECTUS OR OTHER INFORMATION CONVEYED ORALLY BY UNDERWRITER TO
PURCHASERS INCLUDED IN THE GENERAL DISCLOSURE PACKAGE
PURCHASERS INCLUDED IN THE GENERAL DISCLOSURE PACKAGE
None
SCHEDULE III
List of Persons to Sign Lock-up Agreements
Xxxx X. Xxxxx
Xxxxxxxx X. Xxxxx
Xxxx X. Xxxxxxx
Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx
Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxxxxx
Xxxxxx X. XxxXxxxxxx
Xxxxx Xxxxxx
Xxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxxx
Xxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxxx, Xx.
Xxxxx Xxxxxx-Xxxxxxx
Xxxxx X. Xxxxxxxx
Xxxxxxxx X. Xxxxx
Xxxx X. Xxxxxxx
Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx
Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxxxxx
Xxxxxx X. XxxXxxxxxx
Xxxxx Xxxxxx
Xxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxxx
Xxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxxx, Xx.
Xxxxx Xxxxxx-Xxxxxxx
Xxxxx X. Xxxxxxxx
8
| [Form of Lock-Up Agreement] | Exhibit C |
December 4, 2006
Xxxxxxx, Sachs & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Developers Diversified Realty Corporation — Lock-Up Agreement
Ladies and Gentlemen:
We refer to the Underwriting Agreement (the “Underwriting Agreement”), dated December 4, 2006,
between Developers Diversified Realty Corporation, an Ohio corporation (the “Company”), the Forward
Sellers (as defined therein), the Forward Counterparties (as defined therein) and you as the
Underwriter (the “Underwriter”) named therein, relating to the underwritten public offering (the
“Offering”) of Common Shares, without par value, (the “Shares”), of the Company. Capitalized terms
used herein and not otherwise defined herein shall have the respective meanings ascribed to them in
the Underwriting Agreement.
In consideration of the agreement by the Underwriter to offer and sell the Shares, and of
other good and valuable consideration the receipt and sufficiency of which is hereby acknowledged,
the undersigned agrees that, during the period beginning from the date hereof and continuing to and
including the date 60 days after the date of the final Prospectus covering the public offering of
the Shares (the “Lock-Up Period”), the undersigned will not offer, sell, contract to sell, pledge,
grant any option to purchase, make any short sale or otherwise dispose of any Common Shares of the
Company, or any options or warrants to purchase any Common Shares of the Company, or any securities
convertible into, exchangeable for or that represent the right to receive Common Shares of the
Company, whether now owned or hereinafter acquired, owned directly by the undersigned (including
holding as a custodian) or with respect to which the undersigned has beneficial ownership within
the rules and regulations of the Commission (collectively, the “Undersigned’s Shares”). In the
event that either (x) during the last 17 days of the Lock-Up Period, the Company issues an earnings
release or a press release announcing a significant event or (y) prior to the expiration of the
Lock-Up Period, the Company announces that the Company will release earnings results or a press
release announcing a significant event during the 17-day period beginning on the last day of the
Lock-Up Period, the restrictions described above shall continue to apply until the expiration of
the 17-day period beginning on the first day following the date of the earnings release or press
release.
The foregoing restriction is expressly agreed to preclude the undersigned from engaging in any
hedging or other transaction which is designed to or which reasonably could be expected to lead to
or result in a sale or disposition of the Undersigned’s Shares even if such Shares would be
disposed of by someone other than the undersigned. Such prohibited hedging or other transactions
would include without limitation any short sale or any purchase, sale or grant of any
right (including without limitation any put or call option) with respect to any of the
Undersigned’s Shares or with respect to any security that includes, relates to, or derives any
significant part of its value from such Shares.
Notwithstanding the foregoing, the undersigned may transfer the Undersigned’s Shares (i) as a
bona fide gift or gifts, provided that the donee or donees thereof agree to be bound in writing by
the restrictions set forth herein, (ii) to any trust for the direct or indirect benefit of the
undersigned or the immediate family of the undersigned, provided that the trustee of the trust
agrees to be bound in writing by the restrictions set forth herein, and provided further that any
such transfer shall not involve a disposition for value, or (iii) with the prior written consent of
the Underwriter. For purposes of this Lock-Up Agreement, “immediate family” shall mean any
relationship by blood, marriage or adoption, not more remote than first cousin. In addition,
notwithstanding the foregoing, if the undersigned is a corporation, the corporation may transfer
the capital stock of the Company to any wholly-owned subsidiary of such corporation; provided,
however, that in any such case, it shall be a condition to the transfer that the transferee execute
an agreement stating that the transferee is receiving and holding such capital stock subject to the
provisions of this Agreement and there shall be no further transfer of such capital stock except in
accordance with this Agreement, and provided further that any such transfer shall not involve a
disposition for value. The undersigned now has, and, except as contemplated by clause (i), (ii),
or (iii) above, for the duration of this Lock-Up Agreement will have, good and marketable title to
the Undersigned’s Shares, free and clear of all liens, encumbrances, and claims whatsoever. The
undersigned also agrees and consents to the entry of stop transfer instructions with the Company’s
transfer agent and registrar against the transfer of the Undersigned’s Shares except in compliance
with the foregoing restrictions.
The undersigned understands that the Company and the Underwriter are relying upon this Lock-Up
Agreement in proceeding toward consummation of the offering. The undersigned further understands
that this Lock-Up Agreement is irrevocable and shall be binding upon the undersigned’s heirs, legal
representatives, successors, and assigns.
This letter agreement shall be governed by and construed in accordance with the laws of the
State of New York.
Delivery of a signed copy of this letter by telecopier or facsimile transmission shall be
effective as delivery of the original hereof.
| Very truly yours, | ||||||
| Print Name: | ||||||
ii
