PROLOGIS 40,000,000 Shares Common Shares of Beneficial Interest ($0.01 par value) Equity Distribution Agreement
Exhibit 1.1
40,000,000 Shares
Common Shares of Beneficial Interest
($0.01 par value)
Common Shares of Beneficial Interest
($0.01 par value)
Equity Distribution Agreement
June 2, 2009
Citigroup Global Markets Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx, 00000
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx, 00000
Ladies and Gentlemen:
ProLogis, a Maryland real estate investment trust (the “Company”), confirms its
agreement (this “Agreement”) with Citigroup Global Markets Inc. (the “Manager”) as
follows:
1. Description of Shares. The Company proposes to issue and sell through or to the
Manager, as sales agent and/or principal, of up to 40,000,000 common shares (the “Shares”)
of beneficial interest, par value $0.01 per share (“Common Stock”), of the Company, from
time to time during the term of this Agreement and on the terms set forth in Section 3 of this
Agreement. For purposes of selling the Shares through the Manager, the Company hereby appoints the
Manager as exclusive agent of the Company for the purpose of soliciting purchases of the Shares
from the Company pursuant to this Agreement and the Manager agrees to use its reasonable efforts to
solicit purchases of the Shares on the terms and subject to the conditions stated herein. The
Company agrees that whenever it determines to sell the Shares directly to the Manager as principal,
it will enter into a separate agreement (each, a “Terms Agreement”) in substantially the
form of Annex I hereto, relating to such sale in accordance with Section 3 of this Agreement.
Certain terms used herein are defined in Section 18 hereof.
2. Representations and Warranties. The Company represents and warrants to, and agrees
with, the Manager at the Execution Time and on each such time the following representations and
warranties are repeated or deemed to be made pursuant to this Agreement, as set forth below.
(a) The Company meets the requirements for use of Form S-3 under the Act and has
prepared and filed with the Commission an automatic shelf registration statement, as defined
in Rule 405 (File Number 333-157818) on Form S-3, including a related Base Prospectus, for
registration under the Act of the offering and sale of the Shares and other securities of
the Company. Such Registration Statement, including any amendments thereto filed prior to
the Execution Time or prior to any such time this representation is repeated or deemed to be
made, became effective upon filing. The
Company shall file with the Commission the Prospectus Supplement relating to the Shares
in accordance with Rule 424(b) promptly after the Execution Time (but in any event in the
time period prescribed thereby). As filed, the Prospectus will contain all information
required by the Act and the rules thereunder, and, except to the extent the Manager shall
agree in writing to a modification, shall be in all substantive respects in the form
furnished to the Manager prior to the Execution Time or prior to any such time this
representation is repeated or deemed to be made. The Registration Statement, at the
Execution Time, each such time this representation is repeated or deemed to be made, and at
all times during which a prospectus is required by the Act to be delivered (whether
physically or through compliance with Rule 172 or any similar rule) in connection with any
offer or sale of Shares, meets the requirements set forth in Rule 415(a)(1)(x). The initial
Effective Date of the Registration Statement was not earlier than the date three years
before the Execution Time. Any reference herein to the Registration Statement, the Base
Prospectus, the Prospectus Supplement, any Interim Prospectus Supplement or the Prospectus
shall be deemed to refer to and include the documents incorporated by reference therein
pursuant to Item 12 of Form S-3 which were filed under the Exchange Act on or before the
Effective Date of the Registration Statement or the issue date of the Base Prospectus, the
Prospectus Supplement, any Interim Prospectus Supplement or the Prospectus, as the case may
be; and any reference herein to the terms “amend,” “amendment” or “supplement” with respect
to the Registration Statement, the Base Prospectus, the Prospectus Supplement, any Interim
Prospectus Supplement or the Prospectus shall be deemed to refer to and include the filing
of any document under the Exchange Act after the Effective Date of the Registration
Statement or the issue date of the Base Prospectus, the Prospectus Supplement, any Interim
Prospectus Supplement or the Prospectus, as the case may be, deemed to be incorporated
therein by reference. Notwithstanding the foregoing, the representations and warranties in
this subsection shall not apply to (i) that part of the Registration Statement which
constitutes the Statement of Eligibility on Form T-1 of the trustee under the Trust
Indenture Act (the “Form T-1”) and (ii) statements in or omissions from the
Registration Statement or any post-effective amendment or the Prospectus or any amendments
or supplements thereto, made in reliance upon and in conformity with information furnished
to the Company in writing by the Manager relating to the Manager expressly for use therein.
(b) To the extent that the Registration Statement is not available for the sales of the
Shares as contemplated by this Agreement or the Company otherwise is unable to make the
representations set forth in Section 2(e) at any time when such representations are
required, the Company shall file a new registration statement with
respect to any additional shares of Common Stock necessary to complete such sales of the Shares and shall cause such
registration statement to become effective as promptly as practicable. After the
effectiveness of any such registration statement, all references to “Registration Statement”
included in this Agreement shall be deemed to include such new registration statement,
including all documents incorporated by reference therein pursuant to Item 12 of Form S-3,
and all references to “Base Prospectus” included in this Agreement shall be deemed to
include the final form of prospectus, including all documents incorporated therein by
reference, included in any such registration statement at the time such registration
statement became effective.
2
(c) On each Effective Date, at the Execution Time, at each Applicable Time, at each
Settlement Date and at all times during which a prospectus is required by the Act to be
delivered (whether physically or through compliance with Rule 172 or any similar rule) in
connection with any offer or sale of Shares, the Registration Statement complied and will
comply in all material respects with the applicable requirements of the Act and the rules
thereunder and did not and will not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in order to make the
statements therein not misleading; and on the date of any filing pursuant to Rule 424(b), at
each Applicable Time, on each Settlement Date and at all times during which a prospectus is
required by the Act to be delivered (whether physically or through compliance with Rule 172
or any similar rule) in connection with any offer or sale of Shares, the Prospectus
(together with any supplement thereto) complied and will comply in all material respects
with the applicable requirements of the Act and the rules thereunder and did not and will
not include any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided, however, that the Company
makes no representations or warranties as to the information contained in or omitted from
the Registration Statement or the Prospectus (or any supplement thereto) in reliance upon
and in conformity with information furnished in writing to the Company by the Manager
specifically for inclusion in the Registration Statement or the Prospectus (or any
supplement thereto).
(d) At the Execution Time, at each Applicable Time and at each Settlement Date, the
Disclosure Package does not contain 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 preceding sentence does not
apply to statements in or omissions from the Disclosure Package based upon and in conformity
with written information furnished to the Company by the Manager specifically for use
therein.
(e) (i) At the time of filing the Registration Statement, (ii) at the time of the most
recent amendment thereto for the purposes of complying with Section 10(a)(3) of the Act
(whether such amendment was by post-effective amendment, incorporated report filed pursuant
to Sections 13 or 15(d) of the Exchange Act or form of prospectus), and (iii) at the time
the Company or any person acting on its behalf (within the meaning, for this clause only, of
Rule 163(c)) made any offer relating to the Shares in reliance on the exemption in Rule 163,
the Company was or is (as the case may be) a “well-known seasoned issuer” as defined in Rule
405. The Company agrees to pay the fees required by the Commission relating to the Shares
within the time required by Rule 456(b)(1) without regard to the proviso therein and
otherwise in accordance with Rules 456(b) and 457(r).
(f) (i) At the earliest time after the filing of the Registration Statement that the
Company or another offering participant made a bona fide offer (within the meaning of Rule
164(h)(2)) of the Shares and (ii) as of the Execution Time and on each such time this
representation is repeated or deemed to be made (with such date being used as the
determination date for purposes of this clause (ii)), the Company was not and is not an
3
Ineligible Issuer (as defined in Rule 405), without taking account of any determination
by the Commission pursuant to Rule 405 that it is not necessary that the Company be
considered an Ineligible Issuer.
(g) Each Issuer Free Writing Prospectus does not include any information that conflicts
with the information contained in the Registration Statement, including any document
incorporated therein by reference and any prospectus supplement 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 Issuer Free Writing Prospectus based upon and in
conformity with written information furnished to the Company by the Manager specifically for
use therein.
(h) The Registration Statement is not the subject of a pending proceeding or
examination under Section 8(d) or 8(e) of the Act, and the Company is not the subject of a
pending proceeding under Section 8A of the Act in connection with the offering of the
Shares.
(i) The Common Stock is an “actively-traded security” exempted from the requirements of
Rule 101 of Regulation M under the Exchange Act by subsection (c)(1) of such rule.
(j) The Company has not entered into any other sales agency agreements or other similar
arrangements with any agent or any other representative in respect of at the market
offerings of the Shares in accordance with Rule 415(a)(4) of the Act.
(k) The Company has not and will not (i) 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 Exchange Act or otherwise, stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Shares or (ii) sell, bid
for, purchase or pay any person (other than as contemplated by this Agreement) any
compensation for soliciting purchases of the Shares.
(l) Other than the Manager, there is no broker, finder or other party that is entitled
to receive from the Company any brokerage or finder’s fee or other fee or commission as a
result of any transactions contemplated by this Agreement.
(m) This Agreement has been, and any applicable Terms Agreement will be, duly
authorized, executed and delivered by the Company.
(n) The Shares have been duly authorized, and when issued, delivered and paid for in
accordance with this Agreement and any applicable Terms Agreement, will be validly issued,
fully paid and non-assessable, free and clear of any lien, charge or encumbrance; the shares
of beneficial interest of the Company, including the Shares, conform to the description
thereof contained in the Registration Statement and the Shares will conform to the
description thereof contained in the Prospectus as amended or supplemented. Neither the
shareholders of the Company, nor any other person or entity have any preemptive rights or
rights of first refusal with respect to the Shares or other rights to purchase or receive
any of the Shares, and no person has the right, contractual or
4
otherwise,
to cause the Company to issue to it, or register pursuant to the Act, any shares of beneficial interest or other securities or assets of the Company upon the issuance
or sale of the Shares.
(o) Except as otherwise disclosed in the Disclosure Package and the Prospectus,
subsequent to the respective dates as of which information is given in the Disclosure
Package and the Prospectus: (i) there has been no material adverse change, or any
development that could reasonably be expected to result in a material adverse change, in the
condition, financial or otherwise, or in the earnings, business, operations or prospects,
whether or not arising from transactions in the ordinary course of business, of the Company
and its subsidiaries, considered as one entity (any such change is called a “Material
Adverse Change”); (ii) the Company and its subsidiaries, considered as one entity, have
not incurred any material liability or obligation, indirect, direct or contingent, not in
the ordinary course of business or entered into any material transaction or agreement not in
the ordinary course of business; and (iii) except for regular quarterly dividends on the
Common Stock or shares of preferred stock or shares in amounts per share that are consistent
with past practice or any special dividends on the Common Stock that are the subject of a
press release (whether in cash, Common Stock or a combination of both), there has been no
dividend or distribution of any kind declared, paid or made by the Company or, except for
dividends paid to the Company or other subsidiaries, any of its subsidiaries on any class of
capital stock or shares or repurchase or redemption by the Company or any of its
subsidiaries of any class of capital stock or shares.
(p) KPMG LLP, who have expressed their opinion with respect to the Company’s audited
financial statements for the fiscal years ended December 31, 2006, 2007 and 2008
incorporated by reference in the Registration Statement and the Prospectus, are independent
public or certified public accountants within the meaning of Regulation S-X under the
Securities Act and the Exchange Act and a registered public accounting firm within the
meaning of the Xxxxxxxx-Xxxxx Act of 2002.
(q) The financial statements together with the related notes thereto and the related
schedule(s) incorporated by reference in the Registration Statement and the Prospectus
present fairly the consolidated financial position of the Company and its subsidiaries, as
of and at the dates indicated and the results of their operations and cash flows for the
periods specified. Such financial statements and related schedule(s) have been prepared in
conformity with generally accepted accounting principles as applied in the United States
applied on a consistent basis throughout the periods involved, except as may be expressly
stated in the related notes thereto. No other financial statements or supporting schedules
are required to be included in the Registration Statement. The summary financial
information, if any, included in the Prospectus present fairly in all material respects the
information shown therein and have been compiled on a basis consistent with that of the
audited financial statements incorporated by reference in the Registration Statement and the
Prospectus.
(r) The Company has been duly organized and is validly existing as a real estate
investment trust in good standing under the laws of the State of Maryland and has
5
the trust power and authority to own, lease and operate its properties and to conduct
its business as described in the Disclosure Package and the Prospectus, and to enter into
and perform its obligations under this Agreement and any applicable Terms Agreement. The
Company is duly qualified 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 for such jurisdictions where the failure to so
qualify or to be in good standing would not, individually or in the aggregate, result in a
Material Adverse Change.
(s) Each subsidiary and joint venture of the Company listed on Schedule II hereto
(collectively, the “Significant Subsidiaries”) has been duly incorporated or
organized, as the case may be, and is validly existing as a corporation, trust or
partnership and (except as to any general partnership) in good standing under the laws of
the jurisdiction of its incorporation or organization, as the case may be, and has the power
(corporate or other) and authority to own, lease and operate its properties and to conduct
its business as described in the Disclosure Package and the Prospectus. Each Significant
Subsidiary is duly qualified as a foreign corporation, trust or partnership 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 for such jurisdictions where the failure to so qualify or to be in good
standing would not, individually or in the aggregate, result in a Material Adverse Change.
All of the issued and outstanding capital stock and other equity interests of each
Significant Subsidiary have been duly authorized and validly issued, and are fully paid and
(except for general partnership interests and directors’ qualifying shares) nonassessable;
all shares of outstanding capital stock and other equity interests of each Significant
Subsidiary held by the Company, directly or through subsidiaries, are owned free and clear
of any security interest, mortgage, pledge, lien, encumbrance or claim, except for the
pledge of such capital stock or other interests to secure borrowings of the Company or one
of its wholly owned subsidiaries. The subsidiaries of the Company listed on Schedule II are
the only subsidiaries of the Company that are material to the condition, financial or
otherwise, or the earnings, business, operations or prospects of the Company and its
subsidiaries, considered as one entity, and include all subsidiaries of the Company, which
individually meet the criteria in the definition of “significant subsidiary” pursuant to
Rule 1-02(w) of Regulation S-X under the Securities Act.
(t) All of the issued and outstanding shares of beneficial interest of the Company have
been duly authorized and validly issued, are fully paid and nonassessable and have been
issued in compliance with federal and state securities laws.
(u) There are no outstanding options to purchase, or any rights or warrants to
subscribe for, or any securities or obligations convertible into, or any contracts or
commitments to issue or sell, any shares of Common Stock, any shares of capital stock of any
subsidiary, or any such warrants, convertible securities or obligations, except as set forth
in the Disclosure Package and the Prospectus and except for options granted under, or
contracts or commitments pursuant to, the Company’s previous or currently existing option
plan and other similar officer, trustee or employee benefit plans; and there are no
contracts, commitments, agreements, arrangements, understandings or undertakings of
6
any kind to which the Company is a party, or by which it is bound, granting to any
person the right to require either the Company to file a registration statement under the
Securities Act with respect to any securities of the Company or requiring the Company to
include such securities with the Shares registered pursuant to any registration statement,
except as set forth in the Disclosure Package and the Prospectus.
(v) Neither the Company nor any of its subsidiaries is in violation of its declaration
of trust (or charter or by laws or other similar constitutive documents), except, in the
case of subsidiaries of the Company, for such violations as would not, individually or in
the aggregate, result in a Material Adverse Change. Neither the Company nor any of its
subsidiaries is in default (or, with the giving of notice or lapse of time or both, would be
in default) (“Default”) under any indenture, mortgage, loan or credit agreement,
note, contract, franchise, lease or other instrument to which the Company or any of its
subsidiaries is a party or by which it or any of them may be bound, or to which any of the
property or assets of the Company or any of its subsidiaries is subject (each, an
“Existing Instrument”), except for such Defaults as would not, individually or in
the aggregate, result in a Material Adverse Change. The Company’s execution, delivery and
performance of this Agreement and any applicable Terms Agreement, and the issuance and
delivery of the Shares, the consummation of the transactions contemplated hereby and by the
Disclosure Package and the Prospectus (i) have been duly authorized by all necessary trust,
corporate or other action, as the case may be, and will not result in any violation of the
provisions of the declaration of trust (or charter or by laws or other similar constitutive
documents) of the Company or any subsidiary of the Company, except, in the case of
subsidiaries of the Company, for such violations as would not, individually or in the
aggregate, result in a Material Adverse Change, (ii) 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 any of its subsidiaries pursuant
to, or require the consent of any other party to, any Existing Instrument, except for such
conflicts, breaches, Defaults, liens, charges or encumbrances as would not, individually or
in the aggregate, result in a Material Adverse Change and (iii) will not result in any
violation of any law, administrative regulation or administrative or court decree applicable
to the Company or any subsidiary of the Company, except for such violation as would not,
individually or in the aggregate, result in a Material Adverse Change. No consent,
approval, authorization or other order of, or registration or filing with, any court or
other governmental or regulatory authority or agency, is required for the Company’s
execution, delivery and performance of this Agreement and any applicable Terms Agreement, or
the issuance and delivery of the Shares or consummation of the transactions contemplated
hereby and by the Disclosure Package and the Prospectus, except for the filing of the
Prospectus Supplement as contemplated by Section 2(a) and such as have been obtained or made
by the Company and are in full force and effect under the Securities Act, and applicable
state securities or blue sky laws and from the Financial Industry Regulatory Authority
(“FINRA”) or the failure of which to obtain would not result in a Material Adverse
Change or have a material adverse effect on the consummation of the transactions
contemplated by this Agreement.
7
(w) Except as otherwise disclosed in the Disclosure Package and the Prospectus, there
are no legal or governmental actions, suits or proceedings pending or, to the best of the
Company’s knowledge, threatened (i) against or affecting the Company or any of its
subsidiaries, (ii) which has as the subject thereof any officer or director of, or property
owned or leased by, the Company or any of its subsidiaries or (iii) relating to
environmental or discrimination matters, where in any such case (A) there is a reasonable
possibility that such action, suit or proceeding might be determined adversely to the
Company or such subsidiary and (B) any such action, suit or proceeding, if so determined
adversely, would reasonably be expected to result in a Material Adverse Change or adversely
affect the consummation of the transactions contemplated by this Agreement.
(x) No material labor dispute with the employees of the Company or any of its
subsidiaries exists or, to the best of the Company’s knowledge, is threatened or imminent,
except for such disputes as would not, individually or in the aggregate, result in a
Material Adverse Change.
(y) The Company and its subsidiaries own or possess sufficient trademarks, trade names,
patent rights, copyrights, domain names, licenses, approvals, trade secrets and other
similar rights (collectively, “Intellectual Property Rights”) reasonably necessary
to conduct their businesses as now conducted, except as would not result in a Material
Adverse Change; and the expected expiration of any of such Intellectual Property Rights
would not result in a Material Adverse Change. Neither the Company nor any of its
subsidiaries has received any notice of infringement or conflict with asserted Intellectual
Property Rights of others, which infringement or conflict, if the subject of an unfavorable
decision, would result in a Material Adverse Change. The Company is not a party to or bound
by any options, licenses or agreements with respect to the Intellectual Property Rights of
any other person or entity that are required to be set forth in the Registration Statement
or the Prospectus, and that are not described in all material respects in such documents.
None of the technology employed by the Company has been obtained or is being used by the
Company in violation of any contractual obligation binding on the Company or, to the
Company’s knowledge, any of its officers, directors or employees or otherwise in violation
of the rights of any persons, except for such violations as would not, individually or in
the aggregate, result in a Material Adverse Change.
(z) The Company and each subsidiary possess such valid and current certificates,
authorizations, permits, licenses, approvals, consents and other authorizations issued by
the appropriate state, federal or foreign regulatory agencies or bodies necessary to conduct
their respective businesses, and neither the Company nor any subsidiary has received any
notice of proceedings relating to the revocation or modification of, or non-compliance with,
any such certificate, authorization, permit, license, approval, consent or other
authorization which, singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, could result in a Material Adverse Change.
(aa) Except as otherwise disclosed in the Disclosure Package and the Prospectus, the
Company and each of its subsidiaries has good and marketable title to all the properties and
assets reflected as owned in the financial statements referred to in
8
Section 1(q) above (or elsewhere in the Disclosure Package and the Prospectus), in each
case free and clear of any security interests, mortgages, liens, encumbrances, equities,
claims and other defects, except such as do not materially and adversely affect the value of
such property and do not materially interfere with the use made or proposed to be made of
such property by the Company or such subsidiary. The real property, improvements, equipment
and personal property held under lease by the Company or any subsidiary are held under valid
and enforceable leases, with such exceptions as are not material and do not materially
interfere with the use made or proposed to be made of such real property, improvements,
equipment or personal property by the Company or such subsidiary.
(bb) The Company and its subsidiaries have filed all material federal, state and
foreign income and franchise tax returns or have properly requested extensions thereof and
have paid all taxes required to be paid by any of them and, if due and payable, any related
or similar assessment, fine or penalty levied against any of them except as may be being
contested in good faith and by appropriate proceedings. The Company has made adequate
charges, accruals and reserves in the applicable financial statements referred to in Section
1(q) above in respect of all federal, state and foreign income and franchise taxes for all
periods as to which the tax liability of the Company or any of its subsidiaries has not been
finally determined. With respect to all tax periods in respect of which the Internal
Revenue Service is or will be entitled to any claim, the Company has met the requirements
for qualification as a real estate investment trust under Sections 856 through 860 of the
Internal Revenue Code of 1986, as amended, and the regulations and published interpretations
thereunder (the “Internal Revenue Code”) and the Company’s present and contemplated
organizational ownership, method of operation, assets and income are such that the Company
will continue to meet such requirements.
(cc) The Company is not, and after receipt of payment for the Shares and the
application of the proceeds as described in the Disclosure Package and the Prospectus under
“Use of Proceeds” will not be, an “investment company” within the meaning of the Investment
Company Act of 1940, as amended (the “Investment Company Act”).
(dd) Each of the Company and its subsidiaries taken as a whole carry or are covered by
insurance in such amounts covering such risks as are generally deemed adequate and customary
for their businesses. The Company has no reason to believe that it or any subsidiary will
not be able (i) to renew its existing insurance coverage as and when such policies expire or
(ii) to obtain comparable coverage from similar institutions as may be necessary or
appropriate to conduct its business as now conducted and at a cost that would not result in
a Material Adverse Change.
(ee) Neither the Company nor any of its Significant Subsidiaries nor, to the best of
the Company’s knowledge, any employee or agent of the Company or any Significant Subsidiary,
has made any contribution or other payment to any official of, or candidate for, any
federal, state or foreign office in violation of any law or of the character necessary to be
disclosed in the Disclosure Package and the Prospectus in order to make the statements
therein, in the light of the circumstances under which such statements were made, not
misleading.
9
(ff) Except as would not, individually or in the aggregate, result in a Material
Adverse Change (i) neither the Company nor any of its subsidiaries is in violation of any
federal, state, local or foreign law or regulation relating to pollution or protection of
human health or the environment (including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata) or wildlife, including without limitation,
laws and regulations relating to emissions, discharges, releases or threatened releases of
chemicals, pollutants, contaminants, wastes, toxic substances, hazardous substances,
petroleum and petroleum products (collectively, “Materials of Environmental
Concern”), or otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of Materials of Environmental Concern
(collectively, “Environmental Laws”), which violation includes, but is not limited
to, noncompliance with any permits or other governmental authorizations required for the
operation of the business of the Company or its subsidiaries under applicable Environmental
Laws, or noncompliance with the terms and conditions thereof, nor has the Company or any of
its subsidiaries received any written communication, whether from a governmental authority,
citizens group, employee or otherwise, that alleges that the Company or any of its
subsidiaries is in violation of any Environmental Law; (ii) there is no claim, action or
cause of action filed with a court or governmental authority with respect to which the
Company has received written notice, no investigation with respect to which the Company has
received written notice, and no written notice by any person or entity alleging potential
liability for investigatory costs, cleanup costs, governmental responses costs, natural
resources damages, property damages, personal injuries, attorneys’ fees or penalties arising
out of, based on or resulting from the presence, or release into the environment, of any
Material of Environmental Concern at any location owned, leased or operated by the Company
or any of its subsidiaries, now or in the past (collectively, “Environmental
Claims”), pending or, to the best of the Company’s knowledge, threatened against the
Company or any of its subsidiaries or any person or entity whose liability for any
Environmental Claim the Company or any of its subsidiaries has retained or assumed either
contractually or by operation of law; and (iii) to the best of the Company’s knowledge,
there are no past or present actions, activities, circumstances, conditions, events or
incidents, including, without limitation, the release, emission, discharge, presence or
disposal of any Material of Environmental Concern, that reasonably could result in a
violation of any Environmental Law or form the basis of a potential Environmental Claim
against the Company or any of its subsidiaries or against any person or entity whose
liability for any Environmental Claim the Company or any of its subsidiaries has retained or
assumed either contractually or by operation of law.
(gg) The Company and its subsidiaries and any “employee benefit plan” (as defined in
Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended, and the
regulations and published interpretations thereunder (collectively, “ERISA”))
established or maintained by the Company, its subsidiaries or their “ERISA Affiliates” (as
defined below) are in compliance in all material respects with ERISA. “ERISA Affiliate”
means, with respect to the Company or a subsidiary, any member of any group of organizations
described in Sections 414(b), (c), (m) or (o) of the Internal Revenue Code, of which the
Company or such subsidiary is a member. No “reportable event” (as defined under ERISA) has
occurred or is reasonably expected to occur with respect to any “employee benefit plan”
established or maintained by the Company, its
10
subsidiaries or any of their ERISA Affiliates. No “employee benefit plan” established
or maintained by the Company, its subsidiaries or any of their ERISA Affiliates, if such
“employee benefit plan” were terminated, would have any “amount of unfunded benefit
liabilities” (as defined under ERISA). Neither the Company, its subsidiaries nor any of
their ERISA Affiliates has incurred or reasonably expects to incur any liability under (i)
Title IV of ERISA with respect to termination of, or withdrawal from, any “employee benefit
plan,” (ii) Sections 412, 4971 or 4975 of the Internal Revenue Code, or (iii) Section 4980B
of the Internal Revenue Code with respect to the excise tax imposed thereunder. Each
“employee benefit plan” established or maintained by the Company, its subsidiaries or any of
their ERISA Affiliates that is intended to be qualified under Section 401(a) of the Internal
Revenue Code has received a favorable determination letter from the Internal Revenue Service
and nothing has occurred, whether by action or failure to act, which is reasonably likely to
cause disqualification of any such employee benefit plan under Section 401(a) of the
Internal Revenue Code.
(hh) The Company and its subsidiaries maintain effective internal control over
financial reporting, as such term is defined in Rule 13a-15(f) under the Exchange Act.
(ii) The Company has established and maintains disclosure controls and procedures (as
such term is defined in Rules 13a-15 and 15d-14 under the Exchange Act); such disclosure
controls and procedures are designed to ensure that material information relating to the
Company and its subsidiaries is made known to the chief executive officer and chief
financial officer of the Company by others within the Company or any of its subsidiaries,
and such disclosure controls and procedures are reasonably effective to perform the
functions for which they were established subject to the limitations of any such control
system; the Company’s auditors and the audit committee of the board of directors of the
Company have been advised of: (i) any significant deficiencies or material weaknesses in the
design or operation of internal controls which could adversely affect the Company’s ability
to record, process, summarize, and report financial data; and (ii) any fraud, whether or not
material, that involves management or other employees who have a role in the Company’s
internal controls; and since the date of the most recent evaluation of such disclosure
controls and procedures, there have been no significant changes in internal controls or in
other factors that could significantly affect internal controls, including any corrective
actions with regard to significant deficiencies and material weaknesses.
(jj) The Shares have been approved for listing on the New York Stock Exchange
(“NYSE”), subject only to official notice of issuance.
Any certificate signed by any officer of the Company and delivered to the Manager or counsel
for the Manager in connection with this Agreement or any Terms Agreement shall be deemed a
representation and warranty by the Company, as to matters covered thereby, to the Manager.
3. Sale and Delivery of Shares.
11
(a) Subject to the terms and conditions and in reliance upon the representations and
warranties herein set forth, the Company agrees to issue and sell Shares from time to time through
the Manager, acting as sales agent, and the Manager agrees to use its reasonable efforts to sell,
as sales agent for the Company, the Shares on the following terms.
(i) The Shares are to be sold on a daily basis or otherwise as shall be agreed
to by the Company and the Manager on any day that (A) is a trading day for the NYSE,
(B) the Company has instructed the Manager by telephone (confirmed promptly by
electronic mail) to make such sales and (C) the Company has satisfied its
obligations under Section 6 of this Agreement. The Company will designate the
maximum amount of the Shares to be sold by the Manager daily as agreed to by the
Manager (in any event not in excess of the amount available for issuance under the
Prospectus and the currently effective Registration Statement) and the minimum price
per Share at which such Shares may be sold. Subject to the terms and conditions
hereof, the Manager shall use its reasonable efforts to sell on a particular day all
of the Shares designated for the sale by the Company on such day. The gross sales
price of the Shares sold under this Section 3(a) shall be the market price for
shares of the Company’s Common Stock sold by the Manager under this Section 3(a) on
the NYSE at the time of sale of such Shares (but in no event shall such gross price
be less than the minimum price per Share designated by the Company at which such
Shares may be sold).
(ii) The Company acknowledges and agrees that (A) there can be no assurance
that the Manager will be successful in selling the Shares, (B) the Manager will
incur no liability or obligation to the Company or any other person or entity if it
does not sell Shares for any reason other than a failure by the Manager to use its
reasonable efforts consistent with its normal trading and sales practices and
applicable law and regulations to sell such Shares as required under this Agreement,
and (C) the Manager shall be under no obligation to purchase Shares on a principal
basis pursuant to this Agreement, except as otherwise specifically agreed by the
Manager and the Company.
(iii) The Company shall not authorize the issuance and sale of, and the Manager
may not sell, any Share at a price lower than the minimum price therefor designated
from time to time by the Company’s Board of Directors (the “Board”), or a
duly authorized committee thereof, and notified to the Manager in writing. The
Company or the Manager may, upon notice to the other party hereto by telephone
(confirmed promptly by electronic mail), suspend the offering of the Shares for any
reason and at any time; provided, however, that such suspension or
termination shall not affect or impair the parties’ respective obligations with
respect to the Shares sold hereunder prior to the giving of such notice.
(iv) The Manager hereby covenants and agrees not to make any sales of the
Shares on behalf of the Company, pursuant to this Section 3(a), other than (A) by
means of ordinary brokers’ transactions between members of the NYSE that qualify for
delivery of a Prospectus to the NYSE in accordance with Rule 153 of the 1933 Act
Regulations (such transactions are hereinafter referred to as
12
“Continuous Offerings”) and (B) such other sales of the Shares on
behalf of the Company in its capacity as agent of the Company as shall be agreed by
the Company and the Manager pursuant to a Terms Agreement.
(v) The compensation to the Manager for sales of the Shares with respect to
which the Manager acts as sales agent under this Agreement shall be 2.00% of the
gross sales price of the Shares sold pursuant to this Section 3(a) and payable as
described in the succeeding subsection (vi) below. The foregoing rate of
compensation shall not apply when the Manager acts as principal, in which case the
Company may sell Shares to the Manager as principal at a price agreed upon at the
relevant Applicable Time pursuant to a Terms Agreement. The remaining proceeds,
after further deduction for any transaction fees imposed by any governmental or
self-regulatory organization in respect of such sales (the “Transaction
Fees”), shall constitute the net proceeds to the Company for such Shares (the
“Net Proceeds”).
(vi) The Manager shall provide written confirmation (which may be by facsimile
or electronic mail) to the Company following the close of trading on the NYSE each
day in which the Shares are sold under this Section 3(a) setting forth the number of
the Shares sold on such day, the aggregate gross sales proceeds and the Net Proceeds
to the Company. Compensation payable to the Manager with respect to any sales made
pursuant to this Agreement shall be set forth and invoiced in periodic statements
from the Manager to the Company, with payment to be made by the Company promptly
after its receipt thereof.
(vii) Settlement for sales of the Shares pursuant to this Section 3(a) will
occur on the third trading day following the date on which such sales are made (each
such day, a “Settlement Date”). On each Settlement Date, the Shares sold
through the Manager for settlement on such date shall be issued and delivered by the
Company to the Manager against payment of the aggregate gross sales proceeds less
any Transaction Fees from the sale of such Shares. Settlement for all such Shares
shall be effected by free delivery of the Shares to the Manager’s account at The
Depository Trust Company (“DTC”) in return for payments in same day funds
delivered to the account designated by the Company. If the Company or its transfer
agent (if applicable) shall default on its obligation to deliver the Shares on any
Settlement Date, the Company shall (A) indemnify and hold the Manager harmless
against any loss, claim or damage arising from or as a result of such default by the
Company and (B) pay the Manager any commission to which it would otherwise be
entitled absent such default. If the Manager breaches this Agreement by failing to
deliver the aggregate gross sales proceeds less any Transaction Fees to the Company
on any Settlement Date for the Shares delivered by the Company, the Manager will pay
the Company interest based on the effective overnight federal funds rate on such
unpaid amount less any compensation due to the Manager.
(viii) At each Applicable Time, Settlement Date, Representation Date (as
defined in Section 4(l)) and Filing Date (as defined in Section 4(r)), the
13
Company shall be deemed to have affirmed each representation and warranty
contained in this Agreement as if such representation and warranty were made as of
such date, modified as necessary to relate to the Registration Statement and the
Prospectus as amended as of such date. Any obligation of the Manager to use its
reasonable efforts to sell the Shares on behalf of the Company shall be subject to
the continuing accuracy of the representations and warranties of the Company herein,
to the performance by the Company of its obligations hereunder and to the continuing
satisfaction of the additional conditions specified in Section 6 of this Agreement.
(b) If the Company wishes to issue and sell the Shares pursuant to this Agreement but
other than as set forth in Section 3(a) of this Agreement (each, a “Placement”), it
will notify the Manager of the proposed terms of such Placement. If the Manager, acting as
principal, wishes to accept such proposed terms (which it may decline to do for any reason
in its sole discretion) or, following discussions with the Company wishes to accept amended
terms, the Manager and the Company will enter into a Terms Agreement setting forth the terms
of such Placement. The terms set forth in a Terms Agreement will not be binding on the
Company or the Manager unless and until the Company and the Manager have each executed such
Terms Agreement accepting all of the terms of such Terms Agreement. In the event of a
conflict between the terms of this Agreement and the terms of a Terms Agreement, the terms
of such Terms Agreement will control.
(c) Each sale of the Shares to the Manager shall be made in accordance with the terms
of this Agreement and, if applicable, a Terms Agreement, which will provide for the sale of
such Shares to, and the purchase thereof by, the Manager. A Terms Agreement may also
specify certain provisions relating to the reoffering of such Shares by the Manager. The
commitment of the Manager to purchase the Shares pursuant to any Terms Agreement shall be
deemed to have been made on the basis of the representations and warranties of the Company
herein contained and shall be subject to the terms and conditions herein set forth. Each
Terms Agreement shall specify the number of the Shares to be purchased by the Manager
pursuant thereto, the price to be paid to the Company for such Shares, any provisions
relating to rights of, and default by, underwriters acting together with the Manager in the
reoffering of the Shares, and the time and date (each such time and date being referred to
herein as a “Time of Delivery”) and place of delivery of and payment for such
Shares. Such Terms Agreement shall also specify any requirements for opinions of counsel,
accountants’ letters and officers’ certificates pursuant to Section 6 of this Agreement and
any other information or documents required by the Manager.
(d) Under no circumstances shall the number and aggregate amount of the Shares sold
pursuant to this Agreement and any Terms Agreement exceed (i) the aggregate amount set forth
in Section 1, (ii) the number of shares of the Common Stock available for issuance under the
currently effective Registration Statement or (iii) the number and aggregate amount of the
Shares authorized from time to time to be issued and sold under this Agreement by the Board,
or a duly authorized committee thereof, and notified to the Manager in writing.
14
(e) If either party has reason to believe that the exemptive provisions set forth in
Rule 101(c)(1) of Regulation M under the Exchange Act are not satisfied with respect to the
Shares, it shall promptly notify the other party and sales of the Shares under this
Agreement and any Terms Agreement shall be suspended until that or other exemptive
provisions have been satisfied in the judgment of each party.
4. Agreements. The Company agrees with the Manager that:
(a) During any period when the delivery of a prospectus relating to the Shares is
required (including in circumstances where such requirement may be satisfied pursuant to
Rule 172) to be delivered under the Act in connection with the offering or sale of the
Shares, the Company will not file any amendment of the Registration Statement or supplement
in connection with the offering and sale of the Shares (including the Prospectus Supplement
or any Interim Prospectus Supplement) to the Base Prospectus, the Disclosure Package or the
Prospectus, whether pursuant to the Securities Act, the Exchange Act or otherwise, unless
(A) the Company has furnished to the Manager a copy of such amendment or supplement
(including, for the avoidance of doubt, reports or other information to be filed by the
Company under the Exchange Act that would be incorporated by reference into the Registration
Statement and Prospectus) for its review a reasonable period of time prior to filing (or, in
the case of Current Reports on Form 8-K, has used its commercially reasonable efforts to so
furnish copies to the Manager prior to filing), and (B) except for reports or other
information required to be filed by the Company under the Exchange Act, the Company will not
file any such proposed amendment or supplement to which the Manager reasonably objects. The
Company has prepared the Prospectus, in a form approved by the Manager, and shall file such
Prospectus, as amended at the Execution Time, with the Commission pursuant to the applicable
paragraph of Rule 424(b) promptly after the Execution Time (but in any event within the time
period described thereby) and will cause any supplement to the Prospectus to be prepared, in
a form approved by the Manager, and will file such supplement with the Commission pursuant
to the applicable paragraph of Rule 424(b) within the time period prescribed thereby and
will notify the Manager of such timely filing. During any period when the delivery of a
prospectus relating to the Shares is required (including in circumstances where such
requirement may be satisfied pursuant to Rule 172) to be delivered under the Act in
connection with the offering or sale of the Shares, the Company will promptly advise the
Manager (i) when the Prospectus, and any supplement thereto, shall have been filed (if
required) with the Commission pursuant to Rule 424(b), (ii) when, during any period when the
delivery of a prospectus (whether physically or through compliance with Rule 172 or any
similar rule) is required under the Act in connection with the offering or sale of the
Shares, any amendment to the Registration Statement shall have been filed or become
effective (other than a prospectus supplement relating solely to the offering of securities
other than the Shares), (iii) of any request by the Commission or its staff for any
amendment of the Registration Statement, or for any supplement to the Prospectus or for any
additional information, (iv) of the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement or of any notice objecting to its use or the
institution or threatening of any proceeding for that purpose and (v) of the receipt by the
Company of any notification with respect to the suspension of the qualification of the
Shares 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
15
the occurrence of any such suspension or objection to the use of the Registration
Statement and, upon such issuance, occurrence or notice of objection, to obtain at the
earliest possible moment the withdrawal of such stop order or relief from such occurrence or
objection, including, if necessary, by filing an amendment to the Registration Statement or
a new registration statement and using its best efforts to have such amendment or new
registration statement declared effective as soon as practicable.
(b) If, at any time on or after an Applicable Time but prior to the related Settlement
Date or Time of Delivery, any event occurs as a result of which the Disclosure Package 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
or the circumstances then prevailing not misleading, the Company will (i) notify promptly
the Manager so that any use of the Disclosure Package may cease until it is amended or
supplemented; (ii) amend or supplement the Disclosure Package to correct such statement or
omission; and (iii) supply any amendment or supplement to the Manager in such quantities as
the Manager may reasonably request.
(c) During any period when the delivery of a prospectus relating to the Shares is
required (including in circumstances where such requirement may be satisfied pursuant to
Rule 172) to be delivered under the 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 at such time not misleading, or if it shall be
necessary to amend the Registration Statement, file a new registration statement or
supplement the Prospectus to comply with the Act or the Exchange Act or the respective rules
thereunder, including in connection with use or delivery of the Prospectus, the Company
promptly will (i) notify the Manager of any such event, (ii) prepare and file with the
Commission, subject to the first sentence of paragraph (a) of this Section 4, an amendment
or supplement or new registration statement which will correct such statement or omission or
effect such compliance, (iii) use its best efforts to have any amendment to the Registration
Statement or new registration statement declared effective as soon as practicable in order
to avoid any disruption in use of the Prospectus and (iv) supply any supplemented Prospectus
to the Manager in such quantities as the Manager may reasonably request.
(d) As soon as practicable, the Company will make generally available to its security
holders and to the Manager an earnings statement or statements of the Company and its
subsidiaries which will satisfy the provisions of Section 11(a) of the Act and Rule 158.
(e) The Company will furnish to the Manager and counsel for the Manager, without
charge, signed copies of the Registration Statement as originally filed and of each
amendment thereto (including exhibits filed therewith or incorporated by reference therein
and documents incorporated or deemed to be incorporated by reference therein) and signed
copies of all consents and certificates of experts. The Registration Statement
and each amendment thereto furnished to the Manager will be identical to any
electronically transmitted copies thereof filed with the Commission pursuant to XXXXX,
16
except to the extent permitted by Regulation S-T. The Company will pay the expenses of
printing or other production of all documents relating to the offering.
(f) The Company will furnish to the Manager and counsel for the Manager, without
charge, for so long as delivery of a prospectus by the Manager or dealer may be required by
the Act (including in circumstances where such requirement may be satisfied pursuant to Rule
172), as many copies of the Prospectus and each Issuer Free Writing Prospectus and any
supplement thereto as the Manager may reasonably request. The Prospectus and any Issuer
Free Writing Prospectus and any amendments or supplements thereto furnished to the Manager
will be identical to any electronically transmitted copies thereof filed with the Commission
pursuant to XXXXX, except to the extent permitted by Regulation S-T. The Company will pay
the expenses of printing or other production of all documents relating to the offering.
(g) The Company will arrange, if necessary, for the qualification of the Shares for
sale under the laws of such jurisdictions as the Manager may designate and will maintain
such qualifications in effect so long as required for the distribution of the Shares;
provided 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 Shares, in any jurisdiction where it is not now so subject or where it would be
subject to taxation as a foreign business.
(h) The Company agrees that, unless it has or shall have obtained the prior written
consent of the Manager, and the Manager agrees with the Company that, unless it has or shall
have obtained, as the case may be, the prior written consent of the Company, it has not made
and will not make any offer relating to the Shares that would constitute an Issuer Free
Writing Prospectus or that would otherwise constitute a “free writing prospectus” (as
defined in Rule 405) required to be filed by the Company with the Commission or retained by
the Company under Rule 433; provided that the prior written consent of the parties
hereto shall be deemed to have been given in respect of the Free Writing Prospectuses
included in Schedule I hereto. Any such free writing prospectus consented to by the Manager
or the Company is hereinafter referred to as a “Permitted Free Writing Prospectus.” The
Company agrees that (i) it has treated and will treat, as the case may be, each Permitted
Free Writing Prospectus as an Issuer Free Writing Prospectus and (ii) it has complied and
will comply, as the case may be, with the requirements of Rules 164 and 433 applicable to
any Permitted Free Writing Prospectus, including in respect of timely filing with the
Commission, legending and record keeping.
(i) Intentionally Omitted.
(j) The Company will not (i) 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
Exchange Act or otherwise, stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Shares or (ii) sell, bid for,
purchase or pay any person (other than as contemplated by this Agreement or any Terms
Agreement) any compensation for soliciting purchases of the Shares.
17
(k) The Company will, at any time during the term of this Agreement, as supplemented
from time to time, advise the Manager promptly after it shall have received notice or obtain
knowledge thereof, of any information or fact that would materially alter or affect any
opinion, certificate, letter and other document provided to the Manager pursuant to Section
6 herein.
(l) Upon commencement of the offering of the Shares under this Agreement (if requested
by the Manager) (and upon the recommencement of the offering of the Shares under this
Agreement following the termination of a suspension of sales hereunder), and each time that
(i) the Registration Statement or the Prospectus shall be amended or supplemented (other
than (A) an Interim Prospectus Supplement filed pursuant to Rule 424(b) pursuant to Section
4(r) of this Agreement, (B) a prospectus supplement relating solely to the offering of
securities other than the Shares or (C) the filing with the Commission of any report under
the Exchange Act), (ii) there is filed with the Commission any annual report on Form 10-K or
quarterly report on Form 10-Q, or any document which contains financial statements or
financial information (other than an annual report on Form 10-K or a quarterly report on
Form 10-Q) incorporated by reference into the Prospectus, or any amendment thereto, or (iii)
the Shares are delivered to the Manager as principal at the Time of Delivery pursuant to a
Terms Agreement (such commencement date (in the case that the above-mentioned request is
made by the Manager) or recommencement date and each such date referred to in (i), (ii) and
(iii) above, a “Representation Date”), the Company shall furnish or cause to be
furnished to the Manager forthwith a certificate dated and delivered on such Representation
Date, as the case may be, in form satisfactory to the Manager to the effect that the
statements contained in the certificate referred to in Section 6(d) of this Agreement which
were last furnished to the Manager are true and correct at the time of such Representation
Date, as though made at and as of such time (except that such statements shall be deemed to
relate to the Registration Statement and the Prospectus as amended and supplemented to such
time) or, in lieu of such certificate, a certificate of the same tenor as the certificate
referred to in said Section 6(d), modified as necessary to relate to the Registration
Statement and the Prospectus as amended and supplemented to the time of delivery of such
certificate.
(m) At each Representation Date, the Company shall furnish or cause to be furnished
forthwith to the Manager and to counsel to the Manager a written opinion of Xxxxx Xxxxx LLP,
counsel to the Company (“Company Counsel”), or other counsel reasonably satisfactory
to the Manager, and the General Counsel of the Company, each dated and delivered on such
Representation Date, in form and substance satisfactory to the Manager, of the same tenor as
the opinions referred to in Section 6(b) of this Agreement, but modified as necessary to
relate to the Registration Statement and the Prospectus as amended and supplemented to the
time of delivery of such opinion.
(n) At each Representation Date, Shearman & Sterling LLP, counsel to the Manager, shall
deliver a written opinion, dated and delivered on such Representation
Date, in form and substance satisfactory to the Manager, of the same tenor as the
opinions referred to in Section 6(c) of this Agreement but modified as necessary to relate
18
to the Registration Statement and the Prospectus as amended and supplemented to the time of
delivery of such opinion.
(o) At each Representation Date, the Company shall cause KPMG LLP (the
“Accountants”), or other independent accountants satisfactory to the Manager
forthwith, to furnish the Manager a letter, dated and delivered on such Representation Date,
in form satisfactory to the Manager, of the same tenor as the letter referred to in Section
6(e) of this Agreement but modified to relate to the Registration Statement and the
Prospectus, as amended and supplemented to the date of such letter.
(p) At each Representation Date, and at such other times as may be reasonably requested
by the Manager (which shall be on a weekly basis or otherwise), the Company will conduct a
due diligence session, in form and substance satisfactory to the Manager, which shall
include representatives of the management and the independent accountants of the Company.
The Company shall cooperate timely with any reasonable due diligence request from or review
conducted by the Manager or its agents from time to time in connection with the transactions
contemplated by this Agreement, including, without limitation, providing information and
available documents and access to appropriate corporate officers and the Company’s agents
during regular business hours and at the Company’s principal offices, and timely furnishing
or causing to be furnished such certificates, letters and opinions from the Company, its
officers and its agents, as the Manager may reasonably request.
(q) The Company consents to the Manager trading in the Common Stock for the Manager’s
own account and for the account of its clients at the same time as sales of the Shares occur
pursuant to this Agreement or pursuant to a Terms Agreement.
(r) The Company will either (i) disclose in its Annual Reports on Form 10-K and
Quarterly Reports on Form 10-Q, as applicable, with regard to the relevant quarter, the
number of the Shares sold through the Manager pursuant to this Agreement, the Net Proceeds
to the Company and the compensation paid by the Company with respect to such sales of the
Shares pursuant to this Agreement, or (ii) on or prior to the earlier of (A) the date on
which the Company shall file a Quarterly Report on Form 10-Q or an Annual Report on Form
10-K in respect of any fiscal quarter in which sales of Shares were made by the Manager
pursuant to Section 3(a) of this Agreement and (B) the date on which the Company shall be
obligated to file such document referred to in clause (A) in respect of such quarter (each
such date, and any date on which an amendment to any such document is filed, a “Filing
Date”), the Company will file a prospectus supplement with the Commission under the
applicable paragraph of Rule 424(b), which prospectus supplement will set forth, with regard
to such quarter, the number of the Shares sold through the Manager as agent pursuant to
Section 3(a) of this Agreement in Continuous Offerings, the Net Proceeds to the Company and
the compensation paid by the Company with respect to such sales of the Shares pursuant to
Section 3(a) of this Agreement and deliver such number of copies of each such prospectus
supplement to the NYSE as are required by such exchange.
19
(s) If to the knowledge of the Company, the conditions set forth in Section 6(a), 6(f)
or 6(h) shall not be true and correct on the applicable Settlement Date, the Company will
offer to any person who has agreed to purchase Shares from the Company as the result of an
offer to purchase solicited by the Manager the right to refuse to purchase and pay for such
Shares.
(t) Each acceptance by the Company of an offer to purchase the Shares hereunder, and
each execution and delivery by the Company of a Terms Agreement, shall be deemed to be an
affirmation to the Manager that the representations and warranties of the Company contained
in or made pursuant to this Agreement are true and correct as of the date of such acceptance
or of such Terms Agreement as though made at and as of such date, and an undertaking that
such representations and warranties will be true and correct as of the Settlement Date for
the Shares relating to such acceptance or as of the Time of Delivery relating to such sale,
as the case may be, as though made at and as of such date (except that such representations
and warranties shall be deemed to relate to the Registration Statement and the Prospectus as
amended and supplemented relating to such Shares).
(u) The Company shall ensure that there are at all times sufficient shares of Common
Stock to provide for the issuance, free of any preemptive rights, out of its authorized but
unissued shares of Common Stock or shares of Common Stock held in treasury, of the maximum
aggregate number of Shares authorized for issuance by the Board pursuant to the terms of
this Agreement. The Company will use its commercially reasonable efforts to cause the
Shares to be listed for trading on NYSE and to maintain such listing.
(v) During any period when the delivery of a prospectus relating to the Shares is
required (including in circumstances where such requirement may be satisfied pursuant to
Rule 172) to be delivered under the Act, the Company will file all documents required to be
filed with the Commission pursuant to the Exchange Act within the time periods required by
the Exchange Act and the regulations thereunder.
(w) The Company shall cooperate with Manager and use its reasonable efforts to permit
the Shares to be eligible for clearance and settlement through the facilities of DTC.
(x) The Company will apply the Net Proceeds from the sale of the Shares in the manner
set forth in the Disclosure Package and the Prospectus.
5. Payment of Expenses.
(a) The Company agrees to pay the costs and expenses incident to the performance of its
obligations under this Agreement, whether or not the transactions contemplated hereby are
consummated, including without limitation: (i) the preparation, printing or reproduction and
filing with the Commission of the Registration Statement (including financial statements and
exhibits thereto), the Prospectus and each Issuer Free Writing Prospectus, and each amendment or
supplement to any of them; (ii) the printing (or
20
reproduction) and delivery (including postage, air freight charges and charges for counting
and packaging) of such copies of the Registration Statement, the Prospectus, and each Issuer Free
Writing 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 Shares; (iii) the
preparation, printing, authentication, issuance and delivery of certificates for the Shares,
including any stamp or transfer taxes in connection with the original issuance and sale of the
Shares; (iv) the printing (or reproduction) and delivery of this Agreement, any blue sky memorandum
and all other agreements or documents printed (or reproduced) and delivered in connection with the
offering of the Shares; (v) the registration of the Shares under the Exchange Act and the listing
of the Shares on the NYSE; (vi) any registration or qualification of the Shares 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 Manager relating to such registration and
qualification); (vii) any filings required to be made with the Financial Industry Regulatory
Authority, Inc. (“FINRA”) (including filing fees and the reasonable fees and expenses of
counsel for the Manager relating to such filings); (viii) the transportation and other expenses
incurred by or on behalf of Company representatives in connection with presentations to prospective
purchasers of the Shares; (ix) the fees and expenses of the Company’s accountants and the fees and
expenses of counsel (including local and special counsel) for the Company; and (x) all other costs
and expenses incident to the performance by the Company of its obligations hereunder.
(b) If this Agreement is terminated in accordance with the provisions of Section 8 hereof and
the aggregate offering price of all Shares offered and sold pursuant to this Agreement does not
equal or exceed $40,000,000, the Company shall reimburse the Manager for all of its reasonable and
documented out-of-pocket expenses up to $150,000, including the reasonable fees, disbursements and
expenses of counsel for the Manager incurred by it in connection with the offering contemplated by
this Agreement.
6. Conditions to the Obligations of the Manager. The obligations of the Manager under
this Agreement and any Terms Agreement shall be subject to (i) the accuracy of the representations
and warranties on the part of the Company contained herein as of the Execution Time, each
Representation Date, and as of each Applicable Time, Settlement Date and Time of Delivery, (ii) to
the performance by the Company of its obligations hereunder and (iii) the following additional
conditions:
(a) The Prospectus, and any supplement thereto, required by Rule 424 to be filed with
the Commission have been filed in the manner and within the time period required by
Rule 424(b) with respect to any sale of Shares; each Interim Prospectus Supplement shall
have been filed in the manner required by Rule 424(b) within the time period required by
Section 4(r) of this Agreement; any material required to be filed by the Company pursuant to
Rule 433(d) under the Act, shall have been filed with the Commission within the applicable
time periods prescribed for such filings by Rule 433; and no stop order suspending the
effectiveness of the Registration Statement or any notice objecting to its use shall have
been issued and no proceedings for that purpose shall have been instituted or threatened.
(b) (A) The Company shall have requested and caused Company Counsel, to furnish to the
Manager, on every date specified in Section 4(m) of this Agreement, its
21
opinion, dated as of such date and addressed to the Manager, in the form attached as
Exhibit A.
(B) The Company shall have requested and caused its General Counsel or Deputy General
Counsel, to furnish to the Manager, on every date specified in Section 4(m) of this
Agreement, its opinion, dated as of such date and addressed to the Manager, in the form
attached as Exhibit B.
(c) The Manager shall have received from Shearman & Sterling LLP, counsel for the
Manager, on every date specified in Section 4(n) of this Agreement, such opinion or
opinions, dated as of such date and addressed to the Manager, with respect to the issuance
and sale of the Shares, the Registration Statement, the Disclosure Package, the Prospectus
(together with any supplement thereto) and other related matters as the Manager may
reasonably require, and the Company shall have furnished to such counsel such documents as
they request for the purpose of enabling them to pass upon such matters.
(d) The Company shall have furnished or caused to be furnished to the Manager, on every
date specified in Section 4(l) of this Agreement, a certificate of the Company, signed by
the Chief Executive Officer or General Counsel and the principal financial or accounting
officer of the Company, dated as of such date, to the effect that the signers of such
certificate have carefully examined the Registration Statement, the Disclosure Package and
the Prospectus and any supplements or amendments thereto and this Agreement and that:
(i) the representations and warranties of the Company in this Agreement are
true and correct on and as of such date with the same effect as if made on such date
and the Company has complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied at or prior to such date;
(ii) no stop order suspending the effectiveness of the Registration Statement
or any notice objecting to its use has been issued and no proceedings for that
purpose have been instituted or, to the Company’s knowledge, threatened; and
(iii) since the date of the most recent financial statements included in the
Disclosure Package, there has been no Material Adverse Change, except as set forth
in or contemplated in the Disclosure Package and the Prospectus.
(e) The Company shall have requested and caused the Accountants to have furnished to
the Manager, on every date specified in Section 4(o) hereof and to the extent requested by
the Manager in connection with any offering of the Shares, letters (which may refer to
letters previously delivered to the Manager), dated as of such date, in form and substance
satisfactory to the Manager, which letters shall cover, without limitation, the various
financial statements and disclosures contained or incorporated by reference in the
Registration Statement, the Disclosure Package and the Prospectus and other matters
22
ordinarily covered by accountants’ “comfort letters” to underwriters in connection with
registered public offerings as contemplated in the Statement on Auditing Standards No. 72,
as well as confirming that they have performed a review of any unaudited interim financial
information of the Company included or incorporated by reference in the Registration
Statement, the Disclosure Package and the Prospectus in accordance with Statement on
Auditing Standards No. 100.
References to the Prospectus in this paragraph (e) include any supplement thereto at
the date of the letter.
(f) Since the respective dates as of which information is disclosed in the Registration
Statement, the Disclosure Package and the Prospectus, except as otherwise stated therein,
there shall not have been (i) any change or decrease specified in the letter or letters
referred to in paragraph (e) of this Section 6 or (ii) Material Adverse Change, except as
set forth in or contemplated in the Disclosure Package (exclusive of any amendment or
supplement thereto) the effect of which, in any case referred to in clause (i) or (ii)
above, is, in the sole judgment of the Manager, so material and adverse as to make it
impractical or inadvisable to proceed with the offering or delivery of the Shares as
contemplated by the Registration Statement (exclusive of any amendment thereof), the
Disclosure Package and the Prospectus (exclusive of any amendment or supplement thereto).
(g) The Company shall have paid the required Commission filing fees relating to the
Shares within the time period required by Rule 456(b)(1)(i) of the Act without regard to the
proviso therein and otherwise in accordance with Rules 456(b) and 457(r) of the Act and, if
applicable, shall have updated the “Calculation of Registration Fee” table in accordance
with Rule 456(b)(1)(ii) either in a post-effective amendment to the Registration Statement
or on the cover page of a prospectus filed pursuant to Rule 424(b).
(h) Intentionally Omitted.
(i) FINRA shall not have raised any objection with respect to the fairness and
reasonableness of the terms and arrangements under this Agreement.
(j) The Shares shall have been listed and admitted and authorized for trading on the
NYSE, and satisfactory evidence of such actions shall have been provided to the Manager.
(k) Prior to each Settlement Date and Time of Delivery, as applicable, the Company
shall have furnished to the Manager such further information, certificates and documents as
the Manager may reasonably request.
If any of the conditions specified in this Section 6 shall not have been fulfilled when and as
provided in this Agreement, or if any of the opinions and certificates mentioned above or elsewhere
in this Agreement shall not be reasonably satisfactory in form and substance to the Manager and
counsel for the Manager, this Agreement and all obligations of the Manager hereunder may be
canceled at, or at any time prior to, any Settlement Date or Time of Delivery,
23
as applicable, by the Manager. 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 6 shall be delivered at the office of
Shearman & Sterling LLP, counsel for the Manager, at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx,
00000, on each such date as provided in this Agreement.
7. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless the Manager, the directors,
officers, employees and agents of the Manager and each person who controls the Manager
within the meaning of either the Act or the Exchange Act against any and all losses, claims,
damages or liabilities, to which they or any of them may become subject under the Act, the
Exchange Act or other Federal or state statutory law or regulation, at common law or
otherwise (including in settlement of any litigation, if such settlement is effected with
the written consent of the Company), insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon (i) upon any untrue statement
or alleged untrue statement of a material fact contained in the Registration Statement (or
any amendment thereto) or the omission or alleged omission therefrom of a material fact
required to be stated therein or necessary to make the statements therein not misleading; or
(ii) upon any untrue statement or alleged untrue statement of a material fact contained in
any Issuer Free Writing Prospectus or any “issuer information” filed or required to be filed
pursuant to Rule 433(d) under the Act, the Base Prospectus, the Prospectus Supplement or any
Interim Prospectus Supplement (or any amendment or supplement thereto) or the omission or
alleged omission therefrom of a material fact, in each case, necessary in order to make the
statements therein, in the light of the circumstances under which they were made, not
misleading; or (iii) in whole or in part upon any inaccuracy in the representations and
warranties of the Company contained herein; or (iv) in whole or in part upon any failure of
the Company to perform its obligations hereunder or under law; and agrees to reimburse each
such indemnified party, for any legal or other expenses as such expenses are reasonably
incurred by them in connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that 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 by the Manager specifically for inclusion therein. This indemnity
agreement will be in addition to any liability that the Company may otherwise have.
(b) The Manager agrees to indemnify and hold harmless the Company, each of its
trustees, each of its officers who signs the Registration Statement, and each person who
controls the Company within the meaning of either the Act or the Exchange Act, to the same
extent as the foregoing indemnity from the Company to the Manager, but only with reference
to written information relating to the Manager furnished to the Company by the Manager
specifically for inclusion in the documents referred to in the foregoing indemnity. This
indemnity agreement will be in addition to any liability which the Manager may otherwise
have.
24
(c) Promptly after receipt by an indemnified party under this Section 7 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 7, notify the indemnifying
party in writing of the commencement thereof; but the failure so to notify the indemnifying
party will not relieve it from any liability which it may have to any indemnified party for
contribution or otherwise than under the indemnity agreement contained in paragraph (a) or
(b) above or to the extent it is not prejudiced as a proximate result of such failure. 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 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 a conflict may arise between the
positions of the indemnifying party and the indemnified party in conducting the defense of
any such action or 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,
(ii) 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 (iii) the indemnifying party shall authorize the indemnified
party to employ separate counsel at the expense of the indemnifying party. The indemnifying
party under this Section 7 shall not be liable for any settlement of any proceeding effected
without its written consent, but if settled with such consent or if there be a final
judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified party
against any loss, claim, damage, liability or expense by reason of such settlement or
judgment. Notwithstanding the foregoing sentence, if at any time an indemnified party shall
have requested an indemnifying party to reimburse the indemnified party for fees and
expenses of counsel as contemplated by Section 7(c) hereof, the indemnifying party agrees
that it shall be liable for any settlement of any proceeding effected without its written
consent if (i) such settlement is entered into more than 60 days after receipt by such
indemnifying party of the aforesaid request and (ii) such indemnifying party shall not have
reimbursed the indemnified party in accordance with such request prior to the date of such
settlement; provided, that if it is ultimately determined that an indemnified party was not
entitled to indemnification hereunder, such indemnified party shall be responsible for
repaying or reimbursing such amounts to the indemnifying party. Upon receipt of notice from
the indemnifying party to such indemnified party of such indemnifying party’s election so to
assume the defense of such action and approval by the indemnified party of counsel, the
indemnifying party will not be liable to such indemnified party under this Section 7 for any
legal or other expenses subsequently incurred by such indemnified party in connection with
the defense thereof unless (i) the indemnified party shall have employed
25
separate counsel in accordance with the proviso to the next preceding sentence (it
being understood, however, that the indemnifying party shall not be liable for the expenses
of more than one separate counsel (together with local counsel), approved by the
indemnifying party, representing the indemnified parties who are parties to such action) or
(ii) the indemnifying party shall not have employed counsel reasonably satisfactory to the
indemnified party to represent the indemnified party within a reasonable time after notice
of commencement of the action, in each of which cases the fees and expenses of counsel shall
be at the expense of the indemnifying party. An indemnifying party will not, without the
prior written consent of the indemnified parties, 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 (i) includes an unconditional release
of such indemnified party from all liability on claims that are the subject matter of such
action, suit or proceeding and (ii) does not include a statement as to or an admission of
fault, culpability or a failure to act, by or on behalf of any indemnified party.
(d) In the event that the indemnity provided in paragraph (a), (b) or (c) of this
Section 7 is unavailable to or insufficient to hold harmless an indemnified party for any
reason, the Company and the Manager agree to contribute to the aggregate losses, claims,
damages and liabilities (including legal or other expenses reasonably incurred in connection
with investigating or defending the same) (collectively “Losses”) to which the
Company and the Manager 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 Manager on the other
from the offering of the Shares pursuant to this Agreement; provided,
however, that in no case shall the Manager be responsible for any amount in excess
of the underwriting discount or commission, as the case may be, applicable to the Shares
sold by the Manager hereunder. If the allocation provided by the immediately preceding
sentence is unavailable for any reason, the Company and the Manager 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 Manager on the other
in connection with the statements or omissions which resulted in such Losses as well as any
other relevant equitable considerations. Benefits received by the Company shall be deemed
to be equal to the total net proceeds from the offering (before deducting expenses) received
by it, and benefits received by the Manager shall be deemed to be equal to the total
underwriting discounts and commissions, in each case as determined by this Agreement or any
applicable Terms Agreement. Relative fault shall be determined by reference to, among other
things, whether any untrue or any alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information provided by the
Company on the one hand or the Manager on the other, the intent of the parties and their
relative knowledge, access to information and opportunity to correct or prevent such untrue
statement or omission. The Company and the Manager 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
26
the Act) shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 7, each person who controls the
Manager within the meaning of either the Act or the Exchange Act and each director, officer,
employee and agent of the Manager shall have the same rights to contribution as the Manager,
and each person who controls the Company within the meaning of either the Act or the
Exchange Act, each officer of the Company who shall have signed the Registration Statement
and each trustee 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).
8. Termination.
(a) The Company shall have the right, by giving written notice as hereinafter specified, to
terminate the provisions of this Agreement relating to the solicitation of offers to purchase the
Shares in its sole discretion at any time. Any such termination shall be without liability of any
party to any other party except that (i) if Shares have been sold through the Manager for the
Company, then Section 4(t) shall remain in full force and effect, (ii) with respect to any pending
sale, through the Manager for the Company, the obligations of the Company, including in respect of
compensation of the Manager, shall remain in full force and effect notwithstanding the termination
and (iii) the provisions of Sections 2, 5, 7, 9, 10, 12 and 14 of this Agreement shall remain in
full force and effect notwithstanding such termination.
(b) The Manager shall have the right, by giving written notice as hereinafter specified, to
terminate the provisions of this Agreement relating to the solicitation of offers to purchase the
Shares in its sole discretion at any time. Any such termination shall be without liability of any
party to any other party except that the provisions of Sections 2, 5, 7, 9, 10, 12 and 14 of this
Agreement shall remain in full force and effect notwithstanding such termination.
(c) This Agreement shall remain in full force and effect unless terminated pursuant to
Sections 8(a) or (b) above or otherwise by mutual agreement of the parties; provided that
any such termination by mutual agreement shall in all cases be deemed to provide that Sections 2,
5, 7 and 9 shall remain in full force and effect.
(d) Any termination of this Agreement shall be effective on the date specified in such notice
of termination; provided that such termination shall not be effective until the close of
business on the date of receipt of such notice by the Manager or the Company, as the case may be.
If such termination shall occur prior to the Settlement Date or Time of Delivery for any sale of
the Shares, such sale shall settle in accordance with the provisions of Section 3(a)(vii) of this
Agreement.
(e) In the case of any purchase of Shares by the Manager pursuant to a Terms Agreement, the
obligations of the Manager pursuant to such Terms Agreement shall be subject to termination, in the
absolute discretion of the Manager, by notice given to the Company prior to the Time of Delivery
relating to such Shares, if at any time prior to such delivery and payment (i) trading or quotation
in any of the Company’s securities shall have been suspended or limited by the Commission or by the
New York Stock Exchange, or trading in securities generally on either the Nasdaq Stock Market or
the New York Stock Exchange shall have been suspended or
27
limited, or minimum or maximum prices shall have been generally established on any of such
stock exchanges by the Commission or FINRA; (ii) a general banking moratorium shall have been
declared by any of federal or New York authorities; (iii) there shall have occurred any outbreak or
escalation of national or international hostilities or any crisis or calamity involving the United
States, or any change in the United States or international financial markets, or any substantial
change or development involving a prospective substantial change in United States’ or international
political, financial or economic conditions, as in the sole judgment of the Manager is material and
adverse and makes it impracticable or inadvisable to proceed with the offering or delivery of the
Shares in the manner and on the terms described in the Disclosure Package and the Prospectus or to
enforce contracts for the sale of securities; (iv) in the judgment of the Representatives there
shall have occurred any Material Adverse Change; or (v) there shall have occurred a material
disruption in commercial banking or securities settlement or clearance services in the United
States.
9. Representations and Indemnities to Survive. The respective agreements,
representations, warranties, indemnities and other statements of the Company or its officers and of
the Manager set forth in or made pursuant to this Agreement will remain in full force and effect,
regardless of any investigation made by the Manager or the Company or any of the officers,
directors, employees, agents or controlling persons referred to in Section 7 hereof, and will
survive delivery of and payment for the Shares.
10. Notices. All communications hereunder will be in writing and effective only on
receipt, and, if sent to the Manager, will be mailed, delivered or telefaxed to the Citigroup
Global Markets Inc. General Counsel (fax no.: (000) 000-0000) and confirmed to the General
Counsel, Citigroup Global Markets Inc., at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000,
Attention: General Counsel, with a copy to: Shearman & Sterling LLP, 000 Xxxxxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000 , (fax no.: (000) 000-0000), Attention: Xxxxxxx X. Xxxxxxxxx; or, if sent to
the Company, will be mailed, delivered or telefaxed to ProLogis, 0000 Xxxxxxx Xxx, Xxxxxx, Xxxxxxxx
00000, (fax no.: (000) 000-0000), Attention: Xxxxxx X. Xxxxxxx, with a copy to: Xxxxx Xxxxx LLP, 00
Xxxxx Xxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000, (fax no.: (000) 000-0000), Attention: Xxxxxxx X.
Xxxxx.
11. Successors. This Agreement will inure to the benefit of and be binding upon the
parties hereto and their respective successors and the officers, directors, employees, agents and
controlling persons referred to in Section 8 hereof, and no other person will have any right or
obligation hereunder.
12. No Fiduciary Duty. The Company hereby acknowledges that (a) the purchase and sale
of the Shares pursuant to this Agreement is an arm’s-length commercial transaction between the
Company, on the one hand, and the Manager and any affiliate through which it may be acting, on the
other, (b) the Manager is acting solely as sales agent and/or principal in connection with the
purchase and sale of the Company’s securities and not as a fiduciary of the Company and (c) the
Company’s engagement of the Manager in connection with the offering and the process leading up to
the offering is as independent contractors and not in any other capacity. Furthermore, the Company
agrees that it is solely responsible for making its own judgments in connection with the offering
(irrespective of whether the Manager has advised or is currently advising the Company on related or
other matters). The Company agrees that it
28
will not claim that the Manager has rendered advisory services of any nature or respect, or
owe an agency, fiduciary or similar duty to the Company, in connection with the transactions
contemplated by this Agreement or the process leading thereto.
13. Integration. This Agreement and any Terms Agreement supersede all prior agreements
and understandings (whether written or oral) between the Company and the Manager with respect to
the subject matter hereof.
14. Applicable Law. This Agreement and any Terms 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.
15. Waiver of Jury Trial. The Company hereby irrevocably waives, 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, any Terms Agreement or the transactions contemplated
hereby or thereby.
16. Counterparts. This Agreement and any Terms Agreement may be signed in one or more
counterparts, each of which shall constitute an original and all of which together shall constitute
one and the same agreement.
17. Headings. The section headings used in this Agreement and any Terms Agreement are
for convenience only and shall not affect the construction hereof.
18. Definitions. The terms that follow, when used in this Agreement and any Terms
Agreement, shall have the meanings indicated.
“Act” shall mean the Securities Act of 1933, as amended, and the rules and
regulations of the Commission promulgated thereunder.
“Applicable Time” shall mean, with respect to any Shares, the time of sale of
such Shares pursuant to this Agreement or any relevant Terms Agreement.
“Base Prospectus” shall mean the base prospectus referred to in Section 2(a)
above contained in the Registration Statement at the Execution Time.
“Business Day” shall mean any day other than a Saturday, a Sunday or a legal
holiday or a day on which banking institutions or trust companies are authorized or
obligated by law to close in New York City.
“Commission” shall mean the Securities and Exchange Commission.
“Disclosure Package” shall mean (i) the Base Prospectus, (ii) the Prospectus
Supplement, (iii) the most recently filed Interim Prospectus Supplement, if any, (iv) the
Issuer Free Writing Prospectuses, if any, identified in Schedule I hereto, (v) the public
offering price of Shares sold at the relevant Applicable Time as specified in a Terms
Agreement and (vi) any other Free Writing Prospectus that the parties hereto shall hereafter
expressly agree in writing to treat as part of the Disclosure Package.
29
“Effective Date” shall mean each date and time that the Registration Statement
and any post-effective amendment or amendments thereto became or becomes effective.
“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the Commission promulgated thereunder.
“Execution Time” shall mean the date and time that this Agreement is executed
and delivered by the parties hereto.
“Free Writing Prospectus” shall mean a free writing prospectus, as defined in
Rule 405.
“Interim Prospectus Supplement” shall mean the prospectus supplement relating
to the Shares prepared and filed pursuant to Rule 424(b) from time to time as provided by
Section 4(r) of this Agreement.
“Issuer Free Writing Prospectus” shall mean an issuer free writing prospectus,
as defined in Rule 433.
“Prospectus” shall mean the Base Prospectus, as supplemented by the Prospectus
Supplement and the most recently filed Interim Prospectus Supplement (if any).
“Prospectus Supplement” shall mean the most recent prospectus supplement
relating to the Shares that was first filed pursuant to Rule 424(b) at or prior to the
Execution Time.
“Registration Statement” shall mean the registration statement referred to in
Section 2(a) above, including exhibits and financial statements and any prospectus
supplement relating to the Shares that is filed with the Commission pursuant to Rule 424(b)
and deemed part of such registration statement pursuant to Rule 430B, as amended on each
Effective Date and, in the event any post-effective amendment thereto becomes effective,
shall also mean such registration statement as so amended.
“Rule 158”, “Rule 163”, “Rule 164”, “Rule 172”,
“Rule 405”, “Rule 415”, “Rule 424”, “Rule 430B” and
“Rule 433” refer to such rules under the Act.
“Well-Known Seasoned Issuer” shall mean a well-known seasoned issuer, as
defined in Rule 405.
30
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 and the Manager.
The foregoing Agreement is hereby confirmed and accepted as of the date first written above. | ||||
CITIGROUP GLOBAL MARKETS INC. | ||||
By:
|
Citigroup Global Markets Inc. | |||
By: |
/s/ Citigroup Global Markets Inc. | |||
Title: |
ProLogis — Equity Distribution Agreement
SCHEDULE I
Schedule of Free Writing Prospectuses included in the Disclosure Package
[None]
Sch. I-1
SCHEDULE II
Significant Subsidiaries
Palmtree Acquisition Corporation
PLD International Incorporated
ProLogis Japan Incorporated
Catellus Operating Limited Partnership
PLD International Incorporated
ProLogis Japan Incorporated
Catellus Operating Limited Partnership
Sch. II-1
[Form of Terms Agreement] | ANNEX I | |
[ISSUER NAME]
Common Stock
TERMS AGREEMENT
, 20___
Citigroup Global Markets Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx, 00000
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx, 00000
Dear Sirs:
[Name] (the “Company”) proposes, subject to the terms and conditions stated herein and
in the Equity Distribution Agreement, dated [date], 20___(the “Equity Distribution
Agreement”), between the Company and Citigroup Global Markets Inc., to issue and sell to
Citigroup Global Markets Inc. the securities specified in the Schedule I hereto (the “Purchased
Shares”) [, and solely for the purpose of covering over-allotments, to grant to Citigroup
Global Markets Inc. the option to purchase the additional securities specified in the Schedule I
hereto (the “Additional Shares”)]. [Include only if Citigroup Global Markets Inc. has an
over-allotment option]
[Citigroup Global Markets Inc. shall have the right to purchase from the Company all or a
portion of the Additional Shares as may be necessary to cover over-allotments made in connection
with the offering of the Purchased Shares, at the same purchase price per share to be paid by
Citigroup Global Markets Inc. to the Company for the Purchased Shares. This option may be
exercised by Citigroup Global Markets Inc. at any time (but not more than once) on or before the
thirtieth day following the date hereof, by written notice to the Company. Such notice shall set
forth the aggregate number of shares of Additional Shares as to which the option is being
exercised, and the date and time when the Additional Shares are to be delivered (such date and time
being herein referred to as the “Option Closing Date”); provided, however,
that the Option Closing Date shall not be earlier than the Time of Delivery (as set forth in the
Schedule I hereto) nor earlier than the second business day after the date on which the option
shall have been exercised nor later than the fifth business day after the date on which the option
shall have been exercised. Payment of the purchase price for the Additional Shares shall be made
at the Option Closing Date in the same manner and at the same office as the payment for the
Purchased Shares.] [Include only if Citigroup Global Markets Inc. has an over-allotment option]
Each of the provisions of the Equity Distribution Agreement not specifically related to the
solicitation by Citigroup Global Markets Inc., as agent of the Company, of offers to purchase
securities is incorporated herein by reference in its entirety, and shall be deemed to be part of
this Terms Agreement to the same extent as if such provisions had been set forth in full herein.
Each of the representations and warranties set forth therein shall be deemed to have been made at
and as of the date of this Terms Agreement [and] [,] the Time of Delivery [and any Option Closing
Date] [Include only if Citigroup Global Markets Inc. has an over-allotment
Annex I -1
option], except that each representation and warranty in Section 2 of the Equity Distribution
Agreement which makes reference to the Prospectus (as therein defined) shall be deemed to be a
representation and warranty as of the date of the Equity Distribution Agreement in relation to the
Prospectus, and also a representation and warranty as of the date of this Terms Agreement [and] [,]
the Time of Delivery [and any Option Closing Date] [Include only if Citigroup Global Markets Inc.
has an over-allotment option] in relation to the Prospectus as amended and supplemented to relate
to the Purchased Shares.
An amendment to the Registration Statement (as defined in the Equity Distribution Agreement),
or a supplement to the Prospectus, as the case may be, relating to the Purchased Shares [and the
Additional Shares] [Include only if Citigroup Global
Markets Inc. has an
over-allotment option], in
the form heretofore delivered to the Manager is now proposed to be filed with the Securities and
Exchange Commission.
Subject to the terms and conditions set forth herein and in the Equity Distribution Agreement
which are incorporated herein by reference, the Company agrees to issue and sell to Citigroup
Global Markets Inc. and the latter agrees to purchase from the Company the number of shares of the
Purchased Shares at the time and place and at the purchase price set forth in the Schedule I
hereto.
Annex I -2
If the foregoing is in accordance with your understanding, please sign and return to us a
counterpart hereof, whereupon this Terms Agreement, including those provisions of the Equity
Distribution Agreement incorporated herein by reference, shall constitute a binding agreement
between the Manager and the Company.
PROLOGIS | ||||
By: | ||||
Name: | ||||
Title: |
ACCEPTED as of the date first written above. | ||||
Citigroup
Global Markets Inc. |
||||
By: |
||||
Title: |
Annex I -3
[Form of Terms Agreement] | Schedule I to the Terms Agreement | |
Title of Purchased Shares [and Additional Shares]:
Common Stock, par value $[__] per share
Number of Shares of Purchased Shares:
[Number of Shares of Additional Shares:]
[Price to Public:]
Purchase Price by Citigroup Global Markets Inc.:
Method of and Specified Funds for Payment of Purchase Price:
By wire transfer to a bank account specified by the Company in same day funds.
Method of Delivery:
Free delivery of the Shares to the Manager’s account at The Depository Trust
Company in return for payment of the purchase price.
Time of Delivery:
Closing Location:
Documents to be Delivered:
The following documents referred to in the Equity Distribution Agreement
shall be delivered as a condition to the closing at the Time of Delivery [and
on any Option Closing Date]:
(1) The
opinion referred to in Section 4(l).
(2) The opinion referred to in Section 4(m).
(3) The accountants’ letter referred to in Section 4(n).
(4) The officers’ certificate referred to in Section 4(k).
(5) Such other documents as the Manager shall reasonably request.
(2) The opinion referred to in Section 4(m).
(3) The accountants’ letter referred to in Section 4(n).
(4) The officers’ certificate referred to in Section 4(k).
(5) Such other documents as the Manager shall reasonably request.
Annex I -4
EXHIBIT A
Form of Opinion of Company Counsel to be delivered pursuant to Section 6(b)(A) of the Equity
Distribution Agreement
References to the Prospectus in this Exhibit A shall also include any supplements thereto at
the Settlement Date.
(i) The Company has been duly organized and is validly existing as a real
estate investment trust in good standing under the laws of the State of Maryland and
has the trust power and authority to own, lease and operate its properties and to
conduct its business as described in [the Disclosure Package and] the Prospectus and
to enter into and perform its obligations under this Agreement and any applicable
Terms Agreement. The Company is duly qualified 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
for such jurisdictions where the failure to so qualify or to be in good standing
would not, individually or in the aggregate, result in a Material Adverse Change.
(ii) This Agreement and any applicable Terms Agreement have been duly
authorized, executed and delivered by the Company.
(iii) The Shares have been duly and validly authorized, and, when issued and
delivered to and paid for [by the Manager] pursuant to this Agreement and any Terms
Agreement, will be fully paid and non-assessable, and the issuance of the Shares
will not be subject to any preemptive or similar rights under the Company’s charter
or bylaws or under Maryland law.
(iv) The Registration Statement became effective upon filing with the
Commission pursuant to Rule 462(e) under the Securities Act. To the best knowledge
of such counsel, no stop order suspending the effectiveness of the Registration
Statement has been issued under the Securities Act and no proceedings for such
purpose have been instituted or are pending or are contemplated or threatened by the
Commission. Any required filing of the Base Prospectus and the Prospectus or any
supplements thereto pursuant to Rule 424(b) under the Securities Act has been made
in the manner and within the time period required by such Rule 424(b).
(v) The Registration Statement, the Prospectus, including any document
incorporated by reference therein, and each amendment or supplement to the
Registration Statement and the Prospectus, including any document incorporated by
reference therein (other than the financial statements and supporting schedules
included or incorporated by reference therein or in exhibits to or excluded from the
Registration Statement and other than the Form T-1, as to which no opinion need be
rendered), when they became effective or were filed
Exhibit A-1
with the Commission, as the case may be, complied as to form in all material
respects with the applicable requirements of the Act and the Exchange Act.
(vi) The Shares conform in all material respects to the description thereof
contained in [the Disclosure Package and] the Prospectus.
(vii) The statements (A) in the Base Prospectus under the captions “Description
of Common Shares” and “Federal Income Tax Considerations,” (B) incorporated by
reference in the Prospectus from Item 3 of Part I of the Company’s Annual Report on
Form 10-K, and (C) in the Item 15 of the Registration Statement, in each case
insofar as such statements constitute a summary of the legal matters, documents or
proceedings referred to therein has been reviewed by such counsel and fairly present
and summarize, in all material respects, the matters referred to therein.
(viii) No consent, approval, authorization or other order of, or registration
or filing with, any court or other governmental authority or agency, is required for
the Company’s execution, delivery and performance of this Agreement and any
applicable Terms Agreement and consummation of the transactions contemplated hereby
and thereby and by [the Disclosure Package and] the Prospectus (including the
issuance and delivery of the Shares), except such as have been obtained or made by
the Company and are in full force and effect under the Securities Act, applicable
state securities or blue sky laws of any jurisdiction in connection with [the
purchase and] the distribution of the Shares by the Manager and from FINRA and
consents the failure of which to obtain would not result in a Material Adverse
Change or have a material adverse effect on the transactions contemplated by this
Agreement or any applicable Terms Agreement.
(ix) The execution and delivery of each of the Agreement and any applicable
Terms Agreement by the Company, and the issuance, sale and delivery of the Shares by
the Company and the performance by the Company of its obligations hereunder and
thereunder (other than performance by the Company of its obligations under the
indemnification section of this Agreement and any applicable Terms Agreement, as to
which no opinion need be rendered) (A) will not result in any violation of the
provisions of the declaration of trust (or charter or bylaws or other similar
constitutive documents) of the Company or any Significant Subsidiary incorporated or
organized in a jurisdiction located in the United States (each, a “U.S.
Significant Subsidiary”); (B) will not 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 of the U.S. Significant Subsidiaries
pursuant to (x) the Global Senior Credit Agreement, dated as of October 6, 2005, by
and among the Company, certain other borrowers, Bank of America, N.A., ABN Amro Bank
N.V. and Sumitomo Mitsui Banking Corporation (other than with respect to compliance
by the Company or any subsidiary with any financial covenants as to which no opinion
need be rendered), or (z) to the best knowledge of such counsel, any other material
Existing Instrument; or (C) to the best knowledge of such counsel, will not result
in any
Exhibit A-2
violation of any law, administrative regulation or administrative or court
decree applicable to the Company or any U.S. Significant Subsidiary, other than in
the case of clauses (B) and (C), such Defaults and violations as would not,
individually or in the aggregate, result in a Material Adverse Change.
(x) The Company is not, and after receipt of payment for the Shares and the
application of the proceeds as described in [the Disclosure Package and] the
Prospectus under “Use of Proceeds”, will not be, an “investment company” within the
meaning of the Investment Company Act of 1940, as amended.
(xi) The Company has qualified to be taxed as a real estate investment trust
pursuant to the Internal Revenue Code for its taxable years ended December 31, 2006,
2007 and 2008 and the Company’s present organization, ownership, the Company’s
present and proposed method of operation, assets and income are such that the
Company is in a position under present law to so qualify for the fiscal year ended
December 31, 2009 and in the future.
(xii) The investments of the Company described in [the Disclosure Package and]
the Prospectus are permitted investments under the declaration of trust of the
Company.
In addition, such counsel shall state that they have examined various documents and records
and participated in conferences with the Manager, officers and other representatives of the
Company, representatives of the independent public or certified public accountants for the Company
and with representatives of the Manager at which the contents of the Registration Statement[, the
Disclosure Package and] the Prospectus, and any supplements or amendments thereto, and related
matters were discussed and, although such counsel is not passing upon and does not assume any
responsibility for the accuracy, completeness or fairness of the statements contained in the
Registration Statement[, the Disclosure Package] or the Prospectus, including the documents
incorporated by reference therein (other than as specified above), and any supplements or
amendments thereto, on the basis of the foregoing, no facts came to their attention that caused
them to believe that (i) the Registration Statement or any amendments thereto, at the most recent
deemed effective date pursuant to Rule 430B(f)(2) under the Securities Act prior hereto, 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; [or] (ii) the Prospectus, as of
its date or at the relevant Representation Date, contained 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 Disclosure Package,
as amended or supplemented at the Execution Time or at any applicable date related to the delivery
of such opinion, contained 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]* (except for the Form T-1 and the financial statements,
supporting schedules and other financial or statistical data included or incorporated by reference
therein or derived or omitted therefrom as to which such counsel need express no belief).
Exhibit A-3
In rendering such opinion, such counsel may rely (A) as to matters involving the application
of laws of any jurisdiction other than the General Corporation Law of the State of Delaware, the
laws regarding real estate investment trusts of the State of Maryland or the federal law of the
United States, to the extent they deem proper and specified in such opinion, upon the opinion
(which shall be dated the date of such counsel’s opinion, shall be satisfactory in form and
substance to Manager, shall expressly state that the Manager may rely on such opinion as if it were
addressed to them and shall be furnished to the Manager) of other counsel of good standing whom
they believe to be reliable and who are satisfactory to counsel for the Manager; provided, however,
that such counsel shall further state that they believe that they and the Manager are justified in
relying upon such opinion of other counsel, (B) upon the opinion of general counsel of the Company
referred to in Section 6(b)(B) of the Agreement, and (C) as to matters of fact, to the extent they
deem proper, on certificates of responsible officers of the Company and public officials and on the
representations of the Company as provided in the Agreement. In rendering the opinions contained
in paragraphs (xi) and (xii), such opinion may be based upon (a) the Internal Revenue Code and the
rules and regulations promulgated thereunder and the interpretations of the Internal Revenue Code
and such regulations by the courts and the Internal Revenue Service, all as they are in effect and
exist at the time of the opinion, (b) Maryland law existing and applicable to the Company, (c)
facts and other matters set forth in the Prospectus, (d) the provisions of the Amended Restated
Declaration of Trust of the Company, the agreements relating to properties owned by the Company and
(e) certain statements and representations as to factual matters made by the Company to such
counsel provided that such statements and representations are also set forth in a certificate to
the Manager.
* | Bracketed language need only be included if the “Disclosure Package” at the time such opinion is rendered contains documents in addition to those covered by the term “Prospectus” as defined in this Agreement, or if the opinion is being delivered at a Time of Delivery relating to the delivery of Shares to the Manager pursuant to a Terms Agreement. |
Exhibit A-4
EXHIBIT B
Form of Opinion of the General Counsel of the Company to be delivered pursuant to
Section 6(b)(B) of the Equity Distribution Agreement
Section 6(b)(B) of the Equity Distribution Agreement
(i) Each of the U.S. Significant Subsidiaries of the Company has been duly
incorporated or organized, as the case may be, and is validly existing as a
corporation, trust or partnership in good standing under the laws of the
jurisdiction of its incorporation or organization, as the case may be, and has the
power (corporate or other) and authority to own, lease and operate its properties
and to conduct its business as described in the Registration Statement [and
Disclosure Package]. Each U.S. Significant Subsidiary is duly qualified as a
foreign corporation, trust, partnership or limited liability company to transact
business and (except as to any general partnership) 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 for such
jurisdictions where the failure to so qualify or to be in good standing would not,
individually or in the aggregate, result in a Material Adverse Change.
(ii) The outstanding shares of Common Stock of the Company have been duly
authorized and are validly issued, fully paid and non-assessable.
(iii) All of the issued and outstanding capital stock and other equity
interests of each U.S. Significant Subsidiary have been duly authorized and validly
issued, is fully paid and (except for general partnership interests) nonassessable;
all shares of outstanding capital stock and other equity interests of each U.S.
Significant Subsidiary held by the Company, directly or through subsidiaries, are
owned free and clear of any security interest, mortgage, pledge, lien, encumbrance
or claim, except for such security interests, mortgages, pledges, liens,
encumbrances and claims as would not, individually or in the aggregate, result in a
Material Adverse Change.
(iv) To the best knowledge of such counsel, there are no legal or governmental
actions, suits or proceedings pending or threatened which are required to be
disclosed in the Registration Statement [,] [or] the Prospectus [or the Disclosure
Package], other than those disclosed therein.
(v) To the best knowledge of such counsel, there are no Existing 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 or incorporated by reference as exhibits thereto; and the descriptions thereof
and references thereto are correct in all material respects.
(vi) To the best knowledge of such counsel, neither the Company nor any
subsidiary formed in the United States is in (A) violation of its declaration of
trust (or charter or by-laws or other similar constitutive documents) or (B)
violation of any law, administrative regulation or administrative or court decree
applicable to the Company or any U.S. Significant Subsidiary or (C) is in Default
Exhibit B-1
in the performance or observance of any obligation, agreement, covenant or
condition contained in any material Existing Instrument, except in the case of (B)
and (C) above, for such violations or Defaults as would not, individually or in the
aggregate, result in a Material Adverse Change.
In rendering such opinion, such counsel may rely (A) as to matters involving the application
of laws of any jurisdiction other than the State of Maryland or the Federal laws of the
United States, to the extent they deem proper and specified in such opinion, upon the
opinion of other counsel of good standing whom they believe to be reliable and who are
satisfactory to counsel for the Manager and (B) as to matters of fact, to the extent they
deem proper, on certificates of responsible officers of the Company and public officials.
References to the Prospectus in this paragraph (b) shall also include any supplements
thereto at the Settlement Date.
* | Bracketed language need only be included if the “Disclosure Package” at the time such opinion is rendered contains documents in addition to those covered by the term “Prospectus” as defined in this Agreement, or if the opinion is being delivered at a Time of Delivery relating to the delivery of Shares to the Manager pursuant to a Terms Agreement. |
Exhibit B-2