Parkway Properties, Inc. Shares of Common Stock EQUITY DISTRIBUTION AGREEMENT
EXHIBIT 1.1
Parkway Properties, Inc.
$75,000,000
Shares of Common Stock
Dated: December 23, 2009
Table of Contents
Page | ||||
SECTION 1. Description of Securities |
1 | |||
SECTION 2. Placements |
2 | |||
SECTION 3. Sale of Placement Securities by Xxxxx Fargo Securities |
4 | |||
SECTION 4. Suspension of Sales |
5 | |||
SECTION 5. Representations and Warranties |
5 | |||
SECTION 6. Sale and Delivery to Xxxxx Fargo Securities; Settlement |
20 | |||
SECTION 7. Covenants of the Company and the Partnership |
22 | |||
SECTION 8. Payment of Expenses |
29 | |||
SECTION 9. Conditions of Xxxxx Fargo Securities’ Obligations |
30 | |||
SECTION 10. Indemnification |
32 | |||
SECTION 11. Contribution |
34 | |||
SECTION 12. Representations, Warranties and Agreements to Survive Delivery |
35 | |||
SECTION 13. Termination of Agreement |
35 | |||
SECTION 14. Notices |
36 | |||
SECTION 15. Parties |
37 | |||
SECTION 16. Adjustments for Stock Splits |
37 | |||
SECTION 17. Governing Law and Time |
37 | |||
SECTION 18. Effect of Headings |
37 | |||
SECTION 19. Definitions |
37 | |||
SECTION 20. Permitted Free Writing Prospectuses |
39 | |||
SECTION 21. Absence of Fiduciary Relationship |
39 | |||
SECTION 22. Research Analyst Independence |
40 |
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EXHIBITS
Exhibit A
|
— | Form of Placement Notice | ||
Exhibit B
|
— | Authorized/Designated Individuals for Placement Notices and Acceptances | ||
Exhibit C
|
— | Compensation | ||
Exhibit D
|
— | Subsidiaries of the Company | ||
Exhibit E-1
|
— | Form of Opinion of Company Counsel | ||
Exhibit E-2
|
— | Form of Tax Opinion of Company Counsel | ||
Exhibit E-3
|
— | Form of Opinion of Special Maryland Counsel | ||
Exhibit F-1
|
— | Officer Certificate of the Company | ||
Exhibit F-2
|
— | Officer Certificate of the Partnership | ||
Exhibit G
|
— | Issuer Pricing Free Writing Prospectus |
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Parkway Properties, Inc.
$75,000,000
Shares of Common Stock
December 23, 2009
Xxxxx Fargo Securities, LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Parkway Properties, Inc., a Maryland corporation (the “Company”) and Parkway
Properties LP, a Delaware limited partnership (the “Partnership”) confirm their agreement
(this “Agreement”) with Xxxxx Fargo Securities, LLC (“Xxxxx Fargo Securities”), as
follows:
SECTION 1. Description of Securities.
The Company agrees that, from time to time during the term of this Agreement, on the terms and
subject to the conditions set forth herein, it may issue and sell through Xxxxx Fargo Securities,
acting as agent and/or principal, shares (the “Securities”) of the Company’s common stock,
par value $0.001 per share (the “Common Stock”) having an aggregate offering price of up to
$75,000,000 (the “Maximum Amount”). The Company agrees that if it determines that Xxxxx
Fargo Securities will purchase any Securities on a principal basis, then it will enter into a
separate underwriting or similar agreement in form and substance satisfactory to both the Company
and Xxxxx Fargo Securities covering such purchase. Notwithstanding anything to the contrary
contained herein, the parties hereto agree that compliance with the limitations set forth in this
Section 1 regarding the number and aggregate market value of the Securities issued and sold under
this Agreement shall be the sole responsibility of the Company, and Xxxxx Fargo Securities shall
have no obligation in connection with such compliance. The issuance and sale of the Securities
through Xxxxx Fargo Securities will be effected pursuant to the Registration Statement (as defined
below) filed by the Company and declared effective by the Securities and Exchange Commission (the
“Commission”), although nothing in this Agreement shall be construed as requiring the
Company to use the Registration Statement to issue the Securities. The Company hereby reserves the
right to issue and sell securities other than through or to Xxxxx Fargo Securities during the term
of this Agreement, subject to the notice provision contained in Section 7(k) hereof.
The Company has filed, in accordance with the provisions of the Securities Act of 1933, as
amended, (the “Securities Act”) and the rules and regulations thereunder (the
“Securities Act Regulations”), with the Commission a registration statement on Form S-3
(File No. 333-156050), including a base prospectus, relating to certain securities, including the
Securities to be issued from time to time by the Company, and which incorporates by reference
documents that the Company has filed or will file in accordance with the provisions of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and
regulations thereunder (the
1
“Exchange Act Regulations”). The Company has prepared a
prospectus supplement specifically relating to the Securities (the “Prospectus Supplement”) to the base prospectus
included as part of such registration statement. The Company will furnish to Xxxxx Fargo
Securities, for use by Xxxxx Fargo Securities, copies of the prospectus included as part of such
registration statement, as supplemented by the Prospectus Supplement, relating to the Securities.
Except where the context otherwise requires, such registration statement, as amended when it became
effective, including all documents filed as part thereof or incorporated by reference therein, and
including any information contained in a Prospectus (as defined below) subsequently filed with the
Commission pursuant to Rule 424(b) under the Securities Act Regulations or deemed to be a part of
such registration statement pursuant to Rule 430B of the Securities Act Regulations, is herein
called the “Registration Statement.” The base prospectus, including all documents
incorporated therein by reference, included in the Registration Statement, as it may be
supplemented by the Prospectus Supplement, in the form in which such prospectus and/or Prospectus
Supplement have most recently been filed by the Company with the Commission pursuant to Rule 424(b)
under the Securities Act Regulations is herein called the “Prospectus.” Any reference
herein to the Registration Statement, the Prospectus or any amendment or supplement thereto shall
be deemed to refer to and include the documents incorporated by reference therein, and any
reference herein to the terms “amend,” “amendment” or “supplement” with respect to the Registration
Statement or the Prospectus shall be deemed to refer to and include the filing after the execution
hereof of any document with the Commission deemed to be incorporated by reference therein. For
purposes of this Agreement, all references to the Registration Statement, the Prospectus or to any
amendment or supplement thereto shall be deemed to include any copy filed with the Commission
pursuant to XXXXX.
The Company has also entered into separate equity distribution agreements (each an
“Alternative Distribution Agreement” and collectively, the “Alternative Distribution
Agreements”), dated as of even date herewith, with each of Xxxxxxx Lynch, Pierce, Xxxxxx &
Xxxxx Incorporated, X.X. Xxxxxx Securities Inc. and Xxxxxx Xxxxxx & Company, Inc. (each an
“Alternative Manager” and collectively, the “Alternative Managers”).
SECTION 2. Placements.
(a) Each time that the Company wishes to issue and sell the Securities hereunder (each, a
“Placement”), it will notify Xxxxx Fargo Securities by email notice (or other method
mutually agreed to in writing by the parties) containing the parameters in accordance with which it
desires the Securities to be sold, which shall at a minimum include the number of Securities to be
issued (the “Placement Securities”), the time period during which sales are requested to be
made, any limitation on the number of Securities that may be sold in any one day and any minimum
price below which sales may not be made (a “Placement Notice”), a form of which containing
such minimum sales parameters necessary is attached hereto as Exhibit A. The Placement
Notice shall originate from any of the individuals from the Company set forth on Exhibit B
(with a copy to each of the other individuals from the Company listed on such schedule), and shall
be addressed to each of the individuals from Xxxxx Fargo Securities set forth on Exhibit B,
as such Exhibit B may be amended from time to time. If Xxxxx Fargo Securities wishes to
accept such proposed terms included in the Placement Notice (which it may decline to do so for any
reason in its sole discretion) or, following discussion with the Company, wishes to accept amended
terms, Xxxxx Fargo Securities will, prior to 4:30 p.m. (New York City time) on
2
the Business Day
following the Business Day on which such Placement Notice is delivered to Xxxxx Fargo Securities,
issue to the Company a notice by email (or other method mutually agreed to in writing by the
parties) addressed to all of the individuals from the Company and
Xxxxx Fargo Securities set forth on Exhibit B) setting forth the terms that Xxxxx
Fargo Securities is willing to accept. Where the terms provided in the Placement Notice are
amended as provided for in the immediately preceding sentence, such terms will not be binding on
the Company or Xxxxx Fargo Securities until the Company delivers to Xxxxx Fargo Securities an
acceptance by email (or other method mutually agreed to in writing by the parties) of all of the
terms of such Placement Notice, as amended (the “Acceptance”), which email shall be
addressed to all of the individuals from the Company and Xxxxx Fargo Securities set forth on
Exhibit B. The Placement Notice (as amended by the corresponding Acceptance, if
applicable) shall be effective upon receipt by the Company of Xxxxx Fargo Securities’ acceptance of
the terms of the Placement Notice or upon receipt by Xxxxx Fargo Securities of the Company’s
Acceptance, as the case may be, unless and until (i) the entire amount of the Placement Securities
have been sold, (ii) in accordance with the notice requirements set forth in the second sentence of
this paragraph, the Company terminates the Placement Notice, (iii) the Company issues a subsequent
Placement Notice with parameters superseding those on the earlier dated Placement Notice, (iv) the
Agreement has been terminated under the provisions of Section 13 or (v) either party shall have
suspended the sale of the Placement Securities in accordance with Section 4 below. The amount of
any discount, commission or other compensation to be paid by the Company to Xxxxx Fargo Securities
in connection with the sale of the Placement Securities shall be calculated in accordance with the
terms set forth in Exhibit C. Notwithstanding the foregoing, in the event the Company
engages Xxxxx Fargo Securities for a sale of Securities that would constitute a “distribution,”
within the meaning of Rule 100 of Regulation M under the Exchange Act Regulations, the Company and
Xxxxx Fargo Securities will agree to compensation that is customary for Xxxxx Fargo Securities with
respect to such transactions. It is expressly acknowledged and agreed that neither the Company nor
Xxxxx Fargo Securities will have any obligation whatsoever with respect to a Placement or any
Placement Securities unless and until the Company delivers a Placement Notice to Xxxxx Fargo
Securities and either (i) Xxxxx Fargo Securities accepts the terms of such Placement Notice or (ii)
where the terms of such Placement Notice are amended, the Company accepts such amended terms by
means of an Acceptance pursuant to the terms set forth above, and then only upon the terms
specified in the Placement Notice (as amended by the Acceptance, if applicable) and herein. In the
event of a conflict between the terms of this Agreement and the terms of a Placement Notice (as
amended by the corresponding Acceptance, if applicable), the terms of the Placement Notice (as
amended by the corresponding Acceptance, if applicable) will control.
(b) Notwithstanding any other provision of this Agreement, the Company shall not offer, sell
or deliver, or request the offer or sale of any Securities and, by notice to Xxxxx Fargo Securities
given by telephone (confirmed promptly by telecopy or email), shall cancel any instructions for the
offer or sale of any Securities, and Xxxxx Fargo Securities shall not be obligated to offer or sell
any Securities, (i) during any period in which the Company’s xxxxxxx xxxxxxx policy, as it exists
on the date of the Agreement, would prohibit the purchases or sales of the Company’s Common Stock
by its officers or directors, (ii) during any other period in which the Company is, or could be
deemed to be, in possession of material non-public information or (iii) except as provided in
paragraph (c) below, at any time from and including the date (each, an “Announcement Date”)
on which the Company shall issue a press release containing, or shall
3
otherwise publicly announce,
its earnings, revenues or other results of operations (each, an “Earnings Announcement”)
through and including the time that is 24 hours after the time that the Company files (a
“Filing Time”) a Quarterly Report on Form 10-Q or an Annual Report on Form
10-K that includes consolidated financial statements as of and for the same period or periods,
as the case may be, covered by such Earnings Announcement.
(c) If the Company wishes to offer, sell or deliver Securities on any time during the period
from and including an Announcement Date through and including the time that is 24 hours after the
corresponding Filing Time, the Company shall (i) prepare and deliver to Xxxxx Fargo Securities
(with a copy to counsel to Xxxxx Fargo Securities) a Current Report on Form 8-K which shall include
substantially the same financial and related information as was set forth in the relevant Earnings
Announcement (other than any earnings projections, similar forward-looking data and officers’
quotations) (each, an “Earnings 8-K”), in form and substance reasonably satisfactory to
Xxxxx Fargo Securities, and obtain the consent of Xxxxx Fargo Securities to the filing thereof
(such consent not to be unreasonably withheld), (ii) provide Xxxxx Fargo Securities with the
officers’ certificate, accountants’ letter and opinions and letters of counsel called for by
Section 7 hereof; respectively, (iii) afford Xxxxx Fargo Securities the opportunity to conduct a
due diligence review in accordance with Section 7(m) hereof and (iv) file such Earnings 8-K with
the Commission, upon such events the provisions of clause (iii) of Section 2(b) shall not be
applicable for the period from and after the time at which the foregoing conditions shall have been
satisfied (or, if later, the time that is 24 hours after the time that the relevant Earnings
Announcement was first publicly released) through and including the time that is 24 hours after the
Filing Time of the relevant Quarterly Report on Form 10-Q or Annual Report on Form 10-K, as the
case may be. For purposes of clarity, the parties hereto agree that (A) the delivery of any
officers’ certificate, accountants’ letter and opinions and letters of counsel pursuant to this
Section 2(c) shall not relieve the Company from any of its obligations under this Agreement with
respect to any Quarterly Report on Form 10-Q or Annual Report on Form 10-K, as the case may be,
including, without limitation, the obligation to deliver officers’ certificates, accountants’
letters and legal opinions and letters as provided in Section 7 hereof and (B) this Section 2(c)
shall in no way affect or limit the operation of the provisions of clauses (i) and (ii) of Section
2(b), which shall have independent application.
SECTION 3. Sale of Placement Securities by Xxxxx Fargo Securities.
Subject to the provisions of Section 6(a), Xxxxx Fargo Securities, for the period specified in
the Placement Notice, will use its commercially reasonable efforts consistent with its normal
trading and sales practices to sell the Placement Securities up to the amount specified, and
otherwise in accordance with the terms of such Placement Notice (as amended by the corresponding
Acceptance, if applicable). Xxxxx Fargo Securities will provide written confirmation to the
Company no later than the opening of the Trading Day (as defined below) immediately following the
Trading Day on which it has made sales of Placement Securities hereunder setting forth the number
of Placement Securities sold on such day, the compensation payable by the Company to Xxxxx Fargo
Securities pursuant to Section 2 with respect to such sales, and the Net Proceeds (as defined
below) payable to the Company, with an itemization of the deductions made by Xxxxx Fargo Securities
(as set forth in Section 6(b)) from the gross proceeds that it receives from such sales. Subject
to the terms of the Placement Notice (as amended by the corresponding Acceptance, if applicable),
Xxxxx Fargo Securities may sell
4
Placement Securities by any method permitted by law deemed to be an
“at the market” offering as defined in Rule 415 of the Securities Act Regulations, including
without limitation sales made by means of ordinary brokers’ transactions on the NYSE, on any other
existing trading market for the Common Stock or to or through a market maker at market prices prevailing at the time
of sale, at prices related to prevailing market prices or at negotiated prices. Subject to the
terms of the Placement Notice (as amended by the corresponding Acceptance, if applicable), Xxxxx
Fargo Securities may also sell Placement Securities by any other method permitted by law, including
but not limited to in privately negotiated transactions. For the purposes hereof, “Trading
Day” means any day on which shares of Common Stock are purchased and sold on the principal
market on which the Common Stock is listed or quoted.
SECTION 4. Suspension of Sales. The Company or Xxxxx Fargo Securities may, upon notice to the
other party in writing or by telephone (confirmed immediately by verifiable facsimile transmission
or email correspondence to each of the individuals of the other party set forth on Exhibit
B), suspend any sale of Placement Securities under this Agreement; provided, however, that such
suspension shall not affect or impair either party’s obligations with respect to any Placement
Securities sold hereunder prior to the receipt of such notice. Each of the parties agrees that no
such notice under this Section 4 shall be effective against the other unless it is made to one of
the individuals named on Exhibit B hereto, as such Exhibit may be amended from time to
time.
SECTION 5. Representations and Warranties.
(a) Representations and Warranties by the Company and the Partnership. The Company and the
Partnership hereby jointly and severally represent and warrant to Xxxxx Fargo Securities as of the
date hereof and as of each Representation Date on which a certificate is required to be delivered
pursuant to Section 7(o) of this Agreement and as of each Applicable Time and Settlement Date, and
agrees with Xxxxx Fargo Securities, as follows:
(1) Compliance with Registration Requirements. The Securities have been duly
registered under the Securities Act pursuant to the Registration Statement. The
Registration Statement has become effective under the Securities Act and no stop order
preventing or suspending the use of any base prospectus, the Prospectus Supplement, the
Prospectus or any Permitted Free Writing Prospectus (as defined below), or the effectiveness
of the Registration Statement and no proceedings for such purpose have been instituted or
are pending or, to the knowledge of the Company or the Partnership, are contemplated by the
Commission, and any request on the part of the Commission for additional information has
been complied with.
At the respective times each of the Registration Statement and any post-effective
amendments thereto became or becomes effective (each, an “Effective Date”) and as of
the date of this Agreement, the Registration Statement and any amendments and supplements
thereto complied and will comply in all material respects with the requirements of the
Securities Act then in effect. The conditions for the use of Form S-3, as set forth in the
General Instructions thereto, and the Registration Statement meets, and the offering and
sale of the Securities as contemplated hereby complies with, the requirements of Rule 415
under the Securities Act Regulations (including, without
5
limitation, Rule 415(a)(5)). The
Registration Statement, as of the date hereof and each effective date with respect thereto,
did not and will not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to
make the statements therein not misleading. Neither the Prospectus nor any amendments
or supplements thereto, as of their respective dates, and at each Applicable Time and
Settlement Date, as the case may be, included or will include an untrue statement of a
material fact or omitted or will omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were made, not
misleading.
The representations and warranties set forth in Section 5(a)(1) of this Agreement shall
not apply to statements in or omissions from the Registration Statement or the Prospectus,
as amended or supplemented, made in reliance upon and in conformity with the Agent Content
(as defined in Section 10(b)).
The copies of the Registration Statement and any amendments thereto, any other
preliminary prospectus, each Issuer Free Writing Prospectus that is required to be filed
with the Commission pursuant to Rule 433 and the Prospectus and any amendments or
supplements thereto delivered and to be delivered to Xxxxx Fargo Securities (electronically
or otherwise) in connection with the offering of the Securities were and will be identical
to the electronically transmitted copies thereof filed with the Commission pursuant to
XXXXX, except to the extent permitted by Regulation S-T under the Securities Act.
Each Issuer Free Writing Prospectus relating to the Securities, as of its issue date
and as of each Applicable Time and Settlement Date, did not, does not and will not include
any information that conflicted, conflicts or will conflict with the information contained
in the Registration Statement or the Prospectus, including any document incorporated by
reference therein or deemed to be a part thereof that has not been superseded or modified,
or taken together with the Prospectus included, includes or will include an untrue statement
of a material fact or omitted, omits or will omit to state a material fact necessary in
order to make the statements therein, in light of the circumstances under which they were
made, not misleading.
At the time of the initial filing of the Registration Statement, at the time of the
most recent amendment thereto for the purposes of complying with Section 10(a)(3) of the
Securities Act (whether such amendment was by post-effective amendment, incorporated report
filed pursuant to Section 13 or 15(d) of the Exchange Act or form of prospectus), at the
time the Company or any person acting on its behalf (within the meaning, for this paragraph
only, of Rule 163(c) of the Securities Act Regulations) made any offer relating to the
Securities in reliance on the exemption of Rule 163 of the Securities Act Regulations and at
the date hereof, the Company was not and is not an “ineligible issuer,” as defined in Rule
405 of the Securities Act Regulations; and, without limitation to the foregoing, the Company
has at all relevant times met, meets and will at all relevant times meet the requirements of
Rule 164 for the use of a free writing prospectus (as defined in Rule 405) in connection
with the offering contemplated hereby.
6
Each document incorporated by reference in the Registration Statement or the Prospectus
(the “Incorporated Documents”) when such Incorporated Documents were filed with the
Commission, complied in all material respects with the requirements of the
Exchange Act in effect at the time of such filing, and any further documents so filed
and incorporated after the date of this Agreement will, when they are filed, comply in all
material respects with the requirements of the Exchange Act; and each such Incorporated
Document when it was filed did not or when it is filed will not, as the case may be, contain
an untrue statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading.
(2) Prior Written Communications. Any offer that is a written communication
relating to the Securities made prior to the initial filing of the Registration Statement by
the Company or any person acting on its behalf (within the meaning, for this paragraph only,
of Rule 163(c) of the Securities Act Regulations) has been filed with the Commission in
accordance with the exemption provided by Rule 163 of the Securities Act Regulations and
otherwise complied with the requirements of Rule 163 of the Securities Act Regulations,
including without limitation the legending requirement.
(3) Accuracy of Statements in Prospectus. The statements in the Prospectus
under the headings “Description of Capital Stock”, “Description of Common Stock”,
“Description of Preferred Stock”, “Description of Warrants”, “Certain Provisions of Maryland
Law and Our Charter and Bylaws”, “Material United States Federal Income Tax Consequences”,
and “Plan of Distribution” (other than the Agent Content), and the information in the
Registration Statement under Item 15, in each case insofar as such statements summarize
legal matters, agreements, documents or proceedings discussed therein, are accurate and fair
summaries of such legal matters, agreements, documents or proceedings; all descriptions in
the Registration Statement and the Prospectus of any Company Documents are accurate in all
material respects; and there are no franchises, contracts, indentures, mortgages, deeds of
trust, loan or credit agreements, bonds, notes, debentures, evidences of indebtedness,
leases or other instruments, agreements or documents required by the Securities Act
Regulations to be described or referred to in the Registration Statement or the Prospectus
or to be filed as exhibits to the Registration Statement which have not been so described
and filed as required.
(4) Distribution of Offering Material by the Company. The Company has not
distributed and, prior to the later of the last Applicable Time and the completion of Xxxxx
Fargo Securities’ distribution of Securities, will not distribute any offering material in
connection with the offering and sale of the Securities to be sold hereunder by Xxxxx Fargo
Securities as principal or agent for the Company, other than the Prospectus and any
Permitted Free Writing Prospectus reviewed and consented to by Xxxxx Fargo Securities.
(5) Authorization of Agreement. This Agreement has been duly authorized,
executed and delivered by the Company and the Partnership and constitutes the legal, valid
and binding obligation of the Company and the Partnership enforceable against the Company
and the Partnership in accordance with its terms, except as may be limited by
7
bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors rights generally
or by general principles of equity.
(6) Authorization of the Securities. The Securities to be sold by the Company
pursuant to this Agreement have been duly authorized for issuance and sale pursuant to this
Agreement and, when issued and delivered by the Company against payment therefor pursuant to
this Agreement, will be validly issued, fully paid and nonassessable; no holder of the
Securities is or will be subject to personal liability by reason of being such a holder; the
issuance and sale of the Securities to be sold by the Company pursuant to this Agreement is
not subject to any preemptive rights, rights of first refusal or other similar rights of any
securityholder of the Company or any other person; and the delivery of the Securities being
sold by the Company against payment therefor pursuant to the terms of this Agreement will
pass valid title to the Securities being sold by the Company, free and clear of any claim,
encumbrance or defect in title, and without notice of any lien, claim or encumbrance. The
form of certificate representing the Common Stock complies with all applicable legal
requirements, the requirements of the Company’s charter and by-laws, and the requirements of
the NYSE.
(7) No Transfer Taxes. There are no transfer taxes or other similar fees or
charges under federal law or the laws of any state, or any political subdivision thereof, or
any other U.S. or non U.S. governmental authority required to be paid in connection with the
execution and delivery of this Agreement or the issuance by the Company or sale by the
Company of the Securities.
(8) No Private Issuances of Common Stock. Except as disclosed in the
Registration Statement and the Prospectus, the Company has not issued or sold any securities
during the six-month period preceding the date of the Prospectus, including any sales
pursuant to Rule 144A or Regulation D or S of the Securities Act.
(9) No Material Adverse Change. Since the respective dates as of which
information is given in the Registration Statement and the Prospectus (in each case
exclusive of any amendments or supplements thereto subsequent to the date of this
Agreement), except as otherwise disclosed therein: (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 results of operations or
earnings, business affairs, business prospects, properties or operations, whether or not
arising from transactions in the ordinary course of business, of the Company, the
Partnership and the Subsidiaries, considered as one entity (any such change is called a
“Material Adverse Effect”); (ii) the Company, the Partnership and the Subsidiaries,
considered as one entity, have not incurred any material liability or obligation, indirect,
direct or contingent, nor entered into any material transaction or agreement; and (iii)
there has been no dividend or distribution of any kind declared, paid or made by the
Company, the Partnership or, except for dividends paid to the Company or other subsidiaries,
any of the Subsidiaries on any class of capital stock or repurchase or redemption by the
Company or any of its subsidiaries of any class of capital stock.
8
(10) Independent Accountants. (i) KPMG LLP, who has expressed its opinion with
respect to the financial statements for the twelve-month period ending December 31, 2008 and
(ii) Ernst & Young LLP, who has expressed its opinion with respect to the financial
statements for the twelve-month periods ending December 31, 2006 and 2007,
including in each case, the related notes thereto, and any supporting schedules filed
with the Commission as a part of or incorporated by reference in the Registration Statement
and included or incorporated by reference in the Registration Statement and the Prospectus,
are independent registered public accountants with respect to the Company as required by the
Securities Act and the Exchange Act and the applicable published rules and regulations
thereunder.
(11) Preparation of the Financial Statements. The financial statements filed
with the Commission as a part of or incorporated by reference in the Registration Statement
and included or incorporated by reference in the Prospectus present fairly the consolidated
financial position of the Company, the Partnership and the Subsidiaries as of and at the
dates indicated and the results of their operations and cash flows for the periods
specified. The supporting schedules included or incorporated by reference in the
Registration Statement present fairly the information required to be stated therein. Such
financial statements and supporting schedules comply as to form with the applicable
accounting requirements of the Securities Act and 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 (“GAAP”), except as may be
expressly stated in the related notes thereto. No other financial statements or supporting
schedules are required to be included or incorporated by reference in the Registration
Statement and the Prospectus. The financial data set forth in the Prospectus under the
caption “Capitalization” fairly presents the information set forth therein on a basis
consistent with that of the audited financial statements contained in the Prospectus. The
Company’s ratio of earnings to fixed charges and preferred stock dividends set forth in the
Prospectus have been calculated in compliance with Item 503(d) of Regulation S-K under the
Securities Act Regulations. Any information contained in the Registration Statement or the
Prospectus regarding “non-GAAP financial measures” (as defined in Regulation G of the
Commission) complies with Regulation G and Item 10 of Regulation S-K of the Commission, to
the extent applicable.
(12) Subsidiaries. The only subsidiaries of the Company and the Partnership
are the subsidiaries listed on Exhibit D hereto under the heading “Subsidiaries”;
and the only significant subsidiaries (as defined in Rule 405 under the Securities Act
Regulations) (the “Significant Subsidiaries”) of the Company and the Partnership are
the subsidiaries listed on Exhibit D under the heading “Significant Subsidiaries”
(collectively, the “Subsidiaries”).
(13) Incorporation and Good Standing of the Company, the Partnership and the
Subsidiaries. Each of the Company, the Partnership and the Significant Subsidiaries has
been duly organized and is validly existing as a corporation, general or limited
partnership, or limited liability company, as the case may be, in good standing under the
laws of the jurisdiction of its organization. Each Subsidiary (other than the Significant
Subsidiaries) has been duly organized and is validly existing as a corporation, general or
9
limited partnership, or limited liability company, as the case may be, in good standing
under the laws of the jurisdiction of its organization, except as would not result in a
Material Adverse Effect. Each of the Company, the Partnership and each of the Subsidiaries
has full power and authority (corporate and other) to own or lease, as the
case may be, operate and encumber its properties and to conduct its business as
described in the Registration Statement and Prospectus, and in the case of the Company, to
enter into and perform its obligations under this Agreement. Each of the Company, the
Partnership and the Subsidiaries is duly qualified or registered to do business in each
jurisdiction in which it owns or leases real property or in which the conduct of its
business requires such qualification or registration, except where the failure to be so
qualified or registered would not, individually or in the aggregate, result in a Material
Adverse Effect; and, other than the Subsidiaries, the Company owns no stock or other
beneficial interest in any corporation, partnership, joint venture or other business entity.
(14) Ownership Interests in the Partnership and Subsidiaries. All of the
issued and outstanding general partnership interests in the Partnership and all of the
issued and outstanding capital stock or ownership interests of each Subsidiary have been
duly authorized and are validly issued, fully paid and nonassessable and are wholly-owned by
the Company, directly or through subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity. All of the issued and outstanding
limited partnership interests in the Partnership have been duly authorized and are validly
issued, fully paid and nonassessable and are majority owned by the Company directly or
indirectly through its Subsidiaries.
(15) Capitalization. As of the date hereof, (A) 67,600,000 shares of Common
Stock were authorized for issuance, of which 21,624,228 shares were issued and outstanding,
(B) 2,400,000 shares of Series D Preferred Stock, par value $.001 per share (the
“Preferred Stock”) were authorized for issuance, all of which were issued and
outstanding, and (C) 30,000,000 shares of Excess Stock, par value $.001 per share, were
authorized for issuance, none of which were issued or outstanding. All of the issued and
outstanding shares of capital stock of the Company have been duly authorized and are validly
issued, fully paid and nonassessable and conform to the description thereof in the
Prospectus. The stockholders of the Company have no preemptive rights with respect to the
Common Stock. All of the issued and outstanding shares of capital stock of the Company, all
the issued and outstanding partnership interests in the Partnership, and all ownership
interests in each Subsidiary have been offered, sold and issued by such entity in compliance
with all applicable laws, including without limitation, federal and state securities laws;
except as described in the Prospectus, there is no outstanding option, warrant or other
right requiring the issuance of, and no commitment, plan or arrangement to issue, any shares
of capital stock of the Company or equity interests in the Partnership or any Subsidiary or
any security convertible into or exchangeable for such shares or interests.
(16) Listing. The Shares have been approved for listing on the NYSE, subject
only to official notice of issuance.
10
(17) Non-Contravention of Agreements; No Further Authorizations or Approvals
Required. The execution, delivery and performance of this Agreement by each of the
Company and the Partnership and consummation of the transactions contemplated hereby, by the
Prospectus (i) have been duly authorized by all necessary corporate or limited partnership
action, as applicable, and will not result in any Default
under the charter or by-laws of the Company, the certificate of limited partnership or
agreement of limited partnership of the Partnership or any organizational document of any
subsidiary thereof, (ii) will not conflict with or constitute a breach of, or default (or,
with the giving of notice or lapse of time, would be in default) (“Default”) or a
Debt Repayment Triggering Event (as define below) under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of the Company,
the Partnership or any of the Subsidiaries pursuant to, or require the consent of any other
party to, any indenture, mortgage, loan or credit agreement, deed of trust, note, contract,
franchise, lease or other agreement, obligation, condition, covenant or instrument to which
the Company or such subsidiary is a party or by which it may be bound, and (iii) will not
result in any violation of any statute, law, rule, regulation, judgment, order or decree
applicable to the Company, the Partnership or any of the Subsidiaries of any court,
regulatory body, administrative agency, governmental body, arbitrator or other authority
having jurisdiction over the Company, the Partnership or any of the Subsidiaries or any of
their properties. 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 execution, delivery and performance of this Agreement by each of the Company and the
Partnership and consummation of the transactions contemplated hereby, by the Prospectus,
except such as have been obtained or made by each of the Company and the Partnership and are
in full force and effect under the Securities Act, applicable state securities or blue sky
laws and from the Financial Industry Regulatory Authority (“FINRA”). As used
herein, a “Debt Repayment Triggering Event” means any event or condition which
gives, or with the giving of notice or lapse of time would give, the holder of any note,
debenture or other evidence of indebtedness (or any person acting on such holder’s behalf)
the right to require the repurchase, redemption or repayment of all or a portion of such
indebtedness by either of the Company or the Partnership or any of the Subsidiaries.
(18) Compliance with Law; No Defaults. The Company, the Partnership and the
Subsidiaries have complied in all respects with all laws, regulations and orders applicable
to them or their respective businesses, except as would not have a Material Adverse Effect;
the Company, the Partnership and the Subsidiaries are not in default under any indenture,
mortgage, deed of trust, voting trust agreement, loan agreement, bond, debenture, note
agreement or evidence of indebtedness, lease, contract or other agreement or instrument to
which they are a party or by which they or any of their properties or other assets are
bound, violation of which would individually or in the aggregate have a Material Adverse
Effect, and no other party under any such agreement or instrument to which the Company, the
Partnership or any of the Subsidiaries are a party is, to the knowledge of the Company, in
default in any material respect thereunder; and the Company, the Partnership and the
Subsidiaries are not in violation of their respective articles of incorporation, by-laws,
certificate of general or limited partnership, partnership agreement or other organizational
documents, as the case may be.
11
(19) Due Authorization of Partnership Agreement. The Agreement of Limited
Partnership of the Partnership, including any amendments thereto (the “Partnership
Agreement”), has been duly and validly authorized, executed and delivered by all
partners of the Partnership and constitutes a valid and binding agreement, enforceable in
accordance with its terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors’ rights generally or by
general principles of equity.
(20) No Liabilities or Obligations. Except as contemplated in the Prospectus,
subsequent to the respective dates as of which information is given in the Registration
Statement and the Prospectus, the Company, the Partnership and the Subsidiaries have not
incurred any liabilities or obligations, direct or contingent; or entered into any
transactions, not in the ordinary course of business, that are material to the Company, the
Partnership and the Subsidiaries on a consolidated basis; and there has not been any
material change in the capital stock or structure, short-term debt or long-term debt of the
Company, the Partnership and the Subsidiaries; or any Material Adverse Effect; and, except
for regular dividends on the Company’s Common Stock, in amounts per share that are
consistent with past practice or the charter documents of the Company and the minimum
dividends required by the Company’s Charter, as amended, or the Preferred Stock, there has
been no dividend or distribution of any kind declared, paid or made by the Company on any
class of its capital stock.
(21) No Material Actions or Proceedings. Except as set forth in the
Prospectus, there is not pending or, to the knowledge of the Company, threatened any action,
suit or proceeding to which the Company, the Partnership, any of the Subsidiaries or any of
their respective officers or directors is a party, or of which any of their properties or
other assets is the subject, before or by any court or governmental agency or body, that is
reasonably likely to result in any Material Adverse Effect.
(22) Labor Matters. No labor problem or dispute with the employees of the
Company, the Partnership or any of the Subsidiaries exists or, to the best of the Company’s
knowledge, is threatened or imminent, and the Company is not aware of any existing or
imminent labor disturbance by the employees of any of its or the Subsidiaries’ principal
suppliers, contractors or customers, that could have a Material Adverse Effect.
(23) Timeliness of Commission Filings. During the period of at least the last
twenty four (24) calendar months prior to the date of this Agreement, the Company has timely
filed with the Commission all documents and other materials required to be filed pursuant to
Sections 13, 14 and 15(d) under the Exchange Act.
(24) Completeness of Commission Filings. There are no contracts or documents
of the Company that are required to be filed as exhibits to the Registration Statement or to
any of the documents incorporated by reference therein by the Securities Act or the Exchange
Act or by the rules and regulations of the Commission thereunder that have not been so
filed.
12
(25) Intellectual Property Rights. The Company, the Partnership and the
Subsidiaries own, possess, license or have other rights to use, on reasonable terms, all
patents, patent applications, trade and service marks, trade and service xxxx registrations,
trade names, copyrights, licenses, inventions, trade secrets, technology, know-how and
other intellectual property necessary for the conduct of the Company’s business as now
conducted or as proposed in the Prospectus to be conducted.
(26) Licenses, Certificates and Permits. The Company, the Partnership and the
Subsidiaries hold all material licenses, certificates and permits from governmental
authorities which are necessary to the conduct of their businesses and are in compliance
with the terms and conditions of such licenses, certificates and permits; and the Company,
the Partnership and the Subsidiaries have not received any notice of proceedings relating to
the revocation or modification of any such permits, licenses or certificates that, if
determined adversely to the Company, the Partnership or any Subsidiary, would have a
Material Adverse Effect.
(27) Title to Properties. Each of the Company, the Partnership and the
Subsidiaries have good and marketable title to the properties and assets, as described in
the Prospectus (the “Properties”), owned by them, free and clear of all liens,
charges, encumbrances or restrictions, except such as are described in the Prospectus or are
not material in relation to the business of the Company, the Partnership and the
Subsidiaries on a consolidated basis. The Company, the Partnership and the Subsidiaries
have valid, subsisting and enforceable leases for the Properties as leased by the Company,
the Partnership and the Subsidiaries with such exceptions as are not material and do not
interfere with the use made and proposed to be made of such properties by the Company, the
Partnership and the Subsidiaries. No tenant under any of the leases pursuant to which the
Company, the Partnership or any of the Subsidiaries lease the Properties has an option or
right of first refusal to purchase the premises demised under such lease. The use and
occupancy of each of the Properties comply in all material respects with all applicable
codes and zoning laws and regulations; the Company, the Partnership and the Subsidiaries
have no knowledge of any pending or threatened condemnation or zoning change that will in
any material respect affect the size of, use of, improvement of, construction on, or access
to any of the Properties; and the Company, the Partnership and the Subsidiaries have no
knowledge of any pending or threatened proceeding or action that will in any manner
materially affect the size of, use of, improvements or construction on, or access to any of
the Properties.
(28) No Claims. Except as described in the Prospectus, there are no contracts,
agreements or understandings between the Company, the Partnership, any of the Subsidiaries
and any person that would give rise to a valid claim against the Company, the Partnership,
any of the Subsidiaries or Xxxxx Fargo Securities for a brokerage commission, finder’s fee
or other like payment in connection with the offering, issuance and sale of the Securities.
(29) No Conversion into Equity. The mortgages and deeds of trust encumbering
the properties and assets described or referred to in the Prospectus are not convertible
into the equity of the Company or any Subsidiary.
13
(30) Tax Returns. Each of the Company, the Partnership and the Subsidiaries has
filed all federal, state, local and foreign income tax returns which have been required to
be filed and has paid all taxes indicated by said returns and all assessments received by
them to the extent that such taxes have become due. No tax deficiency has been
asserted against the Company, the Partnership or any Subsidiary, nor, does the Company or
the Partnership know of any tax deficiency which is likely to be asserted against the
Company, the Partnership or any Subsidiary; all tax liabilities, if any, are adequately
provided for on the respective books of the entities in all material respects.
(31) Tax Classification of the Partnership. The Partnership has been properly
classified either as a partnership or as an entity disregarded as separate from the Company
for federal tax purposes throughout the period from its formation through the date hereof.
(32) Company Not an “Investment Company”. Neither the Company, the Partnership
or any Subsidiary is and, after giving effect to the offering and sale of the Securities and
the application of the proceeds thereof as described in the Prospectus, will not be an
“investment company” or a company “controlled” by an “investment company” within the meaning
of the Investment Company Act of 1940, as amended.
(33) Insurance. Each of the Company, the Partnership and the Subsidiaries
maintains insurance (issued by insurers of recognized financial responsibility) of the types
and in the amounts generally deemed adequate, if any, for their respective businesses and
consistent with insurance coverage maintained by similar companies in similar businesses,
including, but not limited to, insurance covering real and personal property owned or leased
by the Company, the Partnership and the Subsidiaries against theft, damage, destruction,
acts of vandalism and all other risks customarily insured against, all of which insurance is
in full force and effect.
(34) No Restrictions on Dividends. No Subsidiary of the Company is currently
prohibited, directly or indirectly, from paying any dividends to the Company or the
Partnership, from making any other distribution on such Subsidiary’s capital stock, from
repaying to the Company or the Partnership any loans or advances to such Subsidiary from the
Company or the Partnership or from transferring any of such Subsidiary’s property or assets
to the Company, the Partnership or any other Subsidiary of the Company or the Partnership,
except as described in or contemplated by the Prospectus.
(35) No Price Stabilization or Manipulation. The Company has not taken, nor
will it take, directly or indirectly, any action designed to or that might reasonably be
expected to cause or result in, or which has constituted or which might reasonably be
expected to constitute, the stabilization or manipulation of the price of any security of
the Company, to facilitate the sale or resale of any of the Securities.
(36) Disclosure of Related Party Transactions. No transaction has occurred
between or among the Company, the Partnership or any Subsidiaries, on one hand, and any of
their officers or directors or any affiliate or affiliates of any such officer or
14
director,
on the other hand, that is required to be described in and is not described or incorporated
by reference in the Registration Statement and the Prospectus.
(37) No Related Party Loans. Except as otherwise described in the Prospectus,
there are no material outstanding loans or advances or material guarantees of indebtedness
by the Company, the Partnership or any of the Subsidiaries to or for the benefit of any of
the officers or directors of the Company or any of their family members.
(38) Internal Controls and Procedures. The Company, the Partnership and the
Subsidiaries maintain (i) effective internal control over financial reporting as defined in
Rule 13a-15 under the Exchange Act Regulations, and (ii) a system of internal accounting
controls sufficient to provide reasonable assurance that (A) transactions are executed in
accordance with management’s general or specific authorizations; (B) transactions are
recorded as necessary to permit preparation of financial statements in conformity with GAAP
and to maintain asset accountability; (C) access to assets is permitted only in accordance
with management’s general or specific authorization; and (D) the recorded accountability for
assets is compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.
(39) No Material Weakness in Internal Controls. Except as disclosed in the
Prospectus, or in any document incorporated by reference therein, since the end of the
Company’s most recent audited fiscal year, there has been (i) no material weakness in the
Company’s internal control over financial reporting (whether or not remediated) and (ii) no
change in the Company’s internal control over financial reporting that has materially
affected, or is reasonably likely to materially affect, the Company’s internal control over
financial reporting.
(40) Disclosure Controls. The Company has established and maintains disclosure
controls and procedures (as such term is defined in Rule 13a-15 under the Exchange Act
Regulations), which (i) are designed to ensure that material information relating to the
Company, the Partnership and the Subsidiaries, is made known to the Company’s principal
executive officer and its principal financial officer by others within those entities,
particularly during the periods in which the periodic reports required under the Exchange
Act are being prepared, (ii) have been evaluated for effectiveness as of a date within 90
days prior to the filing of the Company’s most recent annual or quarterly report filed with
the Commission and (iii) are effective in all material respects to perform the functions for
which they were established. Based on the evaluation of the Company’s disclosure controls
and procedures described above, the Company is not aware of (a) any significant deficiency
in the design or operation of internal controls which could adversely affect the Company’s
ability to record, process, summarize and report financial data or any material weaknesses
in internal controls or (b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the Company’s internal controls. Since the
most recent evaluation of the Company’s disclosure controls and procedures described above,
there have been no significant changes in internal controls or in other factors that could
significantly affect internal controls.
15
(41) Maintenance of Title Insurance. Title insurance in favor of the Company,
the Partnership or the Subsidiaries is maintained with respect to each of the properties
owned by them in an amount at least equal to the cost of acquisition of such property,
except, in each case, where the failure to maintain such title insurance is not
reasonably likely to have a Material Adverse Effect.
(42) Condition of the Business. Since the date of the last audited financial
statements included or incorporated by reference in the Registration Statement and the
Prospectus, except as described therein, (i) there has not been any Material Adverse Effect;
(ii) neither the Company, the Partnership nor any of the Subsidiaries has sustained any
material loss or interference with its assets, businesses or properties (whether owned or
leased) from fire, explosion, earthquake, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or any court or legislative or other governmental
action, order or decree; and (iii) neither the Company, the Partnership nor any of the
Subsidiaries has undertaken any liability or obligation, direct or contingent, except such
liabilities or obligations undertaken in the ordinary course of business.
(43) Compliance with Law. The Company, the Partnership and the Subsidiaries
are conducting their respective businesses in material compliance with all applicable laws,
rules and regulations of the jurisdictions in which they are conducting business, including,
without limitation, the Americans with Disabilities Act of 1990 and all applicable local,
state and federal employment, truth-in-advertising, franchising and immigration laws and
regulations, except where the failure to be so in compliance would not have a Material
Adverse Effect.
(44) No Conflict with Money Laundering Laws. The operations of each of the
Company, the Partnership and the Subsidiaries are and have been conducted at all times in
compliance with applicable financial recordkeeping and reporting requirements of the
Currency and Foreign Transactions Reporting Act of 1970, as amended, the money laundering
statutes of all applicable jurisdictions, the rules and regulations thereunder and any
related or similar rules, regulations or guidelines issued, administered or enforced by any
governmental agency (collectively, the “Money Laundering Laws”) and no action, suit
or proceeding by or before any court or governmental agency, authority or body or any
arbitrator involving any of the Company, the Partnership and the Subsidiaries with respect
to the Money Laundering Laws is pending or, to the best knowledge of the Company,
threatened.
(45) No Unlawful Contributions or Other Payments. None of the Company, the
Partnership or the Subsidiaries nor, to the knowledge of the Company, any director, officer,
agent, employee or affiliate of any of the Company, the Partnership or the Subsidiaries has
taken any action, directly or indirectly, that would result in a violation by such persons
of the FCPA, including, without limitation, making use of the mails or any means or
instrumentality of interstate commerce corruptly in furtherance of an offer, payment,
promise to pay or authorization of the payment of any money, or other property, gift,
promise to give, or authorization of the giving of anything of value to any “foreign
official” (as such term is defined in the FCPA) or any foreign political party or official
thereof or any candidate for foreign political office, in contravention of the
16
FCPA, and
each of the Company, the Partnership and the Subsidiaries, and to the knowledge of the
Company, their affiliates have conducted their businesses in compliance with the FCPA and
have instituted and maintain policies and procedures
designed to ensure, and which are reasonably expected to continue to ensure, continued
compliance therewith.
“FCPA” means the Foreign Corrupt Practices Act of 1977, as amended, and the
rules and regulations thereunder.
(46) No Conflict with OFAC Laws. None of the Company, the Partnership or the
Subsidiaries nor, to the knowledge of the Company, any director, officer, agent, employee or
affiliate of any of the Company, the Partnership or the Subsidiaries is currently subject to
any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury
Department (“OFAC”); and none of the Company, the Partnership or the Subsidiaries
will directly or indirectly use the proceeds of the offering, or lend, contribute or
otherwise make available such proceeds, to any subsidiary, joint venture partner or other
person or entity, for the purpose of financing the activities of any person currently
subject to any U.S. sanctions administered by OFAC.
(47) REIT Qualification. Commencing with its taxable year ended December 31,
1997, the Company has continuously been organized and operating in conformity with the
requirements for qualification as a “real estate investment trust” under the Internal
Revenue Code of 1986, as amended (the “Code”). The Company’s current and proposed
organization and method of operation will permit it to meet and to continue to meet the
requirements for taxation as a “real estate investment trust” under the Code for its current
taxable year and thereafter. The Company has no intention of changing its operations or
engaging in activities which would cause it to fail to qualify, or make economically
undesirable its continued qualification as, a real estate investment trust.
(48) No Applicable Registration or Other Similar Rights. There are no persons
with registration or other similar rights to have any equity or debt securities registered
for sale under the Registration Statement or included in the offering contemplated by this
Agreement, nor does any person have preemptive rights, co-sale rights, rights of first
refusal or other rights to purchase any of the Shares, except in each case for such rights
as have been duly waived.
(49) Company Not a Broker or Dealer. None of the Company, the Partnership or
any of the Subsidiaries, and if operated in the manner described in the Prospectus, as
amended or supplemented, none will be, a “broker” within the meaning of Section 3(a)(4) of
the Exchange Act or a “dealer” within the meaning of Section 3(a)(5) of the Exchange Act or
required to be registered pursuant to Section 15(a) of the Exchange Act.
(50) Environmental Matters. Except as otherwise described in the Prospectus,
neither the Company, the Partnership nor any Subsidiary has authorized or conducted or has
knowledge of the generation, transportation, storage, presence, use, treatment, disposal,
release, or other handling of any hazardous substance, hazardous waste, hazardous material,
hazardous constituent, toxic substance, pollutant, contaminant,
17
asbestos, radon,
polychlorinated biphenyls (“PCBs”), petroleum product or waste (including crude oil
or any fraction hereof, natural gas, liquefied gas, synthetic gas or other material defined,
regulated, controlled or potentially subject to any remediation
requirement under any environmental law (collectively, “Hazardous Materials”),
on, in, under or affecting any of the Company’s properties, except in material compliance
with applicable laws; except as disclosed in the Prospectus, the Company’s properties are in
material compliance with all federal, state and local laws, ordinances, rules, regulations
and other governmental requirements relating to pollution, control of chemicals, management
of waste, (collectively, “Environmental Laws”), and the Company, the Partnership and
the Subsidiaries are in compliance with all licenses, permits, registrations and government
authorizations necessary to operate under all applicable Environmental Laws in all material
respects; except as otherwise described in the Prospectus, neither the Company, the
Partnership or any Subsidiary has received any written or oral notice from any governmental
entity or any other person and there is no pending, or, to the knowledge of the Company,
threatened claim, litigation or any administrative agency proceeding that: alleges a
violation of any Environmental Laws by the Company, the Partnership or any Subsidiary; or
that the Company, the Partnership or any Subsidiary is a liable party or a potentially
responsible party under the Comprehensive Environmental Response, Compensation and Liability
Act, 42 U.S.C. § 9601, et. seq., or any state superfund law; has resulted in or could result
in the attachment of an environmental lien on any of the properties; or alleges that the
Company, the Partnership or any Subsidiary is liable for any contamination of the
environment, contamination of the property, damage to natural resources, property damage, or
personal injury based on their activities or the activities of their predecessors or third
parties (whether at the properties or elsewhere) involving Hazardous Materials, whether
arising under the Environmental Laws, common law principles, or other legal standards. In
the ordinary course of its business, the Company, the Partnership and the Subsidiaries
conduct Phase I environmental assessments on each of their properties at the time such
property is acquired and periodic reviews of the effect of Environmental Laws on the
business, operations and properties of the Company, the Partnership and the Subsidiaries.
None of the entities which prepared appraisals of the properties or Phase I environmental
assessment reports with respect to such properties was employed for such purpose on a
contingent basis or has any substantial interest in the Company, the Partnership or any
Subsidiary, and none of their directors, officers or employees is connected with the
Company, the Partnership or any Subsidiary as a promoter, selling agent, director, officer
or employee.
(51)
ERISA Compliance. None of the following events has occurred or exists:
(i) a failure to fulfill the obligations, if any, under the minimum funding standards of
Xxxxxxx 000 xx xxx Xxxxxx Xxxxxx Employee Retirement Income Security Act of 1974, as amended
(“ERISA”), and the regulations and published interpretations thereunder with respect
to a Plan, determined without regard to any waiver of such obligations or extension of any
amortization period; (ii) an audit or investigation by the Internal Revenue Service, the
U.S. Department of Labor, the Pension Benefit Guaranty Corporation or any other federal or
state governmental agency or any foreign regulatory agency with respect to the employment or
compensation of employees by any member of the Company that could have a material adverse
effect on the Company; (iii) any breach of any contractual obligation, or any violation of
law or applicable qualification
18
standards, with respect to the employment or compensation of
employees by any member of the Company that could have a Material Adverse Effect. None of
the following events has occurred or is reasonably likely to occur: (i) a material increase
in the aggregate
amount of contributions required to be made to all Plans in the current fiscal year of
the Company compared to the amount of such contributions made in the Company’s most recently
completed fiscal year; (ii) a material increase in the Company’s “accumulated
post-retirement benefit obligations” (within the meaning of Statement of Financial
Accounting Standards 106) compared to the amount of such obligations in the Company’s most
recently completed fiscal year; (iii) any event or condition giving rise to a liability
under Title IV of ERISA that could have a Material Adverse Effect; or (iv) the filing of a
claim by one or more employees or former employees of the Company related to their
employment that could have a Material Adverse Effect. For purposes of this paragraph, the
term “Plan” means a plan (within the meaning of Section 3(3) of ERISA) subject to Title IV
of ERISA with respect to which any member of the Company may have any liability.
(52) Brokers. Except as otherwise disclosed in the Prospectus, 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.
(53) No Outstanding Loans or Other Indebtedness. There are no outstanding
loans, advances (except normal advances for business expenses in the ordinary course of
business) or guarantees or indebtedness by the Company to or for the benefit of any of the
officers or directors of the Company or any of the members of any of them, except as
disclosed in the Prospectus.
(54) Xxxxxxxx-Xxxxx Compliance. Other than late Section 16 filings, there is
and has been no failure on the part of the Company and any of the Company’s directors or
officers, in their capacities as such, to comply with any provision of the Xxxxxxxx-Xxxxx
Act of 2002 and the rules and regulations promulgated in connection therewith (the
“Xxxxxxxx-Xxxxx Act”), including Section 402 related to loans and Sections 302 and
906 related to certifications.
(55) Lending Relationship. Except as disclosed in the Prospectus, neither of
the Company or the Partnership (i) has any material lending or other relationship with any
bank or lending affiliate of Xxxxx Fargo Securities and (ii) intend to use any of the
proceeds from the sale of the Securities hereunder to repay any outstanding debt owed to any
affiliate of Xxxxx Fargo Securities.
(56) Statistical and Market Related Data. Nothing has come to the attention of
the Company, or the Partnership that has caused the Company or the Partnership to believe
that the statistical and market-related data included in the Prospectus is not based on or
derived from sources that are reliable and accurate in all material respects.
(57) Compliance with Florida Law. Each of the Company, the Partnership and the
Subsidiaries has complied and will comply with all the provisions of Florida Statutes,
19
Section 517.075 (Chapter 92-198, Laws of Florida); and none of the Company, the Partnership
and the Subsidiaries nor any of their subsidiaries or affiliates does business with the
government of Cuba or with any person or affiliate located in Cuba.
(58) NYSE Compliance. The Company is in compliance with the rules and
regulations of the NYSE, including without limitation, the requirements for continued
listing of the Common Stock on the NYSE, and there are no actions, suits or proceedings
pending, threatened or, to the Company’s knowledge, contemplated, and the Company has not
received any notice from the NYSE, regarding the revocation of such or otherwise regarding
the delisting of the Common Stock from the NYSE.
(59) Proprietary Trading by Xxxxx Fargo Securities. The Company acknowledges
and agrees that Xxxxx Fargo Securities has informed the Company that Xxxxx Fargo Securities
may, to the extent permitted under the Securities Act and the Exchange Act, purchase and
sell shares of Common Stock for its own account while this Agreement is in effect, and shall
be under no obligation to purchase Securities on a principal basis pursuant to this
Agreement, except as otherwise agreed by Xxxxx Fargo Securities in the Placement Notice (as
amended by the corresponding Acceptance, if applicable); provided, that no such purchase or
sales shall take place while a Placement Notice is in effect (except (i) as agreed by Xxxxx
Fargo Securities in the Placement Notice (as amended by the corresponding Acceptance, if
applicable) or (ii) to the extent Xxxxx Fargo Securities may engage in sales of Placement
Securities purchased or deemed purchased from the Company as a “riskless principal” or in a
similar capacity).
(60) FINRA Matters. All of the information provided to Xxxxx Fargo Securities
or to counsel for Xxxxx Fargo Securities by the Company and, to the knowledge of the
Company, its officers and directors and the holders of any securities of the Company in
connection with letters, filings or other supplemental information provided to the FINRA
pursuant to FINRA Conduct Rule 5510 or NASD Conduct Rule 2720 is true, complete and correct.
(61) No Prohibition on Dividends by Subsidiaries. Except as described in the
Prospectus, no subsidiary of the Company is prohibited, directly or indirectly, from paying
any dividends or making any other distributions on such subsidiary’s capital stock, from
repaying any debt owed to the Company or any of its other subsidiaries, or from transferring
any of its property or assets to the Company or any of its other subsidiaries.
(b) Certificates. Any certificate signed by any officer of the Company or the Partnership and
delivered to Xxxxx Fargo Securities or to counsel for Xxxxx Fargo Securities shall be deemed a
representation and warranty by the Company and the Partnership, as the case may be, to Xxxxx Fargo
Securities as to the matters covered thereby.
SECTION 6. Sale and Delivery to Xxxxx Fargo Securities; Settlement.
(a) Sale of Placement Securities. On the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, upon Xxxxx Fargo
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Securities’
acceptance of the terms of a Placement Notice or upon receipt by Xxxxx Fargo Securities of an
Acceptance, as the case may be, and unless the sale of the Placement Securities described therein
has been declined, suspended, or otherwise terminated in accordance with the terms of this
Agreement, Xxxxx Fargo Securities, for the period specified in the Placement
Notice, will use its commercially reasonable efforts consistent with its normal trading and
sales practices to sell such Placement Securities up to the amount specified, and otherwise in
accordance with the terms of such Placement Notice. The Company acknowledges and agrees that (i)
there can be no assurance that Xxxxx Fargo Securities will be successful in selling Placement
Securities, (ii) Xxxxx Fargo Securities will incur no liability or obligation to the Company or any
other person or entity if it does not sell Placement Securities for any reason other than a failure
by Xxxxx Fargo Securities to use its commercially reasonable efforts consistent with its normal
trading and sales practices to sell such Placement Securities as required under this Agreement and
(iii) Xxxxx Fargo Securities shall be under no obligation to purchase Securities on a principal
basis pursuant to this Agreement, except as otherwise agreed by Xxxxx Fargo Securities in the
Placement Notice (as amended by the corresponding Acceptance, if applicable).
(b) Settlement of Placement Securities. Unless otherwise specified in the applicable
Placement Notice, settlement for sales of Placement Securities will occur on the third
(3rd) Trading Day (or such earlier day as is industry practice for regular-way trading)
following the date on which such sales are made (each, a “Settlement Date”). The amount of
proceeds to be delivered to the Company on a Settlement Date against receipt of the Placement
Securities sold (the “Net Proceeds”) will be equal to the aggregate sales price received by
Xxxxx Fargo Securities at which such Placement Securities were sold, after deduction for (i) Xxxxx
Fargo Securities’ commission, discount or other compensation for such sales payable by the Company
pursuant to Section 2 hereof, (ii) any other amounts due and payable by the Company to Xxxxx Fargo
Securities hereunder pursuant to Section 8(a) hereof, and (iii) any transaction fees imposed by any
governmental or self-regulatory organization in respect of such sales.
(c) Delivery of Placement Securities. On or before each Settlement Date, the Company will, or
will cause its transfer agent to, electronically transfer the Placement Securities being sold by
crediting Xxxxx Fargo Securities’ or its designee’s account (provided Xxxxx Fargo Securities shall
have given the Company written notice of such designee prior to the Settlement Date) at The
Depository Trust Company through its Deposit and Withdrawal at Custodian System or by such other
means of delivery as may be mutually agreed upon by the parties hereto which in all cases shall be
freely tradable, transferable, registered shares in good deliverable form. On each Settlement
Date, Xxxxx Fargo Securities will deliver the related Net Proceeds in same day funds to an account
designated by the Company on, or prior to, the Settlement Date. The Company agrees that if the
Company, or its transfer agent (if applicable), defaults in its obligation to deliver Placement
Securities on a Settlement Date, the Company agrees that in addition to and in no way limiting the
rights and obligations set forth in Section 10(a) hereto, it will (i) hold Xxxxx Fargo Securities
harmless against any loss, claim, damage, or expense (including legal fees and expenses), as
incurred, arising out of or in connection with such default by the Company and (ii) pay to Xxxxx
Fargo Securities any commission, discount, or other compensation to which it would otherwise have
been entitled absent such default.
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(d) Denominations; Registration. Certificates for the Securities, if any, shall be in such
denominations and registered in such names as Xxxxx Fargo Securities may request in writing at
least one full business day before the Settlement Date. The certificates for the Securities, if
any, will be made available for examination and packaging by Xxxxx Fargo Securities in the City of
New York not later than noon (New York City time) on the business day prior to the Settlement Date.
(e) Under no circumstances shall the Company cause or request the offer or sale of any
Securities if, after giving effect to the sale of such Securities, the aggregate gross sales
proceeds sold pursuant to this Agreement would exceed the lesser of (A) together with all sales of
Securities under this Agreement and the Alternative Distribution Agreements, the Maximum Amount,
(B) the amount available for offer and sale under the currently effective Registration Statement
and (C) the amount authorized from time to time to be issued and sold under this Agreement by the
Company’s board of directors, a duly authorized committee thereof or a duly authorized executive
committee, and notified to Xxxxx Fargo Securities in writing. Under no circumstances shall the
Company cause or request the offer or sale of any Securities at a price lower than the minimum
price authorized from time to time by the Company’s board of directors, duly authorized committee
thereof or a duly authorized executive committee, and notified to Xxxxx Fargo Securities in
writing. Further, under no circumstances shall the aggregate offering amount of Securities sold
pursuant to this Agreement and the Alternative Distribution Agreements, including any separate
underwriting or similar agreement covering principal transactions described in Section 1 of this
Agreement and the Alternative Distribution Agreements, exceed the Maximum Amount.
(f) The Company agrees that any offer to sell, any solicitation of an offer to buy, or any
sales of Securities shall only be effected by or through only one of Xxxxx Fargo Securities or the
Alternative Managers on any single given day, but in no event by more than one, and the Company
shall in no event request that Xxxxx Fargo Securities and any of the Alternative Managers sell
Securities on the same day; provided, however, that (a) the foregoing limitation shall not apply to
(i) exercise of any option, warrant, right or any conversion privilege set forth in the instrument
governing such security or (ii) sales solely to employees or security holders of the Company or its
Subsidiaries, or to a trustee or other person acquiring such securities for the accounts of such
persons, and (b) such limitation shall not apply on any day during which no sales are made pursuant
to this Agreement.
SECTION 7. Covenants of the Company and the Partnership. The Company and the
Partnership jointly and severally covenant and agree with Xxxxx Fargo Securities as follows:
(a) Registration Statement Amendments; Payment of Fees. After the date of this Agreement and
during any period in which a Prospectus relating to any Placement Securities is required to be
delivered by Xxxxx Fargo Securities under the Securities Act (including in circumstances where such
requirement may be satisfied pursuant to Rule 172 under the Securities Act Regulations), (i) the
Company will notify Xxxxx Fargo Securities promptly of the time when any subsequent amendment to
the Registration Statement, other than documents incorporated by reference, has been filed with the
Commission and/or has become effective or any subsequent supplement to the Prospectus has been
filed and of any comment letter from the Commission or any request by the Commission for any
amendment or supplement to the
22
Registration Statement or Prospectus or for additional information; (ii) the Company will
prepare and file with the Commission, promptly upon Xxxxx Fargo Securities’ request, any amendments
or supplements to the Registration Statement or Prospectus that, in Xxxxx Fargo Securities’
reasonable opinion, may be necessary or advisable in connection with the distribution of the
Placement Securities by Xxxxx Fargo Securities (provided, however, that the failure of Xxxxx Fargo
Securities to make such request shall not relieve the Company of any obligation or liability
hereunder, or affect Xxxxx Fargo Securities’ right to rely on the representations and warranties
made by the Company or the Partnership in this Agreement); (iii) the Company will not file any
amendment or supplement to the Registration Statement or Prospectus, other than documents
incorporated by reference, relating to the Placement Securities or a security convertible into the
Placement Securities unless a copy thereof has been submitted to Xxxxx Fargo Securities within a
reasonable period of time before the filing and Xxxxx Fargo Securities has not reasonably objected
thereto (provided, however, that the failure of Xxxxx Fargo Securities to make such objection shall
not relieve the Company of any obligation or liability hereunder, or affect Xxxxx Fargo Securities’
right to rely on the representations and warranties made by the Company in this Agreement) and the
Company will furnish to Xxxxx Fargo Securities at the time of filing thereof a copy of any document
that upon filing is deemed to be incorporated by reference into the Registration Statement or
Prospectus, except for those documents available via XXXXX; and (iv) the Company will cause each
amendment or supplement to the Prospectus, other than documents incorporated by reference, to be
filed with the Commission as required pursuant to the applicable paragraph of Rule 424(b) of the
Securities Act Regulations (without reliance on Rule 424(b)(8) of the Securities Act Regulations).
(b) Notice of Commission Stop Orders. The Company will advise Xxxxx Fargo Securities,
promptly after it receives notice or obtains knowledge thereof, of the issuance or threatened
issuance by the Commission of any stop order suspending the effectiveness of the Registration
Statement or of any other order preventing or suspending the use of the Prospectus or any Issuer
Free Writing Prospectus, or of the suspension of the qualification of the Placement Securities for
offering or sale in any jurisdiction or of the loss or suspension of any exemption from any such
qualification, or of the initiation or threatening of any proceedings for any of such purposes, or
of any examination pursuant to Section 8(e) of the Securities Act concerning the Registration
Statement or if the Company becomes the subject of a proceeding under Section 8A of the Securities
Act in connection with the offering of the Securities. The Company will make every reasonable
effort to prevent the issuance of any stop order, the suspension of any qualification of the
Securities for offering or sale and any loss or suspension of any exemption from any such
qualification, and if any such stop order is issued or any such suspension or loss occurs, to
obtain the lifting thereof at the earliest possible moment.
(c) Delivery of Registration Statement and Prospectus. The Company will furnish to Xxxxx
Fargo Securities and its counsel (at the expense of the Company) copies of the Registration
Statement, the Prospectus (including all documents incorporated by reference therein) and all
amendments and supplements to the Registration Statement or Prospectus, and any Issuer Free Writing
Prospectuses, that are filed with the Commission during any period in which a Prospectus relating
to the Placement Securities is required to be delivered under the Securities Act (including all
documents filed with the Commission during such period that are deemed to be incorporated by
reference therein), in each case as soon as reasonably practicable and in such quantities and at
such locations as Xxxxx Fargo Securities may from time to time
23
reasonably request. The copies of the Registration Statement and the Prospectus and any
supplements or amendments thereto furnished to Xxxxx Fargo Securities will be identical to the
electronically transmitted copies thereof filed with the Commission pursuant to XXXXX, except to
the extent permitted by Regulation S-T.
(d) Continued Compliance with Securities Laws. If at any time when a Prospectus is required
by the Securities Act or the Exchange Act to be delivered in connection with a pending sale of the
Placement Securities (including, without limitation, pursuant to Rule 172), any event shall occur
or condition shall exist as a result of which it is necessary, in the opinion of counsel for Xxxxx
Fargo Securities or for the Company, to amend the Registration Statement or amend or supplement the
Prospectus in order that the Prospectus will not include any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements therein not misleading in
the light of the circumstances existing at the time it is delivered to a purchaser, or if it shall
be necessary, in the opinion of such counsel, at any such time to amend the Registration Statement
or amend or supplement the Prospectus in order to comply with the requirements of the Securities
Act, the Company will promptly notify Xxxxx Fargo Securities to suspend the offering of Placement
Securities during such period and the Company will promptly prepare and file with the Commission
such amendment or supplement as may be necessary to correct such statement or omission or to make
the Registration Statement or the Prospectus comply with such requirements, and the Company will
furnish to Xxxxx Fargo Securities such number of copies of such amendment or supplement as Xxxxx
Fargo Securities may reasonably request. If at any time following issuance of an Issuer Free
Writing Prospectus there occurred or occurs an event or development as a result of which such
Issuer Free Writing Prospectus conflicted, conflicts or would conflict with the information
contained in the Registration Statement or the Prospectus or included, includes or would include an
untrue statement of a material fact or omitted, omits or would omit to state a material fact
necessary in order to make the statements therein, in the light of the circumstances, prevailing at
that subsequent time, not misleading, the Company will promptly notify Xxxxx Fargo Securities to
suspend the offering of Placement Securities during such period and the Company will, subject to
Section 7(a) hereof, promptly amend or supplement such Issuer Free Writing Prospectus to eliminate
or correct such conflict, untrue statement or omission.
(e) Blue Sky and Other Qualifications. The Company will use its best efforts, in cooperation
with Xxxxx Fargo Securities, to qualify the Placement Securities for offering and sale, or to
obtain an exemption for the Securities to be offered and sold, under the applicable securities laws
of such states and other jurisdictions (domestic or foreign) as Xxxxx Fargo Securities may
designate and to maintain such qualifications and exemptions in effect for so long as required for
the distribution of the Securities (but in no event for less than one year from the date of this
Agreement); provided, however, that the Company shall not be obligated to file any general consent
to service of process or to qualify as a foreign corporation or as a dealer in securities in any
jurisdiction in which it is not so qualified or to subject itself to taxation in respect of doing
business in any jurisdiction in which it is not otherwise so subject. In each jurisdiction in
which the Placement Securities have been so qualified or exempt, the Company will file such
statements and reports as may be required by the laws of such jurisdiction to continue such
qualification or exemption, as the case may be, in effect for so long as required for the
distribution of the Placement Securities (but in no event for less than one year from the date of
this Agreement).
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(f) Rule 158. The Company will timely file such reports pursuant to the Exchange Act as are
necessary in order to make generally available to its securityholders as soon as practicable an
earnings statement that will satisfy the provisions of Section 11(a) of the Securities Act and Rule
158 under the Securities Act Regulations.
(g) Use of Proceeds. The Company will use the net proceeds received by it from the sale of
the Securities in the manner specified in the Prospectus under “Use of Proceeds.”
(h) Listing. During any period in which the Prospectus relating to the Placement Securities
is required to be delivered by Xxxxx Fargo Securities under the Securities Act with respect to a
pending sale of the Placement Securities (including in circumstances where such requirement may be
satisfied pursuant to Rule 172 under the Securities Act), the Company will use its commercially
reasonable efforts to cause the Placement Securities to be listed on the NYSE.
(i) Filings with the NYSE. The Company will timely file with the NYSE all material documents
and notices required by the NYSE of companies that have or will issue securities that are traded on
the NYSE.
(j) Reporting Requirements. The Company, during any period when the Prospectus is required to
be delivered under the Securities Act and the Exchange Act (including in circumstances where such
requirement may be satisfied pursuant to Rule 172 under the Securities Act Regulations), will (1)
comply with all provisions of the Securities Act and Securities Act Regulations and the Exchange
Act and Exchange Act Regulations and (2) 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
Exchange Act Regulations.
(k) Notice of Other Sales. During the pendency of any Placement Notice given hereunder, the
Company shall provide Xxxxx Fargo Securities notice as promptly as reasonably possible before it
offers to sell, contracts to sell, sells, grants any option to sell or otherwise disposes of any
shares of Common Stock (other than Placement Securities offered pursuant to the provisions of this
Agreement or the Alternative Distribution Agreements) or securities convertible into or
exchangeable for Common Stock, warrants or any rights to purchase or acquire Common Stock;
provided, that such notice shall not be required in connection with the (i) issuance, grant or sale
of Common Stock, options to purchase Common Stock or Common Stock issuable upon the exercise of
options or other equity awards pursuant to any stock option, stock bonus or other stock or
compensatory plan or arrangement described in the Prospectus or (ii) the issuance or sale of Common
Stock pursuant to any dividend reinvestment plan that the Company may adopt from time to time,
provided the implementation of such plan is disclosed to Xxxxx Fargo Securities in advance.
(l) Change of Circumstances. The Company will, at any time during a fiscal quarter in which
the Company intends to tender a Placement Notice or sell Placement Securities, advise Xxxxx Fargo
Securities promptly after it shall have received notice or obtained knowledge thereof, of any
information or fact that would alter or affect in any material respect any opinion, certificate,
letter or other document provided to Xxxxx Fargo Securities pursuant to this Agreement.
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(m) Due Diligence Cooperation. The Company will cooperate with any reasonable due diligence
review conducted by Xxxxx Fargo Securities or its agents in connection with the transactions
contemplated hereby, including, without limitation, providing information and making available
documents and senior officers, during regular business hours and at the Company’s principal
offices, as Xxxxx Fargo Securities may reasonably request.
(n) Disclosure of Sales. The Company will disclose in its quarterly reports on Form 10-Q and
in its annual report on Form 10-K the number of Placement Securities sold through Xxxxx Fargo
Securities, the Net Proceeds to the Company and the compensation payable by the Company to Xxxxx
Fargo Securities during the relevant quarter.
(o) Representation Dates; Certificate. On or prior to the date that the first Securities are
sold pursuant to the terms of this Agreement, each time the Securities are delivered to Xxxxx Fargo
Securities as principal on a Settlement Date and (1) each time the Company:
(i) files the Prospectus relating to the Securities or amends or supplements (other
than a prospectus supplement relating solely to an offering of securities other than the
Securities) the Registration Statement or the Prospectus relating to the Securities by means
of a post-effective amendment, sticker, or supplement but not by means of incorporation of
documents by reference into the Registration Statement or the Prospectus relating to the
Securities;
(ii) files an annual report on Form 10-K under the Exchange Act;
(iii) files its quarterly reports on Form 10-Q under the Exchange Act; or
(iv) files a report on Form 8-K containing amended financial information (other than an
earnings release, to “furnish” information pursuant to Items 2.02 or 7.01 of Form 8-K or to
provide disclosure pursuant to Item 8.01 of Form 8-K relating to the reclassifications of
certain properties as discontinued operations in accordance with Statement of Financial
Accounting Standards No. 144) under the Exchange Act, or
(2) at any other time reasonably requested by Xxxxx Fargo Securities (each date of filing of
one or more of the documents referred to in clauses (1) and any time of request pursuant to
clause (2) shall be a “Representation Date”);
each of the Company and the Partnership shall furnish Xxxxx Fargo Securities with a
certificate, in the form attached hereto as Exhibit F-1 and Exhibit F-2,
respectively, within three (3) Trading Days of any Representation Date. The requirement to provide
a certificate under this Section 7(o) shall be waived for any Representation Date occurring at a
time at which no Placement Notice is pending, which waiver shall continue until the earlier to
occur of the date the Company delivers a Placement Notice hereunder (which for such calendar
quarter shall be considered a Representation Date) and the next occurring Representation Date;
provided, however, that such waiver shall not apply for any Representation Date on which the
Company files its annual report on Form 10-K. Notwithstanding the foregoing, if the Company
subsequently decides to sell Placement Securities following a Representation Date when the Company
relied on such waiver and did not provide Xxxxx Fargo Securities with a certificate under this
Section 7(o), then before the Company delivers the Placement Notice or Xxxxx Fargo
26
Securities sells any Placement Securities, the Company and the Partnership shall provide Xxxxx
Fargo Securities with a certificate, in the form attached hereto as Exhibit F-1 and
Exhibit F-2, respectively, dated the date of the Placement Notice (each, a “Catch-up
Date”).
(p) Legal Opinions.
(1) On or prior to the date that the first Securities are sold pursuant to the terms of
this Agreement, each time the Securities are delivered to Xxxxx Fargo Securities as
principal on a Settlement Date, within three (3) Trading Days of each Representation Date
with respect to which the Company is obligated to deliver a certificate in the form attached
hereto as Exhibit F-1 and Exhibit F-2 for which no waiver is applicable and
on each Catch-up Date, the Company shall cause to be furnished to Xxxxx Fargo Securities a
written opinion of (1) Xxxxxxx Xxxxxxxxxxx & Mugel, LLP, counsel for the Company and (2) DLA
Piper LLP (US), special Maryland counsel to the Company (collectively, “Company
Counsel”), or other counsel satisfactory to Xxxxx Fargo Securities, in form and
substance satisfactory to Xxxxx Fargo Securities and its counsel, dated the date that the
opinion is required to be delivered, substantially similar to the forms attached hereto as
Exhibit E-1 and Exhibit E-2, with respect to Xxxxxxx Xxxxxxxxxxx & Mugel,
LLP and Exhibit E-3, with respect to the opinion of DLA Piper LLP (US), modified, as
necessary, to relate to the Registration Statement and the Prospectus as then amended or
supplemented; provided, however, that in lieu of such opinions for subsequent Representation
Dates, any such counsel may furnish Xxxxx Fargo Securities with a letter (a “Reliance
Letter”) to the effect that Xxxxx Fargo Securities may rely on a prior opinion delivered
under this Section 7(p) to the same extent as if it were dated the date of such letter
(except that statements in such prior opinion shall be deemed to relate to the Registration
Statement and the Prospectus as amended or supplemented at such Representation Date).
(2) On or prior to the date that the first Securities are sold pursuant to the terms of
this Agreement, each time the Securities are delivered to Xxxxx Fargo Securities as
principal on a Settlement Date, within three (3) Trading Days of each Representation Date
with respect to which the Company is obligated to deliver a certificate in the form attached
hereto as Exhibit F-1 and Exhibit F-2 for which no waiver is applicable and
on each Catch-up Date, Xxxxx Fargo Securities shall have received the opinion of Hunton &
Xxxxxxxx LLP, counsel to Xxxxx Fargo Securities (“Agent Counsel”), dated as of such
date, in customary form and substance satisfactory to Xxxxx Fargo Securities.
(q) Comfort Letter. On or prior to the date that the first Securities are sold pursuant to
the terms of this Agreement, each time the Securities are delivered to Xxxxx Fargo Securities as
principal on a Settlement Date, within three (3) Trading Days of each Representation Date with
respect to which each of the Company and the Partnership is obligated to deliver a certificate in
the form attached hereto as Exhibit F-1 and Exhibit F-2, respectively, for which no
waiver is applicable and on each Catch-up Date, the Company shall cause its independent accountants
(and any other independent accountants whose report is included in the Registration Statement or
the Prospectus) to furnish the Managers letters (the “Comfort Letters”), dated the date the
Comfort Letter is delivered, in form and substance satisfactory to the Managers, (i) confirming
that they are an independent registered public accounting firm within the meaning of
27
the Securities Act, the Exchange Act and the PCAOB, (ii) stating, as of such date, the
conclusions and findings of such firm with respect to the financial information and other matters
ordinarily covered by accountants’ “comfort letters” to underwriters in connection with registered
public offerings (the first such letter, the “Initial Comfort Letter”) and (iii) updating
the Initial Comfort Letter with any information that would have been included in the Initial
Comfort Letter had it been given on such date and modified as necessary to relate to the
Registration Statement and the Prospectus, as amended and supplemented to the date of such letter.
(r) Market Activities. Neither the Company nor the Partnership will, directly or indirectly,
(i) take any action designed to cause or result in, or that constitutes or might reasonably be
expected to constitute, the stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities or (ii) sell, bid for, or purchase the
Securities to be issued and sold pursuant to this Agreement, or pay anyone any compensation for
soliciting purchases of the Securities to be issued and sold pursuant to this Agreement other than
Xxxxx Fargo Securities; provided, however, that the Company may bid for and purchase its Common
Stock in accordance with Rule 10b-18 under the Exchange Act.
(s) Insurance. The Company and its subsidiaries shall maintain, or caused to be maintained,
insurance in such amounts and covering such risks as is reasonable and customary for companies
engaged in similar businesses in similar industries.
(t) Compliance with Laws. The Company and each of its subsidiaries shall maintain, or cause
to be maintained, all material environmental permits, licenses and other authorizations required by
federal, state and local law in order to conduct their businesses as described in the Prospectus,
and the Company and each of its subsidiaries shall conduct their businesses, or cause their
businesses to be conducted, in substantial compliance with such permits, licenses and
authorizations and with applicable environmental laws, except where the failure to maintain or be
in compliance with such permits, licenses and authorizations could not reasonably be expected to
have a Material Adverse Effect.
(u) Investment Company Act. The Company will conduct its affairs in such a manner so as to
reasonably ensure that neither it nor its subsidiaries will be or become, at any time prior to the
termination of this Agreement, an “investment company,” as such term is defined in the Investment
Company Act, assuming no change in the Commission’s current interpretation as to entities that are
not considered an investment company.
(v) Securities Act and Exchange Act. The Company will use its best efforts to comply with all
requirements imposed upon it by the Securities Act and the Exchange Act as from time to time in
force, so far as necessary to permit the continuance of sales of, or dealings in, the Placement
Securities as contemplated by the provisions hereof and the Prospectus.
(w) No Offer to Sell. Other than a free writing prospectus (as defined in Rule 405 under the
Securities Act Regulations) approved in advance in writing by the Company and Xxxxx Fargo
Securities in its capacity as principal or agent hereunder, the Company (including its agents and
representatives, other than Xxxxx Fargo Securities in its capacity as such) will not, directly or
indirectly, make, use, prepare, authorize, approve or refer to any free writing
28
prospectus relating to the Securities to be sold by Xxxxx Fargo Securities as principal or
agent hereunder.
(x) Xxxxxxxx-Xxxxx Act. The Company and its subsidiaries will use their best efforts to
comply with all effective applicable provisions of the Xxxxxxxx-Xxxxx Act of 2002.
(y) Regulation M. If the Company has reason to believe that the exemptive provisions set
forth in Rule 101(c)(1) of Regulation M under the Exchange Act are not satisfied with respect to
the Company or the Common Stock, it shall promptly notify Xxxxx Fargo Securities and sales of the
Placement Securities under this Agreement shall be suspended until that or other exemptive
provisions have been satisfied in the judgment of each party.
(z) REIT Qualification. The Company will use its best efforts to continue to meet the
requirements for qualification and taxation as a REIT under the Code, subject to any future
determination by the Company’s board of directors that it is no longer in the Company’s best
interests to qualify as a REIT.
SECTION 8. Payment of Expenses.
(a) Expenses. The Company will pay all expenses incident to the performance of its
obligations under this Agreement, including (i) the preparation, printing and filing of the
Registration Statement (including financial statements and exhibits) as originally filed and of
each amendment and supplement thereto, (ii) the word processing, printing and delivery to Xxxxx
Fargo Securities of this Agreement and such other documents as may be required in connection with
the offering, purchase, sale, issuance or delivery of the Placement Securities, (iii) the
preparation, issuance and delivery of the certificates for the Placement Securities to Xxxxx Fargo
Securities, including any stock or other transfer taxes and any capital duties, stamp duties or
other duties or taxes payable upon the sale, issuance or delivery of the Placement Securities to
Xxxxx Fargo Securities, (iv) the fees and disbursements of the counsel, accountants and other
advisors to the Company, (v) the qualification or exemption of the Placement Securities under
securities laws in accordance with the provisions of Section 7(e) hereof, including filing fees and
the reasonable fees and disbursements of counsel for Xxxxx Fargo Securities in connection therewith
and in connection with the preparation of the Blue Sky Survey and any supplements thereto, (vi) the
printing and delivery to Xxxxx Fargo Securities of copies of any Permitted Free Writing Prospectus
and the Prospectus and any amendments or supplements thereto, (vii) the preparation, printing and
delivery to Xxxxx Fargo Securities of copies of the Blue Sky Survey and any Canadian “wrapper” and
any supplements thereto, (viii) the fees and expenses of the transfer agent and registrar for the
Securities, (ix) the filing fees incident to the review by FINRA of the terms of the sale of the
Securities, (x) the fees and expenses incurred in connection with the listing of the Placement
Securities on the NYSE, and (xi) if an aggregate number of shares having at least an aggregate
offering price of $20,000,000 have not been offered and sold under this Agreement or any
Alternative Distribution Agreement by the eighteen month anniversary of this Agreement (or such
earlier date on which the Company terminates this Agreement) the (“Determination Date”),
the Company shall reimburse Xxxxx Fargo Securities, Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated, X.X. Xxxxxx Securities Inc. and Xxxxxx Xxxxxx & Company, Inc. (the
“Managers”) for their out-of-pocket fees and disbursements of counsel incurred by them in
connection with the offering contemplated by this Agreement and the
29
Alternative Distribution Agreements (“Expenses”); provided, however, the Company shall
not be required to pursuant to this Section 8(a) to reimburse the Managers for their Expenses in
excess of $125,000. The Expenses shall be divided among the Managers in amounts proportionate to
the aggregate offering amount sold by each Manager under this Agreement and the Alternative
Distribution Agreements, after taking into account the amount of Expenses actually paid by each
Manager, and shall be due and payable by the Company to the Managers within five (5) business days
of the Determination Date.
(b) Termination of Agreement. If this Agreement is terminated by the Representatives in
accordance with the provisions of Section 9 or Section 13(a) hereof, the Company shall reimburse
Xxxxx Fargo Securities for all of their out-of-pocket expenses, including the fees and
disbursements of counsel for Xxxxx Fargo Securities.
SECTION 9. Conditions of Xxxxx Fargo Securities’ Obligations. The obligations of
Xxxxx Fargo Securities hereunder with respect to a Placement will be subject to the continuing
accuracy and completeness of the representations and warranties of the Company and the Partnership
contained in this Agreement or in certificates of any officer of the Company, the Partnership or
any Subsidiary of the Company delivered pursuant to the provisions hereof, to the performance by
the Company of its covenants and other obligations hereunder, and to the following further
conditions:
(a) Effectiveness of Registration Statement. The Registration Statement and any Rule
462(b) Registration Statement shall have become effective and shall be available for (i) all
sales of Placement Securities issued pursuant to all prior Placement Notices and (ii) the
sale of all Placement Securities contemplated to be issued by any Placement Notice.
(b) No Material Notices. None of the following events shall have occurred and be
continuing: (i) receipt by the Company or any of its Subsidiaries of any request for
additional information from the Commission or any other federal or state governmental
authority during the period of effectiveness of the Registration Statement, the response to
which would require any post-effective amendments or supplements to the Registration
Statement or the Prospectus; (ii) the issuance by the Commission or any other federal or
state governmental authority of any stop order suspending the effectiveness of the
Registration Statement or the initiation of any proceedings for that purpose; (iii) receipt
by the Company of any notification with respect to the suspension of the qualification or
exemption from qualification of any of the Placement Securities for sale in any jurisdiction
or the initiation or threatening of any proceeding for such purpose; (iv) the occurrence of
any event that makes any material statement made in the Registration Statement or the
Prospectus, or any Issuer Free Writing Prospectus, or any material document incorporated or
deemed to be incorporated therein by reference untrue in any material respect or that
requires the making of any changes in the Registration Statement, related Prospectus, or any
Issuer Free Writing Prospectus, or such documents so that, in the case of the Registration
Statement, it will not contain any materially untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the statements
therein not misleading and, that in the case of the Prospectus and any Issuer Free Writing
Prospectus, it will not contain any materially
30
untrue statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(c) No Misstatement or Material Omission. Xxxxx Fargo Securities shall not have
advised the Company that the Registration Statement or Prospectus, or any Issuer Free
Writing Prospectus, or any amendment or supplement thereto, contains an untrue statement of
fact that in Xxxxx Fargo Securities’ reasonable opinion is material, or omits to state a
fact that in Xxxxx Fargo Securities’ opinion is material and is required to be stated
therein or is necessary to make the statements therein not misleading.
(d) Material Changes. Except as contemplated in the Prospectus, or disclosed in the
Company’s reports filed with the Commission, there shall not have been any Material Adverse
Effect.
(e) Opinion of Counsel for Company. Xxxxx Fargo Securities shall have received the
favorable opinion of Company Counsel, required to be delivered pursuant to Section 7(p) on
or before the date on which such delivery of such opinion is required pursuant to Section
7(p).
(f) Opinion of Counsel for Xxxxx Fargo Securities. Xxxxx Fargo Securities shall have
received the opinion of Agent Counsel, required to be delivered pursuant to Section 7(p) on
or before the date on which such delivery of such opinion is required pursuant to Section
7(p).
(g) Representation Certificate. Xxxxx Fargo Securities shall have received the
certificate required to be delivered pursuant to Section 7(o) on or before the date on which
delivery of such certificate is required pursuant to Section 7(o).
(h) Accountant’s Comfort Letter. Xxxxx Fargo Securities shall have received the
Comfort Letter required to be delivered pursuant Section 7(q) on or before the date on which
such delivery of such letter is required pursuant to Section 7(q).
(i) Approval for Listing. The Placement Securities shall either have been (i) approved
for listing on NYSE, subject only to notice of issuance, or (ii) the Company shall have
filed an application for listing of the Placement Securities on NYSE at, or prior to, the
issuance of any Placement Notice.
(j) No Suspension. Trading in the Securities shall not have been suspended on the
NYSE.
(k) Additional Documents. On each date on which the Company is required to deliver a
certificate pursuant to Section 7(o), counsel for Xxxxx Fargo Securities shall have been
furnished with such documents and opinions as they may reasonably require for the purpose of
enabling them to pass upon the issuance and sale of the Securities as herein contemplated,
or in order to evidence the accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, contained in this Agreement.
31
(l) Securities Act Filings Made. All filings with the Commission required by Rule 424
under the Securities Act Regulations to have been filed prior to the issuance of any
Placement Notice hereunder shall have been made within the applicable time period prescribed
for such filing by Rule 424.
(m) Termination of Agreement. If any condition specified in this Section 9 shall not
have been fulfilled when and as required to be fulfilled, this Agreement may be terminated
by Xxxxx Fargo Securities effective immediately by notice to the Company, and such
termination shall be without liability of any party to any other party except as provided in
Section 8 hereof and except that, in the case of any termination of this Agreement, Sections
5, 8, 10, 11, 12 and 21 hereof shall survive such termination and remain in full force and
effect.
SECTION 10. Indemnification.
(a) Indemnification by the Company and the Partnership. The Company and the Partnership,
jointly and severally, agree to indemnify and hold harmless Xxxxx Fargo Securities and each person,
if any, who controls Xxxxx Fargo Securities within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act as follows:
(i) against any and all loss, liability, claim, damage and expense whatsoever, as
incurred, joint or several, arising out of 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 arising out of or based upon
any untrue statement or alleged untrue statement of a material fact included in any Issuer
Free Writing Prospectus or the Prospectus (or any amendment or supplement thereto), or the
omission or alleged omission therefrom of a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were made, not
misleading;
(ii) against any and all loss, liability, claim, damage and expense whatsoever, as
incurred, joint or several, to the extent of the aggregate amount paid in settlement of any
litigation, or any investigation or proceeding by any governmental agency or body, commenced
or threatened, or of any claim whatsoever based upon any such untrue statement or omission,
or any such alleged untrue statement or omission; provided that (subject to Section 10(d)
below) any such settlement is effected with the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred (including the fees and
disbursements of counsel chosen by Xxxxx Fargo Securities), reasonably incurred in
investigating, preparing or defending against any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any such alleged untrue
statement or omission, to the extent that any such expense is not paid under (i) or (ii)
above,
32
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue statement or omission
or alleged untrue statement or omission made in reliance upon and in conformity with the Agent
Content.
(b) Indemnification by Xxxxx Fargo Securities. Xxxxx Fargo Securities agrees to indemnify and
hold harmless the Company, its directors, each of its officers who signed the Registration
Statement, and each person, if any, who controls the Company within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act against any and all loss, liability, claim,
damage and expense described in the indemnity contained in subsection (a) of this Section 10, as
incurred, but only with respect to untrue statements or omissions, or alleged untrue statements or
omissions, made in the Registration Statement (or any amendment thereto), any Issuer Free Writing
Prospectus or the Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Company by Xxxxx Fargo Securities expressly
for use therein; and the Company hereby acknowledges that the only information that Xxxxx Fargo
Securities has furnished to the Company expressly for use in the Registration Statement, any Issuer
Free Writing Prospectus, or the Prospectus (or any amendment or supplement thereto) are the
statements set forth in first sentence of the first paragraph under the caption “Plan of
Distribution” in the Prospectus (collectively, the “Agent Content”).
(c) Actions against Parties; Notification. Each indemnified party shall give notice as
promptly as reasonably practicable to each indemnifying party of any action commenced against it in
respect of which indemnity may be sought hereunder, but failure to so notify an indemnifying party
shall not relieve such indemnifying party from any liability hereunder and shall not relive it from
any liability which it may have otherwise than on account of this indemnity agreement. Counsel to
the indemnified parties shall be selected as follows: counsel to Xxxxx Fargo Securities and each
person, if any, who controls Xxxxx Fargo Securities within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act shall be selected by Xxxxx Fargo Securities; and
counsel to the Company, its directors, each of its officers who signed the Registration Statement
and each person, if any, who controls the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act shall be selected by the Company. An indemnifying
party may participate at its own expense in the defense of any such action; provided, however, that
counsel to the indemnifying party shall not (except with the consent of the indemnified party) also
be counsel to the indemnified party. In no event shall the indemnifying parties be liable for the
fees and expenses of more than one counsel (in addition to any local counsel) separate from their
own counsel for Xxxxx Fargo Securities and each person, if any, who controls Xxxxx Fargo Securities
within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, and the
fees and expenses of more than one counsel (in addition to any local counsel) separate from their
own counsel for the Company, its directors, each of its officers who signed the Registration
Statement and each person, if any, who controls the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, in each case in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of the same general
allegations or circumstances. No indemnifying party shall, without the prior written consent of
the indemnified parties, settle or compromise or consent to the entry of any judgment with respect
to any litigation, or any investigation or proceeding by any governmental agency or body, commenced
or threatened, or any claim whatsoever in respect of which indemnification or contribution could be
sought under
33
this Section 10 or Section 11 hereof (whether or not the indemnified parties are actual or
potential parties thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not include a statement as to or an admission of
fault, culpability or a failure to act by or on behalf of any indemnified party.
(d) Settlement Without Consent if Failure to Reimburse. If at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses
of counsel, such indemnifying party agrees that it shall be liable for any settlement of the nature
contemplated by Section 10(a)(ii) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the aforesaid request,
(ii) such indemnifying party shall have received notice of the terms of such settlement at least 30
days prior to such settlement being entered into and (iii) such indemnifying party shall not have
reimbursed such indemnified party in accordance with such request prior to the date of such
settlement.
(e) Other Agreements with Respect to Indemnification and Contribution. The provisions of this
Section 10 and in Section 11 hereof shall not affect any agreements among the Company with respect
to indemnification of each other or contribution between themselves.
SECTION 11. Contribution. If the indemnification provided for in Section 10 hereof is
for any reason unavailable to or insufficient to hold harmless an indemnified party in respect of
any losses, liabilities, claims, damages or expenses referred to therein, then each indemnifying
party shall contribute to the aggregate amount of such losses, liabilities, claims, damages and
expenses incurred by such indemnified party, as incurred, (i) in such proportion as is appropriate
to reflect the relative benefits received by the Company or the Partnership on the one hand and
Xxxxx Fargo Securities on the other hand from the offering of the Securities pursuant to this
Agreement or (ii) if the allocation provided by clause (i) is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the Company or the Partnership on the one hand and of
Xxxxx Fargo Securities on the other hand in connection with the statements or omissions that
resulted in such losses, liabilities, claims, damages or expenses.
The relative benefits received by the Company or the Partnership on the one hand and Xxxxx
Fargo Securities on the other hand in connection with the offering of the Securities pursuant to
this Agreement shall be deemed to be in the same respective proportions as the total net proceeds
from the offering of the Securities pursuant to this Agreement (before deducting expenses) received
by the Company and the total discounts and commissions received by Xxxxx Fargo Securities, in each
case as set forth on the cover of the Prospectus, bear to the aggregate public offering price of
the Securities as set forth on such cover.
The relative fault of the Company or the Partnership on the one hand and Xxxxx Fargo
Securities on the other hand shall be determined by reference to, among other things, whether any
such untrue or alleged untrue statement of a material fact or omission or alleged omission to state
a material fact relates to information supplied by the Company or the Partnership on the one hand
or by Xxxxx Fargo Securities on the other hand and the parties’ relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission.
34
The Company, the Partnership and Xxxxx Fargo Securities agree that it would not be just and
equitable if contribution pursuant to this Section 11 were determined by pro rata allocation or by
any other method of allocation which does not take account of the equitable considerations referred
to above in this Section 11. The aggregate amount of losses, liabilities, claims, damages and
expenses incurred by an indemnified party and referred to above in this Section 11 shall be deemed
to include any legal or other expenses reasonably incurred by such indemnified party in
investigating, preparing or defending against any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any
such untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 11, Xxxxx Fargo Securities shall not be
required to contribute any amount in excess of the discounts and commissions received by Xxxxx
Fargo Securities in connection with the Securities underwritten by it and distributed to the
public.
No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
For purposes of this Section 11, each person, if any, who controls Xxxxx Fargo Securities
within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act shall have
the same rights to contribution as Xxxxx Fargo Securities, and each director of the Company, each
officer of the Company who signed the Registration Statement, and each person, if any, who controls
the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act shall have the same rights to contribution as the Company.
SECTION 12. Representations, Warranties and Agreements to Survive Delivery. All
representations, warranties and agreements contained in this Agreement or in certificates of
officers of the Company, the Partnership or any of the Subsidiaries submitted pursuant hereto,
shall remain operative and in full force and effect, regardless of any investigation made by or on
behalf of Xxxxx Fargo Securities or controlling person, or by or on behalf of the Company or the
Partnership, and shall survive delivery of the Securities to Xxxxx Fargo Securities.
SECTION 13. Termination of Agreement.
(a) Termination; General. Xxxxx Fargo Securities may terminate this Agreement, by notice to
the Company, as hereinafter specified at any time (i) if there has been, since the time of
execution of this Agreement or since the date as of which information is given in the Prospectus,
any Material Adverse Effect, which individually or in the aggregate, in the sole judgment of Xxxxx
Fargo Securities is material and adverse and makes it impractical or inadvisable to market the
Securities or to enforce contracts for the sale of the Securities, (ii) if there has occurred any
material adverse change in the financial markets in the United States or the international
financial markets, any outbreak of hostilities or escalation thereof or other calamity or crisis or
any change or development involving a prospective change in national or international political,
financial or economic conditions, in each case the effect of which is such as to make it, in the
judgment of Xxxxx Fargo Securities, impracticable or inadvisable to market the Securities or to
enforce contracts for the sale of the Securities, (iii) if trading in the Placement Securities has
35
been suspended or limited by the Commission or the NYSE, or if trading generally on the
American Stock Exchange, the NYSE or the Nasdaq Global Market has been suspended or limited, or
minimum or maximum prices for trading have been fixed, or maximum ranges for prices have been
required, by any of said exchanges or by order of the Commission, the FINRA or any other
governmental authority, (iv) a material disruption in commercial banking or securities settlement
or clearance services in the United States, or (v) if a banking moratorium has been declared by
either U.S. Federal or New York authorities.
(b) Termination by the Company. The Company shall have the right, by giving ten (10) days
notice as hereinafter specified to terminate this Agreement in their sole discretion at any
time after the date of this Agreement.
(c) Termination by Xxxxx Fargo Securities. Xxxxx Fargo Securities shall have the right, by
giving ten (10) days notice as hereinafter specified to terminate this Agreement in its sole
discretion at any time after the date of this Agreement.
(d) Automatic Termination. Unless earlier terminated pursuant to this Section 13, this
Agreement shall automatically terminate upon the issuance and sale of all of the Placement
Securities through (1) Xxxxx Fargo Securities on the terms and subject to the conditions set forth
herein or any Placement Notice or (2) the Alternative Managers through the Alternative Distribution
Agreements on the terms and subject to the conditions set forth therein or any Placement Notice.
(e) Continued Force and Effect. This Agreement shall remain in full force and effect unless
terminated pursuant to Sections 9(m), 13(a), (b), (c), or (d) above or otherwise by mutual
agreement of the parties.
(f) Effectiveness of Termination. Any termination of this Agreement shall be effective on the
date specified in such notice of termination; provided, however, that such termination shall not be
effective until the close of business on the date of such notice by Xxxxx Fargo Securities or the
Company, as the case may be. If such termination shall occur prior to the Settlement Date for any
sale of Placement Securities, such Placement Securities shall settle in accordance with the
provisions of this Agreement.
(g) Liabilities. If this Agreement is terminated pursuant to Section 9(m) or this Section 13,
such termination shall be without liability of any party to any other party except as provided in
Section 8 hereof, and except that, in the case of any termination of this Agreement, Section 5,
Section 10, Section 11, Section 12, and Section 21 hereof shall survive such termination and remain
in full force and effect.
SECTION 14. Notices. Except as otherwise provided in this Agreement, all notices and
other communications hereunder shall be in writing and shall be deemed to have been duly given if
mailed or transmitted by any standard form of telecommunication. Notices to Xxxxx Fargo Securities
shall be directed to Xxxxx Fargo Securities at Xxxxx Fargo Securities, LLC, 000 Xxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Equity Syndicate Department, fax no: (000) 000-0000; with copy to
(which shall not constitute notice): Hunton & Xxxxxxxx LLP, Riverfront Plaza, East Tower, 000 Xxxx
Xxxx Xxxxxx, Xxxxxxxx, Xxxxxxxx 00000-0000, fax no. 804-343-
36
4580, Attention of Xxxxx X. Xxxxxx, Esq. Notices to the Company shall be directed to it at
Parkway Properties, Inc., 000 Xxx Xxxxxxx Xxxxx, 000 Xxxx Xxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx,
Xxxxxxxxxxx 00000, fax no. 000-000-0000, Attention of J. Xxxxxxxx Xxxxxxx, Chief Financial
officers; with copy to (which shall not constitute notice): Xxxxxxx Xxxxxxxxxxx & Mugel, LLP,
Twelve Xxxxxxxx Xxxxx, Xxxxxxx, Xxx Xxxx 00000-0000, fax no. 000-000-0000, Attention: Xxxxxx X.
Xxxxxxx, Esq.
SECTION 15. Parties. This Agreement shall inure to the benefit of and be binding upon
Xxxxx Fargo Securities, the Company and their respective successors. Nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any person, firm or
corporation, other than Xxxxx Fargo Securities, the Company and their respective successors and the
controlling persons and officers and directors referred to in Sections 10 and 11 and their heirs
and legal representatives, any legal or equitable right, remedy or claim under or in respect of
this Agreement or any provision herein contained. This Agreement and all conditions and provisions
hereof are intended to be for the sole and exclusive benefit of Xxxxx Fargo Securities, the Company
and their respective successors, and said controlling persons and officers and directors and their
heirs and legal representatives, and for the benefit of no other person, firm or corporation. No
purchaser of Securities from Xxxxx Fargo Securities shall be deemed to be a successor by reason
merely of such purchase.
SECTION 16. Adjustments for Stock Splits. The parties acknowledge and agree that all
stock-related numbers contained in this Agreement shall be adjusted to take into account any stock
split, stock dividend or similar event effected with respect to the Securities.
SECTION 17. Governing Law and Time. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY
TIME.
SECTION 18. Effect of Headings. The Section and Exhibit headings herein are for
convenience only and shall not affect the construction hereof.
SECTION 19. Definitions. As used in this Agreement, the following terms have the
respective meanings set forth below:
“Applicable Time” means the time of each sale of any Securities pursuant to this
Agreement.
“Company Documents” means any contracts, indentures, mortgages, deeds of trust, loan
or credit agreements, bonds, notes, debentures, evidences of indebtedness, leases or other
instruments or agreements to which the Company or any of its subsidiaries is a party or by which
the Company or any of its subsidiaries is bound or to which any of the property or assets of the
Company or any of its subsidiaries is subject including, without limitation, all Subject
Instruments.
“XXXXX” means the Commission’s Electronic Data Gathering, Analysis and Retrieval
system.
“FINRA” means the Financial Industry Regulatory Authority.
37
“Issuer Free Writing Prospectus” means any “issuer free writing prospectus,” as
defined in Rule 433, relating to the Securities that (i) is required to be filed with the
Commission by the Company, (ii) is a “road show” that is a “written communication” within the
meaning of Rule 433(d)(8)(i) whether or not required to be filed with the Commission, or (iii) is
exempt from filing pursuant to Rule 433(d)(5)(i) because it contains a description of the
Securities or of the offering that does not reflect the final terms, and all free writing
prospectuses that are listed in Exhibit G hereto, in each case in the form furnished
(electronically or otherwise) to Xxxxx Fargo Securities for use in connection with the offering of
the Securities.
“NYSE” means the New York Stock Exchange.
“Rule 163,” “Rule 164,” “Rule 172,” “Rule 405,” “Rule
415,” “Rule 424(b),” “Rule 430B,” and “Rule 433” refer to such rules
under the Securities Act Regulations.
All references in this Agreement to financial statements and schedules and other information
that is “contained,” “included” or “stated” in the Registration Statement or the Prospectus (and
all other references of like import) shall be deemed to mean and include all such financial
statements and schedules and other information that is incorporated by reference in the
Registration Statement or the Prospectus, as the case may be.
All references in this Agreement to the Registration Statement, the Prospectus or any
amendment or supplement to any of the foregoing shall be deemed to include the copy filed with the
Commission pursuant to XXXXX; all references in this Agreement to any Issuer Free Writing
Prospectus (other than any Issuer Free Writing Prospectuses that, pursuant to Rule 433, are not
required to be filed with the Commission) shall be deemed to include the copy thereof filed with
the Commission pursuant to XXXXX; and all references in this Agreement to “supplements” to the
Prospectus shall include, without limitation, any supplements, “wrappers” or similar materials
prepared in connection with any offering, sale or private placement of any Placement Securities by
Xxxxx Fargo Securities outside of the United States.
38
SECTION 20. Permitted Free Writing Prospectuses. The Company represents, warrants and
agrees that, unless it obtains the prior consent of Xxxxx Fargo Securities, and Xxxxx Fargo
Securities represents, warrants and agrees that, unless it obtains the prior consent of the
Company, it has not made and will not make any offer relating to the Securities that would
constitute an Issuer Free Writing Prospectus, or that would otherwise constitute a “free writing
prospectus,” as defined in Rule 405, required to be filed with the Commission. Any such free
writing prospectus consented to by Xxxxx Fargo Securities or by the Company, as the case may be, is
hereinafter referred to as a “Permitted Free Writing Prospectus.” The Company represents and
warrants that it has treated and agrees that it will treat each Permitted Free Writing Prospectus
as an Issuer Free Writing Prospectus, and has complied and will comply with the requirements of
Rule 433 applicable to any Permitted Free Writing Prospectus, including timely filing with the
Commission where required, legending and record keeping. For the purposes of clarity, the parties
hereto agree that all free writing prospectuses, if any, listed in Exhibit G hereto are
Permitted Free Writing Prospectuses.
SECTION 21. Absence of Fiduciary Relationship. Each of the Company and the
Partnership acknowledges and agrees that:
(a) Xxxxx Fargo Securities is acting solely as agent and/or principal in connection with the
public offering of the Securities and in connection with each transaction contemplated by this
Agreement and the process leading to such transactions, and no fiduciary or advisory relationship
between the Company or any of its respective affiliates, stockholders (or other equity holders),
creditors or employees or any other party, on the one hand, and Xxxxx Fargo Securities, on the
other hand, has been or will be created in respect of any of the transactions contemplated by this
Agreement, irrespective of whether or not Xxxxx Fargo Securities has advised or is advising the
Company or the Partnership on other matters, and Xxxxx Fargo Securities has no obligation to the
Company or the Partnership with respect to the transactions contemplated by this Agreement, except
the obligations expressly set forth in this Agreement;
(b) the public offering price of the Securities set forth in this Agreement was not
established by Xxxxx Fargo Securities;
(c) it is capable of evaluating and understanding, and understands and accepts, the terms,
risks and conditions of the transactions contemplated by this Agreement;
(d) Xxxxx Fargo Securities has not provided any legal, accounting, regulatory or tax advice
with respect to the transactions contemplated by this Agreement and it has consulted its own legal,
accounting, regulatory and tax advisors to the extent it has deemed appropriate;
(e) it is aware that Xxxxx Fargo Securities and its respective affiliates are engaged in a
broad range of transactions which may involve interests that differ from those of the Company or
the Partnership and Xxxxx Fargo Securities has no obligation to disclose such interests and
transactions to the Company or the Partnership by virtue of any fiduciary, advisory or agency
relationship or otherwise; and
(f) it waives, to the fullest extent permitted by law, any claims it may have against Xxxxx
Fargo Securities for breach of fiduciary duty or alleged breach of fiduciary duty in
39
connection with the sale of Securities under this Agreement and agrees that Xxxxx Fargo
Securities shall not have any liability (whether direct or indirect, in contract, tort or
otherwise) to it in respect of such a fiduciary duty claim or to any person asserting a fiduciary
duty claim on its behalf or in right of it or the Company or the Partnership, or either of their
respective employees or creditors.
SECTION 22. Research Analyst Independence. The Company acknowledges that Xxxxx Fargo
Securities’ research analysts and research department are required to be independent from the
investment banking division and are subject to certain regulations and internal policies, and that
Xxxxx Fargo Securities’ research analysts may hold views and make statements or investment
recommendations and/or publish research reports with respect to the Company and/or the offering
that differ from the views of the investment banking division. The Company hereby waives and
releases, to the fullest extent permitted by law, any claims that the Company may have against
Xxxxx Fargo Securities with respect to any conflict of interest that may arise from the fact that
the views expressed by its independent research analysts and research departments may be different
from or inconsistent with the views or advise communicated to the Company by Xxxxx Fargo
Securities’ investment banking divisions. The Company acknowledges that Xxxxx Fargo Securities is
a full service securities firm and as such from time to time, subject to applicable securities
laws, may effect transactions for its own account or the account of its customers and hold long or
short positions in debt or equity securities of the companies that may be the subject of the
transactions contemplated by this Agreement.
[Signature Page Follows.]
40
If the foregoing is in accordance with your understanding of our agreement, please sign and
return to the Company a counterpart hereof, whereupon this instrument, along with all counterparts,
will become a binding agreement between Xxxxx Fargo Securities, the Company and the Partnership in
accordance with its terms.
Very truly yours,
PARKWAY PROPERTIES, INC. |
||||
By | /s/ Xxxxxx X. Xxxxxx | |||
Name: Xxxxxx X. Xxxxxx | ||||
Title: President and CEO | ||||
PARKWAY PROPERTIES LP
By: Parkway Properties General Partners, Inc., its sole general partner |
|||||
By | /s/ Xxxxxx X. Xxxxxx | ||||
Name: Xxxxxx X. Xxxxxx | |||||
Title: President and CEO | |||||
CONFIRMED AND ACCEPTED, as of the date first
above written:
above written:
XXXXX FARGO SECURITIES, LLC
By | /s/ Xxxxxxx Xxxxx | |||
Authorized Signatory | ||||
41
EXHIBIT C
COMPENSATION
Xxxxx Fargo Securities shall be paid compensation equal to 2% of the gross proceeds from the
sales of Securities pursuant to the terms of this Agreement (the “Base Commission”).
In addition to the Base Commission, in the event that Xxxxx Fargo Securities, or any
Alternative Managers pursuant to an Alternative Distribution Agreement, sells on behalf of the
Company a number of Placement Securities having an aggregate offering price equal to or greater
than $20,000,000 in a block trade approved by the Pricing Committee (the “Committee”) of the Company’s Board of Directors (each an, “Eligible Trade”),
then each of Xxxxx Fargo Securities and the Alternative Managers shall receive from the Company
compensation in an aggregate amount (which aggregate amount shall be allocated 26.667% to each of
Well Fargo Securities, LLC, Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, X.X. Xxxxxx
Securities Inc. and 20.0% to Xxxxxx Xxxxxx & Company, Inc.) equal to the Incentive Commission
Percentage multiplied by the gross proceeds from the sale of such Eligible Trade (the
“Incentive Commission”). For purposes of this Agreement, “Incentive Commission
Percentage” means an amount equal to 2.0%; provided, however, (i) the Incentive Commission
Percentage shall be reduced to zero in the event the offering price of the Eligible Trade is at a
discount of 2.0% or greater to the last reported sale price of the Common Stock on the trading date
immediately prior to the Time of Sale applicable to the Eligible Trade
or such lesser price determined by the Company and the Committee (the “Reference Price”)
and (ii) in the event the
offering price of the Eligible Trade is at a discount of between 0.1% and 1.99% of the Reference Price
applicable to the Eligible Trade (the “Discount”), then the Incentive Commission Percentage
shall be an amount equal to 2.0% less the Discount.
C-1