40,000,000 Shares
Common Shares of Beneficial Interest
($0.01 par value)
Equity Distribution
Agreement
Citigroup
Global Markets Inc.
388 Greenwich Street
New York, New York, 10013
ProLogis,
a Maryland real estate investment trust (the “ Company
”), confirms its agreement (this “ Agreement
”) with Citigroup Global Markets Inc. (the “
Manager ”) as follows:
1.
Description of Shares . The Company proposes to issue and
sell through or to the Manager, as sales agent and/or principal, of
up to 40,000,000 common shares (the “ Shares ”)
of beneficial interest, par value $0.01 per share (“
Common Stock ”), of the Company, from time to time
during the term of this Agreement and on the terms set forth in
Section 3 of this Agreement. For purposes of selling the
Shares through the Manager, the Company hereby appoints the Manager
as exclusive agent of the Company for the purpose of soliciting
purchases of the Shares from the Company pursuant to this Agreement
and the Manager agrees to use its reasonable efforts to solicit
purchases of the Shares on the terms and subject to the conditions
stated herein. The Company agrees that whenever it determines to
sell the Shares directly to the Manager as principal, it will enter
into a separate agreement (each, a “ Terms Agreement
”) in substantially the form of Annex I hereto, relating to
such sale in accordance with Section 3 of this Agreement.
Certain terms used herein are defined in Section 18
hereof.
2.
Representations and Warranties . The Company represents and
warrants to, and agrees with, the Manager at the Execution Time and
on each such time the following representations and warranties are
repeated or deemed to be made pursuant to this Agreement, as set
forth below.
(a) The Company
meets the requirements for use of Form S-3 under the Act and
has prepared and filed with the Commission an automatic shelf
registration statement, as defined in Rule 405 (File Number
333-157818) on Form S-3, including a related Base Prospectus,
for registration under the Act of the offering and sale of the
Shares and other securities of the Company. Such Registration
Statement, including any amendments thereto filed prior to the
Execution Time or prior to any such time this representation is
repeated or deemed to be made, became effective upon filing.
The
Company shall
file with the Commission the Prospectus Supplement relating to the
Shares in accordance with Rule 424(b) promptly after the Execution
Time (but in any event in the time period prescribed thereby). As
filed, the Prospectus will contain all information required by the
Act and the rules thereunder, and, except to the extent the Manager
shall agree in writing to a modification, shall be in all
substantive respects in the form furnished to the Manager prior to
the Execution Time or prior to any such time this representation is
repeated or deemed to be made. The Registration Statement, at the
Execution Time, each such time this representation is repeated or
deemed to be made, and at all times during which a prospectus is
required by the Act to be delivered (whether physically or through
compliance with Rule 172 or any similar rule) in connection
with any offer or sale of Shares, meets the requirements set forth
in Rule 415(a)(1)(x). The initial Effective Date of the
Registration Statement was not earlier than the date three years
before the Execution Time. Any reference herein to the Registration
Statement, the Base Prospectus, the Prospectus Supplement, any
Interim Prospectus Supplement or the Prospectus shall be deemed to
refer to and include the documents incorporated by reference
therein pursuant to Item 12 of Form S-3 which were filed
under the Exchange Act on or before the Effective Date of the
Registration Statement or the issue date of the Base Prospectus,
the Prospectus Supplement, any Interim Prospectus Supplement or the
Prospectus, as the case may be; and any reference herein to the
terms “amend,” “amendment” or
“supplement” with respect to the Registration
Statement, the Base Prospectus, the Prospectus Supplement, any
Interim Prospectus Supplement or the Prospectus shall be deemed to
refer to and include the filing of any document under the Exchange
Act after the Effective Date of the Registration Statement or the
issue date of the Base Prospectus, the Prospectus Supplement, any
Interim Prospectus Supplement or the Prospectus, as the case may
be, deemed to be incorporated therein by reference. Notwithstanding
the foregoing, the representations and warranties in this
subsection shall not apply to (i) that part of the
Registration Statement which constitutes the Statement of
Eligibility on Form T-1 of the trustee under the Trust Indenture
Act (the “ Form T-1 ”) and
(ii) statements in or omissions from the Registration
Statement or any post-effective amendment or the Prospectus or any
amendments or supplements thereto, made in reliance upon and in
conformity with information furnished to the Company in writing by
the Manager relating to the Manager expressly for use
therein.
(b) To the extent
that the Registration Statement is not available for the sales of
the Shares as contemplated by this Agreement or the Company
otherwise is unable to make the representations set forth in
Section 2(e) at any time when such representations are required,
the Company shall file a new registration statement with respect to
any additional shares of Common Stock necessary to complete such
sales of the Shares and shall cause such registration statement to
become effective as promptly as practicable. After the
effectiveness of any such registration statement, all references to
“Registration Statement” included in this Agreement
shall be deemed to include such new registration statement,
including all documents incorporated by reference therein pursuant
to Item 12 of Form S-3, and all references to “Base
Prospectus” included in this Agreement shall be deemed to
include the final form of prospectus, including all documents
incorporated therein by reference, included in any such
registration statement at the time such registration statement
became effective.
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(c) On each
Effective Date, at the Execution Time, at each Applicable Time, at
each Settlement Date and at all times during which a prospectus is
required by the Act to be delivered (whether physically or through
compliance with Rule 172 or any similar rule) in connection
with any offer or sale of Shares, the Registration Statement
complied and will comply in all material respects with the
applicable requirements of the Act and the rules thereunder and did
not and will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary in order to make the statements therein not misleading;
and on the date of any filing pursuant to Rule 424(b), at each
Applicable Time, on each Settlement Date and at all times during
which a prospectus is required by the Act to be delivered (whether
physically or through compliance with Rule 172 or any similar
rule) in connection with any offer or sale of Shares, the
Prospectus (together with any supplement thereto) complied and will
comply in all material respects with the applicable requirements of
the Act and the rules thereunder and did not and will not include
any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading; provided , however , that the Company
makes no representations or warranties as to the information
contained in or omitted from the Registration Statement or the
Prospectus (or any supplement thereto) in reliance upon and in
conformity with information furnished in writing to the Company by
the Manager specifically for inclusion in the Registration
Statement or the Prospectus (or any supplement thereto).
(d) At the
Execution Time, at each Applicable Time and at each Settlement
Date, the Disclosure Package does not contain any untrue statement
of a material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The
preceding sentence does not apply to statements in or omissions
from the Disclosure Package based upon and in conformity with
written information furnished to the Company by the Manager
specifically for use therein.
(e) (i) At
the time of filing the Registration Statement, (ii) at the
time of the most recent amendment thereto for the purposes of
complying with Section 10(a)(3) of the Act (whether such
amendment was by post-effective amendment, incorporated report
filed pursuant to Sections 13 or 15(d) of the Exchange Act or
form of prospectus), and (iii) at the time the Company or any
person acting on its behalf (within the meaning, for this clause
only, of Rule 163(c)) made any offer relating to the Shares in
reliance on the exemption in Rule 163, the Company was or is
(as the case may be) a “well-known seasoned issuer” as
defined in Rule 405. The Company agrees to pay the fees required by
the Commission relating to the Shares within the time required by
Rule 456(b)(1) without regard to the proviso therein and
otherwise in accordance with Rules 456(b) and 457(r).
(f) (i) At
the earliest time after the filing of the Registration Statement
that the Company or another offering participant made a bona fide
offer (within the meaning of Rule 164(h)(2)) of the Shares and
(ii) as of the Execution Time and on each such time this
representation is repeated or deemed to be made (with such date
being used as the determination date for purposes of this clause
(ii)), the Company was not and is not an
3
Ineligible
Issuer (as defined in Rule 405), without taking account of any
determination by the Commission pursuant to Rule 405 that it
is not necessary that the Company be considered an Ineligible
Issuer.
(g) Each Issuer
Free Writing Prospectus does not include any information that
conflicts with the information contained in the Registration
Statement, including any document incorporated therein by reference
and any prospectus supplement deemed to be a part thereof that has
not been superseded or modified. The foregoing sentence does not
apply to statements in or omissions from any Issuer Free Writing
Prospectus based upon and in conformity with written information
furnished to the Company by the Manager specifically for use
therein.
(h) The
Registration Statement is not the subject of a pending proceeding
or examination under Section 8(d) or 8(e) of the Act, and the
Company is not the subject of a pending proceeding under
Section 8A of the Act in connection with the offering of the
Shares.
(i) The Common
Stock is an “actively-traded security” exempted from
the requirements of Rule 101 of Regulation M under the
Exchange Act by subsection (c)(1) of such rule.
(j) The Company
has not entered into any other sales agency agreements or other
similar arrangements with any agent or any other representative in
respect of at the market offerings of the Shares in accordance with
Rule 415(a)(4) of the Act.
(k) The Company
has not and will not (i) take, directly or indirectly, any
action designed to or that would constitute or that might
reasonably be expected to cause or result in, under the Exchange
Act or otherwise, stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the
Shares or (ii) sell, bid for, purchase or pay any person
(other than as contemplated by this Agreement) any compensation for
soliciting purchases of the Shares.
(l) Other than the
Manager, there is no broker, finder or other party that is entitled
to receive from the Company any brokerage or finder’s fee or
other fee or commission as a result of any transactions
contemplated by this Agreement.
(m) This Agreement
has been, and any applicable Terms Agreement will be, duly
authorized, executed and delivered by the Company.
(n) The Shares
have been duly authorized, and when issued, delivered and paid for
in accordance with this Agreement and any applicable Terms
Agreement, will be validly issued, fully paid and non-assessable,
free and clear of any lien, charge or encumbrance; the shares of
beneficial interest of the Company, including the Shares, conform
to the description thereof contained in the Registration Statement
and the Shares will conform to the description thereof contained in
the Prospectus as amended or supplemented. Neither the shareholders
of the Company, nor any other person or entity have any preemptive
rights or rights of first refusal with respect to the Shares or
other rights to purchase or receive any of the Shares, and no
person has the right, contractual or
4
otherwise, to
cause the Company to issue to it, or register pursuant to the Act,
any shares of beneficial interest or other securities or assets of
the Company upon the issuance or sale of the Shares.
(o) Except as
otherwise disclosed in the Disclosure Package and the Prospectus,
subsequent to the respective dates as of which information is given
in the Disclosure Package and the Prospectus: (i) there has
been no material adverse change, or any development that could
reasonably be expected to result in a material adverse change, in
the condition, financial or otherwise, or in the earnings,
business, operations or prospects, whether or not arising from
transactions in the ordinary course of business, of the Company and
its subsidiaries, considered as one entity (any such change is
called a “ Material Adverse Change ”);
(ii) the Company and its subsidiaries, considered as one
entity, have not incurred any material liability or obligation,
indirect, direct or contingent, not in the ordinary course of
business or entered into any material transaction or agreement not
in the ordinary course of business; and (iii) except for
regular quarterly dividends on the Common Stock or shares of
preferred stock or shares in amounts per share that are consistent
with past practice or any special dividends on the Common Stock
that are the subject of a press release (whether in cash, Common
Stock or a combination of both), there has been no dividend or
distribution of any kind declared, paid or made by the Company or,
except for dividends paid to the Company or other subsidiaries, any
of its subsidiaries on any class of capital stock or shares or
repurchase or redemption by the Company or any of its subsidiaries
of any class of capital stock or shares.
(p) KPMG LLP, who
have expressed their opinion with respect to the Company’s
audited financial statements for the fiscal years ended
December 31, 2006, 2007 and 2008 incorporated by reference in
the Registration Statement and the Prospectus, are independent
public or certified public accountants within the meaning of
Regulation S-X under the Securities Act and the Exchange Act
and a registered public accounting firm within the meaning of the
Sarbanes-Oxley Act of 2002.
(q) The financial
statements together with the related notes thereto and the related
schedule(s) incorporated by reference in the Registration Statement
and the Prospectus present fairly the consolidated financial
position of the Company and its subsidiaries, as of and at the
dates indicated and the results of their operations and cash flows
for the periods specified. Such financial statements and related
schedule(s) have been prepared in conformity with generally
accepted accounting principles as applied in the United States
applied on a consistent basis throughout the periods involved,
except as may be expressly stated in the related notes thereto. No
other financial statements or supporting schedules are required to
be included in the Registration Statement. The summary financial
information, if any, included in the Prospectus present fairly in
all material respects the information shown therein and have been
compiled on a basis consistent with that of the audited financial
statements incorporated by reference in the Registration Statement
and the Prospectus.
(r) The Company
has been duly organized and is validly existing as a real estate
investment trust in good standing under the laws of the State of
Maryland and has
5
the trust power
and authority to own, lease and operate its properties and to
conduct its business as described in the Disclosure Package and the
Prospectus, and to enter into and perform its obligations under
this Agreement and any applicable Terms Agreement. The Company is
duly qualified to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of
business, except for such jurisdictions where the failure to so
qualify or to be in good standing would not, individually or in the
aggregate, result in a Material Adverse Change.
(s) Each
subsidiary and joint venture of the Company listed on
Schedule II hereto (collectively, the “ Significant
Subsidiaries ”) has been duly incorporated or organized,
as the case may be, and is validly existing as a corporation, trust
or partnership and (except as to any general partnership) in good
standing under the laws of the jurisdiction of its incorporation or
organization, as the case may be, and has the power (corporate or
other) and authority to own, lease and operate its properties and
to conduct its business as described in the Disclosure Package and
the Prospectus. Each Significant Subsidiary is duly qualified as a
foreign corporation, trust or partnership to transact business and
is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except for such
jurisdictions where the failure to so qualify or to be in good
standing would not, individually or in the aggregate, result in a
Material Adverse Change. All of the issued and outstanding capital
stock and other equity interests of each Significant Subsidiary
have been duly authorized and validly issued, and are fully paid
and (except for general partnership interests and directors’
qualifying shares) nonassessable; all shares of outstanding capital
stock and other equity interests of each Significant Subsidiary
held by the Company, directly or through subsidiaries, are owned
free and clear of any security interest, mortgage, pledge, lien,
encumbrance or claim, except for the pledge of such capital stock
or other interests to secure borrowings of the Company or one of
its wholly owned subsidiaries. The subsidiaries of the Company
listed on Schedule II are the only subsidiaries of the Company
that are material to the condition, financial or otherwise, or the
earnings, business, operations or prospects of the Company and its
subsidiaries, considered as one entity, and include all
subsidiaries of the Company, which individually meet the criteria
in the definition of “significant subsidiary” pursuant
to Rule 1-02(w) of Regulation S-X under the Securities
Act.
(t) All of the
issued and outstanding shares of beneficial interest of the Company
have been duly authorized and validly issued, are fully paid and
nonassessable and have been issued in compliance with federal and
state securities laws.
(u) There are no
outstanding options to purchase, or any rights or warrants to
subscribe for, or any securities or obligations convertible into,
or any contracts or commitments to issue or sell, any shares of
Common Stock, any shares of capital stock of any subsidiary, or any
such warrants, convertible securities or obligations, except as set
forth in the Disclosure Package and the Prospectus and except for
options granted under, or contracts or commitments pursuant to, the
Company’s previous or currently existing option plan and
other similar officer, trustee or employee benefit plans; and there
are no contracts, commitments, agreements, arrangements,
understandings or undertakings of
6
any kind to
which the Company is a party, or by which it is bound, granting to
any person the right to require either the Company to file a
registration statement under the Securities Act with respect to any
securities of the Company or requiring the Company to include such
securities with the Shares registered pursuant to any registration
statement, except as set forth in the Disclosure Package and the
Prospectus.
(v) Neither the
Company nor any of its subsidiaries is in violation of its
declaration of trust (or charter or by laws or other similar
constitutive documents), except, in the case of subsidiaries of the
Company, for such violations as would not, individually or in the
aggregate, result in a Material Adverse Change. Neither the Company
nor any of its subsidiaries is in default (or, with the giving of
notice or lapse of time or both, would be in default) (“
Default ”) under any indenture, mortgage, loan or
credit agreement, note, contract, franchise, lease or other
instrument to which the Company or any of its subsidiaries is a
party or by which it or any of them may be bound, or to which any
of the property or assets of the Company or any of its subsidiaries
is subject (each, an “ Existing Instrument ”),
except for such Defaults as would not, individually or in the
aggregate, result in a Material Adverse Change. The Company’s
execution, delivery and performance of this Agreement and any
applicable Terms Agreement, and the issuance and delivery of the
Shares, the consummation of the transactions contemplated hereby
and by the Disclosure Package and the Prospectus (i) have been
duly authorized by all necessary trust, corporate or other action,
as the case may be, and will not result in any violation of the
provisions of the declaration of trust (or charter or by laws or
other similar constitutive documents) of the Company or any
subsidiary of the Company, except, in the case of subsidiaries of
the Company, for such violations as would not, individually or in
the aggregate, result in a Material Adverse Change, (ii) will
not conflict with or constitute a breach of, or Default under, or
result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any of
its subsidiaries pursuant to, or require the consent of any other
party to, any Existing Instrument, except for such conflicts,
breaches, Defaults, liens, charges or encumbrances as would not,
individually or in the aggregate, result in a Material Adverse
Change and (iii) will not result in any violation of any law,
administrative regulation or administrative or court decree
applicable to the Company or any subsidiary of the Company, except
for such violation as would not, individually or in the aggregate,
result in a Material Adverse Change. No consent, approval,
authorization or other order of, or registration or filing with,
any court or other governmental or regulatory authority or agency,
is required for the Company’s execution, delivery and
performance of this Agreement and any applicable Terms Agreement,
or the issuance and delivery of the Shares or consummation of the
transactions contemplated hereby and by the Disclosure Package and
the Prospectus, except for the filing of the Prospectus Supplement
as contemplated by Section 2(a) and such as have been obtained or
made by the Company and are in full force and effect under the
Securities Act, and applicable state securities or blue sky laws
and from the Financial Industry Regulatory Authority (“
FINRA ”) or the failure of which to obtain would not
result in a Material Adverse Change or have a material adverse
effect on the consummation of the transactions contemplated by this
Agreement.
7
(w) Except as
otherwise disclosed in the Disclosure Package and the Prospectus,
there are no legal or governmental actions, suits or proceedings
pending or, to the best of the Company’s knowledge,
threatened (i) against or affecting the Company or any of its
subsidiaries, (ii) which has as the subject thereof any
officer or director of, or property owned or leased by, the Company
or any of its subsidiaries or (iii) relating to environmental
or discrimination matters, where in any such case (A) there is
a reasonable possibility that such action, suit or proceeding might
be determined adversely to the Company or such subsidiary and
(B) any such action, suit or proceeding, if so determined
adversely, would reasonably be expected to result in a Material
Adverse Change or adversely affect the consummation of the
transactions contemplated by this Agreement.
(x) No material
labor dispute with the employees of the Company or any of its
subsidiaries exists or, to the best of the Company’s
knowledge, is threatened or imminent, except for such disputes as
would not, individually or in the aggregate, result in a Material
Adverse Change.
(y) The Company
and its subsidiaries own or possess sufficient trademarks, trade
names, patent rights, copyrights, domain names, licenses,
approvals, trade secrets and other similar rights (collectively,
“ Intellectual Property Rights ”) reasonably
necessary to conduct their businesses as now conducted, except as
would not result in a Material Adverse Change; and the expected
expiration of any of such Intellectual Property Rights would not
result in a Material Adverse Change. Neither the Company nor any of
its subsidiaries has received any notice of infringement or
conflict with asserted Intellectual Property Rights of others,
which infringement or conflict, if the subject of an unfavorable
decision, would result in a Material Adverse Change. The Company is
not a party to or bound by any options, licenses or agreements with
respect to the Intellectual Property Rights of any other person or
entity that are required to be set forth in the Registration
Statement or the Prospectus, and that are not described in all
material respects in such documents. None of the technology
employed by the Company has been obtained or is being used by the
Company in violation of any contractual obligation binding on the
Company or, to the Company’s knowledge, any of its officers,
directors or employees or otherwise in violation of the rights of
any persons, except for such violations as would not, individually
or in the aggregate, result in a Material Adverse
Change.
(z) The Company
and each subsidiary possess such valid and current certificates,
authorizations, permits, licenses, approvals, consents and other
authorizations issued by the appropriate state, federal or foreign
regulatory agencies or bodies necessary to conduct their respective
businesses, and neither the Company nor any subsidiary has received
any notice of proceedings relating to the revocation or
modification of, or non-compliance with, any such certificate,
authorization, permit, license, approval, consent or other
authorization which, singly or in the aggregate, if the subject of
an unfavorable decision, ruling or finding, could result in a
Material Adverse Change.
(aa) Except as
otherwise disclosed in the Disclosure Package and the Prospectus,
the Company and each of its subsidiaries has good and marketable
title to all the properties and assets reflected as owned in the
financial statements referred to in
8
Section 1(q) above (or elsewhere in the
Disclosure Package and the Prospectus), in each case free and clear
of any security interests, mortgages, liens, encumbrances,
equities, claims and other defects, except such as do not
materially and adversely affect the value of such property and do
not materially interfere with the use made or proposed to be made
of such property by the Company or such subsidiary. The real
property, improvements, equipment and personal property held under
lease by the Company or any subsidiary are held under valid and
enforceable leases, with such exceptions as are not material and do
not materially interfere with the use made or proposed to be made
of such real property, improvements, equipment or personal property
by the Company or such subsidiary.
(bb) The Company
and its subsidiaries have filed all material federal, state and
foreign income and franchise tax returns or have properly requested
extensions thereof and have paid all taxes required to be paid by
any of them and, if due and payable, any related or similar
assessment, fine or penalty levied against any of them except as
may be being contested in good faith and by appropriate
proceedings. The Company has made adequate charges, accruals and
reserves in the applicable financial statements referred to in
Section 1(q) above in respect of all federal, state and foreign
income and franchise taxes for all periods as to which the tax
liability of the Company or any of its subsidiaries has not been
finally determined. With respect to all tax periods in respect of
which the Internal Revenue Service is or will be entitled to any
claim, the Company has met the requirements for qualification as a
real estate investment trust under Sections 856 through 860 of
the Internal Revenue Code of 1986, as amended, and the regulations
and published interpretations thereunder (the “ Internal
Revenue Code ”) and the Company’s present and
contemplated organizational ownership, method of operation, assets
and income are such that the Company will continue to meet such
requirements.
(cc) The Company
is not, and after receipt of payment for the Shares and the
application of the proceeds as described in the Disclosure Package
and the Prospectus under “Use of Proceeds” will not be,
an “investment company” within the meaning of the
Investment Company Act of 1940, as amended (the “
Investment Company Act ”).
(dd) Each of the
Company and its subsidiaries taken as a whole carry or are covered
by insurance in such amounts covering such risks as are generally
deemed adequate and customary for their businesses. The Company has
no reason to believe that it or any subsidiary will not be able
(i) to renew its existing insurance coverage as and when such
policies expire or (ii) to obtain comparable coverage from
similar institutions as may be necessary or appropriate to conduct
its business as now conducted and at a cost that would not result
in a Material Adverse Change.
(ee) Neither the
Company nor any of its Significant Subsidiaries nor, to the best of
the Company’s knowledge, any employee or agent of the Company
or any Significant Subsidiary, has made any contribution or other
payment to any official of, or candidate for, any federal, state or
foreign office in violation of any law or of the character
necessary to be disclosed in the Disclosure Package and the
Prospectus in order to make the statements therein, in the light of
the circumstances under which such statements were made, not
misleading.
9
(ff) Except as
would not, individually or in the aggregate, result in a Material
Adverse Change (i) neither the Company nor any of its
subsidiaries is in violation of any federal, state, local or
foreign law or regulation relating to pollution or protection of
human health or the environment (including, without limitation,
ambient air, surface water, groundwater, land surface or subsurface
strata) or wildlife, including without limitation, laws and
regulations relating to emissions, discharges, releases or
threatened releases of chemicals, pollutants, contaminants, wastes,
toxic substances, hazardous substances, petroleum and petroleum
products (collectively, “ Materials of Environmental
Concern ”), or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal,
transport or handling of Materials of Environmental Concern
(collectively, “ Environmental Laws ”), which
violation includes, but is not limited to, noncompliance with any
permits or other governmental authorizations required for the
operation of the business of the Company or its subsidiaries under
applicable Environmental Laws, or noncompliance with the terms and
conditions thereof, nor has the Company or any of its subsidiaries
received any written communication, whether from a governmental
authority, citizens group, employee or otherwise, that alleges that
the Company or any of its subsidiaries is in violation of any
Environmental Law; (ii) there is no claim, action or cause of
action filed with a court or governmental authority with respect to
which the Company has received written notice, no investigation
with respect to which the Company has received written notice, and
no written notice by any person or entity alleging potential
liability for investigatory costs, cleanup costs, governmental
responses costs, natural resources damages, property damages,
personal injuries, attorneys’ fees or penalties arising out
of, based on or resulting from the presence, or release into the
environment, of any Material of Environmental Concern at any
location owned, leased or operated by the Company or any of its
subsidiaries, now or in the past (collectively, “
Environmental Claims ”), pending or, to the best of
the Company’s knowledge, threatened against the Company or
any of its subsidiaries or any person or entity whose liability for
any Environmental Claim the Company or any of its subsidiaries has
retained or assumed either contractually or by operation of law;
and (iii) to the best of the Company’s knowledge, there
are no past or present actions, activities, circumstances,
conditions, events or incidents, including, without limitation, the
release, emission, discharge, presence or disposal of any Material
of Environmental Concern, that reasonably could result in a
violation of any Environmental Law or form the basis of a potential
Environmental Claim against the Company or any of its subsidiaries
or against any person or entity whose liability for any
Environmental Claim the Company or any of its subsidiaries has
retained or assumed either contractually or by operation of
law.
(gg) The Company
and its subsidiaries and any “employee benefit plan”
(as defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended, and the regulations and published
interpretations thereunder (collectively, “ ERISA
”)) established or maintained by the Company, its
subsidiaries or their “ERISA Affiliates” (as defined
below) are in compliance in all material respects with ERISA.
“ERISA Affiliate” means, with respect to the Company or
a subsidiary, any member of any group of organizations described in
Sections 414(b), (c), (m) or (o) of the Internal
Revenue Code, of which the Company or such subsidiary is a member.
No “reportable event” (as defined under ERISA) has
occurred or is reasonably expected to occur with respect to any
“employee benefit plan” established or maintained by
the Company, its
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subsidiaries or
any of their ERISA Affiliates. No “employee benefit
plan” established or maintained by the Company, its
subsidiaries or any of their ERISA Affiliates, if such
“employee benefit plan” were terminated, would have any
“amount of unfunded benefit liabilities” (as defined
under ERISA). Neither the Company, its subsidiaries nor any of
their ERISA Affiliates has incurred or reasonably expects to incur
any liability under (i) Title IV of ERISA with respect to
termination of, or withdrawal from, any “employee benefit
plan,” (ii) Sections 412, 4971 or 4975 of the
Internal Revenue Code, or (iii) Section 4980B of the
Internal Revenue Code with respect to the excise tax imposed
thereunder. Each “employee benefit plan” established or
maintained by the Company, its subsidiaries or any of their ERISA
Affiliates that is intended to be qualified under Section 401(a) of
the Internal Revenue Code has received a favorable determination
letter from the Internal Revenue Service and nothing has occurred,
whether by action or failure to act, which is reasonably likely to
cause disqualification of any such employee benefit plan under
Section 401(a) of the Internal Revenue Code.
(hh) The Company
and its subsidiaries maintain effective internal control over
financial reporting, as such term is defined in Rule 13a-15(f)
under the Exchange Act.
(ii) The Company
has established and maintains disclosure controls and procedures
(as such term is defined in Rules 13a-15 and 15d-14 under the
Exchange Act); such disclosure controls and procedures are designed
to ensure that material information relating to the Company and its
subsidiaries is made known to the chief executive officer and chief
financial officer of the Company by others within the Company or
any of its subsidiaries, and such disclosure controls and
procedures are reasonably effective to perform the functions for
which they were established subject to the limitations of any such
control system; the Company’s auditors and the audit
committee of the board of directors of the Company have been
advised of: (i) any significant deficiencies or material
weaknesses in the design or operation of internal controls which
could adversely affect the Company’s ability to record,
process, summarize, and report financial data; and (ii) any
fraud, whether or not material, that involves management or other
employees who have a role in the Company’s internal controls;
and since the date of the most recent evaluation of such disclosure
controls and procedures, there have been no significant changes in
internal controls or in other factors that could significantly
affect internal controls, including any corrective actions with
regard to significant deficiencies and material
weaknesses.
(jj) The Shares
have been approved for listing on the New York Stock Exchange
(“ NYSE ”), subject only to official notice of
issuance.
Any certificate
signed by any officer of the Company and delivered to the Manager
or counsel for the Manager in connection with this Agreement or any
Terms Agreement shall be deemed a representation and warranty by
the Company, as to matters covered thereby, to the
Manager.
3.
Sale and Delivery of Shares .
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(a) Subject
to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Company agrees
to issue and sell Shares from time to time through the Manager,
acting as sales agent, and the Manager agrees to use its reasonable
efforts to sell, as sales agent for the Company, the Shares on the
following terms.
(i) The Shares are
to be sold on a daily basis or otherwise as shall be agreed to by
the Company and the Manager on any day that (A) is a trading
day for the NYSE, (B) the Company has instructed the Manager
by telephone (confirmed promptly by electronic mail) to make such
sales and (C) the Company has satisfied its obligations under
Section 6 of this Agreement. The Company will designate the
maximum amount of the Shares to be sold by the Manager daily as
agreed to by the Manager (in any event not in excess of the amount
available for issuance under the Prospectus and the currently
effective Registration Statement) and the minimum price per Share
at which such Shares may be sold. Subject to the terms and
conditions hereof, the Manager shall use its reasonable efforts to
sell on a particular day all of the Shares designated for the sale
by the Company on such day. The gross sales price of the Shares
sold under this Section 3(a) shall be the market price for
shares
of the Company’s Common Stock sold by the Manager under this
Section 3(a) on the NYSE at the time of sale of such Shares (but in
no event shall such gross price be less than the minimum price per
Share designated by the Company at which such Shares may be
sold).
(ii) The Company
acknowledges and agrees that (A) there can be no assurance
that the Manager will be successful in selling the Shares,
(B) the Manager will incur no liability or obligation to the
Company or any other person or entity if it does not sell Shares
for any reason other than a failure by the Manager to use its
reasonable efforts consistent with its normal trading and sales
practices and applicable law and regulations to sell such Shares as
required under this Agreement, and (C) the Manager shall be
under no obligation to purchase Shares on a principal basis
pursuant to this Agreement, except as otherwise specifically agreed
by the Manager and the Company.
(iii) The Company
shall not authorize the issuance and sale of, and the Manager may
not sell, any Share at a price lower than the minimum price
therefor designated from time to time by the Company’s Board
of Directors (the “ Board ”), or a duly
authorized committee thereof, and notified to the Manager in
writing. The Company or the Manager may, upon notice to the other
party hereto by telephone (confirmed promptly by electronic mail),
suspend the offering of the Shares for any reason and at any time;
provided , however , that such suspension or
termination shall not affect or impair the parties’
respective obligations with respect to the Shares sold hereunder
prior to the giving of such notice.
(iv) The Manager
hereby covenants and agrees not to make any sales of the Shares on
behalf of the Company, pursuant to this Section 3(a), other
than (A) by means of ordinary brokers’ transactions
between members of the NYSE that qualify for delivery of a
Prospectus to the NYSE in accordance with Rule 153 of the 1933
Act Regulations (such transactions are hereinafter referred to
as
12
“
Continuous Offerings ”) and (B) such other sales
of the Shares on behalf of the Company in its capacity as agent of
the Company as shall be agreed by the Company and the Manager
pursuant to a Terms Agreement.
(v) The
compensation to the Manager for sales of the Shares with respect to
which the Manager acts as sales agent under this Agreement shall be
2.00% of the gross sales price of the Shares sold pursuant to this
Section 3(a) and payable as described in the succeeding subsection
(vi) below. The foregoing rate of compensation shall not apply
when the Manager acts as principal, in which case the Company may
sell Shares to the Manager as principal at a price agreed upon at
the relevant Applicable Time pursuant to a Terms Agreement. The
remaining proceeds, after further deduction for any transaction
fees imposed by any governmental or self-regulatory organization in
respect of such sales (the “ Transaction Fees
”), shall constitute the net proceeds to the Company for such
Shares (the “ Net Proceeds ”).
(vi) The Manager
shall provide written confirmation (which may be by facsimile or
electronic mail) to the Company following the close of trading on
the NYSE each day in which the Shares are sold under this Section
3(a) setting forth the number of the Shares sold on such day, the
aggregate gross sales proceeds and the Net Proceeds to the Company.
Compensation payable to the Manager with respect to any sales made
pursuant to this Agreement shall be set forth and invoiced in
periodic statements from the Manager to the Company, with payment
to be made by the Company promptly after its receipt
thereof.
(vii) Settlement
for sales of the Shares pursuant to this Section 3(a) will occur on
the third trading day following the date on which such sales are
made (each such day, a “ Settlement Date ”). On
each Settlement Date, the Shares sold through the Manager for
settlement on such date shall be issued and delivered by the
Company to the Manager against payment of the aggregate gross sales
proceeds less any Transaction Fees from the sale of such Shares.
Settlement for all such Shares shall be effected by free delivery
of the Shares to the Manager’s account at The Depository
Trust Company (“ DTC ”) in return for payments
in same day funds delivered to the account designated by the
Company. If the Company or its transfer agent (if applicable) shall
default on its obligation to deliver the Shares on any Settlement
Date, the Company shall (A) indemnify and hold the Manager
harmless against any loss, claim or damage arising from or as a
result of such default by the Company and (B) pay the Manager
any commission to which it would otherwise be entitled absent such
default. If the Manager breaches this Agreement by failing to
deliver the aggregate gross sales proceeds less any Transaction
Fees to the Company on any Settlement Date for the Shares delivered
by the Company, the Manager will pay the Company interest based on
the effective overnight federal funds rate on such unpaid amount
less any compensation due to the Manager.
(viii) At each
Applicable Time, Settlement Date, Representation Date (as defined
in Section 4(l)) and Filing Date (as defined in
Section 4(r)), the
13
Company shall
be deemed to have affirmed each representation and warranty
contained in this Agreement as if such representation and warranty
were made as of such date, modified as necessary to relate to the
Registration Statement and the Prospectus as amended as of such
date. Any obligation of the Manager to use its reasonable efforts
to sell the Shares on behalf of the Company shall be subject to the
continuing accuracy of the representations and warranties of the
Company herein, to the performance by the Company of its
obligations hereunder and to the continuing satisfaction of the
additional conditions specified in Section 6 of this
Agreement.
(b) If the Company
wishes to issue and sell the Shares pursuant to this Agreement but
other than as set forth in Section 3(a) of this Agreement (each, a
“ Placement ”), it will notify the Manager of
the proposed terms of such Placement. If the Manager, acting as
principal, wishes to accept such proposed terms (which it may
decline to do for any reason in its sole discretion) or, following
discussions with the Company wishes to accept amended terms, the
Manager and the Company will enter into a Terms Agreement setting
forth the terms of such Placement. The terms set forth in a Terms
Agreement will not be binding on the Company or the Manager unless
and until the Company and the Manager have each executed such Terms
Agreement accepting all of the terms of such Terms Agreement. In
the event of a conflict between the terms of this Agreement and the
terms of a Terms Agreement, the terms of such Terms Agreement will
control.
(c) Each sale of
the Shares to the Manager shall be made in accordance with the
terms of this Agreement and, if applicable, a Terms Agreement,
which will provide for the sale of such Shares to, and the purchase
thereof by, the Manager. A Terms Agreement may also specify certain
provisions relating to the reoffering of such Shares by the
Manager. The commitment of the Manager to purchase the Shares
pursuant to any Terms Agreement shall be deemed to have been made
on the basis of the representations and warranties of the Company
herein contained and shall be subject to the terms and conditions
herein set forth. Each Terms Agreement shall specify the number of
the Shares to be purchased by the Manager pursuant thereto, the
price to be paid to the Company for such Shares, any provisions
relating to rights of, and default by, underwriters acting together
with the Manager in the reoffering of the Shares, and the time and
date (each such time and date being referred to herein as a “
Time of Delivery ”) and place of delivery of and
payment for such Shares. Such Terms Agreement shall also specify
any requirements for opinions of counsel, accountants’
letters and officers’ certificates pursuant to Section 6
of this Agreement and any other information or documents required
by the Manager.
(d) Under no
circumstances shall the number and aggregate amount of the Shares
sold pursuant to this Agreement and any Terms Agreement exceed
(i) the aggregate amount set forth in Section 1,
(ii) the number of shares of the Common Stock available for
issuance under the currently effective Registration Statement or
(iii) the number and aggregate amount of the Shares authorized
from time to time to be issued and sold under this Agreement by the
Board, or a duly authorized committee thereof, and notified to the
Manager in writing.
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(e) If either
party has reason to believe that the exemptive provisions set forth
in Rule 101(c)(1) of Regulation M under the Exchange Act
are not satisfied with respect to the Shares, it shall promptly
notify the other party and sales of the Shares under this Agreement
and any Terms Agreement shall be suspended until that or other
exemptive provisions have been satisfied in the judgment of each
party.
4.
Agreements . The Company agrees with the Manager
that:
(a) During any
period when the delivery of a prospectus relating to the Shares is
required (including in circumstances where such requirement may be
satisfied pursuant to Rule 172) to be delivered under the Act
in connection with the offering or sale of the Shares, the Company
will not file any amendment of the Registration Statement or
supplement in connection with the offering and sale of the Shares
(including the Prospectus Supplement or any Interim Prospectus
Supplement) to the Base Prospectus, the Disclosure Package or the
Prospectus, whether pursuant to the Securities Act, the Exchange
Act or otherwise, unless (A) the Company has furnished to the
Manager a copy of such amendment or supplement (including, for the
avoidance of doubt, reports or other information to be filed by the
Company under the Exchange Act that would be incorporated by
reference into the Registration Statement and Prospectus) for its
review a reasonable period of time prior to filing (or, in the case
of Current Reports on Form 8-K, has used its commercially
reasonable efforts to so furnish copies to the Manager prior to
filing), and (B) except for reports or other information
required to be filed by the Company under the Exchange Act, the
Company will not file any such proposed amendment or supplement to
which the Manager reasonably objects. The Company has prepared the
Prospectus, in a form approved by the Manager, and shall file such
Prospectus, as amended at the Execution Time, with the Commission
pursuant to the applicable paragraph of Rule 424(b) promptly
after the Execution Time (but in any event
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