EXHIBIT 10.1
Kansas City Southern
Common Stock
($.01 par value)
ATM EQUITY OFFERING
SM
SALES AGREEMENT
April 27, 2009
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
4 World Financial Center
New York, New York 10080
Ladies and Gentlemen:
Kansas
City Southern, a Delaware corporation (the “ Company
”), proposes, subject to the terms and conditions stated
herein, to issue and sell from time to time through Merrill Lynch,
Pierce, Fenner & Smith Incorporated, as sales agent (the
“ Agent ”), shares (the “ Shares
” ) of the Company’s common stock, $.01 par
value (the “ Common Stock ”), having an
aggregate offering price of up to $75,000,000 on the terms set
forth in Section 2 of this ATM Equity Offering
SM Sales Agreement (the “ Agreement
”).
Section 1. Representations and
Warranties . The Company represents and warrants to the Agent
that as of the date of this Agreement, each Suspension Termination
Date (as defined in Section 2(c) below), each Applicable Time (as
defined in Section 1(a) below) and each Settlement Date (as defined
in Section 2 below) and, except during any period in which the
offering of Shares is suspended pursuant to Section 2(c), any
applicable Registration Statement Amendment Date (as defined in
Section 3 below), each Company Periodic Report Date (as
defined in Section 3 below) and each Company Earnings Report
Date (as defined in Section 3 below):
(a) Compliance with Registration
Requirements . The Company has filed with the Securities and
Exchange Commission (the “ Commission ”) an
“automatic shelf registration statement” as defined
under Rule 405 under the Securities Act of 1933, as amended,
and the rules and regulations of the Commission thereunder (the
“ 1933 Act ”), on Form S-3 (File No.
333-155601), relating to certain securities of the Company
(including the Shares) (collectively, the “ Securities
”) not earlier than three years prior to the date hereof;
such registration statement, and any post-effective amendment
thereto, became effective on filing; and no stop order suspending
the effectiveness of such registration statement or any part
thereof has been issued and no proceeding for that purpose has been
initiated or, to the knowledge of the Company, threatened by the
Commission, and no notice of objection of the Commission to the use
of such form of registration statement or any post-effective
amendment thereto pursuant to Rule 401(g)(2) under the 1933
Act has been received by the Company (the base prospectus filed as
part of such registration statement, in the form in which it has
most recently been filed with the Commission on or prior to the
date of this Agreement, is hereinafter called the “ Basic
Prospectus ”; the various parts of such registration
statement, excluding any Form T-1 but including all exhibits
thereto and any prospectus supplement relating to the Shares that
is filed with the Commission and deemed by virtue of Rule 430B
to be part of such registration statement, each as amended at the
time such part of the registration statement became effective, are
hereinafter collectively called the “ Registration
Statement ”; the prospectus supplement specifically
relating to the Shares prepared and filed by the Company with the
Commission pursuant to Rule 424(b) under the 1933 Act is
hereinafter called the “ Prospectus Supplement
”; the Basic Prospectus, as amended and supplemented by the
Prospectus Supplement, is hereinafter called the “
Prospectus ”; any reference herein to the Basic
Prospectus, the 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 under the
1933 Act; any reference to any amendment or supplement to the Basic
Prospectus, the Prospectus Supplement or the Prospectus shall be
deemed to refer to and include any post-effective amendment to the
Registration Statement, any prospectus supplement relating to the
Shares filed by the Company with the Commission pursuant to Rule
424(b) under the 1933 Act and any documents filed by the Company
under the Securities Exchange Act of 1934, as amended, and the
rules and regulations of the Commission thereunder (the “
1934 Act ”), and incorporated therein, in each case
after the date of the Basic Prospectus, the Prospectus Supplement
or the Prospectus, as the case may be; any reference to any
amendment to the Registration Statement shall be deemed to refer to
and include any annual report of the Company filed pursuant to
Section 13(a) or 15(d) of the 1934 Act after the effective date of
the Registration Statement that is incorporated by reference in the
Registration Statement; and any “issuer free writing
prospectus” as defined in Rule 433 under the 1933 Act
relating to the Shares is hereinafter called an “ Issuer
Free Writing Prospectus ”).
No
order preventing or suspending the use of the Basic Prospectus, the
Prospectus Supplement, the Prospectus or any Issuer Free Writing
Prospectus has been issued by the Commission, and the Basic
Prospectus and the Prospectus Supplement, at the time of filing
thereof, conformed in all material respects to the requirements of
the 1933 Act and did 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, in the light of the
circumstances under which they were made, not misleading, except
that the representations and warranties set forth in this Section
shall not apply to statements or omissions based upon information
relating to the Agent furnished to the Company by the Agent in
writing expressly for use in any Prospectus, Prospectus Supplement,
Issuer Free Writing Prospectus or General Disclosure
Package.
For
the purposes of this Agreement, the “ Applicable Time
” means, with respect to any Shares, the time of sale of such
Shares pursuant to this Agreement. The Prospectus and any
applicable Issuer Free Writing Prospectus(es) issued at or prior to
such Applicable Time, taken together (collectively, and, with
respect to any Shares, together with the public offering price of
such Shares, the “ General Disclosure Package ”)
as of each Applicable Time and each Settlement Date, will not
include any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were
made, not misleading, except that the representations and
warranties set forth in this Section shall not apply to statements
or omissions based upon information relating to the Agent furnished
to the Company by the Agent in writing expressly for use in any
Prospectus, Prospectus Supplement, Issuer Free Writing Prospectus
or General Disclosure Package; and each applicable Issuer Free
Writing Prospectus will not conflict with the information contained
in the Registration Statement, the Prospectus Supplement or the
Prospectus and each such Issuer Free Writing Prospectus, as
supplemented by and taken together with the General Disclosure
Package as of such Applicable Time, will not include any untrue
statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading,
except that the representations and warranties set forth in this
section shall not apply to statements or omissions based upon
information relating to the Agent furnished to the Company by the
Agent in writing expressly for use in any Prospectus, Prospectus
Supplement, Issuer Free Writing Prospectus or General Disclosure
Package.
(b) Incorporation of Documents by
Reference . The documents incorporated or deemed to be
incorporated by reference in the Registration Statement and the
Prospectus, when they became effective or were filed with the
Commission, as the case may be, complied in all material respects
with the requirements of the 1934 Act, and, when read together with
the other information in the Prospectus, (a) at the time the
Registration Statement became effective, (b) at the time the
Prospectus was issued and (c) on the date of this Agreement,
did 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.
(c) Independent Accountants . The
accountants who certified the financial statements and supporting
schedules included in the Registration Statement are independent
public accountants with respect to the Company as required by the
1933 Act and the 1933 Act Regulations.
(d) Financial Statements . The
historical audited consolidated financial statements and notes of
the Company included or incorporated by reference in the
Registration Statement, the General Disclosure Package and the
Prospectus (i) have been prepared in accordance with U.S.
generally accepted accounting principles (“ GAAP
”), (ii) present fairly in all material respects the
financial condition, results of operations and cash flows of the
Company and each of its subsidiaries taken as a whole, and
(iii) comply as to form in all material respects with the
applicable accounting requirements of the 1933 Act. No other
financial statements are required to be included or incorporated by
reference in the Registration Statement, the General Disclosure
Package or the Prospectus.
(e) No Material Adverse Change in
Business . Since the respective dates as of which information
is given in the Registration Statement, the General Disclosure
Package or the Prospectus, except as otherwise stated therein,
there has not occurred any material adverse change, or to the
Company’s knowledge, any development involving a prospective
material adverse change, in the condition, financial or otherwise,
or in the earnings, business affairs or operations of the Company
and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business (a “ Material
Adverse Effect ”).
(f) Good Standing of the Company .
The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the jurisdiction of
its incorporation, has the corporate power and authority to own,
lease and operate its property and to conduct its business as
described in the Prospectus and is duly qualified to transact
business and is in good standing in each jurisdiction in which the
conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure
to be so qualified or be in good standing would not result in a
Material Adverse Effect.
(g) Good Standing of Subsidiaries .
Each subsidiary of the Company has been duly organized, is validly
existing and in good standing (to the extent applicable) under the
laws of the jurisdiction of its organization, has the power and
authority to own, lease and operate its property and to conduct its
business as described in the Prospectus and is duly qualified to
transact business and is in good standing (to the extent
applicable) in each jurisdiction in which the conduct of its
business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so
qualified or be in good standing (to the extent applicable) would
not have a Material Adverse Effect; all of the issued shares of
capital stock of each corporate subsidiary of the Company held by
the Company have been duly and validly authorized and issued, are
fully paid and non-assessable and are owned directly or indirectly
by the Company free and clear of all liens, encumbrances, equities
or claims.
(h) Capitalization . The
authorized, issued and outstanding capital stock of the Company is
as set forth in the Registration Statements and the Prospectus in
the column entitled “Actual” under the caption
“Capitalization” (except for subsequent issuances, if
any, pursuant to this Agreement, pursuant to reservations,
agreements or employee benefit plans referred to in the Prospectus
or pursuant to the exercise of convertible securities or options
referred to in the Prospectus). The shares of issued and
outstanding Common Stock have been duly authorized and validly
issued and are fully paid and non-assessable; none of the
outstanding shares of capital stock was issued in violation of the
preemptive or other similar rights of any securityholder of the
Company. The Company’s Common Stock has been registered
pursuant to Section 12(b) of the 1934 Act and is listed on the New
York Stock Exchange (the “ NYSE ”), and the
Company has taken no action designed to, or likely to have the
effect of, terminating the listing of the Common Stock from the
NYSE, nor has the Company received any notification that the
Commission or the NYSE is contemplating terminating such
registration or listing.
(i) Authorization of Agreement .
This Agreement has been duly authorized, executed and delivered by
the Company.
(j) Authorization and Description of
Securities . The Shares have been duly authorized and reserved
for issuance and sale pursuant to this Agreement and, when issued
and delivered by the Company pursuant to this Agreement against
payment of the consideration set forth herein, will be validly
issued and fully paid and non-assessable; the Common Stock conforms
as to legal matters to the description thereof contained in the
Prospectus and such description conforms in all material respects
to the rights set forth in the instruments defining the same; no
holder of the Shares will be subject to personal liability by
reason of being such a holder; and the issuance of the Shares is
not subject to the preemptive or other similar rights of any
securityholder of the Company.
(k) Absence of Defaults and
Conflicts . Neither the Company nor any of its subsidiaries is
in violation of its charter or by-laws or in default in the
performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, deed of
trust, loan or credit agreement, note, lease or other agreement or
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 subsidiary is
subject except for such defaults that would not have a Material
Adverse Effect; and the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated
herein and in the Registration Statement (including the issuance
and sale of the Shares and the use of the proceeds from the sale of
the Shares as described in the Prospectus under the caption
“Use of Proceeds”) and compliance by the Company with
its obligations hereunder have been duly authorized by all
necessary corporate action and do not and will not
(i) contravene any provision of applicable law or the
certificate of incorporation or by-laws of the Company or any
agreement or other instrument binding upon the Company or any of
its subsidiaries included or incorporated by reference in the
Company’s most recent Annual Report on Form 10-K,
(ii) result in an event or condition which gives the holder of
any notes, debenture, or other evidence of indebtedness included or
incorporated by reference in the Company’s most recent Annual
Report on Form 10-K (or any person acting on such holder’s
behalf) the right to require the repurchase, redemption or
repayment of all or a portion of such indebtedness by the Company
or any of its subsidiaries, or (iii) contravene, conflict with
or constitute a breach of, or default under any judgment, order or
decree of any governmental body, agency or court having
jurisdiction over the Company or any of its subsidiaries and their
respective operations, except to the extent that such
contravention, violation, breach or default described in item
(iii) above would not have a Material Adverse
Effect.
(l) Absence of Labor Dispute .
Except as described in the Registration Statement, no material
labor dispute with the employees of the Company or any of its
subsidiaries exists or, to the knowledge of the Company or any of
its subsidiaries, is threatened or, to the knowledge of the
Company, is imminent, and to the knowledge of the Company and any
of its subsidiaries there is no existing or imminent labor
disturbance by the employees of any of their respective principal
suppliers, contractors or customers that would be reasonably likely
to have a Material Adverse Effect.
(m) Absence of Proceedings . There
are no legal or governmental proceedings pending or, to the
Company’s knowledge, threatened to which the Company or any
of its subsidiaries is a party or to which any of the properties of
the Company or any of its subsidiaries is subject (i) other than
proceedings that are accurately described in all material respects
in the Registration Statement and proceedings that would not have a
Material Adverse Effect, or on the power or ability of the Company
to perform its obligations under this Agreement or to consummate
the transactions contemplated by this Agreement or (ii) that
are required to be described in the Registration Statement by
Regulation S-K or the item requirements of the applicable form
under the 1933 Act or the 1934 Act and are not so
described.
(n) Disclosure of Statutes and
Contracts, Etc. There are no statutes, regulations, contracts
or other documents that are required to be described in the
Registration Statement, the Prospectus or the documents
incorporated by reference therein by Regulation S-K or the
item requirements of the applicable form under the 1933 Act or the
1934 Act or to be filed as exhibits thereto that are not described
or filed as required.
(o) Absence of Further Requirements
. No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any court or
governmental authority or agency is necessary or required for the
performance by the Company of its obligations hereunder, in
connection with the offering, issuance or sale of the Securities
hereunder or the consummation of the transactions contemplated by
this Agreement, except such as have been already obtained or as may
be required under the 1933 Act or the 1933 Act Regulations or state
securities laws.
(p) Absence of Manipulation .
Neither the Company nor any affiliate of the Company has taken, nor
will the Company or any affiliate take, directly or indirectly, any
action which is designed to or which has constituted or which would
reasonably be expected to cause or result in stabilization or
manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares.
(q) Possession of Licenses and
Permits . The Company and each of its subsidiaries own, possess
or has obtained all licenses, permits, certificates, consents,
orders, approvals and other authorizations from, and has made all
declarations and filings with, all federal, state, local and other
governmental authorities (including foreign regulatory agencies),
all self-regulatory organizations and all courts and other
tribunals, domestic or foreign, necessary to own or lease, as the
case may be, and to operate their properties and to carry on their
business as conducted as of the date hereof and as described in the
Registration Statement, except to the extent that the failure to
own, possess or obtain such licenses, permits, certificates,
consents, orders, approvals and other authorizations would not have
a Material Adverse Effect; and neither the Company nor any of its
subsidiaries has received any notice of any proceeding relating to
revocation or modification of any such license, permit,
certificate, consent, order, approval or other authorization which,
individually or in the aggregate, if the subject of an unfavorable
or adverse decision or ruling, would reasonably be expected to
result in a Material Adverse Effect.
(r) Investment Company Act . The
Company is not required, and upon the issuance and of the Shares as
herein contemplated and the application of the net proceeds
therefrom as described in the Prospectus will not be required, to
register as an “investment company” within the meaning
of the Investment Company Act of 1940, as amended (the “
1940 Act ”).
(s) Environmental Laws . The
Company and its subsidiaries (i) are in compliance with any and all applicable
foreign, federal, state and local laws and regulations relating to
the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
(“ Environmental Laws ”), (ii)
have received all permits, licenses
or other approvals required of them under applicable Environmental
Laws to conduct their respective businesses and (iii)
are in compliance with all terms and
conditions of any such permit, license or approval, except, in each
case, where such noncompliance with Environmental Laws, failure to
receive required permits, licenses or other approvals or failure to
comply with the terms and conditions of such permits, licenses or
approvals would not, singly or in the aggregate, have a Material
Adverse Effect. There are no costs or liabilities associated with
Environmental Laws (including, without limitation, any capital or
operating expenditures required for clean-up, closure of properties
or compliance with Environmental Laws or any permit, license or
approval, any related constraints on operating activities and any
potential liabilities to third parties) which would, singly or in
the aggregate, have a Material Adverse Effect.
(t) Registration Rights . There are
no persons with registrations rights or other similar rights to
have any securities registered pursuant to the Registration
Statement or otherwise registered by the Company under the 1933
Act.
(u) Accounting Controls . The
Company and each of its subsidiaries maintain 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) all
transactions are recorded as necessary to permit preparation of
financial statements in 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.
(v) Well-Known Seasoned Issuer .
(A)(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 1933 Act
(whether such amendment was by post-effective amendment,
incorporated report filed pursuant to Section 13 or 15(d) of
the 1934 Act or form of prospectus), 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) under the 1933 Act) made any offer
relating to the Shares in reliance on the exemption of
Rule 163 under the 1933 Act, the Company was a
“well-known seasoned issuer” as defined in
Rule 405 under the 1933 Act; and (B) 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) under the 1933 Act) of the Shares,
the Company was not an “ineligible issuer” as defined
in Rule 405 under the 1933 Act.
(w) No Commissions . Neither the
Company nor any of its subsidiaries is a party to any contract,
agreement or understanding with any person (other than as
contemplated by this Agreement) that would give rise to a valid
claim against the Company or any of its subsidiaries or the Agent
for a brokerage commission, finder’s fee or like payment in
connection with the offering and sale of the Shares.
(x) Actively-Traded Security . The
Common Stock is an “actively-traded security” exempted
from the requirements of Rule 101 of Regulation M under
the 1934 Act by subsection (c)(1) of such rule.
(y) Deemed Representation . Any
certificate signed by any officer of the Company delivered to the
Agent or to counsel for the Agent pursuant to or in connection with
this Agreement shall be deemed a representation and warranty by the
Company to the Agent as to the matters covered thereby as of the
date or dates indicated in such certificate.
(z) Compliance with the Sarbanes-Oxley
Act. There is and has been no failure on the part of the
Company and, to the Company’s knowledge, any of the
Company’s directors or officers, in their capacities as such,
to comply with any provision of the Sarbanes-Oxley Act of 2002 and
the rules and regulations promulgated in connection therewith (the
“ Sarbanes-Oxley Act ”) applicable to the
Company as of the date hereof.
(aa) Payment of Taxes . The Company
and each of its subsidiaries has filed all tax returns (foreign,
national, local or other) required to be filed and has paid all
taxes required to be paid by them and any other assessment, fine or
penalty levied against them, to the extent that any of the
foregoing is due and payable, except for any such assessment, fine
or penalty that is currently being contested in good faith and
except where the failure to file or pay would not, individually or
in the aggregate, result in a Material Adverse Effect.
(bb) Insurance . The Company and
each of its subsidiaries is insured by insurers of recognized
financial responsibility against such losses and risks and in such
amounts as are prudent and customary for companies engaged in the
same or similar businesses; all such policies covering any of their
business, assets, employees, officers and directors are in full
force and effect; the Company and each of its subsidiaries is in
compliance with the terms of such policies and instruments in all
material respects, and there are no claims by the Company or any of
its subsidiaries under any such policy or instrument as to which
any insurance company is denying liability of defending under a
reservation of rights clause; and neither the Company nor any of
its subsidiaries has any reason to believe that it will not be able
to renew its existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as may
be necessary to continue in their businesses.
(cc) Unlawful Payments . Neither
the Company nor any of its subsidiaries or affiliates, nor to the
knowledge of the Company, any director, officer, employee, agent or
representative of the Company or of any of its subsidiaries or
affiliates, has taken or will take any action in furtherance of an
offer, payment, promise to pay, or authorization or approval of the
payment or giving of money, property, gifts or anything else of
value, directly or indirectly, to any “government
official” (including any officer or employee of a government
or government-owned or controlled entity or of a public
international organization, or any person acting in an official
capacity for or on behalf of any of the foregoing, or any political
party or party official or candidate for political office) to
influence official action or secure an improper advantage; and the
Company and its subsidiaries and affiliates have conducted their
businesses in compliance with applicable anti-corruption laws and
have instituted and maintain and will continue to maintain policies
and procedures designed to promote and achieve compliance with such
laws and with the representation and warranty contained
herein.
(dd) Money Laundering Laws . The
operations of the Company and its domestic subsidiaries are and
have been conducted at all times in material compliance with all
applicable financial recordkeeping and reporting requirements,
including those of the Bank Secrecy Act, as amended by Title III of
the Uniting and Strengthening America by Providing Appropriate
Tools Required to Intercept and Obstruct Terrorism Act of 2001 (USA
PATRIOT Act), and the applicable anti-money laundering statutes of
jurisdictions where the Company and its subsidiaries conduct
business, the rules and regulations thereunder and any related or
similar rules, regulations or guidelines, issued, administered or
enforced by any governmental agency (collectively, the “
Anti-Money Laundering Laws ”), and no action, suit or
proceeding by or before any court or governmental agency, authority
or body or any arbitrator involving the Company or any of its
subsidiaries with respect to the Anti-Money Laundering Laws is
pending or, to the knowledge of the Company, threatened.
(ee) OFAC . (i) The Company
represents that neither it nor any of its domestic subsidiaries
(collectively, the “ Entity ”) or, to the
knowledge of the Entity, any director, officer, employee, agent,
affiliate or representative of the Entity, is an individual or
entity (“ Person ”) that is, or is owned or
controlled by a Person that is:
(A) the subject of any sanctions
administered or enforced by the U.S. Department of Treasury’s
Office of Foreign Assets Control (“ OFAC ”) or
other relevant sanctions authority (collectively, “
Sanctions ”), nor
(B) located, organized or resident in a
country or territory that is the subject of Sanctions (including,
without limitation, Burma/Myanmar, Cuba, Iran, North Korea, Sudan
and Syria).
(ii) The Entity represents and covenants
that it will not, directly or indirectly, use the proceeds of the
offering of Shares, or lend, contribute or otherwise make available
such proceeds to any subsidiary, joint venture partner or other
Person:
(A) to fund or facilitate any activities or
business of or with any Person or in any country or territory that,
at the time of such funding or facilitation, is the subject of
Sanctions; or
(B) in any other manner that will result in
a violation of Sanctions by any Person (including any Person
participating in the offering, whether as underwriter, advisor,
investor or otherwise).
(iii) The Entity represents and covenants
that it has not knowingly engaged in, and will not engage in, any
dealings or transactions with any Person, or in any country or
territory, that at the time of the dealing or transaction is or was
the subject of Sanctions.
(ff) No
Relationships . No
relationship, direct or indirect, exists between the Company or any
of its subsidiaries on the one hand, and the directors, officers,
stockholders, customers or suppliers of the Company or any of its
subsidiaries on the other hand, which is required by the 1933 Act
to be described in the Prospectus which is not so
described.
(gg) Title to Property . The
Company and its subsidiaries have good and marketable title to all
real property owned by the Company and its subsidiaries and good
title to all other properties owned by them, in each case, free and
clear of all mortgages, pledges, liens, security interests, claims,
restrictions or encumbrances of any kind except such as
(a) are described in the Prospectus or (b) do not, singly
or in the aggregate, materially affect the value of such property
and do not interfere with the use made and proposed to be made of
such property by the Company or any of its subsidiaries; and all of
the leases and subleases material to the business of the Company
and its subsidiaries, considered as one enterprise, and under which
the Company or any of its subsidiaries holds properties described
in the Prospectus, are in full force and effect, and neither the
Company nor any subsidiary has any notice of any material claim of
any sort that has been asserted by anyone adverse to the rights of
the Company or any subsidiary under any of the leases or subleases
mentioned above, or affecting or questioning the rights of the
Company or such subsidiary to the continued possession of the
leased or subleased premises under any such lease or
sublease.
Section 2. Sale and Delivery of
Shares .
(a) Subject to the terms and conditions set
forth herein, the Company agrees to issue and sell through the
Agent acting as sales agent from time to time, and the Agent agrees
to use commercially reasonable efforts to sell as sales agent for
the Company, the Shares. Sales of the Shares, if any, through the
Agent acting as sales agent will be made by means of ordinary
brokers’ transactions on the NYSE or otherwise at market
prices prevailing at the time of sale, at prices related to
prevailing market prices or at negotiated prices.
(b) The Shares are to be sold on a daily
basis or otherwise as shall be agreed to by the Company and the
Agent on any trading day (other than a day on which the NYSE is
scheduled to close prior to its regular weekday closing time, each,
a “ Trading Day ”) that the Company has
satisfied its obligations under Section 6 of this Agreement
and that the Company has instructed the Agent to make such sales.
On any Trading Day, the Company may instruct the Agent by telephone
(confirmed promptly by telecopy or email, which confirmation will
be promptly acknowledged by the Agent) as to the maximum number of
Shares to be sold by the Agent on such day (in any event not in
excess of the number 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 Agent shall use commercially
reasonable efforts to sell as sales agent all of the Shares so
designated by the Company. The Company and the Agent each
acknowledge and agree that (A) there can be no assurance that
the Agent will be successful in selling the Shares, (B) the
Agent 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 Agent to use commercially reasonable
efforts consistent with normal trading and sales practices and
applicable law and regulations to sell such Shares as required by
this Agreement, and (C) the Agent shall be under no obligation
to purchase Shares on a principal basis.
(c) Notwithstanding the foregoing, the
Company shall not authorize the issuance and sale of, and the Agent
as sales agent shall not be obligated to use commercially
reasonable efforts to sell, any Shares (i) at a price lower
than the minimum price therefor authorized from time to time, or
(ii) in a number in excess of the number of Shares authorized
from time to time to be issued and sold under this Agreement, in
each case, by the Company’s board of directors, or a duly
authorized committee thereof, and notified to the Agent in writing.
In addition, the Company or the Agent may, upon notice to the other
party hereto by telephone (confirmed promptly by telecopy or email,
which confirmation will be promptly acknowledged), suspend the
offering of the Shares with respect to which the Agent is acting as
sales agent 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. Each date of termination of a suspension of the offering of
Shares pursuant to this Section 2(c), if any, is herein
referred to as a “ Suspension Termination Date
”.
(d) The gross sales price of any Shares
sold pursuant to this Agreement by the Agent shall be the market
price prevailing at the time of sale for shares of the
Company’s Common Stock sold by the Agent on the NYSE or
otherwise, at prices relating to prevailing market prices or at
negotiated prices. The compensation payable to the Agent for sales
of Shares shall be equal to 2.00% of the gross sales price of the
Shares for amounts of Shares sold pursuant to this Agreement. The
remaining proceeds, after further deduction for any transaction
fees imposed by any governmental, regulatory or self-regulatory
organization in respect of such sales, shall constitute the net
proceeds to the Company for such Shares (the “ Net
Proceeds ”). The Agent shall notify the Company as
promptly as practicable if any deduction referenced in the
preceding sentence will be required.
(e) The Agent shall provide written
confirmation to the Company following the close of trading on the
NYSE each day in which Shares are sold under this Agreement setting
forth the number of Shares sold on such day, the aggregate gross
sales proceeds of the Shares, the Net Proceeds to the Company and
the compensation payable by the Company to the Agent with respect
to such sales.
(f) Under no circumstances shall the
aggregate offering price or number, as the case may be, of Shares
sold pursuant to this Agreement exceed the aggregate offering price
or number, as the case may be, of Shares of Common Stock
(i) set forth in the preamble paragraph of this Agreement,
(ii) available for issuance under the Prospectus and the then
currently effective Registration Statement or (iii) authorized
from time to time to be issued and sold under this Agreement by the
Company’s board of directors, or a duly authorized committee
thereof, and notified to the Agent in writing. In addition, under
no circumstances shall any Shares be sold at a price lower than the
minimum price therefor authorized from time to time by the
Company’s board of directors, or a duly authorized committee
thereof, and notified to the Agent in writing.
(g) If either party believes that the
exemptive provisions set forth in Rule 101(c)(1) of
Regulation M under the 1934 Act (applicable to securities with
an average daily trading volume of $1,000,000 that are issued by an
issuer whose common equity securities have a public float value of
at least $150,000,000) are not satisfied with respect to the
Company or the Shares, it shall promptly notify the other party and
sales of Shares under this Agreement shall be suspended until that
or other exemptive provisions have been satisfied in the judgment
of each party.
(h) Settlement for sales of Shares pursuant
to this Section 2 will occur on the third business day that is
also a Trading Day following the trade date on which such sales are
made, unless another date shall be agreed to by the Company and the
Agent (each such day, a “ Settlement Date ”). On
each Settlement Date, the Shares sold through the Agent for
settleme
