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EXHIBIT 1.1
CONTROLLED EQUITY OFFERING(SM)
SALES AGREEMENT
July 23, 2004
CANTOR FITZGERALD & CO.
135 East 57th Street
New York, NY 10022
Dear Sirs/Ladies:
ProLogis, a Maryland statutory real estate investment trust
(the
"Company"), confirms its agreement
("Agreement") with Cantor Fitzgerald & Co.
("CF&Co"), as follows:
1. Issuance and Sale of Shares.
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 will issue and sell
through CF&Co, acting as agent and/or
principal, 7,400,000 common shares of
beneficial interest, par value $0.01 per
share (the "Shares"), of the Company.
Notwithstanding anything to the contrary
contained herein, the parties hereto agree
that the Company shall have the sole
responsibility to monitor the number and
aggregate sale price of Shares issued
and sold under this Agreement and to issue
and sell Shares within such
limitations, and CF&Co shall have no
responsibility in connection therewith. The
issuance and sale of Shares through
CF&Co will be effected pursuant to a
registration statement on Form S-3 (File
No. 333-105717) (the "Registration
Statement") filed by the Company and
declared effective by the Securities and
Exchange Commission (the "Commission").
2. Placements. Each time that
the Company wishes to issue and sell Shares
hereunder (each, a "Placement"), it will
notify CF&Co of the proposed terms of
such Placement. If CF&Co 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, CF&Co will issue to the
Company a written notice setting forth the
terms that CF&Co is willing to
accept, including without limitation the
number of Shares ("Placement Shares")
to be issued, the manner(s) in which sales
are to be made, the date or dates on
which such sales are anticipated to be
made, any minimum price below which sales
may not be made, and the capacity in which
CF&Co may act in selling Shares
hereunder (as principal, agent or both) (a
"Placement Notice"), the form of
which is attached hereto as Schedule 2. The
amount of compensation to be paid by
the Company to CF&Co shall be two and
one-quarter percent (2.25%) of gross
proceeds of the sale of such Placement
Shares. The terms set forth in a
Placement Notice will not be binding on the
Company or CF&Co unless and until
the Company delivers written notice of its
acceptance of all of the terms of
such Placement Notice (an "Acceptance");
provided, however, that neither the
Company nor CF&Co will be bound by the
terms of a Placement Notice unless the
Company
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delivers to CF&Co an Acceptance with
respect thereto prior to 4:30 p.m. (New
York time) on the Business Day following
the Business Day on which such
Placement Notice is delivered to the
Company. It is expressly acknowledged and
agreed that neither the Company nor
CF&Co will have any obligation whatsoever
with respect to a Placement or any
Placement Shares unless and until CF&Co
delivers a Placement Notice to the Company,
and then only upon the terms
specified therein and herein. In the event
of a conflict between the terms of
this Agreement and the terms of a Placement
Notice, the terms of the Placement
Notice will control.
3. Sale of Placement Shares by
CF&Co. Subject to the terms and conditions
of this Agreement, upon the Acceptance of a
Placement Notice, and unless the
sale of the Placement Shares described
therein has been suspended or otherwise
terminated in accordance with the terms of
this Agreement, CF&Co will use its
commercially reasonable efforts consistent
with its normal trading and sales
practices to sell such Placement Shares up
to the amount specified, and
otherwise in accordance with the terms of
such Placement Notice. CF&Co will
provide written confirmation to the Company
no later than the opening of the
Trading Day next following the Trading Day
on which it has made sales of
Placement Shares hereunder setting forth
the number of Placement Shares sold on
such day, the compensation payable by the
Company to CF&Co with respect to such
sales, and the Net Proceeds (as defined
below) payable to the Company. CF&Co may
sell any Placement Shares in privately
negotiated transactions and/or any other
method permitted by law, including sales
made directly on the New York Stock
Exchange, the then existing trading market
for the Shares or sales made to or
through a market maker or through an
electronic communications network, or in
any other manner that may be deemed to be
an "at the market" offering as defined
in Rule 415 of the Act of 1933, as amended
and the rule and regulations
promulgated thereunder (the "Act"). The
Company acknowledges and agrees that (i)
there can be no assurance that CF&Co
will be successful in selling Placement
Shares, and (ii) CF&Co will incur no
liability or obligation to the Company or
any other person or entity if it does not
sell Placement Shares for any reason
other than a failure by CF&Co to use
its commercially reasonable efforts
consistent with its normal trading and
sales practices to sell such Placement
Shares as required under this Section 3.
For the purposes hereof, "Trading Day"
means any day on which Shares are purchased
and sold on the principal market on
which the Shares are listed or quoted.
4. Suspension of Sales. The
Company or CF&Co may, upon notice to the other
party in writing or by telephone (confirmed
immediately by verifiable facsimile
transmission), suspend any sale of
Placement Shares; provided, however, that
such suspension shall not affect or impair
either party's obligations with
respect to any Placement Shares sold
hereunder prior to the receipt of such
notice. The Company agrees that no such
notice shall be effective against CF&Co
unless it is made to one of the individuals
named on Schedule 3 hereto, as such
Schedule may be amended in writing from
time to time.
5. Settlement.
(a) Settlement of Placement Shares. Unless otherwise specified in
the
applicable Placement Notice, settlement for
sales of Placement Shares will occur
on the third (3rd) Business Day (or such
other 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 the receipt of the
Placement Shares sold ("Net
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Proceeds") will be equal to the aggregate
sales price at which such Placement
Shares were sold, after deduction for (i)
CF&Co's commission, discount, or other
compensation for such sales payable by the
Company in accordance with Section 2,
(ii) any other amounts due and payable by
the Company to CF&Co hereunder and
(iii) any transaction fees imposed by the
Commission pursuant to Section 31 of
the Securities Exchange Act of 1934, as
amended and the rules and regulations
thereunder (the "Exchange Act"), in respect
of such sale.
(b) Delivery of Shares. On or before each Settlement Date, the
Company
will, or will cause its transfer agent to,
electronically transfer the Placement
Shares being sold by crediting CF&Co's
or its designee's account at The
Depository Trust Company through its
Deposit Withdrawal Agent Commission System
or by such other means of delivery as may
be mutually agreed upon by the parties
hereto and, upon receipt of such Placement
Shares, which in all cases shall be
freely tradeable, transferable, registered
shares in good deliverable form,
CF&Co will deliver the related Net
Proceeds in immediately available funds
delivered to an account designated by the
Company prior to the Settlement Date.
If the Company defaults in its obligation
to deliver Placement Shares on a
Settlement Date, the Company agrees that in
addition to and in no way limiting
the rights and obligations set forth in
Section 9(a) hereto, it will (i) hold
CF&Co harmless against any loss, claim,
damage, or expense (including reasonable
legal fees and expenses), as incurred,
arising out of or in connection with such
default by the Company and (ii) pay to
CF&Co any commission, discount, or other
compensation to which it would otherwise
have been entitled absent such default.
6. Representations and
Warranties of the Company. The Company represents
and warrants to CF&Co as follows:
(a) The Company meets the requirements for the use of Form S-3
under
the Act. The Registration Statement has
been declared effective by the
Commission under the Act. The Company has
complied to the Commission's
satisfaction with all requests of the
Commission for additional or supplemental
information. No stop order suspending the
effectiveness of the Registration
Statement is in effect and no proceedings
for such purpose have been instituted
or are pending or, to the best knowledge of
the Company, are contemplated or
threatened by the Commission.
The form of prospectus contained in the registration statement
(as
amended or supplemented the "Prospectus")
when filed complied when so filed in
all material respects with the Act and the
Prospectus delivered to CF&Co for use
in connection with the offer and sale of
the Shares will, at the time of such
delivery, be identical to any copies filed
by electronic transmission pursuant
to the Commission's Electronic Data
Gathering, Analysis and Retrieval System
("EDGAR") (except as may be permitted by
Regulation S-T under the Act). Each of
the Registration Statement and any
post-effective amendment thereto (including
the filing of the Company's most recent
Annual Report on Form 10-K with the
Commission (the "Annual Report on Form
10-K")), at the time it became effective
and at all subsequent times, complied and
will comply in all material respects
with the Act and 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. The Prospectus as of its date and
at all subsequent times, did not and will
not contain an 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
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under which they were made, not misleading.
The representations and warranties
set forth in the two immediately preceding
sentences do not apply to that part
of the Registration Statement which
constitutes the Statement of Eligibility and
Qualification ("Form T-1") under the Trust
Indenture Act of 1939, as amended and
the rules and regulations promulgated
thereunder, of the Trustee and statements
in or omissions from the Registration
Statement, including any post-effective
amendment to the Registration Statement, or
the Prospectus, or any amendments or
supplements thereto, made in reliance upon
and in conformity with information
relating to CF&Co furnished to the
Company in writing by the CF&Co expressly for
use therein. There are no contracts or
other documents required to be described
in the Prospectus or to be filed as
exhibits to the Registration Statement which
have not been described or filed as
required.
(b) The documents incorporated or deemed to be incorporated by
reference in the Registration Statement and
the Prospectus, at the respective
times they were or hereafter are filed with
the Commission, complied and will
comply in all material respects with the
requirements of the Exchange Act and,
when read together with the other
information in the Prospectus, at the date of
the Prospectus and at the Settlement Date
(as defined herein), 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.
(c) The Company has not distributed and will not distribute, prior
to
the later of the applicable Settlement Date
and the completion of CF&Co'
distribution of the Shares, any offering
material in connection with the
issuance and sale of the Shares other than
the Prospectus or the Registration
Statement.
(d) This Agreement has been duly authorized, executed and delivered
by
the Company.
(e) The Shares have been duly authorized and, when issued,
delivered
and paid for pursuant to this Agreement,
will be validly issued and fully paid
and non-assessable, free and clear of all
Encumbrances; 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 or any other securities or
assets of the Company, and no person has
the right, contractual or 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.
(f) Except as otherwise disclosed in the Prospectus, subsequent to
the
respective dates as of which information is
given in 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
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(iii) except for regularly quarterly
dividends or distributions on the common
stock or shares or preferred stock or
shares in amounts per share that are
consistent with past practice, 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.
(g) Arthur Andersen LLP, who have expressed their opinion with
respect
to the audited financial statements for the
fiscal year ended December 31, 2001
and supporting schedules incorporated by
reference in the Registration Statement
and the Prospectus, were, at the time each
such opinion was issued, independent
public or certified public accountants
within the meaning of Regulation S-X
under the Act and the Exchange Act. KPMG
LLP, who have expressed their opinion
with respect to the audited financial
statements for the fiscal years ended
December 31, 2002 and 2003 and supporting
schedules and have conducted a review
in accordance with Statement of Auditing
Standards No. 100 with respect to the
unaudited financial statements for the
period ended March 31, 2004 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 Act and the Exchange Act.
(h) The financial statements, together with the related notes
thereto,
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. The supporting schedules
included in the Registration Statement
present fairly the information required
to be stated therein. Such financial
statements and supporting schedules 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.
(i) The Company has been duly organized and is validly existing as
a
real estate investment trust in good
standing under the laws of the State of
Maryland and has the trust power and
authority to own, lease and operate its
properties and to conduct its business as
described in the Prospectus and to
enter into and perform its obligations
under each of this 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.
(j) Each subsidiary and joint venture of the Company listed on
Schedule
1 (collectively, the "Significant
Subsidiaries") has been duly incorporated or
organized, as the case may be, and is
validly existing as a corporation, trust,
limited liability company 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
Prospectus. Each Significant Subsidiary is duly
qualified as a foreign corporation, trust,
limited liability company or
partnership to transact business and is in
good standing in each jurisdiction
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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 1 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 meet the criteria in the
definition of "significant subsidiary"
pursuant to Rule 1-02(w) of Regulation
S-X under the Act. The corporations,
trusts, limited liability companies,
partnerships and other entities listed on
Schedule 1 are considered to be
subsidiaries of the Company solely for
purposes of this Agreement.
(k) 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 the
issuance and delivery of the Shares, and
consummation of the transactions
contemplated hereby and by the Prospectus
(i) have been duly authorized by all
necessary trust action 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, 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, 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, or the issuance and
delivery of the Shares, or consummation of
the transactions contemplated hereby and by
the Prospectus, except such as
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have been obtained or made by the Company
and are in full force and effect under
the Act, applicable state securities or
blue sky laws and from the NASD, 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.
(l) Except as otherwise disclosed in 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. 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.
(m) The Company and its Significant 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; 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 Significant
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
Prospectus and are not described in all
material respects. 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, trustees 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.
(n) 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.
(o) Except as otherwise disclosed in 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 Section
6(h) above (or elsewhere in the
Prospectus), in each case free and clear of any
security interests, mortgages, liens,
encumbrances, equities,
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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.
(p) 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 6(h)
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; ProLogis Limited
Partnership-I, ProLogis Limited
Partnership-II, ProLogis Limited Partnership-III
and ProLogis Limited Partnership-IV are
properly treated as partnerships for
federal income tax purposes and not as
"associations taxable as corporations."
(q) The Company is not, and after receipt of payment for the
Shares
will not be, an "investment company" within
the meaning of the Investment
Company Act of 1940, as amended and the
rules and regulations promulgated
thereunder.
(r) 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.
(s) 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 required to
be disclosed in the Prospectus.
(t) 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
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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.
(u) 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
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)
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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.
Any certificate signed by an officer of the Company and delivered
to
CF&Co or its counsel shall be deemed to
be a representation and warranty by the
Company to CF&Co as to the matters set
forth therein.
The Company acknowledges that CF&Co and, for purposes of the
opinions
to be delivered pursuant to Section 8
hereof, counsel for the Company, will rely
upon the accuracy and truthfulness of the
foregoing representations and hereby
consents to such reliance.
7. Covenants of the Company.
The Company covenants and agrees with CF&Co
that:
(a) After the date of this Agreement and during the period in which
a
prospectus relating to the Shares is
required to be delivered by CF&Co under the
Act, the Company will notify CF&Co
promptly of the time when any subsequent
amendment to the Registration Statement has
been filed with the Commission and
has become effective or any subsequent
supplement to the Prospectus has been
filed and of any request by the Commission
for any amendment or supplement to
the Registration Statement or Prospectus or
for additional information; it will
prepare and file with the Commission,
promptly upon CF&Co's reasonable request,
any amendments or supplements to the
Registration Statement or Prospectus that,
in CF&Co's opinion, may be necessary or
advisable in connection with the
distribution of the Shares by CF&Co
(provided, however that the failure of CF&Co
to make such request shall not relieve the
Company of any obligation or
liability hereunder, or affect CF&Co's
right to rely on the representations and
warranties made by the Company in this
Agreement); the Company will not file any
amendment or supplement to the Registration
Statement or Prospectus (except for
periodic reports filed with the Commission
pursuant to and in accordance with
the Exchange Act) unless a copy thereof has
been submitted to CF&Co a reasonable
period of time before the filing and
CF&Co has not reasonably and promptly
objected thereto (provided, however, that
the failure of CF&Co to make such
objection shall not relieve the Company of
any obligation or liability
hereunder, or affect CF&Co's right to
rely on the representations and warranties
made by the Company in this Agreement); and
the Company will cause each
amendment or supplement to the Prospectus
to be filed with the Commission as
required pursuant to the applicable
paragraph of Rule 424(b) of the rules and
regulations under the Act or, in the case
of any document to be incorporated
therein by reference, to be filed with the
Commission as required pursuant to
the Exchange Act, within the time period
prescribed.
(b) The Company will advise CF&Co, 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, of the suspension of the
qualification of the Shares for offering or
sale in any jurisdiction, or of the
initiation or threatening of any proceeding
for any such purpose; and it will promptly
use its commercially reasonable
efforts to
10
<PAGE>
prevent the issuance of any stop order or
to obtain its withdrawal if such a
stop order should be issued.
(c) Within the time during which a prospectus relating to the
Shares is
required to be delivered by CF&Co under
the Act, the Company will comply with
all requirements imposed upon it by the
Act, as from time to time in force, and
will file on or before their respective due
dates all reports and any definitive
proxy or information statements required to
be filed by the Company with the
Commission pursuant to Sections 13(a),
13(c), 14, 15(d) or any other provision
of or under the Exchange Act. If during
such period any event occurs as a result
of which the Prospectus as then amended or
supplemented would include an untrue
statement of a material fact or omit to
state a material fact necessary to make
the statements therein, in the light of the
circumstances then exis
