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EXHIBIT 1.2
DOCS(R) FINANCING PROGRAM
SALES AGREEMENT
July 23, 2004
Brinson Patrick Securities Corporation
330 Madison Avenue, 9th Floor
New York, NY 10017
Dear Sirs/Ladies:
ProLogis, a Maryland statutory real estate investment trust
(the
"Company"), confirms its agreement
("Agreement") with Brinson Patrick Securities
Corporation (the "Sales Manager"), 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 the Sales Manager, 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 the
Sales Manager shall have no
responsibility in connection therewith. The
issuance and sale of Shares through
the Sales Manager 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 the Sales Manager of the
proposed terms of such Placement. If the
Sales Manager 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 Sales Manager will issue to the
Company a written notice setting
forth the terms that the Sales Manager 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 the Sales Manager may
act in selling Shares hereunder, as
agent (a "Placement Notice"), the form of
which is attached hereto as Schedule
2. The amount of compensation to be paid by
the Company to the Sales Manager
shall be two percent (2.0%) of gross
proceeds of the sale of such Placement
Shares. The terms set forth in a
DOCS(R) is a registered service mark of
Brinson Patrick Securities Corporation
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Placement Notice will not be binding on the
Company or the Sales Manager 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 the Sales Manager
will be bound by the terms of a
Placement Notice unless the Company
delivers to the Sales Manager 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
the Sales Manager will have any obligation
whatsoever with respect to a
Placement or any Placement Shares unless
and until the Sales Manager 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
the Sales Manager. 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, the Sales
Manager 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.
The Sales Manager 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 the Sales
Manager with respect to such sales, and the
Net Proceeds (as defined below)
payable to the Company. The Sales Manager
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 the Sales Manager will be successful
in selling Placement Shares, and (ii)
the Sales Manager 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 the Sales Manager 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 the Sales Manager 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 the Sales Manager 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.
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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
Proceeds") will be equal to the aggregate
sales price at which such Placement
Shares were sold, after deduction for (i)
the Sales Manager'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 the Sales Manager 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. The Company shall open and maintain a
trading
account (the "Trading Account") at a
clearing agent designated by the Sales
Manager to facilitate the transactions
contemplated by this Agreement. The
Company shall, with respect to each sale of
Placement Shares, effect delivery of
the applicable number of Placement Shares
to the Trading Account, on or before
the third business day (or such other day
as is industry practice for
regular-way trading) following such sale of
the Placement Shares (each, a
"Settlement Date"). The Net Proceeds from
the sale of the Placement Shares shall
be available in the Trading Account
following the settlement of the sale on the
Settlement Date. The Sales Manager's
compensation shall be withheld from the
sales proceeds on each Settlement Date and
shall be paid to the Sales Manager.
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
the Sales Manager 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 the Sales Manager
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 the Sales Manager 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 the Sales
Manager 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
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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 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
the Sales Manager furnished to the
Company in writing by the the Sales Manager
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 the Sales
Manager' 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.
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(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
(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
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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 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
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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 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.
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(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, 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
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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 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
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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) 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
the Sales Manager or its counsel shall be
deemed to be a representation and
warranty by the Company to the Sales
Manager as to the matters set forth
therein.
The Company acknowledges that the Sales Manager 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 the
Sales Manager 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 the Sales
Manager under the Act, the Company will
notify the Sales Manager 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 the
Sales Manager's reasonable request, any
amendments or supplements to the
Registration Statement or Prospectus that,
in the Sales Manager's opinion, may
be necessary or advisable in connection
with the distribution of the Shares by
the Sales Manager (provided, however that
the failure of the Sales Manager to
make such request shall not relieve the
Company of any obligation or liability
hereunder, or affect the Sales Manager'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
10
<PAGE>
to the Sales Manager a reasonable period of
time before the filing and the Sales
Manager has not reasonably and promptly
objected thereto (provided, however,
that the failure of the Sales Manager to
make such objection shall not relieve
the Company of any obligation or liability
hereunder, or affect the Sales
Manager'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 the Sales Manager, 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 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 the Sales
Manager 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
existing, not
