EXHIBIT 1.01
WINDROSE MEDICAL PROPERTIES TRUST
DOCS(R) FINANCING PROGRAM
1,200,000, COMMON SHARES OF BENEFICIAL INTEREST,
$0.01 PAR VALUE
SALES AGREEMENT
MAY 19, 2005
DOCS(R) is a registered service xxxx of Xxxxxxx Xxxxxxx Securities Corporation
THIS SALES AGREEMENT (the "Agreement") dated as of May 19, 2005 between
Xxxxxxx Xxxxxxx Securities Corporation, having its principal office at 000
Xxxxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "Sales Manager") and
Windrose Medical Properties Trust, a real estate investment trust formed and
existing under the laws of the State of Maryland (the "Company").
WHEREAS, the Company desires to issue and sell through the Sales Manager
up to 1,200,000 shares (the "Maximum Amount") of its common shares of beneficial
interest, $0.01 par value per share (the "Stock"), on the terms set forth in
Article II below. The Maximum Amount shall be appropriately adjusted for stock
splits and reverse splits.
IN CONSIDERATION of the mutual covenants contained in this Agreement, the
Company and the Sales Manager agree as follows:
ARTICLE I
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
1.1 For purposes of this Agreement, unless the context requires to the
contrary, the term "Company" shall also include all significant subsidiaries (as
defined by Section 1-02 of Regulation S-X) of the Company. The Company
represents and warrants to, and agrees with, the Sales Manager that:
(a) The Company meets the requirements for use of Form S-3 under the
Securities Act of 1933, as amended (the "Act"), and the rules and regulations
thereunder ("Rules and Regulations"). A registration statement on Form S-3
(Registration No. 333-______) with respect to the Stock, including a form of
prospectus, has been prepared by the Company in conformity with the requirements
of the Act and the Rules and Regulations and filed with the Securities and
Exchange Commission (the "Commission") and has become effective. Such
registration statement and prospectus may have been amended or supplemented
prior to the date hereof. Any such amendment or supplement was so prepared and
filed, and any such amendment or supplement filed after the effective date of
such registration statement and prior to the date hereof has become effective.
No stop order suspending the effectiveness of such registration statement has
been issued, and no proceeding for that purpose has been instituted or, to the
knowledge of the Company, threatened by the Commission. Such registration
statement, as it may have heretofore been or may hereafter be amended, is
referred to herein as the "Registration Statement," and the final form of
prospectus included in the Registration Statement solely for purposes of offers
and sales by the Sales Manager of the Stock as contemplated herein, as amended
or supplemented from time to time, is referred to herein as the "Prospectus."
The term "Prospectus" shall not include any prospectuses contained in the
Registration Statement relating to sales of Stock by other parties under other
continuous offering programs. Any reference herein to the Registration
Statement, the Prospectus, or any amendment or supplement thereto shall be
deemed to refer to and include the documents incorporated (or deemed to be
incorporated) by reference therein, and any reference herein to the terms
"amend," "amendment" or "supplement" with respect to the Registration Statement
or Prospectus shall be deemed to refer to and include the filing after the
execution hereof of any document with the Commission deemed to be incorporated
by reference therein.
(b) (1) Each part of the Registration Statement, when such part became or
becomes effective, and the Prospectus and any amendment or supplement thereto,
on the date of filing thereof with the Commission and at each Settlement Date
(as hereinafter defined), conformed or will conform in all material respects
with the requirements of the Act and the Rules and Regulations; each part of the
Registration Statement, when such part became or becomes effective, did not or
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; and the Prospectus and any amendment or supplement
thereto, on the date of filing thereof with the Commission and at each
Settlement Date, did not or will not 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 under which they were made, not misleading;
except that the foregoing shall not apply to statements in or omissions from any
such document in reliance upon, and in conformity with, written information
furnished to the Company by or on behalf of the Sales Manager, specifically for
use in the Registration Statement, the Prospectus or any amendment or supplement
thereto; (2) if applicable, the Company's principal executive officer and
principal financial officer have each delivered to the Commission a sworn
statement in writing (the "Statement"), in compliance with SEC Order, File No.
4-460: Order Requiring the Filing of Sworn Statements Pursuant to Section
21(a)(1) of the Securities Exchange Act of 1934, in the form of Exhibit A
thereto, and have each reviewed the contents of their respective Statements with
the Company's audit committee or, in the absence of such a committee, the
independent members of the Company's board of directors.
(c) The documents incorporated by reference in the Registration Statement
or the Prospectus, or any amendment or supplement thereto, when they were or are
filed with the Commission under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), conformed or will conform in all material respects with
the requirements of the Act or the Exchange Act, as applicable, and the rules
and regulations of the Commission thereunder.
(d) The financial statements of the Company, together with the related
schedules and notes thereto, set forth or included in the Registration Statement
and Prospectus, fairly present the financial condition of the Company as of the
dates indicated and the results of operations, changes in financial position,
stockholders' equity, and cash flows for the periods therein specified, in
conformity with generally accepted accounting principles consistently applied
throughout the periods involved (except as otherwise stated therein). The
summary and selected financial and statistical data included in the Registration
Statement and the Prospectus present fairly the information shown therein and,
to the extent based upon or derived from the financial statements, have been
compiled on a basis consistent with the financial statements presented therein.
(e) The accountants who certified the financial statements and the
supporting schedules included in the Registration Statement are and, during the
periods covered by their reports, were qualified and independent public
accountants as required by Rule 2-01 of Regulation S-X.
(f) The Company has been duly formed and is validly existing as a real
estate investment trust in good standing under the laws of the State of
Maryland. The Company is duly qualified and in good standing as a foreign trust
in each jurisdiction in which the character or location of its assets or
properties (owned, leased or licensed) or the nature of its business makes such
qualification necessary, except for such jurisdictions where the failure to so
qualify would not have a Material Adverse Effect on the Company. For purposes of
this Agreement, "Material Adverse Effect" means any adverse effect on the
business, operations, properties or financial condition of the Company that is
(either alone or together with all other adverse effects) material to the
Company and its
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subsidiaries taken as a whole, and any material adverse effect on the
transactions contemplated under this Agreement or any other agreement or
document contemplated hereby or thereby. Each of the Company's significant
subsidiaries is validly existing as a corporation, limited liability company or
partnership, as applicable, in its respective jurisdiction of formation.
Schedule 1.1(f) hereto identifies each of the Company's subsidiaries that is a
significant subsidiary (as defined in Section 1-02 of Regulation S-X) of the
Company. All of the issued and outstanding capital stock, limited liability
company interests or partnership interests, as applicable, of each significant
subsidiary has been duly authorized and validly issued, is fully paid and
nonassessable and (except as otherwise disclosed in the Registration Statement
and the Prospectus) is owned by the Company, directly or indirectly (except as
disclosed in the Company's reports filed with the Commission under the Exchange
Act), free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity; provided, however that the Company's ownership
interest in certain significant subsidiaries may be used to secure certain
indebtedness. Except as disclosed in the Registration Statement and the
Prospectus, the Company does not own, lease or license any asset or property or
conduct any business outside the United States of America. The Company has all
requisite corporate power and authority and all necessary authorizations,
approvals, consents, orders, licenses, certificates and permits of and from all
governmental orders or regulatory bodies or any other person or entity, to own,
lease, license and operate its assets and properties and conduct its business as
now being conducted and as described in the Registration Statement and the
Prospectus, except for such authorizations, approvals, consents, orders,
licenses, certificates and permits the absence of which would not have a
Material Adverse Effect.
(g) The Company has good and marketable title to, or leasehold interests
in, all properties and assets (including, without limitation, mortgaged assets)
as described in the Registration Statement and the Prospectus owned by the
Company, free and clear of all liens, charges, encumbrances or restrictions,
except such as are described in the Registration Statement and the Prospectus
and except such as would not have a Material Adverse Effect; provided, however,
that the Company's ownership interest in certain significant subsidiaries may be
used to secure certain indebtedness. The Company has such consents, easements,
rights-of-way or licenses (collectively, "rights-of-way") from any person as are
necessary to conduct its business in the manner described in the Registration
Statement, except for those which if not obtained would not, singly or in the
aggregate, have a Material Adverse Effect.
(h) [INTENTIONALLY OMITTED]
(i) There is no litigation or governmental or other proceeding or, to the
Company's knowledge, investigation before any court or before or by any public
body or board pending or, to the knowledge of the Company, threatened against,
or involving the assets, properties or businesses of the Company which would
have a Material Adverse Effect except as described in the Registration
Statement.
(j) The Company maintains insurance (issued by insurers of recognized
financial responsibility) of the types and in the amounts generally deemed
adequate for its businesses and, to the knowledge of the Company, consistent
with insurance coverage maintained by similar companies in similar businesses,
including, but not limited to, insurance covering real and personal property
owned or leased by the Company against theft, damage, destruction, acts of
vandalism and all other risks customarily insured against, all of which
insurance is in full force and effect.
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(k) Subsequent to the respective dates as of which information is given in
the Registration Statement and the Prospectus, except as described therein, (i)
there has not been any change in the assets or properties, business, results of
operations, or condition (financial or otherwise) of the Company, whether or not
arising from transactions in the ordinary course of business that has had a
Material Adverse Effect; (ii) the Company has not sustained any material loss or
interference with its assets, businesses or properties (whether owned or leased)
from fire, explosion, earthquake, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or any court or legislative or
other governmental action, order or decree; (iii) the Company has not undertaken
any material liability or obligation, direct or contingent, except such
liabilities or obligations undertaken in the ordinary course of business; and
(iv) there has not been any transaction that is material to the Company, except
transactions in the ordinary course of business or as otherwise disclosed in the
Registration Statement and the Prospectus.
(l) There is no document or contract of a character required to be
described in the Registration Statement or the Prospectus or to be filed as an
exhibit to the Registration Statement that is not described or filed as
required. Each document, instrument, contract and agreement of the Company
described in the Registration Statement or the Prospectus or incorporated by
reference therein or listed as exhibits to the Registration Statement is in full
force and effect and is valid and enforceable by and against the Company in
accordance with their terms, assuming the due authorization, execution and
delivery thereof by each of the other parties thereto except as otherwise
disclosed in the Registration Statement or Prospectus or otherwise as would not
have a Material Adverse Effect. The Company is not, nor to the knowledge of the
Company is any other party, in default in the observance or performance of any
term or obligation to be performed by it under any such agreement, and no event
has occurred which with notice or lapse of time or both would constitute such a
default, which default or event would have a Material Adverse Effect. No default
exists, and no event has occurred which with notice or lapse of time or both
would constitute a default, in the due performance and observance of any term,
covenant or condition, by the Company of any other agreement or instrument to
which the Company is a party or by which it or its properties or business may be
bound or affected, which default or event would have a Material Adverse Effect.
(m) The Company is not in violation of any term or provision of its
charter, by-laws or operating agreement, as applicable. The Company is not in
violation of any franchise, license, permit, judgment, decree, order, statute,
rule or regulation, where the consequences of such violation would have a
Material Adverse Effect.
(n) Neither the execution, delivery and performance of this Agreement by
the Company nor the consummation of any of the transactions contemplated hereby
(including, without limitation, the issuance and sale by the Company of the
Stock) will give rise to a right to terminate or accelerate the due date of any
payment due under, or conflict with or result in the breach of any term or
provision of, or constitute a default (or an event which with notice or lapse of
time or both would constitute a default) under, or require any consent or waiver
under, or result in the execution or imposition of any lien, charge,
encumbrance, claim, security interest, restriction or defect upon any properties
or assets of the Company pursuant to the terms of, any indenture, mortgage, deed
of trust or other agreement or instrument to which the Company is a party or by
which the Company is bound, or any of its properties or businesses are bound, or
any franchise, license, permit, judgment, decree, order, statute, rule or
regulation applicable to the Company or violate any provision of the charter or
by-laws of the Company, except for such consents or waivers which have already
been obtained and are in full force and effect.
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(o) All of the outstanding common shares of beneficial interest of the
Company have been duly authorized and validly issued and are fully paid and
nonassessable and none of such shares were issued in violation of any preemptive
or other similar right. The Stock, when issued and sold pursuant to this
Agreement, will be duly authorized and validly issued, fully paid and
nonassessable and will not be issued in violation of any preemptive or other
similar right. Except as disclosed in the Registration Statement and the
Prospectus, there is no outstanding option, warrant or other right calling for
the issuance of, and there is no commitment, plan or arrangement to issue, any
capital stock of the Company or any security convertible into or exercisable or
exchangeable for such capital stock, except for standard dividend reinvestment
plans. The Stock conforms in all material respects to all statements relating
thereto contained in the Registration Statement and the Prospectus.
(p) Subsequent to the respective dates as of which information is given in
the Registration Statement and the Prospectus, except as (x) described or
referred to therein, or (y) are not material (as to clauses (i) and (ii) only),
are consistent with past practice (as to clauses (i) and (ii) only), and are
publicly disclosed (as to clause (iii) only), the Company has not (i) issued any
securities or incurred any liability or obligation, direct or contingent, except
such liabilities or obligations incurred in the ordinary course of business
including, without limitation, debt financing to acquire and develop properties,
(ii) entered into any transaction not in the ordinary course of business or
(iii) declared or paid any dividend or made any distribution on any shares of
its capital stock or redeemed, purchased or otherwise acquired or agreed to
redeem, purchase or otherwise acquire any shares of its capital stock.
(q) Except as disclosed in the Registration Statement and Prospectus, no
holder of any security of the Company has the right, which has not been waived,
to have any security owned by such holder included in the Registration
Statement.
(r) All necessary corporate action has been taken by the Company to
authorize the execution, delivery and performance of this Agreement and the
issuance and sale of the Stock by the Company. This Agreement has been duly and
validly authorized, executed and delivered by the Company and constitutes and
will constitute the legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms. Except for any
"blue sky" filings or stock exchange listing applications to be filed pursuant
hereto, each approval, consent, order, authorization, designation, declaration
or filing by or with any regulatory, administrative or other governmental body
necessary in connection with the execution and delivery by the Company of this
Agreement and the consummation of the transactions contemplated hereby and the
issuance and sale of the Stock by the Company has been obtained or made and is
in full force and effect.
(s) The Company has not incurred any liability for a fee, commission or
other compensation on account of the employment of a broker or finder in
connection with the transactions contemplated by this Agreement other than as
contemplated hereby or as described in the Registration Statement.
(t) The Company is conducting its business in compliance with all
applicable laws, rules and regulations of the jurisdictions in which it is
conducting business, except where the failure to be so in compliance would not
have a Material Adverse Effect.
(u) No transaction has occurred between or among the Company and any of
its officers or directors or any affiliate or affiliates of any such officer or
director that is required to be described in and is not described in the
Registration Statement and the Prospectus.
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(v) The Company has not taken, nor will it take, directly or indirectly,
any action designed to or which might reasonably be expected to cause or result
in, or which has constituted or which might reasonably be expected to
constitute, the stabilization or manipulation of the price of the common shares
of beneficial interest of the Company to facilitate the sale or resale of any of
the Stock in violation of any rules or regulations of the Commission.
(w) The Company has filed all federal, state, local and foreign tax
returns that are required to be filed through the date hereof (and will file all
such tax returns when and as required to be filed after the date hereof), or has
received extensions thereof, and has paid all taxes shown on such returns to be
due on or prior to the date hereof (and will pay all taxes shown on such returns
to be due after the date hereof) and all assessments received by it to the
extent that the same have become due except where the failure to file such a
return or pay such amount would not have a Material Adverse Effect or the
Company is contesting in good faith the payment of any such amounts.
(x) The Company has met the qualification requirements for a "real estate
investment trust" during its taxable years ending on or after December 31, 1999
and its proposed method of operations will enable it to continue to meet the
requirements for qualification and taxation as a "real estate investment trust"
under the Internal Revenue Code of 1986, as amended (the "Code"), assuming no
change in the applicable underlying law. The Company does not know of any event
that would cause or is likely to cause the Company to fail to qualify as a "real
estate investment trust."
(y) The Company is not an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
(z) The Company's systems of internal accounting controls taken as a whole
are sufficient to meet the broad objectives of internal accounting control
insofar as those objectives pertain to the prevention or detection of errors or
irregularities in amounts that would be material in relation to the Company's
financial statements; and, to the best of the Company's knowledge, neither the
Company nor any employee or agent thereof has made any payment of funds of the
Company or received or retained any funds, and no funds of the Company have been
set aside to be used for any payment, in each case in violation of any law, rule
or regulation.
(aa) The Company is not involved in any labor dispute and, to the
knowledge of the Company, no such dispute has been threatened, except for such
disputes as would not have a Material Adverse Effect on the Company.
(bb) Except as disclosed in the Registration Statement or the Prospectus,
(i) there has been no storage, disposal, generation, manufacture, refinement,
transportation, handling or treatment of toxic wastes, hazardous wastes or
hazardous substances by the Company or any of its subsidiaries (or to the
knowledge of the Company, any of their predecessors in interest) at, upon or
from any of the property now or previously owned or leased by the Company or its
subsidiaries in violation of any applicable law, ordinance, rule, regulation,
order, judgment, decree or permit or which would require remedial action under
any applicable law, ordinance, rule, regulation, order, judgment, decree or
permit, except for any violation or remedial action which would not have a
Material Adverse Effect; (ii) there has been no material spill, discharge, leak,
emission, injection, escape, dumping or release of any kind onto such property
or into the environment surrounding such property of any toxic wastes, solid
wastes, hazardous wastes or hazardous substances due to or caused by the Company
or
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any of its subsidiaries, except for any such spill, discharge, leak emission,
injection, escape, dumping or release which would not have a Material Adverse
Effect; and (iii) the terms "hazardous wastes," "toxic wastes" and "hazardous
substances" shall have the meanings specified in any applicable local, state,
federal and foreign laws or regulations with respect to environmental
protection.
ARTICLE II
SALE AND DELIVERY OF SECURITIES
2.1 Sale and Delivery of Securities.
(a) On the basis of the representations, warranties and agreements herein
contained, but subject to the terms and conditions herein set forth, the Company
agrees to issue and sell through the Sales Manager, as agent, and the Sales
Manager agrees to sell, as agent for the Company, on a best efforts basis, up to
the Maximum Amount of the Stock during the term of this Agreement on the terms
set forth herein. The Stock will be sold from time to time as described in the
Registration Statement or Prospectus, in amounts, and subject to price
limitations, as directed by the Company and as agreed to by the Sales Manager.
(b) The Company or the Sales Manager may, upon notice to the other party
hereto by telephone (confirmed promptly by telecopy), at any time and from time
to time suspend the offering of Stock; provided, however, that such suspension
shall not affect or impair the parties' respective obligations with respect to
the Stock sold hereunder prior to the giving of such notice.
(c) The compensation to the Sales Manager for sales of Stock sold under
this Agreement shall be at a fixed commission rate of 3% of the gross sales
price per share. The proceeds remaining after paying the commission and further
deducting any transaction fees imposed by any governmental or self-regulatory
organization in respect to such sale, shall constitute the net proceeds to the
Company for such sales of Stock (the "Net Proceeds").
(d) 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 Sales Manager shall provide the
Company with notice on the day of any sales of Stock. The Company shall, with
respect to each sale of Stock, effect delivery of the applicable number of
shares of Stock to the Trading Account, on or before the third business day (or
such other day as is industry practice for regular-way trading) following each
sale of the Stock (each, a "Settlement Date"). The Net Proceeds from the sale of
the Stock 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.
(e) At each Settlement Date, the Company shall be deemed to have affirmed
each representation, warranty, covenant and other agreement contained in this
Agreement. Any obligation of the Sales Manager under this Agreement shall be
subject to the continuing accuracy of the representations and warranties of the
Company herein, to the performance by the Company of its obligations hereunder
and to the continuing satisfaction of the additional conditions specified in
Article IV below.
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(f) If the Company shall default on its obligation to deliver Stock on any
Settlement Date, the Company shall (i) hold the Sales Manager harmless against
any loss, claim or damage arising from or as a result of such default by the
Company and (ii) pay the Sales Manager any commission to which it would
otherwise be entitled absent such default. Notwithstanding the foregoing, the
Company shall not be required to issue and sell shares of Stock.
ARTICLE III
COVENANTS OF THE COMPANY
3.1 The Company covenants and agrees with the Sales Manager that:
(a) [INTENTIONALLY OMITTED]
(b) During the period in which a prospectus relating to the Stock is
required to be delivered under the Act, the Company will notify the Sales
Manager promptly of the time when any subsequent amendment to the Registration
Statement 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 the Prospectus or for additional
information. The Company 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 reasonable
opinion, may be necessary or advisable in connection with the sale of the Stock
pursuant to this Agreement; provided, however, that the Company shall have no
such obligation if the Company is not then selling Stock through the Sales
Manager or has not requested the Sales Manager to sell Stock. The Company will
not file any amendment or supplement to the Registration Statement or Prospectus
that relates to the sale of Stock through the Sales Manager (other than a
supplement to the Prospectus that (i) relates solely to the issuance of
securities other than the Stock of the Company and (ii) does not materially
change the information about the Company or its business, operations, properties
or financial condition disclosed in the Registration Statement or Prospectus
previously thereto (an "Excluded Supplement")) unless a copy thereof has been
submitted to the Sales Manager a reasonable period of time before the filing and
the Sales Manager has not reasonably objected thereto; and it will notify the
Sales Manager at the time of filing thereof a copy of any document that upon
filing is deemed to be incorporated by reference in the Registration Statement
or Prospectus, which will then be available on the Company's website at
xxx.xxxxxxxxxxx.xxx (and will furnish to the Sales Manager any such document
that is not available on the Company's website); provided, however, that the
Company shall have no such obligation if the Company is not then selling Stock
through the Sales Manager or has not requested the Sales Manager to sell Stock.
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 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.
(c) The Company will advise the Sales Manager, promptly after it shall
receive notice or obtain knowledge thereof, of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration Statement, of
the suspension of the qualification of the Stock for offering or sale in any
jurisdiction, or of the initiation or threatening of any proceeding for any such
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purpose; and it will promptly use its best reasonable efforts to prevent the
issuance of any stop order or to obtain its withdrawal if such a stop order
should be issued.
(d) Within the time during which a prospectus relating to the Stock is
required to be delivered under the Act, the Company will comply with all
requirements imposed upon it by the Act and by the Rules and Regulations, as
from time to time in force, so far as necessary to permit the continuance of
sales of or dealings in the Stock as contemplated by the provisions hereof and
the Prospectus. 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
misleading, or if during such period it is necessary to amend or supplement the
Registration Statement or Prospectus to comply with the Act, the Company will
promptly notify the Sales Manager to suspend the offering of Stock during such
period and the Company will amend or supplement the Registration Statement or
Prospectus (at the expense of the Company) so as to correct such statement or
omission or effect such compliance and will use its best reasonable efforts to
have any amendment or supplement to the Registration Statement or Prospectus
declared effective as soon as possible, unless the Company has reasonable
business reasons to defer public disclosure of the relevant information.
(e) The Company will use commercially reasonable efforts to qualify the
Stock for sale under the securities laws of such jurisdictions as the Sales
Manager designates and to continue such qualifications in effect so long as
required for the sale of the Stock, except that the Company shall not be
required in connection therewith to qualify as a foreign corporation or to
execute a general consent to service of process in any jurisdiction.
(f) The Company will furnish to the Sales Manager and its legal counsel
(at the expense of the Company) copies of the Registration Statement and the
Prospectus during the period in which a prospectus relating to the Stock is
required to be delivered under the Act, in each case as soon as available and in
such quantities as the Sales Manager may from time to time reasonably request
and, in the case when the Trading Market (as defined below) is a national
securities exchange, the Company will also furnish copies of the Prospectus to
such exchange in accordance with Rule 153 of the Rules and Regulations.
(g) The Company will make generally available to its security holders as
soon as practicable, but in any event not later than 15 months after the end of
the Company's current fiscal quarter, an earnings statement (which need not be
audited) covering a 12-month period that satisfies the provisions of Section
11(a) of the Act and Rule 158 of the Rules and Regulations.
(h) The Company, whether or not the transactions contemplated hereunder
are consummated or this Agreement is terminated, will pay all of its expenses
incident to the performance of its obligations hereunder (including, but not
limited to, any transaction fees imposed by any governmental or self-regulatory
organization with respect to transactions contemplated by this Agreement and any
blue sky fees) and will pay the expenses of printing all documents relating to
the offering. The Company will reimburse the Sales Manager for its reasonable
out-of-pocket costs and expenses incurred in connection with entering into this
Agreement, including, without limitation, reasonable travel, reproduction,
printing and similar expenses, initial and ongoing due diligence, and reasonable
fees and disbursements of its legal counsel (provided that such reimbursement
for costs and expenses shall not exceed $10,000). In addition, without limiting
the foregoing, the Company
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will pay any filing fees in connection with filings required to be made by the
Sales Manager under NASD Rule 2710, the Corporate Financing Rule.
(i) The Company shall use its best reasonable efforts to list, subject to
notice of issuance, the Stock on each applicable Trading Market. For purposes of
this Agreement, the "Trading Market" is (i) the New York Stock Exchange, Inc.
and (ii) each other securities exchange or market on which the common shares of
beneficial interest of the Company trades or is admitted for trading.
(j) The Company will apply the Net Proceeds from the sale of the Stock as
set forth in the Prospectus.
(k) The Company will not, directly or indirectly, offer or sell any common
shares of beneficial interest (other than the Stock) or securities convertible
into or exchangeable for, or any rights to purchase or acquire, common shares of
beneficial interest, during the period from the date of this Agreement through
the final Settlement Date for the sale of Stock hereunder without (i) giving the
Sales Manager at least one business day prior written notice specifying the
nature of the proposed sale and the date of such proposed sale and (ii)
suspending activity under this program for such period of time as may reasonably
be determined by agreement of the Company and the Sales Manager; provided,
however, that no such notice and suspension shall be required in connection with
the Company's issuance or sale of (i) common shares of beneficial interest
pursuant to any employee or director stock option or benefits plan, stock
ownership plan, dividend reinvestment plan, as such plans may be amended from
time to time, and (ii) common shares of beneficial interest issuable upon
conversion of securities or the exercise of warrants, options or other rights in
effect or outstanding on the date hereof, including without limitation unit of
limited partnership interest in Windrose Medical Properties, L.P.
Notwithstanding the foregoing, this paragraph (k) shall not apply during a
period when the Company otherwise is not selling Stock through the Sales
Manager. For purposes of the foregoing sentence, a period when the Company is
selling Stock through the Sales Manager shall be deemed to begin when, pursuant
to Section 2.1(a) above, the Sales Manager has accepted a direction to sell from
the Company and to end on the final applicable Settlement Date relating to such
direction.
(l) The Company will, at any time during the term of this Agreement, as
supplemented from time to time, advise the Sales Manager immediately after it
shall have received notice or obtain knowledge thereof, of any information or
fact that would alter or affect any opinion, certificate, letter and other
document provided to the Sales Manager pursuant to Article IV below.
(m) Each time that the Registration Statement or the Prospectus shall be
amended or supplemented (other than an Excluded Supplement), the Company shall
(unless the Company is not then selling Stock through the Sales Manager and has
not requested the Sales Manager to sell Stock) furnish or cause to be furnished
to the Sales Manager forthwith a certificate dated the date of filing with the
Commission of such amendment, supplement or other document, the date of
effectiveness of amendment, as the case may be, in form satisfactory to the
Sales Manager to the effect that the statements contained in the certificates
referred to in Section 4.1(f) below that were last furnished to the Sales
Manager are true and correct at the time of such amendment, supplement, filing,
as the case may be, as though made at and as of such time (except that such
statements shall be deemed to relate to the Registration Statement and the
Prospectus as amended and supplemented to such time) or, in lieu of such
certificates, certificates of the same tenor as the certificates referred to in
said Section 4.1(f) below, modified as necessary to relate to the Registration
Statement and the Prospectus as amended and supplemented to the time of delivery
of such certificate.
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(n) On the date of the first Settlement Date under this Agreement and each
time that there is filed with the Commission the Company's Annual Report on Form
10-K, the Company shall (unless the Company is not then selling Stock through
the Sales Manager and has not requested the Sales Manager to sell Stock) furnish
or cause to be furnished forthwith to the Sales Manager, a written opinion of
Hunton & Xxxxxxxx LLP, counsel to the Company ("Company Counsel"), or other
counsel reasonably satisfactory to the Sales Manager, dated the first Settlement
Date under this Agreement or the date of filing with the Commission of such
Annual Report on Form 10-K, as the case may be, in form and substance
satisfactory to the Sales Manager, of the same tenor as the opinion referred to
in Section 4.1(d) below, but modified as necessary to relate to the Registration
Statement and the Prospectus as amended and supplemented to the time of delivery
of such opinion.
(o) On the date of the first Settlement Date under this Agreement and each
time that there is filed with the Commission the Company's Annual Report on Form
10-K, the Company shall (unless the Company is not then selling Stock through
the Sales Manager and has not requested the Sales Manager to sell Stock) cause
KPMG LLP, or other independent accountants then retained by the Company,
forthwith to furnish to the Sales Manager a letter, dated the first Settlement
Date under this Agreement, or the date of filing of such Annual Report on Form
10-K with the Commission, as the case may be, in form satisfactory to the Sales
Manager, of the same tenor as the letter referred to in Section 4.1(e) below but
modified to relate to the Registration Statement and the Prospectus, as amended
and supplemented to the date of such letter.
ARTICLE IV
CONDITIONS OF THE SALES MANAGER'S OBLIGATIONS
4.1 The obligations of the Sales Manager to sell the Stock as provided
herein shall be subject to the accuracy, as of the date hereof, and as of each
Settlement Date contemplated under this Agreement, of the representations and
warranties of the Company herein, to the performance by the Company of its
obligations hereunder and to the following additional conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceeding for that purpose shall have
been instituted or, to the knowledge of the Company or the Sales Manager,
threatened by the Commission, and any request of the Commission for additional
information (to be included in the Registration Statement or the Prospectus or
otherwise) shall have been complied with to the Sales Manager's reasonable
satisfaction.
(b) The Sales Manager shall not have advised the Company that the
disclosures in the Registration Statement or the Prospectus are not reasonably
acceptable to the Sales Manager.
(c) Except as contemplated in the Prospectus, subsequent to the respective
dates as of which information is given in the Registration Statement and the
Prospectus, there shall not have been any change in the capital stock of the
Company, or any change, or any development that may reasonably be expected to
cause a change, in the condition (financial or other), business, net worth or
results of operations of the Company, or any adverse change in the rating
assigned to any securities of the Company that has had a Material Adverse
Effect.
(d) (1) The Sales Manager shall have received at the first Settlement Date
hereunder (the "Commencement Date") and at every other date specified in Section
3.1(n) above, opinions of
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Company Counsel, dated as of the Commencement Date and dated as of such other
date, in the form of Schedule A hereto.
(2) The Sales Manager shall have received a letter from Company
Counselauthorizing the Sales Manager to rely on the opinion on tax matters
delivered by Company Counsel as Exhibit 8.1 to the Registration Statement.
(e) At the Commencement Date and at such other dates specified in Section
3.1(o) above, the Sales Manager shall have received a "comfort letter" from KPMG
LLP, independent public accountants for the Company, or other independent
accountants then retained by the Company, dated the date of delivery thereof, in
form and substance satisfactory to the Sales Manager.
(f) The Sales Manager shall have received from the Company a certificate,
or certificates, signed by the Chief Financial Officer and President or Chief
Executive Officer or any Vice President of the Company, dated as of the
Commencement Date and (unless the Company is not then selling Stock through the
Sales Manager and has not requested the Sales Manager to sell Stock) dated as of
the first business day of each calendar month thereafter (each, a "Certificate
Date"), to the effect that, to the best of their knowledge based upon reasonable
investigation:
(i) The representations and warranties of the Company in this
Agreement are true and correct, as if made at and as of the Commencement
Date or the Certificate Date (as the case may be), and the Company has
complied with all the agreements and satisfied all the conditions on its
part to be performed or satisfied at or prior to the Commencement Date and
each such Certificate Date (as the case may be);
(ii) No stop order suspending the effectiveness of the Registration
Statement has been issued, and no proceeding for that purpose has been
instituted or, to the knowledge of such officer after due inquiry, is
threatened, by the Commission;
(iii) Since the date of this Agreement there has occurred no event
required to be set forth in an amendment or supplement to the Registration
Statement or Prospectus that has not been so set forth and there has been
no document required to be filed under the Exchange Act and the rules and
regulations of the Commission thereunder that upon such filing would be
deemed to be incorporated by reference in the Prospectus that has not been
so filed; and
(iv) Since the date of this Agreement, there has not been any change
in the assets or properties, business, results of operations, or condition
(financial or otherwise) of the Company that has had a Material Adverse
Effect, which has not been described in an amendment or supplement to the
Registration Statement or Prospectus (directly or by incorporation).
(g) At the Commencement Date and on each Settlement Date, the Company
shall have furnished to the Sales Manager such appropriate further information,
certificates and documents as the Sales Manager may reasonably request.
(h) The Sales Manager's participation in the distribution of Stock
contemplated by this Agreement shall have been reviewed and found acceptable by
the NASD pursuant to NASD Rule 2710 (Corporate Financing Rule).
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All such opinions, certificates, letters and other documents will be in
compliance with the provisions hereof only if they are satisfactory in form and
substance to the Sales Manager. The Company will furnish the Sales Manager with
such conformed copies of such opinions, certificates, letters and other
documents, as the Sales Manager shall reasonably request.
ARTICLE V
INDEMNIFICATION AND CONTRIBUTION
5.1 (a) The Company agrees to indemnify and hold harmless the Sales
Manager and each person, if any, who controls the Sales Manager within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration
Statement (or any amendment thereto), or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary to
make the statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact contained in any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto) or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, if such settlement is effected with
the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred
(including, subject to Section 5.1(c) below, the reasonable fees and
disbursements of legal counsel chosen by the Sales Manager), reasonably
incurred in investigating, preparing or defending against any litigation,
or any investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under (i) or
(ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by the
Sales Manager expressly for use in the Registration Statement (or any amendment
thereto) or any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto).
(b) The Sales Manager agrees to indemnify and hold harmless the Company
and its directors and each officer of the Company who signed the Registration
Statement, and each person, if any, who controls the Company within the meaning
of Section 15 of the Act or Section 20 of the Exchange Act against any and all
loss, liability, claim, damage and expense described in the indemnity contained
in Section 5.1(a) above, as incurred, but only with respect to untrue statements
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or omissions, or alleged untrue statements or omissions, made in the
Registration Statement (or any amendments thereto) or any preliminary prospectus
or the Prospectus (or any amendment or supplement thereto) in reliance upon and
in conformity with written information furnished to the Company by the Sales
Manager expressly for use in the Registration Statement (or any amendment
thereto) or such preliminary prospectus or the Prospectus (or any amendment or
supplement thereto). The total liability of the Sales Manager under this Section
5.1(b) shall not exceed the total actual sales price of Stock sold by the Sales
Manager that is the subject of the dispute.
(c) Any indemnified party that proposes to assert the right to be
indemnified under this Article V will, promptly after receipt of notice of
commencement of any action against such party in respect of which a claim is to
be made against an indemnifying party or parties under this Article V, notify
each such indemnifying party of the commencement of such action, enclosing a
copy of all papers served, but the omission so to notify such indemnifying party
will not relieve the indemnifying party from any liability that it might have to
any indemnified party to the extent it is not materially prejudiced as a result
thereof. If any such action is brought against any indemnified party and it
notifies the indemnifying party of its commencement, the indemnifying party will
be entitled to participate in and, to the extent that it elects by delivering
written notice to the indemnified party promptly after receiving notice of the
commencement of the action from the indemnified party, jointly with any other
indemnifying party similarly notified, to assume the defense of the action, with
legal counsel reasonably satisfactory to the indemnified party, and after notice
from the indemnifying party to the indemnified party of its election to assume
the defense, the indemnifying party will not be liable to the indemnified party
for any legal or other expenses except as provided below. The indemnified party
will have the right to employ its own legal counsel in any such action, but the
fees, expenses and other charges of such legal counsel will be at the expense of
such indemnified party unless (1) the employment of legal counsel by the
indemnified party has been authorized in writing by the indemnifying party, (2)
the indemnified party has reasonably concluded (based on the written advice of
legal counsel) that there may be legal defenses available to it or other
indemnified parties that are different from or in addition to those available to
the indemnifying party, (3) a conflict or potential conflict exists (based on
the written advice of legal counsel to the indemnified party) between the
indemnified party and the indemnifying party (in which case the indemnifying
party will not have the right to direct the defense of such action on behalf of
the indemnified party) or (4) the indemnifying party has not in fact employed
legal counsel to assume the defense of such action within a reasonable time
after receiving notice of the commencement of the action, in each of which cases
the reasonable fees, disbursements and other charges of legal counsel will be at
the expense of the indemnifying party or parties. It is understood that the
indemnifying party or parties shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the reasonable fees,
disbursements and other charges of more than one separate firm admitted to
practice in such jurisdiction at any one time for all such indemnified party or
parties. All such fees, disbursements and other charges will be reimbursed by
the indemnifying party promptly as they are incurred. An indemnifying party will
not be liable for any settlement of any action or claim effected without its
written consent (which consent will not be unreasonably withheld).
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in the foregoing
paragraphs of this Article V is applicable in accordance with its terms but for
any reason is held to be unavailable from the Company or the Sales Manager, the
Company and the Sales Manager will contribute to the total losses, claims,
liabilities, expenses and damages (including any investigative, legal and other
expenses reasonably incurred in connection with, and any amount paid in
settlement of, any action, suit or proceeding or any claim asserted, but after
deducting any contribution received by the Company from persons other than the
14
Sales Manager, such as persons who control the Company within the meaning of the
Act, officers of the Company who signed the Registration Statement and directors
of the Company, who also may be liable for contribution) to which the Company
and the Sales Manager may be subject in such proportion as shall be appropriate
to reflect the relative benefits received by the Company on the one hand and the
Sales Manager on the other. The relative benefits received by the Company on the
one hand and the Sales Manager on the other hand shall be deemed to be in the
same proportion as the total net proceeds from the offering (before deducting
expenses) received by the Company bear to the total compensation (before
deducting expenses) received by the Sales Manager from the sale of Stock on
behalf of the Company. If, but only if, the allocation provided by the foregoing
sentence is not permitted by applicable law, the allocation of contribution
shall be made in such proportion as is appropriate to reflect not only the
relative benefits referred to in the foregoing sentence but also the relative
fault of the Company, on the one hand, and the Sales Manager, on the other, with
respect to the statements or omission which resulted in such loss, claim,
liability, expense or damage, or action in respect thereof, as well as any other
relevant equitable considerations with respect to such offering. Such relative
fault shall be determined by reference to whether the untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact relates to information supplied by the Company or the Sales Manager, the
intent of the parties and their relative knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company and
the Sales Manager agree that it would not be just and equitable if contributions
pursuant to this Section 5.1(d) were to be determined by pro rata allocation or
by any other method of allocation, which does not take into account, the
equitable considerations referred to herein. The amount paid or payable by an
indemnified party as a result of the loss, claim, liability, expense or damage,
or action in respect thereof, referred to above in this Section 5.1(d) shall be
deemed to include, for the purpose of this Section 5.1(d), any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
foregoing provisions of this Section 5.1(d), the Sales Manager shall not be
required to contribute any amount in excess of the amount by which the total
actual sales price at which Stock sold by the Sales Manager exceeds the amount
of any damages that the Sales Manager has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission and no person found guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) will be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For purposes of
this Section 5.1(d), any person who controls a party to this Agreement within
the meaning of the Act will have the same rights to contribution as that party,
and each officer and director of the Company who signed the Registration
Statement will have the same rights to contribution as the Company, subject in
each case to the provisions hereof. Any party entitled to contribution, promptly
after receipt of notice of commencement of any action against such party in
respect of which a claim for contribution may be made under this Section 5.1(d),
will notify any such party or parties from whom contribution may be sought, but
the omission so to notify will not relieve that party or parties from whom
contribution may be sought from any other obligation it or they may have under
this Section 5.1(d). No party will be liable for contribution with respect to
any action or claim settled without its written consent (which consent will not
be unreasonably withheld).
(e) The indemnity and contribution provided by this Article V shall not
relieve the Company and the Sales Manager from any liability the Company and the
Sales Manager may otherwise have (including, without limitation, any liability
the Sales Manager may have for a breach of its obligations under Article II
above).
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ARTICLE VI
REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY
6.1 All representations, warranties and agreements of the Company herein
or in certificates delivered pursuant hereto, and the agreements of the Sales
Manager contained in Article V above, shall remain operative and in full force
and effect regardless of any investigation made by or on behalf of the Sales
Manager or any controlling persons, or the Company (or any of their officers,
directors or controlling persons), and shall survive delivery of and payment for
the Stock.
ARTICLE VII
TERMINATION
7.1 The Company shall have the right, by giving notice as hereinafter
specified, to terminate this Agreement in its sole discretion at any time. Any
such termination shall be without liability of any party to any other party
except that the provisions of Section 3.1(h), Article V and Article VI above
shall remain in full force and effect notwithstanding such termination.
7.2 The Sales Manager shall have the right, by giving notice as
hereinafter specified, to terminate this Agreement in its sole discretion at any
time. Any such termination shall be without liability of any party to any other
party except that the provisions of Section 3.1(h), Article V and Article VI
above shall remain in full force and effect notwithstanding such termination.
7.3 This Agreement shall remain in full force and effect unless terminated
pursuant to Sections 7.1 or 7.2 above or otherwise by mutual agreement of the
parties; provided that any such termination by mutual agreement shall in all
cases be deemed to provide that Section 3.1(h), Article V and Article VI above
shall remain in full force and effect.
7.4 Any termination of this Agreement shall be effective on the date
specified in such notice of termination; provided that such termination shall
not be effective until the close of business on the date of receipt of such
notice by the Sales Manager or the Company, as the case may be. If such
termination shall occur during a period when sales of Stock are being made
pursuant to this Agreement, any sales of Stock made prior to the termination of
this Agreement shall settle in accordance with the provisions of this Agreement.
ARTICLE VIII
NOTICES
8.1 All notices or communications hereunder shall be in writing and if
sent to the Sales Manager shall be mailed, delivered or telecopied and confirmed
to the Sales Manager at Xxxxxxx Xxxxxxx Securities Corporation, 000 Xxxxxxx
Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, facsimile number (000) 000-0000,
Attention: Corporate Finance, or if sent to the Company, shall be mailed,
delivered or telecopied and confirmed to the Company at 0000 XXXXXXXX XXXXX,
XXXXX 000, XXXXXXXXXXXX, XXXXXXX 00000, Attention: CHIEF FINANCIAL OFFICER;
facsimile number (000) 000-0000. Each party to this Agreement may change such
address for notices by sending to the parties to this Agreement written notice
of a new address for such purpose.
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ARTICLE IX
MISCELLANEOUS
9.1 This Agreement shall inure to the benefit of and be binding upon the
Company and the Sales Manager and their respective successors and the
controlling persons, officers and directors referred to in Article V above, and
no other person will have any right or obligation hereunder.
9.2 This Agreement constitutes the entire agreement and supersedes all
other prior and contemporaneous agreements and undertakings, both written and
oral, between the parties hereto with regard to the subject matter hereof.
9.3 THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO ANY PRINCIPLES OF
CONFLICTS OF LAWS THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF ANY OTHER
JURISDICTION.
9.4 This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument. The parties agree that this Agreement will be
considered signed when the signature of a party is delivered by facsimile
transmission. Such facsimile transmission shall be treated in all respects as
having the same effect as an original signature.
17
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the date hereof.
WINDROSE MEDICAL PROPERTIES TRUST
By: /s/ Xxxxxxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxxxxxx X. Xxxxxx
Title: President
XXXXXXX XXXXXXX SECURITIES CORPORATION
By: /s/ Xxxx Xxxxx
---------------------------------------
Name: Xxxx Xxxxx
Title: Managing Director
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