WEINGARTEN REALTY INVESTORS Common Shares of Beneficial Interest ($0.03 par value) ATM EQUITY OFFERINGSM SALES AGREEMENT
XXXXXXXXXX
REALTY INVESTORS
Common
Shares of Beneficial Interest
($0.03
par value)
ATM
EQUITY OFFERINGSM SALES
AGREEMENT
March 12,
2009
XXXXXXX
XXXXX & CO.
Xxxxxxx
Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
0 Xxxxx
Xxxxxxxxx Xxxxxx
Xxx Xxxx,
Xxx Xxxx 00000
Ladies
and Gentlemen:
Xxxxxxxxxx
Realty Investors, a Texas real estate investment trust (the “Company”), proposes,
subject to the terms and conditions stated herein, to issue and sell from time
to time to or through Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, as
sales agent and/or principal (the “Agent”), shares (the
“Shares”) of
the Company’s common shares of beneficial interest, $0.03 par value (the “Common Shares”),
having an aggregate offering price of up to $125,000,000 on the terms
set forth in Section 2 of this ATM Equity OfferingSM Sales
Agreement (the “Agreement”). The
Company agrees that whenever it determines to sell Shares directly to the Agent
as principal, it will enter into a separate agreement (each, a “Terms Agreement”) in
substantially the form of Annex I hereto, relating to such sale in accordance
with Section 3 of this Agreement.
Section
1. Representations and
Warranties. The Company represents and warrants to the Agent
that as of the date of this Agreement, any applicable Registration Statement
Amendment Date (as defined in Section 3 below), each Company Periodic Report
Date (as defined in Section 3 below), each Applicable Time (as defined below)
and each Settlement Date (as defined in Section 2 below):
(a) Compliance with Registration
Requirements. The Company has filed with the Securities and
Exchange Commission (the “Commission”) an
“automatic shelf registration statement” as defined under Rule 405 under the
Securities Act of 1933, as amended (the “1933 Act”), on Form
S-3 (File No. 333-155993), in respect of the Company’s Common Shares (including
the Shares) (collectively, the “Securities”) not
earlier than three years prior to the date hereof; such registration statement,
and any post-effective amendment thereto, became effective on filing; and no
stop order suspending the effectiveness of such registration statement or any
part thereof has been issued and no proceeding for that purpose has been
initiated or, to the knowledge of the Company, threatened by the Commission, and
no notice of objection of the Commission to the use of such form of registration
statement or any post-effective amendment thereto pursuant to Rule 401(g)(2)
under the 1933 Act has been received by the Company (the base prospectus filed
as part of such registration statement, in the form in which it has most
recently been filed with the Commission on or prior to the date of this
Agreement, is hereinafter called the “Basic Prospectus”;
the various parts of such registration statement, excluding any Form T-1 but
including all exhibits thereto and any prospectus supplement relating to the
Shares that is filed with the Commission and deemed by virtue of Rule 430B to be
part of such registration statement, each as amended at the time such part of
the registration statement became effective, are hereinafter collectively called
the “Registration
Statement”; the prospectus supplement specifically relating to the Shares
prepared and filed with the Commission pursuant to Rule 424(b) under the 1933
Act is hereinafter called the “Prospectus
Supplement”; the Basic Prospectus, as amended and supplemented by the
Prospectus Supplement, is hereinafter called the “Prospectus”; any
reference herein to the Basic Prospectus, the Prospectus Supplement or the
Prospectus shall be deemed to refer to and include the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 under the 1933 Act; any
reference to any amendment or supplement to the Basic Prospectus, the Prospectus
Supplement or the Prospectus shall be deemed to refer to and include any
post-effective amendment to the Registration Statement, any prospectus
supplement relating to the Shares filed with the Commission pursuant to Rule
424(b) under the 1933 Act and any documents filed under the Securities Exchange
Act of 1934, as amended (the “1934 Act”), and
incorporated therein, in each case after the date of the Basic Prospectus, the
Prospectus Supplement or the Prospectus, as the case may be; any reference to
any
amendment
to the Registration Statement shall be deemed to refer to and include any annual
report of the Company filed pursuant to Section 13(a) or 15(d) of the 1934 Act
after the effective date of the Registration Statement that is incorporated by
reference in the Registration Statement; and any “issuer free writing
prospectus” as defined in Rule 433 under the 1933 Act relating to the Shares is
hereinafter called an “Issuer Free Writing
Prospectus”).
No order
preventing or suspending the use of the Basic Prospectus, the Prospectus
Supplement, the Prospectus or any Issuer Free Writing Prospectus has been issued
by the Commission, and the Basic Prospectus and the Prospectus Supplement, at
the time of filing thereof, conformed in all material respects to the
requirements of the 1933 Act and the rules and regulations of the Commission
thereunder (the “1933
Act Regulations”) and did not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading.
For the
purposes of this Agreement, the “Applicable Time”
means, with respect to any Shares, the time of sale of such Shares pursuant to
this Agreement; the Prospectus and the applicable Issuer Free Writing
Prospectus(es) issued at or prior to such Applicable Time, taken together
(collectively, and, with respect to any Shares, together with the public
offering price of such Shares, the “General Disclosure
Package”) as of each Applicable Time and each Settlement Date, will not
include any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and each applicable
Issuer Free Writing Prospectus will not conflict with the information contained
in the Registration Statement, the Prospectus Supplement or the Prospectus and
each such Issuer Free Writing Prospectus, as supplemented by and taken together
with the General Disclosure Package as of such Applicable Time, will not include
any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(b) Incorporation of Documents
by Reference. The documents incorporated or deemed to be
incorporated by reference in the Registration Statement and the Prospectus, when
they became effective or were filed with the Commission, as the case may be,
complied in all material respects with the requirements of the 1934 Act and the
1934 Act Regulations, and, when read together with the other information in the
Prospectus, (a) at the time the Registration Statement became effective, (b) at
the time the Prospectus was issued and (c) on the date of this Agreement, did
not contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading.
(c) Independent
Accountants. The accountants who certified the financial
statements and supporting schedules included in the Registration Statement are
independent public accountants as required by the 1933 Act and the 1933 Act
Regulations.
(d) Financial
Statements. The financial statements included or incorporated
by reference in the Registration Statement, the General Disclosure Package and
the Prospectus, together with the related schedules and notes, present fairly
the financial position of the Company and its consolidated subsidiaries at the
dates indicated and the statements of consolidated income and comprehensive
income, shareholders’ equity and cash flows of the Company and its consolidated
subsidiaries for the periods specified; said financial statements have been
prepared in conformity with generally accepted accounting principles (“GAAP”) applied on a
consistent basis throughout the periods involved. The supporting
schedules, if any, present fairly in accordance with GAAP the information
required to be stated therein. The selected financial data
incorporated by reference in the Prospectus present fairly the information shown
therein and have been compiled on a basis consistent with that of the audited
financial statements included or incorporated by reference in the Registration
Statement. Any pro forma financial statements and the related notes thereto
incorporated by reference in the Registration Statement, the General Disclosure
Package and the Prospectus present fairly the information shown therein, have
been prepared in accordance with the Commission’s rules and guidelines with
respect to pro forma financial statements and have been properly compiled on the
basis described therein, and the assumptions used in the preparation thereof are
reasonable and the adjustments used therein are appropriate to give effect to
the transactions and circumstances referred to therein. All
disclosures contained in the Registration Statement, the General Disclosure
Package or the Prospectus, or incorporated by reference therein, regarding
“non-GAAP financial measures” (as such term is defined by the rules and
regulations of the Commission) comply with Regulation G of the 1934 Act and Item
10 of Regulation S-K of the 1933 Act, to the extent applicable.
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(e) No Material Adverse Change
in Business. Since the respective dates as of which
information is given in the Registration Statement, the General Disclosure
Package or the Prospectus, except as otherwise stated therein, (A) there has
been no material adverse change in the condition, financial or otherwise, or in
the earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business (a “Material Adverse
Effect”), (B) there have been no transactions entered into by the Company
or any of its subsidiaries, other than those in the ordinary course of business,
which are material with respect to the Company and its subsidiaries considered
as one enterprise, and (C) except for regular quarterly dividends on the Common
Shares, 6.75% Series D cumulative redeemable preferred shares of beneficial
interest, 6.95% Series E cumulative redeemable preferred shares of beneficial
interest, 6.5% Series F cumulative redeemable preferred shares of beneficial
interest and Variable-rate Series G cumulative redeemable preferred shares of
beneficial interest 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 on any class of its shares of beneficial interest.
(f) Good Standing of the
Company. The Company is a real estate investment trust duly
formed and validly existing under the laws of the State of Texas, with full
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 this Agreement; the Company is duly qualified to transact
business and is in good standing in each other jurisdiction in which it owns or
leases properties, or conducts any business, so as to require such
qualification, or is subject to no material liability or disability by reason of
the failure to be so qualified in any such jurisdiction, and holds all
authorizations, approvals, orders, licenses, certificates and permits from all
governmental authorities which are material to the conduct of its
business.
(g)
Good Standing of
Subsidiaries. Each subsidiary of the Company has been duly
formed and is validly existing as a corporation, trust, partnership, limited
partnership or limited liability company, as the case may be, in good standing
under the laws of the jurisdiction of its formation, has full power and
authority to own, lease and operate its properties and to conduct its business
as described in the Prospectus and is duly qualified to transact business and is
in good standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify would not have a material
adverse effect or a prospective material adverse effect, on the condition,
financial or otherwise, or the earnings or business affairs of the Company and
its subsidiaries considered as one enterprise; all of the issued and outstanding
capital stock or other ownership interests of each such subsidiary has been duly
authorized and validly issued, is fully paid and non-assessable and is owned by
the Company, directly or through subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or
equity. Weingarten Nostat, Inc., WRI Golden State, LLC, Xxxxxxxxxx
Realty Management Company, Decatur 215, LLC, WRI/TEXLA, LLC and
Weingarten/Investments, Inc., LLC are the only significant subsidiaries of the
Company (as “significant subsidiary” is defined in Rule 1-02 of Regulation
S-X).
(h) Capitalization. The
issued and outstanding Common Shares have been duly authorized and validly
issued and are fully paid and non-assessable; none of the outstanding capital
shares was issued in violation of the preemptive or other similar rights of any
securityholder of the Company. The Company’s Common Shares have been
registered pursuant to Section 12(b) of the 1934 Act and are listed on the New
York Stock Exchange (the “NYSE”), and the
Company has taken no action designed to, or likely to have the effect of,
terminating the registration of the Common Shares from the NYSE, nor has the
Company received any notification that the Commission or the NYSE is
contemplating terminating such registration or listing.
(i)
Authorization of
Agreement. This Agreement and any Terms Agreement has been
duly authorized, executed and delivered by the Company.
(j)
Authorization
and Description of Securities. The Shares have been duly
authorized and reserved for issuance and sale pursuant to this Agreement and,
when issued and delivered by the Company pursuant to this Agreement or any Terms
Agreement against payment of the consideration set forth herein, will be validly
issued and fully paid and non assessable; the Common Shares conform to all
statements relating thereto contained in the Prospectus and such description
conforms to the rights set forth in the instruments defining the same; no holder
of the Shares will be subject to personal liability by reason of being such a
holder; and the issuance of the Shares is not subject to the preemptive or other
similar rights of any securityholder of the Company.
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(k) Absence of Defaults and
Conflicts. Neither the Company nor any of its subsidiaries is
in violation of its declaration of trust, charter, by-laws or similar governing
instruments and, except as disclosed in Registration Statement, the General
Disclosure Package, the Prospectus and the Prospectus Supplement, neither the
Company nor any of its subsidiaries is in default in the performance or
observance of any obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, deed of trust, loan or credit agreement, note,
lease or other agreement or instrument to which the Company or any of its
subsidiaries is a party or by which it or any of them may be bound, or to which
any of the property or assets of the Company or any subsidiary is subject
(collectively, “Agreements and
Instruments”) except for such defaults that would not result in a
Material Adverse Effect; and the execution, delivery and performance of this
Agreement or of any Terms Agreement and the consummation of the transactions
contemplated herein or in any Terms Agreement and in the Registration Statement
(including the issuance and sale of the Shares and the use of the proceeds from
the sale of the Shares as described in the Prospectus under the caption “Use of
Proceeds”) and compliance by the Company with its obligations hereunder have
been duly authorized by all necessary trust action and do not and will not,
whether with or without the giving of notice or passage of time or both,
conflict with or constitute a breach of, or default or Repayment Event (as
defined below) under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any
subsidiary pursuant to, the Agreements and Instruments (except for such
conflicts, breaches, defaults or Repayment Events or liens, charges or
encumbrances that would not result in a Material Adverse Effect), nor will such
action result in any violation of the provisions of the declaration of trust,
charter, by laws or similar governing instrument of the Company or any
subsidiary or any applicable law, statute, rule, regulation, judgment, order,
writ or decree of any government, government instrumentality or court, domestic
or foreign, having jurisdiction over the Company or any subsidiary or any of
their assets, properties or operations. As used herein, a “Repayment Event”
means any event or condition which gives the holder of any note, debenture or
other evidence of indebtedness (or any person acting on such holder’s behalf)
the right to require the repurchase, redemption or repayment of all or a portion
of such indebtedness by the Company or any subsidiary.
(l) Absence of Labor
Dispute. No labor dispute with the employees of the Company or
any subsidiary exists or, to the knowledge of the Company, is imminent, and the
Company is not aware of any existing or imminent labor disturbance by the
employees of any of its or any subsidiary’s principal suppliers, tenants or
contractors, which, in either case, would result in a Material Adverse
Effect.
(m) Absence of
Proceedings. Except as disclosed in the Registration
Statement, the General Disclosure Package, the Prospectus and the Prospectus
Supplement, there is no action, suit, proceeding, inquiry or investigation
before or brought by any court or governmental agency or body, domestic or
foreign, now pending, or, to the knowledge of the Company, threatened, against
or affecting the Company or any subsidiary, which is required to be disclosed in
the Registration Statement (other than as disclosed therein), or which might
result in a Material Adverse Effect, or which might materially and adversely
affect the properties or assets thereof or the consummation of the transactions
contemplated in this Agreement or the performance by the Company of its
obligations hereunder; the aggregate of all pending legal or governmental
proceedings to which the Company or any subsidiary is a party or of which any of
their respective property or assets is the subject which are not described in
the Registration Statement, including ordinary routine litigation incidental to
the business, could not result in a Material Adverse Effect.
(n) Accuracy of
Exhibits. There are no contracts or documents which are
required to be described in the Registration Statement, the Prospectus or the
documents incorporated by reference therein or to be filed as exhibits thereto
which have not been so described and filed as required.
(o) Possession of Intellectual
Property. The Company and its subsidiaries own or possess, or
can acquire on reasonable terms, adequate patents, patent rights, licenses,
inventions, copyrights, know how (including trade secrets and other unpatented
and/or unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks, trade names or other intellectual
property (collectively, “Intellectual
Property”) necessary to carry on the business now operated by them, and
neither the Company nor any of its subsidiaries has received any notice or is
otherwise aware of any infringement of or conflict with asserted rights of
others with respect to any Intellectual Property or of any facts or
circumstances which would render any Intellectual Property invalid or inadequate
to protect the interest of the Company or any of its subsidiaries therein, and
which infringement or conflict (if the subject of any unfavorable decision,
ruling or finding) or invalidity or inadequacy, singly or in the aggregate,
would result in a Material Adverse Effect.
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(p) Absence of Further
Requirements. No filing with, or authorization, approval,
consent, license, order, registration, qualification or decree of, any court or
governmental authority or agency is necessary or required for the performance by
the Company of its obligations hereunder, in connection with the offering,
issuance or sale of the Securities hereunder or the consummation of the
transactions contemplated by this Agreement or any Terms Agreement, except such
as have been already obtained or as may be required under the 1933 Act or the
1933 Act Regulations or state securities laws.
(q) Absence of
Manipulation. Neither the Company nor any affiliate of the
Company has taken, nor will the Company or any affiliate take, directly or
indirectly, any action which is designed to or which has constituted or which
would be expected to cause or result in stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of the
Shares.
(r) Possession of Licenses and
Permits. The Company and its subsidiaries possess such
permits, licenses, approvals, consents and other authorizations (collectively,
“Governmental
Licenses”) issued by the appropriate federal, state, local or foreign
regulatory agencies or bodies necessary to conduct the business now operated by
them, except where the failure so to possess would not, singly or in the
aggregate, result in a Material Adverse Effect; the Company and its subsidiaries
are in compliance with the terms and conditions of all such Governmental
Licenses, except where the failure to comply would not, singly or in the
aggregate, result in a Material Adverse Effect; all of the Governmental Licenses
are valid and in full force and effect, except when the invalidity of such
Governmental Licenses or the failure of such Governmental Licenses to be in full
force and effect would not, singly or in the aggregate, result in a Material
Adverse Effect; and neither the Company nor any of its subsidiaries has received
any notice of proceedings relating to the revocation or modification of any such
Governmental Licenses which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result in a Material Adverse
Effect.
(s) Title to
Property. The Company and its subsidiaries have good and
marketable title to all real property and interests in its real property and
good and marketable title to all its personal property, in each case free and
clear of all pledges, liens, encumbrances, claims, security interests and
defects, except as are disclosed in the Prospectus or such as do not materially
affect the value of such property and interests in the aggregate and do not
interfere with the use made and proposed to be made of such property and
interests by the Company and its subsidiaries taken as a whole; in the case of
real property and interests in real property, the Company and its subsidiaries
have obtained satisfactory confirmation (consisting of policies of title
insurance or binders therefor or opinions of counsel based upon the examination
of abstracts) confirming, except as is otherwise described in the Prospectus,
(a) that the Company and its subsidiaries have the foregoing title to such real
property and interests in real property; provided, however, that in
those cases in which such information is not current, the Company and its
subsidiaries do not have notice of any material claim of any sort which has been
asserted by anyone adverse to the Company’s or its subsidiaries challenging the
Company’s or its subsidiaries’ title to such real property and interests in real
property, and (b) that the instruments securing the indebtedness of third
parties to the Company or its subsidiaries create valid liens upon the real
properties described in such instruments enjoying the priorities intended,
subject only to exceptions to title which have no materially adverse effect on
the value of such real properties and interests; and any real property and
buildings held under lease by the Company or its subsidiaries or leased by the
Company or its subsidiaries to a third party are held or leased by them under
valid, binding and enforceable leases conforming to the description thereof set
forth in the General Disclosure Package and the Prospectus, with such exceptions
as are not material and do not interfere with the use made and proposed to be
made of such property and buildings by the Company or its subsidiaries or such
third party.
(t) Investment Company
Act. The Company is not required, and upon the issuance and of
the Shares as herein contemplated and the application of the Net Proceeds (as
defined in Section 2(d)) therefrom as described in the Prospectus will not be
required, to register as an “investment company” within the meaning of the
Investment Company Act of 1940, as amended.
(u) Environmental
Laws. Except as disclosed in the Registration Statement, the
General Disclosure Package, the Prospectus and the Prospectus Supplement and
except as would not, singly or in the aggregate, result in a Material Adverse
Effect, and to the Company's knowledge, (A) neither the Company nor any of its
subsidiaries is in violation of any federal, state, local or foreign statute,
law, rule, regulation, ordinance, code, policy or rule of common law or any
judicial or administrative interpretation thereof, including any judicial or
administrative order,
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consent,
decree or judgment, relating to pollution or protection of human health, 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 the release or threatened release
of chemicals, pollutants, contaminants, wastes, toxic substances, hazardous
substances, petroleum or petroleum products, asbestos-containing materials or
mold (collectively, “Hazardous Materials”)
or to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Materials (collectively, “Environmental Laws”),
(B) the Company and its subsidiaries have all permits, authorizations and
approvals required under any applicable Environmental Laws and are each in
compliance with their requirements, (C) there are no pending or threatened
administrative, regulatory or judicial actions, suits, demands, demand letters,
claims, liens, notices of noncompliance or violation, investigation or
proceedings relating to any Environmental Law against the Company or any of its
subsidiaries and (D) there are no events or circumstances that would reasonably
be expected to form the basis of an order for clean-up or remediation, or an
action, suit or proceeding by any private party or governmental body or agency,
against or affecting the Company or any of its subsidiaries relating to
Hazardous Materials or any Environmental Laws.
(v) Registration
Rights. Other than registration rights granted to holders of
operating partnership units convertible into Common Shares, there are no persons
with registrations rights or other similar rights to have any securities
registered pursuant to the Registration Statement or otherwise registration by
the Company under the 1933 Act.
(w) Accounting Controls and
Disclosure Controls. The Company and each of its subsidiaries
maintain a system of internal accounting controls sufficient to provide
reasonable assurances that (A) transactions are executed in accordance with
management’s general or specific authorization; (B) transactions are recorded as
necessary to permit preparation of financial statements in conformity with GAAP
and to maintain accountability for assets; (C) access to assets is permitted
only in accordance with management’s general or specific authorization; and (D)
the recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences. Except as described in the Prospectus, since the end of
the Company’s most recent audited fiscal year, there has been (1) no material
weakness in the Company’s internal control over financial reporting (whether or
not remediated) and (2) no change in the Company’s internal control over
financial reporting that has materially affected, or is reasonably likely to
materially affect, the Company’s internal control over financial
reporting.
The
Company and its consolidated subsidiaries employ disclosure controls and
procedures that are designed to ensure that information required to be disclosed
by the Company in the reports that it files or submits under the 1934 Act is
recorded, processed, summarized and reported, within the time periods specified
in the Commission’s rules and forms, and is accumulated and communicated to the
Company’s management, including its principal executive officer or officers and
principal financial officer or officers, as appropriate, to allow timely
decisions regarding disclosure.
(x) Well-Known Seasoned
Issuer. (A)(i) At the time of filing the
Registration Statement, (ii) at the time of the most recent amendment thereto
for the purposes of complying with Section 10(a)(3) of the 1933 Act (whether
such amendment was by post-effective amendment, incorporated report filed
pursuant to Section 13 or 15(d) of the 1934 Act or form of prospectus), and
(iii) at the time the Company or any person acting on its behalf (within the
meaning, for this clause only, of Rule 163(c) under the 0000 Xxx) made any offer
relating to the Shares in reliance on the exemption of Rule 163 under the 1933
Act, the Company was a “well-known seasoned issuer” as defined in Rule 405 under
the 1933 Act; and (B) at the earliest time after the filing of the Registration
Statement that the Company or another offering participant made a bona fide
offer (within the meaning of Rule 164(h)(2) under the 0000 Xxx) of the Shares,
the Company was not an “ineligible issuer” as defined in Rule 405 under the 1933
Act.
(y) No
Commissions. Neither the Company nor any of its subsidiaries
is a party to any contract, agreement or understanding with any person (other
than as contemplated by this Agreement) that would give rise to a valid claim
against the Company or any of its subsidiaries or the Agent for a brokerage
commission, finder’s fee or like payment in connection with the offering and
sale of the Shares.
(z) Actively-Traded
Security. The Common Shares satisfy the definition of an
“actively-traded security” exempted from the requirements of Rule 101 of
Regulation M under the 1934 Act by subsection (c)(1) of such rule.
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(aa) Deemed
Representation. Any certificate signed by any officer of the
Company delivered to the Agent or to counsel for the Agent pursuant to or in
connection with this Agreement or any Terms Agreement shall be deemed a
representation and warranty by the Company to the Agent as to the matters
covered thereby as of the date or dates indicated in such
certificate.
(bb) Compliance with the
Xxxxxxxx-Xxxxx Act. There is and has been no failure on the
part of the Company or any of the Company’s trust managers or officers, in their
capacities as such, to comply in all material respects with any provision of the
Xxxxxxxx-Xxxxx Act of 2002 and the rules and regulations promulgated in
connection therewith (the “Xxxxxxxx-Xxxxx Act”),
including Section 402 related to loans and Sections 302 and 906 related to
certifications.
(cc) Payment of
Taxes. All United States federal income tax returns of the
Company and its subsidiaries required by law to be filed have been filed and all
taxes shown by such returns or otherwise assessed, which are due and payable,
have been paid, except assessments against which appeals have been or will be
promptly taken and as to which adequate reserves have been
provided. The United States federal income tax returns of the Company
through the fiscal year ended December 31, 2007 have been settled and no
assessment in connection therewith has been made against the Company. The
Company and its subsidiaries have filed all other tax returns that are required
to have been filed by them pursuant to applicable foreign, state, local or other
law except insofar as the failure to file such returns would not result in a
Material Adverse Effect, and has paid all taxes due pursuant to such returns or
pursuant to any assessment received by the Company and its subsidiaries, except
for such taxes, if any, as are being contested in good faith and as to which
adequate reserves have been provided. The charges, accruals and
reserves on the books of the Company in respect of any income and corporation
tax liability for any years not finally determined are adequate to meet any
assessments or re-assessments for additional income tax for any years not
finally determined, except to the extent of any inadequacy that would not result
in a Material Adverse Effect.
(dd) REIT
Status. With respect to all tax periods in which the Internal
Revenue Service is or will be entitled to assert 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 (the
“Code”), and
the Company’s present and contemplated operations, assets and income continue to
meet such requirements.
(ee) Insurance. The
Company and its subsidiaries carry or are entitled to the benefits of insurance,
with financially sound and reputable insurers, in such amounts and covering such
risks as is generally maintained by companies of established repute engaged in
the same or similar business, and all such insurance is in full force and
effect. The Company has no reason to believe that it or any
subsidiary will not be able (A) to renew its existing insurance coverage as and
when such policies expire or (B) to obtain comparable coverage from similar
institutions as may be necessary or appropriate to conduct its business as now
conducted and at a cost that would not result in a Material Adverse
Change. Neither of the Company nor any subsidiary has been denied any
insurance coverage which it has sought or for which it has applied.
(ff) Foreign Corrupt Practices
Act. Neither the Company nor, to the knowledge of the Company,
any trust manager, officer, agent, employee, affiliate or other person acting on
behalf of the Company or any of its subsidiaries is aware of or has taken any
action, directly or indirectly, that would result in a violation by such persons
of the Foreign Corrupt Practices Act of 1977, as amended, and the rules and
regulations thereunder (the “FCPA”), including,
without limitation, making use of the mails or any means or instrumentality of
interstate commerce corruptly in furtherance of an offer, payment, promise to
pay or authorization of the payment of any money, or other property, gift,
promise to give, or authorization of the giving of anything of value to any
“foreign official” (as such term is defined in the FCPA) or any foreign
political party or official thereof or any candidate for foreign political
office, in contravention of the FCPA and the Company and, to the knowledge of
the Company, its affiliates have conducted their businesses in compliance with
the FCPA and have instituted and maintain policies and procedures designed to
ensure, and which are reasonably expected to continue to ensure, continued
compliance therewith.
(gg) Money Laundering
Laws. The operations of the Company are and have been
conducted at all times in compliance with applicable financial recordkeeping and
reporting requirements of the Currency and Foreign Transactions Reporting Act of
1970, as amended, the money laundering statutes of all jurisdictions, the rules
and regulations thereunder and any related or similar rules, regulations or
guidelines, issued, administered or
7
enforced
by any governmental agency (collectively, the “Money Laundering
Laws”) and no action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the Company
with respect to the Money Laundering Laws is pending or, to the best knowledge
of the Company, threatened.
(hh) OFAC. Neither
the Company nor, to the knowledge of the Company, any trust manager, officer,
agent, employee, affiliate or person acting on behalf of the Company is
currently subject to any U.S. sanctions administered by the Office of Foreign
Assets Control of the U.S. Treasury Department (“OFAC”); and the
Company will not directly or indirectly use the proceeds of the offering, or
lend, contribute or otherwise make available such proceeds to any subsidiary,
joint venture partner or other person or entity, for the purpose of financing
the activities of any person currently subject to any U.S. sanctions
administered by OFAC.
Section
2. Sale and Delivery of
Shares.
(a) Subject
to the terms and conditions set forth herein, the Company agrees to issue and
sell through the Agent acting as sales agent or directly to the Agent acting as
principal from time to time, and the Agent agrees to use its commercially
reasonable efforts to sell as sales agent for the Company, the
Shares. Sales of the Shares, if any, through the Agent acting as
sales agent or directly to the Agent acting as principal, will be made by means
of ordinary brokers’ transactions on the NYSE or otherwise at market prices
prevailing at the time of sale, at prices related to prevailing market prices or
at negotiated prices.
(b) The
Shares are to be sold on a daily basis or otherwise as shall be agreed to by the
Company and the Agent on any trading day (other than a day on which the NYSE is
scheduled to close prior to its regular weekday closing time, each, a “Trading Day”) that
the Company has satisfied its obligations under Section 6 of this Agreement and
that the Company has instructed the Agent to make such sales. On any
Trading Day, the Company may instruct the Agent by telephone (confirmed promptly
by telecopy or email, which confirmation will be promptly acknowledged by the
Agent) as to the maximum number of Shares to be sold by the Agent on such day
(in any event not in excess of the number available for issuance under the
Prospectus and the currently effective Registration Statement) and the minimum
price per Share at which such Shares may be sold. Subject to the
terms and conditions hereof, the Agent shall use its commercially reasonable
efforts to sell as sales agent all of the Shares so designated by the
Company. The Company and the Agent each acknowledge and agree that
(A) there can be no assurance that the Agent will be successful in selling the
Shares, (B) the Agent will incur no liability or obligation to the Company or
any other person or entity if it does not sell Shares for any reason other than
a failure by the Agent to use its commercially reasonable efforts consistent
with its normal trading and sales practices and applicable law and regulations
to sell such Shares as required by this Agreement, and (C) the Agent shall be
under no obligation to purchase Shares on a principal basis except as otherwise
specifically agreed by the Agent and the Company pursuant to a Terms
Agreement. In the event of a conflict between the terms of this
Agreement and the terms of a Terms Agreement, the terms of such Terms Agreement
will control.
(c) Notwithstanding
the foregoing, the Company shall not authorize the issuance and sale of, and the
Agent as sales agent shall not be obligated to use its commercially reasonable
efforts to sell, any Shares (i) at a price lower than the minimum price therefor
authorized from time to time, or (ii) in a number in excess of the number of
Shares authorized from time to time to be issued and sold under this Agreement,
in each case, by the Company’s board of trust managers (the “Board of Trust
Managers”), or a duly authorized committee thereof, and notified to the
Agent in writing. In addition, the Company or the Agent may, upon
notice to the other party hereto by telephone (confirmed promptly by telecopy or
email, which confirmation will be promptly acknowledged), suspend the offering
of the Shares for any reason and at any time; provided, however, that such
suspension or termination shall not affect or impair the parties’ respective
obligations with respect to the Shares sold hereunder prior to the giving of
such notice.
(d) The
gross sales price of any Shares sold pursuant to this Agreement by the Agent
acting as sales agent of the Company shall be the market price prevailing at the
time of sale for the Company’s Common Shares sold by the Agent on the NYSE or
otherwise, at prices relating to prevailing market prices or at negotiated
prices. The compensation payable to the Agent for sales of Shares
shall be equal to 2% of the gross sales price of the Shares for amounts of
Shares sold pursuant to this Agreement. The Company may sell Shares
to the Agent as principal at a price agreed upon at the relevant Applicable Time
and pursuant to a separate Terms Agreement. The remaining
8
proceeds,
after further deduction for any transaction fees imposed by any governmental,
regulatory or self-regulatory organization in respect of such sales, shall
constitute the net proceeds to the Company for such Shares (the “Net
Proceeds”). The Agent shall notify the Company as promptly as
practicable if any deduction referenced in the preceding sentence will be
required.
(e) If
acting as sales agent hereunder, the Agent shall provide written confirmation to
the Company following the close of trading on the NYSE each day in which Shares
are sold under this Agreement setting forth the number of Shares sold on such
day, the aggregate gross sales proceeds of the Shares, the Net Proceeds to the
Company and the compensation payable by the Company to the Agent with respect to
such sales.
(f) Under
no circumstances shall the aggregate offering price or number, as the case may
be, of Shares sold pursuant to this Agreement and any Terms Agreement exceed the
aggregate offering price or number, as the case may be, of Shares (i) set forth
in the preamble paragraph of this Agreement, (ii) available for issuance under
the Prospectus and the then currently effective Registration Statement or (iii)
authorized from time to time to be issued and sold under this Agreement or any
Terms Agreement by the Board of Trust Managers, or a duly authorized committee
thereof, and notified to the Agent in writing. In addition, under no
circumstances shall any Shares with respect to which the Agent acts as sales
agent be sold at a price lower than the minimum price therefor authorized from
time to time by the Board of Trust Managers, or a duly authorized committee
thereof, and notified to the Agent in writing.
(g) If
either party believes that the exemptive provisions set forth in Rule 101(c)(1)
of Regulation M under the 1934 Act (applicable to securities with an average
daily trading volume of $1,000,000 that are issued by an issuer whose common
equity securities have a public float value of at least $150,000,000) are not
satisfied with respect to the Company or the Shares, it shall promptly notify
the other party and sales of Shares under this Agreement and any Terms Agreement
shall be suspended until that or other exemptive provisions have been satisfied
in the judgment of each party.
(h) Settlement
for sales of Shares pursuant to this Section 2 will occur on the third business
day that is also a Trading Day following the trade date on which such sales are
made, unless another date shall be agreed to by the Company and the Agent (each
such day, a “Settlement
Date”). On each Settlement Date, the Shares sold through the
Agent for settlement on such date shall be delivered by the Company to the Agent
against payment of the Net Proceeds from the sale of such
Shares. Settlement for all Shares shall be effected by book-entry
delivery of Shares to the Agent’s account at The Depository Trust Company
against payments by the Agent of the Net Proceeds from the sale of such Shares
in same day funds delivered to an account designated by the
Company. If the Company shall default on its obligation to deliver
Shares on any Settlement Date, the Company shall (i) indemnify and hold the
Agent harmless against any loss, claim or damage arising from or as a result of
such default by the Company and (ii) pay the Agent any commission to which it
would otherwise be entitled absent such default. If the Agent
breaches this Agreement by failing to deliver the applicable Net Proceeds on any
Settlement Date for Shares delivered by the Company, the Agent will pay the
Company interest based on the effective overnight federal funds rate until such
proceeds, together with such interest, have been fully paid.
(i) Notwithstanding
any other provision of this Agreement, the Company and the Agent agree that no
sales of Shares shall take place, and the Company shall not request the sale of
any Shares that would be sold, and the Agent shall not be obligated to sell,
during any period in which the Company’s xxxxxxx xxxxxxx policy, as it exists on
the date of the Agreement, would prohibit the purchases or sales of the
Company’s Common Shares by its officers or trust managers, or during any other
period in which the Company is, or could be deemed to be, in possession of
material non-public information; provided that, unless
otherwise agreed between the Company and the Agent, for purposes of this
paragraph (i) such period shall be deemed to end on the date on which the
Company’s next subsequent Annual Report on Form 10-K or Quarterly Report on Form
10-Q, as the case may be, is filed with the Commission.
(j) At
each Applicable Time, Settlement Date, Registration Amendment Date and each
Company Periodic Report Date, the Company shall be deemed to have affirmed each
representation and warranty contained in this Agreement. Any
obligation of the Agent to use its commercially reasonable efforts to sell the
Shares on behalf of the Company as sales agent shall be subject to the
continuing accuracy of the representations and warranties of
9
the
Company herein, to the performance by the Company of its obligations hereunder
and to the continuing satisfaction of the additional conditions specified in
Section 6 of this Agreement.
Section
3. Covenants. The
Company agrees with the Agent:
(a) During
any period when the delivery of a prospectus is required in connection with the
offering or sale of Shares (whether physically or through compliance with Rule
153 or 172, or in lieu thereof, a notice referred to in Rule 173(a) under the
1933 Act), (i) to make no further amendment or any supplement to the
Registration Statement or the Prospectus prior to any Settlement Date which
shall be disapproved by the Agent promptly after reasonable notice thereof and
to advise the Agent, promptly after it receives notice thereof, of the time when
any amendment to the Registration Statement has been filed or becomes effective
or any amendment or supplement to the Prospectus has been filed and to furnish
the Representatives with copies thereof, (ii) to file promptly all
other material required to be filed by the Company with the Commission pursuant
to Rule 433(d) under the 1933 Act, (iii) to file promptly all reports and any
definitive proxy or information statements required to be filed by the Company
with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the 1934
Act, (iv) to advise the Agents, promptly after it receives notice thereof, of
the issuance by the Commission of any stop order or of any order preventing or
suspending the use of the Prospectus or other prospectus in respect of the
Shares, of any notice of objection of the Commission to the use of the form of
the Registration Statement or any post-effective amendment thereto pursuant to
Rule 401(g)(2) under the 1933 Act, of the suspension of the qualification of the
Shares for offering or sale in any jurisdiction, of the initiation or
threatening of any proceeding for any such purpose, or of any request by the
Commission for the amending or supplementing of the form of the Registration
Statement or the Prospectus or for additional information, and (v) in the event
of the issuance of any such stop order or of any such order preventing or
suspending the use of the Prospectus in respect of the Shares or suspending any
such qualification, to promptly use its commercially reasonable efforts to
obtain the withdrawal of such order; and in the event of any such issuance of a
notice of objection, promptly to take such reasonable steps as may be necessary
to permit offers and sales of the Shares by the Agent, which may include,
without limitation, amending the Registration Statement or filing a new
registration statement, at the Company’s expense (references herein to the
Registration Statement shall include any such amendment or new registration
statement).
(b) Promptly
from time to time to take such action as the Agent may reasonably request to
qualify the Shares for offering and sale under the securities laws of such
jurisdictions as the Agent may request and to comply with such laws so as to
permit the continuance of sales and dealings therein in such jurisdictions for
as long as may be necessary to complete the sale of the Shares, provided that in
connection therewith the Company shall not be required to qualify as a foreign
corporation or to file a general consent to service of process in any
jurisdiction; and to promptly advise the Agent of the receipt by the Company of
any notification with respect to the suspension of the qualification of the
Shares for offer or sale in any jurisdiction or the initiation or threatening of
any proceeding for such purpose.
(c) During
any period when the delivery of a prospectus is required (whether physically or
through compliance with Rules 153 or 172, or in lieu thereof, a notice referred
to in Rule 173(a) under the 0000 Xxx) in connection with the offering or sale of
Shares, the Company will make available to the Agent, as soon as practicable
after the execution of this Agreement, and thereafter from time to time furnish
to the Agent, copies of the most recent Prospectus in such quantities and at
such locations as the Agent may reasonably request for the purposes contemplated
by the 1933 Act. During any period when the delivery of a prospectus
is required (whether physically or through compliance with Rules 153 or 172, or
in lieu thereof, a notice referred to in Rule 173(a) under the 0000 Xxx) in
connection with the offering or sale of Shares, and if at such time any event
shall have occurred 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 any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made when such Prospectus
is delivered, not misleading, or, if for any other reason it shall be necessary
during such same period to amend or supplement the Prospectus or to file under
the 1934 Act any document incorporated by reference in the Prospectus in order
to comply with the 1933 Act or the 1934 Act, to notify the Agent and to file
such document and to prepare and furnish without charge to the Agent as many
written and electronic copies as the Agent may from time to time reasonably
request of an amended Prospectus or a supplement to the Prospectus which will
correct such statement or omission or effect such compliance.
10
(d) To
make generally available to its securityholders as soon as practicable, but in
any event not later than sixteen months after the effective date of the
Registration Statement (as defined in Rule 158(c) under the 1933 Act), an
earnings statement of the Company and its subsidiaries (which need not be
audited) complying with Section 11(a) of the 1933 Act and the rules and
regulations of the Commission thereunder (including, at the option of the
Company, Rule 158).
(e) To
pay the required Commission filing fees relating to the Shares within the time
required by Rule 456(b)(1) under the 1933 Act without regard to the proviso
therein and otherwise in accordance with Rules 456(b) and 457(r) under the 1933
Act.
(f) To
use the Net Proceeds received by it from the sale of the Shares pursuant to this
Agreement and any Terms Agreement in the manner specified in the Disclosure
Package.
(g) In
connection with the offering and sale of the Shares, the Company will file with
the NYSE all documents and notices, and make all certifications, required by the
NYSE of companies that have securities that are listed on the NYSE and will
maintain such listing.
(h) To
not take, directly or indirectly, any action designed to cause or result in, or
that has constituted or might reasonably be expected to constitute, under the
1934 Act or otherwise, the stabilization or manipulation of the price of any
securities of the Company to facilitate the sale or resale of the
Shares.
(i) At
each Applicable Time, each Settlement Date, each Registration Statement
Amendment Date (as defined below), each Company Earnings Report Date (as defined
below) and each Company Periodic Report Date (as defined below) and each date on
which Shares are delivered to the Agent pursuant to a Terms Agreement, the
Company shall be deemed to have affirmed each representation, warranty, covenant
and other agreement contained in this Agreement or any Terms
Agreement. In each Annual Report on Form 10-K or Quarterly Report on
Form 10-Q filed by the Company in respect of any quarter in which sales of
Shares were made by or through the Agent under this Agreement or any Terms
Agreement (each date on which any such document is filed, and any date on which
an amendment to any such document is filed, a “Company Periodic Report
Date”), the Company shall set forth with regard to such quarter the
number of Shares sold through the Agent under this Agreement or any Terms
Agreement, the Net Proceeds received by the Company and the compensation paid by
the Company to the Agent with respect to sales of Shares pursuant to this
Agreement or any Terms Agreement.
(j) Upon
commencement of the offering of Shares under this Agreement (and upon the
recommencement of the offering of the Shares under this Agreement following any
termination of a suspension of sales hereunder) and each time Shares are
delivered to the Agent as principal on a Settlement Date and promptly after each
(i) date the Registration Statement or the Prospectus shall be amended or
supplemented (other than (1) by an amendment or supplement providing solely for
the determination of the terms of the Shares, (2) in connection with the filing
of a prospectus supplement that contains solely the information set forth in
Section 3(i), (3) in connection with the filing of any current reports on Form
8-K (other than any current reports on Form 8-K which contain financial
statements, supporting schedules or other financial data, including any current
report on Form 8-K under Item 2.02 of such form that is considered “filed” under
the 0000 Xxx) or (4) by a prospectus supplement relating to the offering of
other securities (including, without limitation, other Common Shares)) (each
such date, a “Registration Statement
Amendment Date”), (ii) date on which a current report on Form 8-K
shall be furnished by the Company under Item 2.02 of such form in respect of a
public disclosure or material non-public information regarding the Company’s
results of operations or financial condition for a completed quarterly or annual
fiscal period (a “Company Earnings Report
Date”) and (iii) Company Periodic Report Date, the Company will
furnish or cause to be furnished forthwith to the Agent a certificate dated the
date of effectiveness of such amendment or the date of filing with the
Commission of such supplement or other document, as the case may be, in a form
reasonably satisfactory to the Agent to the effect that the statements contained
in the certificate referred to in Section 6(e)(ii) of this Agreement which were
last furnished to the Agent are true and correct at the time of such amendment,
supplement or 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, the Disclosure Package and the Prospectus as amended and supplemented
to such time) or, in lieu of such certificate, a certificate of the same tenor
as the certificate referred to in said Section 6(e)(ii), but modified as
necessary to relate to the Registration Statement and the Prospectus as amended
and supplemented, or to the document incorporated by reference into the
Prospectus, to the time of
11
delivery
of such certificate. As used in this paragraph, to the extent there shall be an
Applicable Time on or following the date referred to in clause (i) , (ii) or
(iii) above, promptly shall be deemed to be on or prior to the next succeeding
Applicable Time.
(k) Upon
commencement of the offering of Shares under this Agreement (and upon the
recommencement of the offering of the Shares under this Agreement following any
termination of a suspension of sales hereunder) and each time Shares are
delivered to the Agent as principal on a Settlement Date, and promptly after
each (i) Registration Statement Amendment Date, (ii) Company Earnings Report
Date and (iii) Company Periodic Report Date, the Company will furnish or cause
to be furnished to the Agent and to counsel to the Agent the written opinion and
letter of each Company Counsel or other counsel reasonably satisfactory to the
Agent, dated the date of effectiveness of such amendment or the date of filing
with the Commission of such supplement or other document, as the case may be, in
a form and substance reasonably satisfactory to the Agent and its counsel, of
the same tenor as the opinions and letters referred to in Section 6(c) of this
Agreement, but modified as necessary to relate to the Registration Statement,
the Disclosure Package and the Prospectus as amended and supplemented, or to the
document incorporated by reference into the Prospectus, to the time of delivery
of such opinion and letter or, in lieu of such opinion and letter, counsel last
furnishing such letter to the Agent shall furnish such Agent with a letter
substantially to the effect that the Agent may rely on such last opinion and
letter to the same extent as though each were dated the date of such letter
authorizing reliance (except that statements in such last letter shall be deemed
to relate to the Registration Statement and the Prospectus as amended and
supplemented to the time of delivery of such letter authorizing reliance). As
used in this paragraph, to the extent there shall be an Applicable Time on or
following the date referred to in clause (i), (ii) or (iii) above, promptly
shall be deemed to be on or prior to the next succeeding Applicable
Time.
(l) Upon
commencement of the offering of Shares under this Agreement (and upon the
recommencement of the offering of the Shares under this Agreement following any
termination of a suspension of sales hereunder) and each time Shares are
delivered to the Agent as principal on a Settlement Date, and promptly after
each (i) Registration Statement Amendment Date, (ii) Company Earnings Report
Date and (iii) Company Periodic Report Date, the Company will cause Deloitte
& Touche llp, or other independent accountants reasonably satisfactory to
the Agent, to furnish to the Agent a letter, dated the date of effectiveness of
such amendment or the date of filing of such supplement or other document with
the Commission, as the case may be, in form reasonably satisfactory to the Agent
and its counsel, of the same tenor as the letter referred to in Section 6(d)
hereof, but modified as necessary to relate to the Registration Statement, the
Disclosure Package and the Prospectus, as amended and supplemented, or to the
document incorporated by reference into the Prospectus, to the date of such
letter. As used in this paragraph, to the extent there shall be an Applicable
Time on or following the date referred to in clause (i), (ii) or (iii) above,
promptly shall be deemed to be on or prior to the next succeeding Applicable
Time.
(m) The
Company consents to the Agent trading in the Company’s Common Shares for the
Agent’s own account and for the account of its clients at the same time as sales
of Shares occur pursuant to this Agreement or any Terms Agreement.
(n) If,
to the knowledge of the Company, all filings required by Rule 424 in connection
with this offering shall not have been made or the representations in Section
1(a) shall not be true and correct on the applicable Settlement Date, the
Company will offer to any person who has agreed to purchase Shares from the
Company as the result of an offer to purchase solicited by the Agent the right
to refuse to purchase and pay for such Shares.
(o) The
Company will cooperate timely with any reasonable due diligence review conducted
by the Agent or its counsel from time to time in connection with the
transactions contemplated hereby or in any Terms Agreement, including, without
limitation, and upon reasonable notice providing information and making
available documents and appropriate corporate officers, during regular business
hours and at the Company’s principal offices, as the Agent may reasonably
request.
(p) The
Company will not, without (i) giving the Agent at least five business days’
prior written notice specifying the nature of the proposed sale and the date of
such proposed sale and (ii) the Agent suspending activity under this program for
such period of time as requested by the Company or as deemed appropriate by the
Agent in light of the proposed sale, (A) offer, pledge, announce the intention
to sell, sell, contract to sell, sell any
12
option or
contract to purchase, purchase any option or contract to sell, grant any option,
right or warrant for the sale of, lend or otherwise transfer or dispose of,
directly or indirectly, any Common Shares or securities convertible
into or exchangeable or exercisable for or repayable with Common Shares, or file
any registration statement under the 1933 Act with respect to any of the
foregoing (other than a shelf registration statement under Rule 415 under the
1933 Act, a registration statement on Form S-8 or post-effective amendment to
the Registration Statement) or (B) enter into any swap or other agreement or any
transaction that transfers in whole or in part, directly or indirectly, any of
the economic consequence of ownership of the Common Shares, or any securities
convertible into or exchangeable or exercisable for or repayable with Common
Shares, whether any such swap or transaction described in clause (A) or (B)
above is to be settled by delivery of Common Shares or such other securities, in
cash or otherwise. The foregoing sentence shall not apply to (x) the Shares to
be offered and sold through the Agent pursuant to this Agreement or any Terms
Agreement, (y) Common Shares issuable pursuant to the Company’s dividend
reinvestment plan as it may be amended or replaced from time to time and (z)
equity incentive awards approved by the Board of Trust Managers or the
compensation committee thereof or the issuance of Common Shares upon exercise
thereof.
(q) If
immediately prior to the third anniversary (the “Renewal Deadline”) of
the initial effective date of the Registration Statement, any of the Shares
remain unsold, the Company will, prior to the Renewal Deadline file, if it has
not already done so and is eligible to do so, a new automatic shelf registration
statement relating to the Shares, in a form satisfactory to the
Agent. If the Company is no longer eligible to file an automatic
shelf registration statement, the Company will, prior to the Renewal Deadline,
if it has not already done so, file a new shelf registration statement relating
to the Shares, in a form satisfactory to the Agent, and will use its best
efforts to cause such registration statement to be declared effective within 60
days after the Renewal Deadline. The Company will take all other
action necessary or appropriate to permit the issuance and sale of the Shares to
continue as contemplated in the expired registration statement relating to the
Shares. References herein to the Registration Statement shall include
such new automatic shelf registration statement or such new shelf registration
statement, as the case may be.
(r)
To elect to qualify as a “real estate investment trust” under the Code,
and to use its best efforts to continue to meet the requirements to qualify as a
“real estate investment trust.”
Section
4. Free Writing
Prospectus.
(a) (i) The
Company represents and agrees that without the prior consent of the Agent, it
has not made and will not make any offer relating to the Shares that would
constitute a “free writing prospectus” as defined in Rule 405 under the 1933
Act; and
(ii) the
Agent represents and agrees that, without the prior consent of the Company it
has not made and will not make any offer relating to the Shares that would
constitute a free writing prospectus required to be filed with the
Commission.
(b) The
Company has complied and will comply with the requirements of Rule 433 under the
1933 Act applicable to any Issuer Free Writing Prospectus (including any free
writing prospectus identified in Section 4(a) hereof), including timely filing
with the Commission or retention where required and legending.
Section
5. Payment of
Expenses.
(a) The
Company covenants and agrees with the Agent that the Company will pay or cause
to be paid the following: (i) the fees, disbursements and expenses of the
Company’s counsel and accountants in connection with the registration of the
Shares under the 1933 Act and all other expenses in connection with the
preparation, printing and filing of the Registration Statement, the Basic
Prospectus, Prospectus Supplement, any Issuer Free Writing Prospectus and the
Prospectus and amendments and supplements thereto and the mailing and delivering
of copies thereof to the Agents; (ii) the cost of printing or producing this
Agreement or any Terms Agreement, any Blue Sky and Legal Investment Memoranda,
closing documents (including any compilations thereof) and any other documents
in connection with the offering, purchase, sale and delivery of the Shares;
(iii) all expenses in connection with the qualification of the Shares for
offering and sale under state securities laws as provided in Section 3(b)
hereof, including the reasonable fees and disbursements of counsel for the Agent
in connection with such
13
qualification
and in connection with the Blue Sky and Legal Investment Surveys; (iv) any
filing fees incident to, and the reasonable fees and disbursements of a single
counsel for the Agent in connection with, any required review by Financial
Industry Regulatory Authority, Inc. of the terms of the sale of the Shares; (v)
all fees and expenses in connection with listing the Shares on the Exchange;
(vi) the cost of preparing the Shares; (vii) the costs and charges of any
transfer agent or registrar or any dividend distribution agent; and (viii) all
other reasonable costs and expenses incident to the performance of its
obligations hereunder which are not otherwise specifically provided for in this
Section. It is understood, however, that, except as provided in this Section,
and Section 7 hereof, the Agent will pay all of its own costs and expenses,
including the fees of its counsel, transfer taxes on resale of any of the Shares
by it, and any advertising expenses connected with any offers it may
make.
(b) If
Shares having an aggregate offering price of $25,000,000 or more have not
been offered and sold under this Agreement by December 31, 2009 (or such
earlier date on which the Company terminates this Agreement), the Company shall
reimburse the Agent for all of its reasonable out-of-pocket expenses, including
the reasonable fees and disbursements of a single counsel for the Agent incurred
by it in connection with the offering contemplated by this
Agreement.
Section
6. Conditions of Agent’s
Obligation. The obligations of the Agent hereunder shall be
subject, in its discretion, to the condition that all representations and
warranties and other statements of the Company herein or in certificates of any
officer of the Company delivered pursuant to the provisions hereof are true and
correct as of the time of the execution of this Agreement, the date of any
executed Terms Agreement and as of each Registration Statement Amendment Date,
Company Periodic Report Date, Applicable Time and Settlement Date, to the
condition that the Company shall have performed all of its obligations hereunder
theretofore to be performed, and the following additional
conditions:
(a) The
Prospectus Supplement shall have been filed with the Commission pursuant to Rule
424(b) under the 1933 Act on or prior to the date hereof and in accordance with
Section 3(a) hereof, any other material required to be filed by the Company
pursuant to Rule 433(d) under the 1933 Act shall have been filed with the
Commission within the applicable time periods prescribed for such filings by
Rule 433; no stop order suspending the effectiveness of the Registration
Statement or any part thereof shall have been issued and no proceeding for that
purpose shall have been initiated or threatened by the Commission and no notice
of objection of the Commission to the use of the form of the Registration
Statement or any post-effective amendment thereto pursuant to Rule 401(g)(2)
under the 1933 Act shall have been received; no stop order suspending or
preventing the use of the Prospectus or any Issuer Free Writing Prospectus shall
have been initiated or threatened by the Commission; and all requests for
additional information on the part of the Commission shall have been complied
with to the reasonable satisfaction of the Representatives.
(b) On
every date specified in Section 3(k) hereof and on such other dates as
reasonably requested by Agent, Sidley Austin LLP, counsel for the Agent, shall
have furnished to the Agent such written opinion or opinions, dated as of such
date, with respect to such matters as the Agent may reasonably request, and such
counsel shall have received such papers and information as they may reasonably
request to enable them to pass upon such matters.
(c) On
every date specified in Section 3(k) hereof and on such other dates as
reasonably requested by Agent, Xxxxx Lord Xxxxxx & Xxxxxxx LLP counsel
for the Company, shall have furnished to the Agent written opinion or opinions,
dated as of such date, in form and substance satisfactory to the
Agent.
(d) At
the dates specified in Section 3(l) hereof and on such other dates as reasonably
requested by Agent, the independent accountants of the Company who have
certified the financial statements of the Company and its subsidiaries included
or incorporated by reference in the Registration Statement shall have furnished
to the Agent a letter dated as of the date of delivery thereof and addressed to
the Agent in form and substance reasonably satisfactory to the Agent and its
counsel, containing statements and information of the type ordinarily included
in accountants’ “comfort letters” to underwriters with respect to the financial
statements of the Company and its subsidiaries included or incorporated by
reference in the Registration Statement.
(e) (i)
Upon commencement of the offering of Shares under this Agreement and on such
other dates as reasonably requested by Agent, the Company will furnish or cause
to be furnished promptly to the Agent a certificate of an officer in a form
satisfactory to the Agent stating the minimum price for the sale of such Shares
14
pursuant
to this Agreement and the maximum number of Shares that may be issued and sold
pursuant to this Agreement or, alternatively, maximum gross proceeds from such
sales, as authorized from time to time by the Board of Trust Managers or a duly
authorized committee thereof or, in connection with any amendment, revision or
modification of such minimum price or maximum Share number or amount, a new
certificate with respect thereto and (ii) on each date specified in Section 3(j)
and on such other dates as reasonably requested by Agent, the Agent shall have
received a certificate of executive officers of the Company, one of whom shall
be the Chief Financial Officer, Chief Accounting Officer, Treasurer, or
Executive Vice President in the area of capital markets and investments, dated
as of the date thereof, to the effect that (A) there has been no Material
Adverse Effect since the date as of which information is given in the Prospectus
as then amended or supplemented, (B) the representations and warranties in
Section 1 hereof are true and correct as of such date and (C) the Company has
complied with all of the agreements entered into in connection with the
transaction contemplated herein and satisfied all conditions on its part to be
performed or satisfied.
(f)
Since the date of the latest audited financial statements then included or
incorporated by reference in the Prospectus and the Disclosure Package, no
Material Adverse Effect shall have occurred.
(g) The
Company shall have complied with the provisions of Section 3(c) hereof with
respect to the timely furnishing of prospectuses.
(h) On
such dates as reasonably requested by the Agent, the Company shall have
conducted due diligence sessions, in form and substance satisfactory to the
Agent.
(i) All
filings with the Commission required by Rule 424 under the 1933 Act to have been
filed by each Applicable Time or related Settlement Date shall have been made
within the applicable time period prescribed for such filing by Rule 424
(without reliance on Rule 424(b)(8)).
(j) The
Shares shall have received approval for listing on the NYSE prior to the first
Settlement Date.
Section
7. Indemnification.
(a) The
Company will indemnify and hold harmless the Agent against any losses, claims,
damages or liabilities, joint or several, to which the Agent may become subject,
under the 1933 Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement, the Basic Prospectus, the Prospectus Supplement or the
Prospectus or any amendment or supplement thereto, any Issuer Free Writing
Prospectus or any “issuer information” filed or required to be filed pursuant to
Rule 433(d) under the 1933 Act, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will
reimburse the Agent for any legal or other expenses reasonably incurred by the
Agent in connection with investigating or defending any such action or claim as
such expenses are incurred; provided, however, that the
Company shall not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in the
Registration Statement, the Basic Prospectus, the Prospectus Supplement or the
Prospectus, or any amendment or supplement thereto, or any Issuer Free Writing
Prospectus, in reliance upon and in conformity with written information
furnished to the Company by the Agent expressly for use therein.
(b) The
Agent will indemnify and hold harmless the Company against any losses, claims,
damages or liabilities to which the Company may become subject, under the 1933
Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon an untrue statement
or alleged untrue statement of a material fact contained in the Registration
Statement, the Basic Prospectus, the Prospectus Supplement or the Prospectus, or
any amendment or supplement thereto, or any Issuer Free Writing Prospectus, or
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in the Registration Statement, the Basic Prospectus,
the Prospectus Supplement or the Prospectus, or any such amendment or supplement
thereto, or any Issuer Free Writing Prospectus, in reliance upon and in
conformity with
15
written
information furnished to the Company by the Agent expressly for use therein; and
will reimburse the Company for any legal or other expenses reasonably incurred
by the Company in connection with investigating or defending any such action or
claim as such expenses are incurred.
(c) Promptly
after receipt by an indemnified party under subsection (a) or (b) above of
notice of the commencement of any action, such indemnified party shall, if a
claim in respect thereof is to be made against the indemnifying party under such
subsection, notify the indemnifying party in writing of the commencement
thereof; but the omission so to notify the indemnifying party shall not relieve
it from any liability which it may have to any indemnified party otherwise than
under such subsection except and then only to the extent such indemnifying party
is materially prejudiced thereby. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and,
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under this Section 7 for any legal expenses of
other counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than reasonable
costs of investigation. No indemnifying party shall, without the written consent
of the indemnified party, effect the settlement or compromise of, or consent to
the entry of any judgment with respect to, any pending or threatened action or
claim in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified party is an actual or potential party
to such action or claim) unless such settlement, compromise or judgment (i)
includes an unconditional release of the indemnified party from all liability
arising out of such action or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act, by or on behalf of
any indemnified party.
(d) If
the indemnification provided for in this Section 7 is unavailable to hold
harmless an indemnified party under subsection (a) or (b) above in respect of
any losses, claims, damages or liabilities (or actions in respect thereof)
referred to therein, then each indemnifying party shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages or liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the Agent on the other from the offering of the Shares to which such
loss, claim, damage or liability (or action in respect thereof) relates. If,
however, the allocation provided by the immediately preceding sentence is not
permitted by applicable law, then each indemnifying party shall contribute to
such amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company on the one hand and the Agent on the other in connection
with the statements or omissions which resulted in such losses, claims, damages
or liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by the Company on the
one hand and the Agent on the other 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 commissions received by the
Agent. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company on the one hand or the Agent on the other
and the parties’ relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The
Company and the Agent agree that it would not be just and equitable if
contribution pursuant to this subsection (d) were determined by pro rata
allocation (even if the Agent was treated as one entity for such purpose) or by
any other method of allocation which does not take account of the equitable
considerations referred to above in this subsection (d). The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages or liabilities (or actions in respect thereof) referred to above in this
subsection (d) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any such action or claim. Notwithstanding the provisions of this
subsection (d), the Agent shall not be required to contribute any amount in
excess of the amount by which the total price at which the Shares sold by it to
the public were offered to the public exceeds the amount of any damages which
the Agent has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the 0000
Xxx) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation.
16
(e) The
obligations of the Company under this Section 7 shall be in addition to any
liability which the Company may otherwise have and shall extend, upon the same
terms and conditions, to the directors and officers of the Agent and to each
person, if any, who controls the Agent within the meaning of the 1933 Act and
each broker dealer affiliate of the Agent; and the obligations of the Agent
under this Section 7 shall be in addition to any liability which the Agent may
otherwise have and shall extend, upon the same terms and conditions, to each
officer and trust manager of the Company and to each person, if any, who
controls the Company within the meaning of the 1933 Act.
Section
8. Representations, Warranties
and Agreements to Survive Delivery. The respective
indemnities, agreements, representations, warranties and other statements of the
Company and the Agent, as set forth in this Agreement or made by or on behalf of
them, respectively, pursuant to this Agreement, shall remain in full force and
effect, regardless of any investigation (or any statement as to the results
thereof) made by or on behalf of the Agent or any controlling person of the
Agent, or the Company, or any officer or trust manager or controlling person of
the Company, and shall survive delivery of and payment for the
Shares.
Section
9. No Advisory or Fiduciary
Relationship. The Company acknowledges and agrees that (i) the
Agent is acting solely in the capacity of an arm’s length contractual
counterparty to the Company with respect to the offering of Shares contemplated
hereby (including in connection with determining the terms of such offering) and
(ii) the Agent has not assumed an advisory or fiduciary responsibility in favor
of the Company with respect to the offering contemplated hereby or the process
leading thereto (irrespective of whether the Agent has advised or is currently
advising the Company on other matters) or any other obligation to the Company
except the obligations expressly set forth in this Agreement and (iii) the
Company has consulted its own legal and financial advisors to the extent it
deemed appropriate. The Company agrees that it will not claim that the Agent has
rendered advisory services of any nature or respect, or owes a fiduciary or
similar duty to the Company, in connection with such transaction or the process
leading thereto.
Section
10. Termination.
(a) The
Company shall have the right, by giving written 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 (i) with respect to any pending sale through the Agent for the
Company, the obligations of the Company, including in respect of compensation of
the Agent, shall remain in full force and effect notwithstanding such
termination; and (ii) the provisions of Section 1, Section 5(b), Section 7 and
Section 8 of this Agreement shall remain in full force and effect
notwithstanding such termination.
(b) The
Agent shall have the right, by giving written 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 1, Section 5(b), Section 7 and Section 8
of this Agreement shall remain in full force and effect notwithstanding such
termination.
(c) This
Agreement shall remain in full force and effect until and unless terminated
pursuant to Section 10(a) or (b) above or otherwise by mutual agreement of the
parties; provided that any
such termination by mutual agreement or pursuant to this clause (c) shall in all
cases be deemed to provide that Section 1, Section 5(b), Section 7 and Section 8
of this Agreement shall remain in full force and effect.
(d) 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 Agent or the Company, as the case may
be. If such termination shall occur prior to the Settlement Date for
any sale of Shares, such sale shall settle in accordance with the provisions of
Section 2(h) hereof.
(e) In
the case of any purchase by the Agent pursuant to a Terms Agreement, the Agent
may terminate this Agreement, at any time at or prior to the Settlement Date (i)
if there has been, since the time of execution of this Agreement or since the
respective dates as of which information is given in the Prospectus or General
Disclosure Package, any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, or (ii) if there has occurred any
material adverse change in the financial markets in the United States or the
international financial markets, any outbreak of hostilities or escalation
thereof or other calamity
17
or crisis
or any change or development involving a prospective change in national or
international political, financial or economic conditions, in each case the
effect of which is such as to make it, in the judgment of the Agent,
impracticable or inadvisable to market the Shares or to enforce contracts for
the sale of Shares, or (iii) if trading in any securities of the Company has
been suspended or materially limited by the Commission of the NYSE, or if
trading generally on the American Stock Exchange or the NYSE or Nasdaq has been
suspended or materially limited, or minimum or maximum prices for trading have
been fixed, or maximum ranges for prices have been required, by any of said
exchanges or by such system or by order of the Commission, the Financial
Industry Regulatory Authority, Inc. or any other governmental authority, or (iv)
a material disruption has occurred in commercial banking or securities
settlement or clearance services in the United States, or (v) if a banking
moratorium has been declared by either Federal of New York
authorities.
Section
11. Notices. All
statements, requests, notices and agreements hereunder shall be in writing, and
if to the Agent shall be delivered or sent by mail, telex or facsimile
transmission to:
Merrill,
Lynch, Xxxxxx, Xxxxxx & Xxxxx Incorporated
0 Xxxxx
Xxxxxxxxx Xxxxxx
Xxx Xxxx,
Xxx Xxxx 00000
Fax
No. (000) 000-0000
Attention:
Xxxxxxx Xxxx
and if to
the Company to:
Xxxxxxxxxx
Realty Investors
0000
Xxxxxxx Xxxxx Xxxxx
X.X. Xxx
000000
Xxxxxxx,
Xxxxx 00000-0000
Fax No.
(000) 000-0000
Attention:
Xxxxx Xxxxxxx.
Any such
statements, requests, notices or agreements shall take effect upon receipt
thereof.
Section
12. Parties. This
Agreement shall be binding upon, and inure solely to the benefit of, the Agent
and the Company and, to the extent provided in Sections 7 and 8 hereof, the
officers and trust managers of the Company and the Agent and each person who
controls the Company or the Agent, and their respective heirs, executors,
administrators, successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. No purchaser of
Shares through the Agent shall be deemed a successor or assign by reason merely
of such purchase.
Section
13. Time of the
Essence. Time shall be of the essence of this
Agreement. As used herein, the term “business day” shall
mean any day when the Commission’s office in Washington, D.C. is open for
business.
Section
14. Waiver of Jury
Trial. The Company and the Agent hereby irrevocably waive, to
the fullest extent permitted by applicable law, any and all right to jury trial
by jury in any legal proceeding arising out of or relating to this Agreement or
the transactions contemplated hereby.
Section
15. Governing
Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO ITS
PRINCIPLES OF CONFLICTS OF LAW.
Section
16. Counterparts. This
Agreement and any Terms Agreement may be executed by any one or more of the
parties hereto and thereto in any number of counterparts, each of which shall be
deemed to be an original, but all such respective counterparts shall together
constitute one and the same instrument. This Agreement and any Terms
Agreement may be delivered by any party by facsimile or other electronic
transmission.
18
Section
17. Severability. The
invalidity or unenforceability of any Section, paragraph or provision of this
Agreement shall not affect the validity or enforceability of any other Section,
paragraph or provision hereof. If any Section, paragraph or provision
of this Agreement is for any reason determined to be invalid or unenforceable,
there shall be deemed to be made such minor changes (and only such minor
changes) as are necessary to make it valid and enforceable.
Very
truly yours,
|
|
Xxxxxxxxxx
Realty Investors
|
|
By:
|
/s/ Xxxxxxx X. Xxxxxxx |
Name:
Xxxxxxx X. Xxxxxxx
|
|
Title:
Executive Vice President and Chief Financial
Officer
|
Accepted
as of the date hereof:
|
|
Xxxxxxx
Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
|
|
By:
|
/s/ Xxxxx Xxxxxx |
Name:
Xxxxx Xxxxxx
|
|
Title:
Director
|
19
Annex
1
Xxxxxxxxxx
Realty Investors
Common
Shares of Beneficial Interest
($0.03
par value)
TERMS
AGREEMENT
XXXXXXX
XXXXX & CO.
Xxxxxxx
Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
0 Xxxxx
Xxxxxxxxx Xxxxxx
Xxx Xxxx,
Xxx Xxxx 00000
Ladies
and Gentlemen:
Xxxxxxxxxx
Realty Investors, a Texas real estate investment trust corporation (the “Company”), proposes,
subject to the terms and conditions stated herein and in the ATM Equity Offering
Sales Agreement, dated March 12, 2009 (the “Sales Agreement”),
between the Company and Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
(the “Agent”),
to issue and sell to the Agent the securities specified in a Schedule hereto
(the “Purchased
Securities”) [, and solely for the purpose of covering over-allotments,
to grant to the Agent the option to purchase the additional securities specified
in the Schedule hereto (the “Additional
Securities”)]*.
[The
Agent shall have the right to purchase from the Company all or a portion of the
Additional Securities as may be necessary to cover over-allotments made in
connection with the offering of the Purchased Securities, at the same purchase
price per share to be paid by the Agent to the Company for the Purchased
Securities. This option may be exercised by the Agent at any time
(but not more than once) on or before the thirtieth day following the date
hereof, by written notice to the Company. Such notice shall set forth the
aggregate number of shares of Additional Securities as to which the option is
being exercised, and the date and time when the Additional Securities are to be
delivered (such date and time being herein referred to as the “Option Closing
Date”); provided, however, that the
Option Closing Date shall not be earlier than the Time of Delivery (as set forth
in the Schedule hereto) nor earlier than the second business day after the date
on which the option shall have been exercised nor later than the fifth business
day after the date on which the option shall have been exercised. Payment of the
purchase price for the Additional Securities shall be made at the Option Closing
Date in the same manner and at the same office as the payment for the Purchased
Securities.]*
Each of
the provisions of the Sales Agreement not specifically related to the
solicitation by the Agent, as agent of the Company, of offers to purchase
securities is incorporated herein by reference in its entirety, and shall be
deemed to be part of this Terms Agreement to the same extent as if such
provisions had been set forth in full herein. Each of the representations and
warranties set forth therein shall be deemed to have been made at and as of the
date of this Terms Agreement [and] [,] the Applicable Time [and any Option
Closing Date]*, except that each representation and warranty in Section 1 of the
Sales Agreement which makes reference to the Prospectus (as therein defined)
shall be deemed to be a representation and warranty as of the date of the Sales
Agreement in relation to the Prospectus, and also a representation and warranty
as of the date of this Terms Agreement [and] [,] the Settlement Date [and any
Option Closing Date]* in relation to the Prospectus as amended and supplemented
to relate to the Purchased Securities.
An
amendment to the Registration Statement (as defined in the Sales Agreement), or
a supplement to the Prospectus, as the case may be, relating to the Purchased
Securities [and the Additional Securities]*, in the form heretofore delivered to
the Agent is now proposed to be filed with the Securities and Exchange
Commission.
Subject
to the terms and conditions set forth herein and in the Sales Agreement which
are incorporated herein by reference, the Company agrees to issue and sell to
the Agent and the latter agrees to purchase from the
Annex
1-1
Company
the number of shares of the Purchased Securities at the time and place and at
the purchase price set forth in the Schedule hereto.
If the
foregoing is in accordance with your understanding of our agreement, please sign
and return to the Company a counterpart hereof, whereupon this instrument, along
with all counterparts, will become a binding agreement between the Agents and
the Company in accordance with its terms.
Very
truly yours,
|
|
Xxxxxxxxxx
Realty Investors
|
|
By:
|
|
Name:
|
|
Title:
|
Accepted
as of the date hereof:
|
|
Xxxxxxx
Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
|
|
By:
|
|
Name:
|
|
Title:
|
___________________________
Annex 1-2