HEALTHCARE REALTY TRUST INCORPORATED 5,000,000 SHARES CONTROLLED EQUITY OFFERINGSM SALES AGREEMENT
Exhibit 1.1
March 11, 2011
CANTOR ▇▇▇▇▇▇▇▇▇▇ & CO.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
HEALTHCARE REALTY TRUST INCORPORATED, a Maryland corporation (the “Company”), confirms
its agreement (this “Agreement”) with Cantor ▇▇▇▇▇▇▇▇▇▇ & Co. (“CF&Co”), as
follows:
1. Issuance and Sale of Shares. The Company agrees that, from time to time during the
term of this Agreement, on the terms and subject to the conditions set forth herein, it may issue
and sell through CF&Co, acting as agent and/or principal, up to 5,000,000 shares (the
“Shares”) of the Company’s common stock, par value $0.01 per share (the “Common
Shares”). Notwithstanding anything to the contrary contained herein, the parties hereto agree
that compliance with the limitation set forth in this Section 1 on the number of Shares
issued and sold under this Agreement shall be the sole responsibility of the Company, and CF&Co
shall have no obligation in connection with such compliance. The issuance and sale of Shares
through CF&Co will be effected pursuant to the Registration Statement (as defined below) filed by
the Company and automatically effective, although nothing in this Agreement shall be construed as
requiring the Company to use the Registration Statement to issue Shares.
The Company has also entered into a sales agreement (the “Credit Agricole Sales
Agreement”) dated as of even date hereof with Credit Agricole Securities (USA) Inc.
(“Credit Agricole”). The aggregate number of Common Shares that may be sold pursuant to
this Agreement and the Credit Agricole Sales Agreement shall not exceed 5,000,000 shares.
The Company and CF&Co are parties to that certain Sales Agreement dated January 11, 2011 (the
“Prior CF&Co Sales Agreement”). The Company and Credit Agricole are parties to that
certain Sales Agreement dated January 11, 2011 (the “Prior Credit Agricole Sales Agreement”
and collectively with the Prior CF&Co Sales Agreement, the “Prior Sales Agreements”).
Immediately prior to the date hereof, some Common Shares remained available to be sold pursuant to
the Prior Sales Agreements (the “Unused Shares”). As of March 10, 2011, the Unused Shares
consisted of 390,000 Common Shares. The 5,000,000 Shares referenced above to be sold pursuant
to this Agreement and the Credit Agricole Sales Agreement do not include the Unused Shares, which
may be sold under the Prior Sales Agreements. The Company and CF&Co hereby agree that upon
execution of this Agreement, the Prior Sales Agreements will remain in full force and effect until
terminated in accordance with their terms.
The Company has filed, in accordance with the provisions of the Securities Act of 1933, as
amended, and the rules and regulations thereunder (collectively, the “Securities Act”),
with the Securities and Exchange Commission (the “Commission”) an automatic shelf registration
statement on Form S-3 (File No. 333-172368), including a base prospectus, relating to certain
securities, including the Shares to be issued from time to time by the Company, and which
incorporates by reference documents that the
Company has filed or will file in accordance with the provisions of the Securities Exchange Act of
1934, as amended, and the rules and regulations thereunder (collectively, the “Exchange
Act”). The Company has prepared a prospectus supplement to the base prospectus included as part
of such registration statement specifically relating to the Shares (the “Prospectus
Supplement”). The Company will furnish to CF&Co, for use by CF&Co, copies of the prospectus
included as part of such registration statement, as supplemented by the Prospectus Supplement.
Except where the context otherwise requires, such registration statement, as declared effective by
the Commission, including all documents filed as part thereof or incorporated by reference therein,
and including any information contained in a Prospectus (as defined below) subsequently filed with
the Commission pursuant to Rule 424(b) under the Securities Act or deemed to be a part of such
registration statement pursuant to Rule 430B or 462(b) of the Securities Act, is herein called the
“Registration Statement.” The base prospectus, including all documents incorporated therein
by reference, included in the Registration Statement, as it may be supplemented by the Prospectus
Supplement, in the form in which such prospectus and/or Prospectus Supplement have most recently
been filed by the Company with the Commission pursuant to Rule 424(b) under the Securities Act,
together with any “issuer free writing prospectus” (a “Free Writing Prospectus”), as
defined in Rule 433 of the Securities Act Regulations (“Rule 433”), relating to the Shares
that (i) is required to be filed with the Commission by the Company or (ii) is exempt from filing
pursuant to Rule 433(d)(5)(i) in each case in the form filed or required to be filed with the
Commission or, if not required to be filed, in the form retained in the Company’s records pursuant
to Rule 433(g), is herein called the “Prospectus.” Any reference herein to the Registration
Statement, the Prospectus or any amendment or supplement thereto shall be deemed to refer to and
include the documents incorporated by reference therein, and any reference herein to the terms
“amend,” “amendment” or “supplement” with respect to the Registration Statement or the Prospectus
shall be deemed to refer to and include the filing after the execution hereof of any document with
the Commission deemed to be incorporated by reference therein. For purposes of this Agreement, all
references to the Registration Statement, the Prospectus or to any amendment or supplement thereto
shall be deemed to include any copy filed with the Commission pursuant to its Electronic Data
Gathering Analysis and Retrieval System or its Interactive Data Electronic Applications System
(“▇▇▇▇▇”).
2. Placements. Each time that the Company wishes to issue and sell all or a portion of
the Shares hereunder (each, a “Placement”), it will notify CF&Co by e-mail notice in the
form attached hereto as Schedule 1 (or other method mutually agreed to in writing by the
parties) containing the parameters in accordance with which it desires the Shares to be sold, which
shall at a minimum include the number of Shares to be issued (the “Placement Shares”), the
time period during which sales are requested to be made, any limitation on the number of Shares
that may be sold in any one day and any minimum price below which sales may not be made (a
“Placement Notice”). The Placement Notice shall originate from any of the individual
representatives of the Company set forth on Schedule 2 (with a copy to each of the other
individual representatives of the Company listed on such schedule), and shall be addressed to each
of the individual representatives of CF&Co set forth on Schedule 2, as such Schedule
2 may be amended from time to time. The Placement Notice shall be effective upon receipt by
CF&Co unless and until (i) in accordance with the notice requirements set forth in Section
4, CF&Co declines to accept the terms contained therein for any reason, in its sole discretion,
(ii) the entire amount of the Placement Shares have been sold, (iii) in accordance with the notice
requirements set forth in Section 4, the Company suspends or terminates the Placement
Notice, (iv) the Company issues a subsequent Placement Notice with parameters superseding those on
the earlier dated Placement Notice, or (v) this Agreement has been terminated pursuant to the
provisions of Section 11. The amount of any discount, commission or other compensation to
be paid by the Company to CF&Co in connection with the sale of the Placement Shares shall be
calculated in accordance with the terms set forth in Schedule 3. It is
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expressly acknowledged and agreed that neither the Company nor CF&Co will have any obligation
whatsoever with respect to a Placement of any Placement Shares unless and until the Company
delivers a Placement Notice to CF&Co and CF&Co does not decline such Placement Notice pursuant to
the terms set forth above, and then only upon the terms specified therein and herein. In the event
of a conflict between the terms of this Agreement and the terms of a Placement Notice, the terms of
the Placement Notice will control.
3. (a) Sale of Placement Shares by CF&Co. Subject to the terms and conditions herein
set forth, upon the Company’s issuance of a Placement Notice, and unless the sale of the Placement
Shares described therein has been declined, suspended, or otherwise terminated in accordance with
the terms of this Agreement, CF&Co, for the period specified in the Placement Notice, will use its
commercially reasonable efforts consistent with its normal trading and sales practices and
applicable state and federal laws, rules and regulations and the rules of the New York Stock
Exchange (the “Exchange”), to sell such Placement Shares up to the amount specified and
otherwise in accordance with the terms of such Placement Notice. CF&Co will provide written
confirmation to the Company no later than the opening of the Trading Day (as defined below)
immediately following the Trading Day on which it has made sales of Placement Shares hereunder
setting forth the number of Placement Shares sold on such day, the compensation payable by the
Company to CF&Co pursuant to Section 2 with respect to such sales, and the Net Proceeds (as
defined below) payable to the Company, with an itemization of the deductions made by CF&Co (as set
forth in Section 5(a)) from the gross proceeds that it receives from such sales. After
consultation with the Company and subject to the terms of the Placement Notice, CF&Co may sell
Placement Shares by any method permitted by law deemed to be an “at the market” offering as defined
in Rule 415 of the Securities Act, including without limitation sales made directly on the
Exchange, on any other existing trading market for the Common Shares or to or through a market
maker. After consultation with the Company and subject to the terms of the Placement Notice, CF&Co
may also sell Placement Shares in privately negotiated transactions. The Company acknowledges and
agrees that (i) there can be no assurance that CF&Co will be successful in selling Placement
Shares, (ii) CF&Co will incur no liability or obligation to the Company or any other person or
entity if it does not sell Placement Shares for any reason other than a failure by CF& Co to use
its commercially reasonable efforts consistent with its normal trading and sales practices to sell
such Placement Shares as required under this Section 3, and (iii) CF&Co shall be under no
obligation to purchase Shares on a principal basis pursuant to this Agreement. For the purposes
hereof, “Trading Day” means any day on which Common Shares are purchased and sold on the
principal market on which the Common Shares are listed or quoted.
(b) The Company agrees that any offer to sell, any solicitation of an offer to buy, or any
sales of Company Shares shall be effected by or through only one of CF&Co or Credit Agricole on any
single given day, and the Company shall in no event request that CF&Co and Credit Agricole sell
Company Shares on the same day.
4. Suspension of Sales. The Company or CF&Co may, upon notice to the other party in
writing (including by e-mail correspondence to each of the individuals of the other party set forth
on Schedule 2, if receipt of such correspondence is actually acknowledged by any of the
individuals to whom the notice is sent, other than via auto-reply) or by telephone (confirmed
immediately by verifiable facsimile transmission or e-mail correspondence to each of the
individuals of the other party set forth on Schedule 2), suspend any sale of Placement
Shares; provided, however, that such suspension shall not affect or impair either party’s
obligations with respect to any Placement Shares sold hereunder prior to the receipt of such
notice. Each of the parties agrees that no such notice under this Section 4 shall be
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effective against the other unless it is made to one of the individuals named on Schedule 2
hereto, as such Schedule may be amended from time to time.
5. Settlement.
(a) Settlement of Placement Shares. Unless otherwise specified in the applicable
Placement Notice, settlement for sales of Placement Shares will occur on the third (3rd)
Trading Day (or such earlier day as is industry practice for regular-way trading) following the
date on which such sales are made (each, a “Settlement Date”). The amount of proceeds to be
delivered to the Company on a Settlement Date against receipt of the Placement Shares sold (the
“Net Proceeds”) will be equal to the aggregate sales price received by CF&Co for such
Placement Shares, after deduction for (i) CF&Co’s commission, discount or other compensation for
such sales payable by the Company pursuant to Section 2 hereof, (ii) any other amounts due
and payable by the Company to CF&Co hereunder pursuant to Section 7(h) (Expenses) hereof,
and (iii) any transaction fees imposed by any governmental or self-regulatory organization in
respect of such sales.
(b) Delivery of Placement Shares. On or before each Settlement Date, the Company will,
or will cause its transfer agent to, electronically transfer the Placement Shares being sold by
crediting CF&Co’s or its designee’s account (provided CF&Co shall have given the Company written
notice of such designee prior to the Settlement Date) at The Depository Trust Company through its
Deposit and Withdrawal at Custodian System or by such other means of delivery as may be mutually
agreed upon by the parties hereto which in all cases shall be freely tradeable, transferable,
registered shares in good deliverable form. On each Settlement Date, CF&Co will deliver the related
Net Proceeds in same day funds to an account designated by the Company on, or prior to, the
Settlement Date. The Company agrees that if the Company, or its transfer agent (if applicable),
defaults in its obligation to deliver Placement Shares on a Settlement Date, in addition to and in
no way limiting the rights and obligations set forth in Section 9(a) (Indemnification and
Contribution) hereto, it will (i) hold CF&Co harmless against any loss, claim, damage, or expense
(including reasonable legal fees and expenses), as incurred, arising out of or in connection with
such default by the Company and (ii) pay to CF&Co any commission, discount, or other compensation
to which it would otherwise have been entitled absent such default; provided, however, that the
Company shall not be obligated to so indemnify and reimburse CF&Co if the Placement Shares are not
delivered due to (i) a suspension or material limitation in trading in securities generally on the
Exchange, the American Stock Exchange or the NASDAQ; (ii) a general moratorium on commercial
banking activities declared by either federal or New York State authorities or a material
disruption in commercial banking or securities settlement or clearance services in the United
States; (iii) an outbreak or escalation of hostilities or acts of terrorism involving the United
States or a declaration by the United States of a national emergency or war; or (iv) any other
calamity or crisis or any change in financial, political or economic conditions in the United
States or elsewhere.
6. Representations and Warranties of the Company. The Company represents and warrants
to, and agrees with, CF&Co that as of (i) the date of this Agreement, (ii) each Representation Date
(as defined in Section 7(n) below) on which a certificate is required to be delivered
pursuant to Section 7(n) of this Agreement, (iii) the date on which any Placement Notice is
given hereunder, and (iv) as of the time of each sale of Shares pursuant to this Agreement (each
such time of sale, an “Applicable Time”), as the case may be:
(a) The Company satisfies all of the requirements of the Securities Act for use of Form S-3
for the offering of the Shares contemplated hereby. At the time of the initial filing of the
Registration Statement, at the time of the most recent amendment thereto for the purposes of
complying with Section 10(a)(3) of the Securities Act (whether such amendment was by post-effective
amendment,
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incorporated report filed pursuant to Section 13 or 15(d) of the Exchange Act or form of
prospectus), at the time the Company or any person acting on its behalf (within the meaning, for
this clause only, of Rule 163(c) of the Securities Act) made any offer relating to the Shares in
reliance on the exemption of Rule 163 of the Securities Act and at the date hereof, the Company was
and is a “well-known seasoned issuer” as defined in Rule 405 of the Securities Act, including not
having been and not being an “ineligible issuer,” as defined in Rule 405 of the Securities Act. The
Registration Statement is an “automatic shelf registration statement,” as defined in Rule 405 of
the Securities Act, and the Shares, since their registration on the Registration Statement, have
been and remain eligible for registration by the Company on a Rule 405 “automatic shelf
registration statement.” The Company has not received from the Commission any notice pursuant to
Rule 401(g)(2) of the Securities Act objecting to the use of the automatic shelf registration
statement form. The Company has paid or will pay the required Commission filing fees relating to
the Shares within the time required by Rule 456(b)(1)(i) of the Securities Act without regard to
the proviso therein and otherwise in accordance with Rules 456(b) and 457(r) of the Securities Act
(including, if applicable, by updating the “Calculation of Registration Fee” table in accordance
with Rule 456(b)(1)(ii) of the Securities Act either in a post-effective amendment to the
Registration Statement or on the cover page of the Prospectus).
(b) The Registration Statement became effective upon filing under Rule 462(e) of the
Securities Act on February 18, 2011. No stop order suspending the effectiveness of the Registration
Statement has been issued under the Securities Act and no proceedings for that purpose have been
instituted or are pending or, to the knowledge of the Company, are contemplated by the Commission,
and any request on the part of the Commission for additional information has been complied with.
(c) Any offer that is a written communication relating to the Shares made prior to the initial
filing of the Registration Statement by the Company or any person acting on its behalf (within the
meaning, for this paragraph only, of Rule 163(c) of the Securities Act) has been filed with the
Commission in accordance with the exemption provided by Rule 163 of the Securities Act and
otherwise complied with the requirements of Rule 163 of the Securities Act, including without
limitation the legending requirement.
(d) The Company has delivered to CF&Co one complete copy of the Registration Statement and a
copy of each consent and certificate of experts filed as a part thereof, and conformed copies of
the Registration Statement (without exhibits) and the Prospectus, as amended or supplemented, in
such quantities and at such places as CF&Co has reasonably requested. The Prospectus delivered to
CF&Co for use in connection with the offering of Shares will, at the time of such delivery, be
identical to the electronically transmitted copies thereof filed with the Commission pursuant to
▇▇▇▇▇, except to the extent permitted by Regulation S-T.
(e) At the respective times the Registration Statement and each amendment thereto became
effective, at each deemed effective date with respect to CF&Co pursuant to Rule 430B(f)(2) of the
Securities Act, as the case may be, the Registration Statement complied and will comply in all
material respects with the requirements of the Securities Act, and did not and will not contain an
untrue statement of a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading. The preceding sentence does not apply
to statements in or omissions from the Registration Statement or any amendment thereto in reliance
upon and in conformity with written information relating to CF&Co furnished to the Company in
writing by CF&Co expressly for inclusion in any of the aforementioned documents.
(f) Neither the Prospectus nor any amendments or supplements thereto, at the time the
Prospectus or any such amendment or supplement was issued, as of the date hereof, at each
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Representation Date, and at each Applicable Time, as the case may be, included or will include an
untrue statement of a material fact or omitted or will omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances under which they were made,
not misleading. The preceding sentence does not apply to statements in or omissions from the
Prospectus, as amended or supplemented, in reliance upon and in conformity with written information
relating to CF&Co furnished to the Company in writing by CF&Co expressly for inclusion in any of
the aforementioned documents.
(g) Each document incorporated by reference in the Registration Statement or the Prospectus
heretofore filed, when it was filed (or, if any amendment with respect to any such document was
filed, when such amendment was filed), conformed in all material respects with the requirements of
the Exchange Act and the rules and regulations thereunder, and any further documents so filed and
incorporated after the date of this Agreement will, when they are filed, conform in all material
respects with the requirements of the Exchange Act and the rules and regulations thereunder; no
such document when it was filed (or, if an amendment with respect to any such document was filed,
when such amendment was filed), contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary in order to make the statements
therein not misleading; and no such document, when it is filed, will contain an untrue statement of
a material fact or will omit to state a material fact required to be stated therein or necessary in
order to make the statements therein not misleading.
(h) Each issuer Free Writing Prospectus, on its issue date, and as of each Applicable Time,
did not, does not and will not include any information that conflicted, conflicts or will conflict
with the information contained in the Registration Statement or the Prospectus, including any
incorporated document deemed to be a part thereof that has not been superseded or modified. The
foregoing sentence does not apply to statements in or omissions from any issuer Free Writing
Prospectus based upon and in conformity with written information furnished to the Company by CF&Co
specifically for use therein.
(i) This Agreement has been duly authorized, executed and delivered by the Company and this
Agreement constitutes a valid and legally binding obligation of the Company enforceable against the
Company in accordance with its terms, except as enforceability may be limited by bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or
affecting creditors’ rights generally and by general principles of equity (the
“Exceptions”).
(j) The Company and its “Subsidiaries” (as defined in Section 6(m) hereof) have been
duly incorporated or organized and are validly existing as corporations or organizations in good
standing under the laws of the states or other jurisdictions in which they are incorporated or
organized, with full power and authority (corporate and other) to own, lease and operate their
properties and conduct their businesses as described in the Prospectus and, with respect to the
Company, to execute and deliver, and perform the Company’s obligations under, this Agreement; the
Company and its Subsidiaries are duly qualified to do business as foreign corporations or
organizations in good standing in each state or other jurisdiction in which their ownership or
leasing of property or conduct of business legally requires such qualification, except where the
failure to be so qualified, individually or in the aggregate, would not have a Material Adverse
Effect. The term “Material Adverse Effect” as used herein means any material adverse effect
on the condition (financial or other), net worth, business, affairs, management, prospects, results
of operations or cash flow of the Company and its Subsidiaries, taken as a whole.
(k) Neither the Company nor any of its Subsidiaries has sustained since the date of the latest
audited financial statements included or incorporated by reference in the Prospectus any material
loss or
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interference with its business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental action, order or decree
otherwise than as set forth in the Prospectus or as disclosed in writing to CF&Co prior to
execution and delivery of this Agreement and, since the respective dates as of which information is
given in the Registration Statement and the Prospectus, there has not been any change in the
capital stock or long-term debt of the Company or any of its Subsidiaries which would give rise to
a Material Adverse Effect, or any development involving a prospective Material Adverse Effect, in
or affecting the general affairs, management, financial position, stockholders’ equity or results
of operations of the Company and its Subsidiaries taken as a whole, otherwise than as set forth in
the Prospectus.
(l) The issuance and sale of the Shares pursuant to this Agreement and the execution, delivery
and performance by the Company of this Agreement, and the consummation of the transactions herein
or therein contemplated, will not conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, or result in the creation or imposition of
any lien, charge or encumbrance upon any properties or assets of the Company or any of its
Subsidiaries under, any indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any of its Subsidiaries is a party, or by which the Company or
any of its Subsidiaries is bound, or to which any of the properties or assets of the Company or any
of its Subsidiaries is subject, or violate any statute, rule, regulation or other law, or any order
or judgment, of any court or governmental agency or body having jurisdiction over the Company or
any of its Subsidiaries or any of their properties, except to such extent as, individually or in
the aggregate, does not have a Material Adverse Effect, nor will such action result in any
violation of the provisions of the Company’s articles of incorporation or bylaws; and no consent,
approval, authorization, order, registration or qualification of or with any such court or
governmental agency or body is required for the execution, delivery and performance of this
Agreement, the issuance and sale of the Shares pursuant to this Agreement or the consummation of
the transactions contemplated hereby, except such as have been, or will be prior to the applicable
Settlement Date, obtained under the Securities Act or as may be required by the Exchange and such
consents, approvals, authorizations, registrations or qualifications as may be required under state
securities or blue sky laws in connection with the purchase and distribution of the Shares by
CF&Co.
(m) The Company has duly and validly authorized capital stock as set forth in the Prospectus;
all outstanding Common Shares of the Company conform, and when issued the Shares will conform, to
the description thereof in the Prospectus and the Shares, when issued and paid for in the manner
described herein, will be duly authorized, validly issued, fully paid and non-assessable; and the
issuance of the Shares to be purchased from the Company hereunder is not subject to preemptive or
other similar rights, or any restriction upon the voting or transfer thereof (except for those
rights and restrictions relating primarily to the Company’s status as a REIT as described in
Section 6(cc) hereof) pursuant to applicable law or the Company’s articles of incorporation or
by-laws or any agreement to which the Company or any of its Subsidiaries is a party or by which any
of them may be bound. All corporate action required to be taken by the Company for the
authorization, issuance and sale of the Shares has been duly and validly taken prior to the
execution of this Agreement. Except as disclosed in the Prospectus, there are no outstanding
subscriptions, rights, warrants, options, calls, convertible securities, commitments of sale or
rights related to or entitling any person to purchase or otherwise to acquire any shares of, or any
security convertible into or exchangeable or exercisable for, the capital stock of, or other
ownership interest in, the Company. The Company has no subsidiaries (collectively,
“Subsidiaries”) other than those identified in Exhibit 21 to the Company’s last filed
Annual Report on Form 10-K or as otherwise disclosed in writing to CF&Co (“Exhibit 21”).
The Company owns all of the outstanding capital stock of or other equity interests in each such
subsidiary except as set forth in
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Exhibit 21 or as otherwise disclosed in writing to CF&Co. Other than the Subsidiaries referred to
above, the Company does not own, directly or indirectly, any shares of stock or any other equity or
long-term debt of any other corporation or have any direct or indirect equity interest or ownership
of long-term debt in any firm, partnership, joint venture, limited liability company, association
or other entity, except as described in the Prospectus. The outstanding shares of capital stock of
or other equity interests in the Company’s Subsidiaries have been duly authorized and validly
issued, are fully paid and non-assessable and, except as otherwise set forth in Exhibit 21, are
owned, directly or indirectly, by the Company free and clear of any mortgage, pledge, lien,
encumbrance, charge or adverse claim and are not the subject of any agreement or understanding with
any person and were not issued in violation of any preemptive or similar rights; and there are no
outstanding subscriptions, rights, warrants, options, calls, convertible securities, commitments of
sale or instruments related to or entitling any person to purchase or otherwise acquire any shares
of, or any security convertible into or exchangeable or exercisable for, the capital stock of, or
other ownership interest in any of the Subsidiaries.
(n) The statements set forth in the Prospectus, as of its date of issue, describing the Shares
and this Agreement, insofar as they purport to describe the provisions of the laws and documents
referred to therein, are accurate, complete and fair in all material respects.
(o) Each of the Company and its Subsidiaries is in possession of and is operating in
compliance with all franchises, grants, authorizations, licenses, certificates, permits, easements,
consents, orders and approvals (“Permits”) from all state, federal, foreign and other
regulatory authorities, and has satisfied the requirements imposed by regulatory bodies,
administrative agencies or other governmental bodies, agencies or officials, that are required for
the Company and its Subsidiaries lawfully to own, lease and operate their properties and conduct
their businesses as described in the Prospectus, in each case with such exceptions, individually or
in the aggregate, as would not have a Material Adverse Effect; and, each of the Company and its
Subsidiaries is conducting its business in compliance with all of the laws, rules and regulations
of each jurisdiction in which it conducts its business, in each case with such exceptions,
individually or in the aggregate, as would not have a Material Adverse Effect; each of the Company
and its Subsidiaries has filed all notices, reports, documents or other information
(“Notices”) required to be filed under applicable laws, rules and regulations, in each
case, with such exceptions, individually or in the aggregate, as would not have a Material Adverse
Effect; and, except as otherwise specifically described in the Prospectus, neither the Company nor
any of its Subsidiaries has received any notification from any court or governmental body,
authority or agency, relating to the revocation or modification of any such Permit or, to the
effect that any additional authorization, approval, order, consent, license, certificate, permit,
registration or qualification (“Approvals”) from such regulatory authority is needed to be
obtained by any of them, in any case where it could be reasonably expected that obtaining such
Approvals or the failure to obtain such Approvals, individually or in the aggregate, would have a
Material Adverse Effect.
(p) 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 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, individually or in the aggregate, would not result in a Material Adverse Effect, and have
paid all taxes due pursuant to such returns or pursuant to any assessment received by the Company
or any Subsidiary 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 and its Subsidiaries in respect of any income and
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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.
(q) The Company and its Subsidiaries own or possess, or can acquire on reasonable terms, all
licenses, inventions, copyrights, know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or procedures), trademarks, service
marks and trade names, patents and patent rights (collectively “Intellectual Property”)
material to carrying on their businesses as described in the Prospectus, and neither the Company
nor any of its Subsidiaries has received any correspondence relating to any Intellectual Property
or notice of infringement of or conflict with asserted rights of others with respect to any
Intellectual Property which would render any Intellectual Property invalid or inadequate to protect
the interest of the Company and its Subsidiaries and which infringement or conflict (if the subject
of any unfavorable decision, ruling or finding) or invalidity or inadequacy, individually or in the
aggregate, would have or may reasonably be expected to have a Material Adverse Effect.
(r) Except in each case such as would not have a Material Adverse Effect, the Company and its
Subsidiaries have good and marketable title in fee simple or valid, enforceable leasehold title to
all items of real property and good and marketable title to all personal property owned by them or
disclosed as owned by them in the Prospectus, in each case free and clear of all liens,
encumbrances, restrictions and defects except such as are described in the Prospectus or do not
materially affect the value of such property and do not interfere with the use made and proposed to
be made of such property; and any property held under lease or sublease by the Company or any of
its Subsidiaries is held under valid, duly authorized, subsisting and enforceable leases or
subleases with such exceptions as are not material and do not interfere with the use made and
proposed to be made of such property by the Company and its Subsidiaries; the Company and its
Subsidiaries have title insurance on all real properties described in the Prospectus as having been
financed by them pursuant to a mortgage loan in an amount at least equal to the aggregate principal
amount of each such mortgage loan or in an amount at least equal to the aggregate acquisition price
paid by the Company or its Subsidiaries for such properties and the cost of construction of the
improvements located on such properties; and neither the Company nor any of its Subsidiaries has
any notice or knowledge of any material claim of any sort which has been, or may be, asserted by
anyone adverse to the Company’s or any of its Subsidiaries rights as lessee or sublessee under any
lease or sublease described above, or affecting or questioning the Company’s or any of its
Subsidiaries’ rights to the continued possession of the leased or subleased premises under any such
lease or sublease in conflict with the terms thereof. To the knowledge of the Company, no lessee of
any portion of any of the properties described in the Prospectus is in default under its respective
lease and there is no event which, but for the passage of time or the giving of notice or both,
would constitute a default under any such lease, except such defaults that would, individually or
in the aggregate, not have a Material Adverse Effect.
(s) No labor disturbance exists with the employees of the Company or any of its Subsidiaries
or, to the Company’s knowledge, is imminent which, individually or in the aggregate, would have a
Material Adverse Effect. None of the employees of the Company or any of its Subsidiaries is
represented by a union and, to the knowledge of the Company and its Subsidiaries, no union
organizing activities are taking place. Neither the Company nor any of its Subsidiaries has
violated any federal, state or local law or foreign law relating to discrimination in hiring,
promotion or pay of employees, nor any applicable wage or hour laws, or the rules and regulations
thereunder, or analogous foreign laws and regulations, which might, individually or in the
aggregate, result in a Material Adverse Effect.
(t) The Company and its Subsidiaries are in compliance in all material respects with all
presently applicable provisions of the Employee Retirement Income Security Act of 1974, as amended,
including
9
the regulations and published interpretations thereunder (“ERISA”); no “reportable event”
(as defined in ERISA) has occurred with respect to any “pension plan” (as defined in ERISA) for
which the Company and its Subsidiaries would have any liability; the Company and its Subsidiaries
have not incurred and do not expect to incur liability under (i) Title IV of ERISA with respect to
termination of, or withdrawal from, any “pension plan” or (ii) Sections 412 or 4971 of the Internal
Revenue Code of 1986, as amended, including the regulations and published interpretations
thereunder (the “Code”); and each “pension plan” for which the Company or any of its
Subsidiaries would have any liability that is intended to be qualified under Section 401(a) of the
Code is so qualified in all material respects, and, to the Company’s knowledge, nothing has
occurred, whether by action or by failure to act, which would cause the loss of such qualification.
(u) The Company and its Subsidiaries maintain insurance of the types and in the amounts
generally deemed adequate for its business, including, but not limited to, directors’ and officers’
insurance, insurance covering real and personal property owned or leased by the Company and its
Subsidiaries against theft, damage, destruction, acts of vandalism and all other risks customarily
insured against, all of which insurance is in full force and effect. Neither the Company nor any of
its Subsidiaries has been refused any insurance coverage sought or applied for, and the Company has
no reason to believe that it and its Subsidiaries will not be able to renew their existing
insurance coverage as and when such coverage expires or to obtain similar coverage from similar
insurers as may be necessary to continue its business at a cost that would not have a Material
Adverse Effect.
(v) Neither the Company nor any of its Subsidiaries is, or with the giving of notice or lapse
of time or both would be, in default or violation with respect to its articles of incorporation or
by-laws. Neither the Company nor any of its Subsidiaries is, or with the giving of notice or lapse
of time or both would be, in default in the performance or observance of any material obligation,
agreement, covenant or condition contained in any indenture, mortgage, deed of trust, loan
agreement, lease or other agreement or instrument to which the Company or any of its Subsidiaries
is a party or by which the Company or any of its Subsidiaries is bound or to which any of the
properties or assets of the Company or any of its Subsidiaries is subject, or in violation of any
statutes, laws, ordinances or governmental rules or regulations or any orders or decrees to which
it is subject, including, without limitation, Section 13 of the 1934 Act, which default or
violation, individually or in the aggregate, would have a Material Adverse Effect. Neither the
Company nor any of its Subsidiaries has, at any time during the past five years, (A) made any
unlawful contributions to any candidate for any political office, or failed fully to disclose any
contribution in violation of law, or (B) made any payment to any state, federal or foreign
government official, or other person charged with similar public or quasi-public duty (other than
any such payment required or permitted by applicable law).
(w) Other than as set forth in the Prospectus, there are no legal or governmental proceedings
pending to which the Company or any of its Subsidiaries is a party or of which any property of the
Company or any of its Subsidiaries is the subject, or to the Company’s knowledge, any person from
whom the Company or any of its Subsidiaries acquired any of such property, or any lessee, sublessee
or operator of any such property or portion thereof is a party, that, if determined adversely to
the Company or any of its Subsidiaries, would individually or in the aggregate have a Material
Adverse Effect or which would materially and adversely affect the consummation of the transactions
contemplated hereby or which is required to be disclosed in the Registration Statement or the
Prospectus; to the Company’s knowledge, no such proceedings are threatened or contemplated. Neither
the Company nor any of its Subsidiaries has, nor, to the Company’s knowledge, any seller, lessee,
sublessee or operator of any such properties, or portion thereof or any previous owner thereof has,
received from any governmental authority notice of any material violation of any municipal, state
or
10
federal law, rule or regulation (including without limitation any such law, rule or regulation
applicable to the health care industry) and including foreign, federal, state or local law or
regulation relating to human health or safety or the environment or hazardous substances or
materials concerning such properties, or any part thereof which has heretofore been cured, and
neither the Company nor any of its Subsidiaries knows of any such violation, or any factual basis,
occurrence or circumstance that would give rise to a claim under or pursuant to any such laws,
rules or regulations which would, in any of the cases set forth in the sentence, individually or in
the aggregate, have a Material Adverse Effect. Except as described in the Prospectus, none of the
property owned or leased by the Company or any of its Subsidiaries is, to the knowledge of the
Company, contaminated with any waste or hazardous substances, and neither the Company nor any of
its Subsidiaries may be deemed an “owner or operator” of a “facility” or “vessel” which owns,
possesses, transports, generates or disposes of a “hazardous substance” as those terms are defined
in §9601 of the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42
U.S.C. §9601 et seq., except to the extent that it would not have a Material Adverse Effect or a
material adverse effect on any Material Subsidiary. Neither the Company nor any of its
Subsidiaries, nor, to the Company’s knowledge, any seller, lessee, sublessee or operator of any
such property, or portion thereof has, received from any governmental authority any written notice
of any condemnation of or zoning change affecting such properties, or any part thereof that would
have a Material Adverse Effect, or a material adverse effect on any Material Subsidiary and the
Company does not know of any such condemnation or zoning change which is threatened and which if
consummated would have a Material Adverse Effect, or a material adverse effect on any Material
Subsidiary. No contract or document of a character required to be described in the Registration
Statement, the Prospectus or any document incorporated by reference therein or to be filed as an
exhibit to the Registration Statement or any document incorporated therein is not so described,
filed or incorporated by reference as required.
(x) The Company is not and, after giving effect to the offering and sale of the Shares, will
not be an “investment company” or an entity “controlled” by an “investment company,” as such terms
are defined in the Investment Company Act of 1940, as amended (the “1940 Act”).
(y) The accounting firm which has audited the financial statements filed with or incorporated
by reference in and as a part of the Registration Statement, is an independent registered public
accounting firm within the meaning of the Securities Act and the Exchange Act. The consolidated
financial statements and schedules of the Company, including the notes thereto, filed with or
incorporated by reference and as a part of the Registration Statement or the Prospectus, are
accurate in all material respects and present fairly in all material respects the financial
condition of the Company and its Subsidiaries as of the respective dates thereof and the
consolidated results of operations and changes in financial position and consolidated statements of
cash flow for the respective periods covered thereby, all in conformity with generally accepted
accounting principles applied on a consistent basis throughout the periods involved except as
otherwise disclosed therein. All adjustments necessary for a fair presentation of results for such
periods have been made. The selected financial data included or incorporated by reference in the
Registration Statement and Prospectus present fairly in all material respects the information shown
therein and have been compiled on a basis consistent with that of the audited financial statements.
Any operating or other statistical data included or incorporated by reference in the Registration
Statement and Prospectus comply in all material respects with the Securities Act and the Exchange
Act and present fairly in all material respects the information shown therein. The pro forma
financial statements and the related notes thereto included in or incorporated by reference in the
Registration Statement and Prospectus present fairly, in all material respects, the information
shown therein, have been prepared in accordance with the SEC’s rules and guidelines with respect to
pro forma financial statements and have been properly compiled on the bases described therein, and
the assumptions used in the preparation thereof are reasonable and the adjustments used therein are
11
appropriate to give effect to the transactions and circumstances referred to therein. No other
financial statements or schedules are required by Form S-3 or otherwise to be included in the
Registration Statement or the Prospectus.
(z) Except as disclosed in the Prospectus, no holder of any security of the Company has any
right to require registration of the Shares or any other security of the Company because of the
filing of the Registration Statement or the consummation of the transactions contemplated hereby.
No person has the right, contractual or otherwise, to cause the Company to permit such person to
underwrite the sale of any of the Shares. Except for this Agreement and the Credit Agricole Sales
Agreement there are no contracts, agreements or understandings between the Company or any of its
Subsidiaries and any person that would give rise to a valid claim against the Company, its
Subsidiaries or CF&Co for a brokerage commission, finder’s fee or like payment in connection with
the issuance, purchase and sale of the Shares pursuant to this Agreement.
(aa) The Company has not distributed and, prior to completion of the distribution of the
Shares, will not distribute any offering material in connection with the offering and sale of the
Shares other than the Registration Statement, the Prospectus Supplement, any Issuer Free Writing
Prospectus or the Prospectus relating to such issuance.
(bb) The Company has not taken and will not take, directly or indirectly, any action designed
to or which might reasonably be expected to cause or result in stabilization or manipulation of the
price of the Company’s Common Shares, and the Company is not aware of any such action taken or to
be taken by affiliates of the Company.
(cc) (i) The Company is organized and operates in conformity with the requirements for
qualification as a real estate investment trust (“REIT”) under Sections 856 and 857 of the
Code, (ii) the Company qualified as a REIT for all taxable years prior to 2011, and (iii) the
Company’s current method of operation will enable it to meet the requirements for taxation as a
REIT under the Code for 2011, and the Company intends to qualify as a REIT for all subsequent
years.
(dd) Except as described in the Prospectus, neither the Company nor any of its Subsidiaries
has either given or received any communication regarding the termination of, or intent not to
renew, any of the leasehold interests of lessees in the Company’s and its Subsidiaries’ properties
held under lease, any property operating agreement or any other agreement between the Company or
its Subsidiaries and the operators of its properties or facilities, and no such termination or
non-renewal has been threatened by the Company, any of its Subsidiaries or, to the Company’s
knowledge, any other party to any such lease, other than as would not have, individually or in the
aggregate, a Material Adverse Effect.
(ee) Except for the Subsidiaries identified on Schedule 6(ee) to this Agreement
(“Material Subsidiaries”), none of the Subsidiaries of the Company individually consist of
more than 1.5%, or in the aggregate consist of more than 10%, of the Company’s (i) net assets, or
(ii) revenues for the most recently ended quarterly period for which financial statements are
available.
(ff) There is and has been no failure on the part of the Company and, to the Company’s
knowledge, any of the Company’s directors or officers, in their capacities as such, to comply with
any provisions of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and the rules and regulations promulgated in
connection therewith (collectively, the “Sarbanes Oxley Act”), including Section 402
relating to loans and Sections 302 and 906 related to certifications.
(gg) Neither the Company nor any Subsidiary nor, to the knowledge of the Company, any
director, trustee, officer, agent, employee or affiliate of the Company or any of its Subsidiaries
is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of
the U.S.
12
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 any
activities of any person currently subject to any U.S. sanctions administered by OFAC.
(hh) The statistical and market and industry-related data included in the Prospectus are
based on or derived from sources which the Company believes to be reliable and accurate or
represent the Company’s good faith estimates that are made on the basis of data derived from such
sources, and the Company has obtained the written consent to the use of such data from sources to
the extent required.
(ii) The Company’s independent registered public accounting firm and the Audit Committee of
the Board of Directors of the Company have been advised of: (i) all significant deficiencies, if
any, in the design or operation of internal controls which could adversely affect the Company’s
ability to record, process, summarize and report financial data or any material weakness in
internal controls; and (ii) all fraud, if any, whether or not material, that involves management or
other employees who have a significant role in the internal controls of the Company and each of its
Subsidiaries; since the date of the most recent evaluation of such internal controls, there has
been 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 principal executive officers (or their equivalents) and principal
financial officers (or their equivalents) of the Company have made all certifications required by
the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act and any related rules and regulations promulgated by the Commission, and the
statements contained in each such certification are complete and correct.
(jj) The Company maintains disclosure controls and procedures (as such term is defined in Rule
13a-15 (e) of the ▇▇▇▇ ▇▇▇) that comply with the requirements of the Exchange Act; such disclosure
controls and procedures are effective.
(kk) Neither the Company nor any of its Subsidiaries, or any director, officer, agent,
employee or other person associated with or acting on behalf of the Company or any of its
Subsidiaries, has (i) used any corporate funds for any unlawful contribution, gift, entertainment
or other unlawful expense relating to political activity; (ii) made any direct or indirect unlawful
payment to any foreign or domestic government official or employee from corporate funds, (iii)
violated or is in violation of any provision of the Foreign Corrupt Practices Act of 1977, or (iv)
made any bribe, unlawful rebate, payoff, influence payment, kickback or other unlawful payment.
(ll) Any certificate signed by any officer of the Company and delivered to CF&Co or to counsel
for CF&Co shall be deemed a representation and warranty by the Company to CF&Co as to the matters
covered thereby.
(mm) No Subsidiary of the Company is prohibited or restricted, directly or indirectly, from
paying dividends to the Company, or from making any other distribution with respect to such
Subsidiary’s equity securities or from repaying to the Company or any other Subsidiary of the
Company any amounts that may from time to time become due under any loans or advances to such
Subsidiary from the Company of from transferring any property or assets to the Company or to any
other Subsidiary.
(nn) Other than this Agreement, the Credit Agricole Sales Agreement, and the Prior Sales
Agreements, the Company is not party to any agreement with an agent or underwriter for any other
“at-the-market” or continuous public offering of Common Shares by the Company.
7. Covenants of the Company. The Company covenants and agrees with CF&Co that:
13
(a) Registration Statement Amendments; Payment of Fees. After the date of this
Agreement and during any period in which a Prospectus relating to any Placement Shares is required
to be delivered by CF&Co under the Securities Act (including in circumstances where such
requirement may be satisfied pursuant to Rule 172 under the Securities Act), (i) the Company will
notify CF&Co promptly of the time when any subsequent amendment to the Registration Statement,
other than documents incorporated by reference, has been filed with the Commission and/or has
become effective or any subsequent supplement to the Prospectus has been filed and of any comment
letter from the Commission or any request by the Commission for any amendment or supplement to the
Registration Statement or Prospectus or for additional information, (ii) the Company will not file
any amendment or supplement to the Registration Statement or Prospectus, other than documents
incorporated by reference, relating to the Placement Shares or a security convertible into the
Placement Shares unless a copy thereof has been submitted to CF&Co within a reasonable period of
time before the filing and CF&Co has not reasonably objected thereto (provided, however, (A) that
the failure of CF&Co to make such objection shall not relieve the Company of any obligation or
liability hereunder, or affect CF&Co’s right to rely on the representations and warranties made by
the Company in this Agreement and (B) that the Company has no obligation to provide CF&Co any
advance copy of such filing or to provide CF&Co an opportunity to object to such filing if such
filing does not name CF&Co or does not relate to the transactions contemplated hereunder) and the
Company will furnish to CF&Co at the time of filing thereof a copy of any document that upon filing
is deemed to be incorporated by reference into the Registration Statement or Prospectus, except for
those documents available via ▇▇▇▇▇; and (iv) the Company will cause each amendment or supplement
to the Prospectus, other than documents incorporated by reference, to be filed with the Commission
as required pursuant to the applicable paragraph of Rule 424(b) of the Securities Act (without
reliance on Rule 424(b)(8) of the Securities Act).
(b) Notice of Commission Stop Orders. The Company will advise CF&Co, promptly after it
receives notice or obtains knowledge thereof, of the issuance or threatened issuance by the
Commission of any stop order suspending the effectiveness of the Registration Statement or any
other order preventing or suspending the use of the Prospectus, of the suspension of the
qualification of the Placement Shares for offering or sale in any jurisdiction, or of the
initiation or threatening of any proceeding for any such purpose or any examination pursuant to
Section 8(e) of the Securities Act, or if the Company becomes the subject of a proceeding under
Section 8A of the Securities Act in connection with the offering of the Shares; and it will
promptly use its commercially reasonable efforts to prevent the issuance of any stop order or to
obtain its withdrawal if such a stop order should be issued.
(c) Delivery of Prospectus; Subsequent Changes. During any period in which a
Prospectus relating to the Placement Shares is required to be delivered by CF&Co under the
Securities Act with respect to the offer and sale of the Placement Shares (including in
circumstances where such requirement may be satisfied pursuant to Rule 172 under the Securities
Act), the Company will use its best efforts to comply with all requirements imposed upon it by the
Securities Act, as from time to time in force, and to file on or before their respective due dates
all reports and any definitive proxy or information statements required to be filed by the Company
with the Commission pursuant to Sections 13(a), 13(c), 14, 15(d) or any other provision of or under
the Exchange Act. If during such period any event occurs as a result of which the Prospectus as
then amended or supplemented would include an untrue statement of a material fact or omit to state
a material fact necessary to make the statements therein, in the light of the circumstances then
existing, not misleading, or if during such period it is necessary to amend or supplement the
Registration Statement or Prospectus to comply with the Securities Act, the Company will promptly
notify CF&Co to suspend the offering of Placement Shares during such period and the Company will
promptly amend or supplement the Registration Statement or Prospectus (at the expense of the
Company) so as to correct such statement or omission
14
or effect such
compliance. The Company will file pursuant to applicable securities laws any other financial
statements or schedules required by Form S-3 or otherwise to be included in the Registration
Statement or the Prospectus at the time so required.
(d) Listing of Placement Shares. During any period in which the Prospectus relating to
the Placement Shares is required to be delivered by CF&Co under the Securities Act with respect to
the offer and sale of the Placement Shares (including in circumstances where such requirement may
be satisfied pursuant to Rule 172 under the Securities Act), the Company will use its commercially
reasonable efforts to cause the Placement Shares to be listed on the Exchange and to qualify the
Placement Shares for sale under the securities laws of such jurisdictions as CF&Co reasonably
designates and to continue such qualifications in effect so long as required for the distribution
of the Placement Shares; provided, however, that the Company shall not be required in connection
therewith to qualify as a foreign entity or dealer in securities or file a general consent to
service of process in any jurisdiction.
(e) Filings with the Exchange. The Company will timely file with the Exchange all
material documents and notices required by the Exchange of companies that have or will issue
securities that are traded on the Exchange.
(f) Delivery of Registration Statement and Prospectus. The Company will furnish to
CF&Co and its counsel (at the expense of the Company) copies of the Registration Statement, the
Prospectus (including all documents incorporated by reference therein) and all amendments and
supplements to the Registration Statement or Prospectus that are filed with the Commission during
any period in which a Prospectus relating to the Placement Shares is required to be delivered under
the Securities Act (including all documents filed with the Commission during such period that are
deemed to be incorporated by reference therein), in each case as soon as reasonably practicable and
in such quantities as CF&Co may from time to time reasonably request and, at CF&Co’s request, will
also furnish copies of the Prospectus to each exchange or market on which sales of the Placement
Shares may be made; provided, however, that the Company shall not be required to furnish any
document (other than the Prospectus) to CF&Co to the extent such document is available on ▇▇▇▇▇.
(g) Earnings Statement. The Company will make generally available to its security
holders as soon as practicable, but in any event not later than 15 months after the end of the
Company’s current fiscal quarter, an earnings statement covering a 12-month period that satisfies
the provisions of Section 11(a) and Rule 158 of the Securities Act. “Earnings statement” and “make
generally available” will have the meanings contained in Rule 158 under the Securities Act.
(h) Expenses. The Company, whether or not the transactions contemplated hereunder are
consummated or this Agreement is terminated in accordance with the provisions of Section 11
hereunder, will pay all expenses incident to the performance of its obligations hereunder,
including, but not limited to, expenses relating to (i) the preparation, printing and filing of the
Registration Statement and each amendment and supplement thereto, of each Prospectus and of each
amendment and supplement thereto, (ii) the preparation, issuance and delivery of the Placement
Shares, (iii) the qualification of the Placement Shares under securities laws in accordance with
the provisions of Section 7(d) of this Agreement, including filing fees, (iv) the printing
and delivery to CF&Co of copies of the Prospectus and any amendments or supplements thereto, and of
this Agreement, (v) the fees and expenses incurred in connection with the listing or qualification
of the Placement Shares for trading on the Exchange, and (vi) filing fees and expenses, if any, of
the Commission and the Financial Industry Regulatory Authority, Corporate Financing Department.
15
(i) Use of Proceeds. The Company will apply the net proceeds from the sale of the
Shares to be sold by it hereunder in accordance in all material respects with the statements under
the caption “Use of Proceeds” in the Prospectus.
(j) Notice of Other Sales. During the pendency of any Placement Notice given
hereunder, the Company shall provide CF&Co notice as promptly as reasonably possible before it
offers to sell, contracts to sell, sells, grants any option to sell or otherwise disposes of any
Common Shares (other than Placement Shares offered pursuant to the provisions of this Agreement) or
securities convertible into or exchangeable for Common Shares, warrants or any rights to purchase
or acquire Common Shares; provided, that such notice shall not be required in connection with the
(i) issuance, grant or sale of Common Shares, options to purchase Common Shares or Common Shares
issuable upon the exercise of options or other equity awards pursuant to any stock option, stock
bonus or other stock or compensatory plan or arrangement described in the Prospectus, (ii) the
issuance of securities in connection with an acquisition, merger or sale or purchase of assets
described in the Prospectus or (iii) the issuance or sale of Common Shares pursuant to any dividend
reinvestment plan that the Company may adopt from time to time provided the implementation of such
is disclosed to CF&Co in advance.
(k) Change of Circumstances. The Company will, at any time during a fiscal quarter in
which the Company intends to tender a Placement Notice or sell Placement Shares, advise CF&Co
promptly after it shall have received notice or obtained knowledge thereof, of any information or
fact that would alter or affect in any material respect any opinion, certificate, letter or other
document provided to CF&Co pursuant to this Agreement.
(l) Due Diligence Cooperation. The Company will cooperate with any reasonable due
diligence review conducted by CF&Co or its agents in connection with the transactions contemplated
hereby, including, without limitation, providing information and making available documents and
senior officers, during regular business hours and at the Company’s principal offices, as CF&Co may
reasonably request.
(m) Required Filings Relating to Placement of Placement Shares. The Company agrees
that on such dates as the Securities Act shall require, the Company will (i) file a prospectus
supplement with the Commission under the applicable paragraph of Rule 424(b) under the Securities
Act, which prospectus supplement will set forth, within the relevant period, the amount of
Placement Shares sold through CF&Co, the Net Proceeds to the Company and the compensation payable
by the Company to CF&Co with respect to such Placement Shares, and (ii) deliver such number of
copies of each such prospectus supplement to each exchange or market on which such sales were
effected as may be required by the rules or regulations of such exchange or market.
(n) Representation Dates; Certificate. On or prior to the date that the first Shares
are sold pursuant to the terms of this Agreement and each time the Company (i) files the Prospectus
relating to the Placement Shares or amends or supplements the Registration Statement or the
Prospectus relating to the Placement Shares (other than a prospectus supplement filed in accordance
with Section 7(m) of this Agreement) by means of a post-effective amendment, sticker, or
supplement but not by means of incorporation of documents by reference into the Registration
Statement or the Prospectus relating to the Placement Shares; (ii) files an annual report on Form
10-K under the Exchange Act; (iii) files its quarterly reports on Form 10-Q under the Exchange Act;
or (iv) files a report on Form 8-K containing amended financial statements (other than “furnished”
information pursuant to Items 2.02 or 7.01 of Form 8-K or to provide disclosure pursuant to Item
8.01 of Form 8-K relating to the reclassifications of certain properties as discontinued operations
in accordance with Statement of Financial Accounting
16
Standards No. 144), or financial statements
required by Rule 3-14 of Regulation S-X, under the
Exchange Act (each date of filing of one or more of the documents referred to in clauses (i)
through (iv) shall be a “Representation Date”); the Company shall furnish CF&Co with a
certificate, in the form attached hereto as Exhibit 7(n) within three (3) Trading Days of
any Representation Date if requested by CF&Co. The requirement to provide a certificate under this
Section 7(n) shall be waived for any Representation Date occurring at a time at which no
Placement Notice is pending, which waiver shall continue until the earlier to occur of the date the
Company delivers a Placement Notice hereunder (which for such calendar quarter shall be considered
a Representation Date) and the next occurring Representation Date; provided, however, that such
waiver shall not apply for any Representation Date on which the Company files its annual report on
Form 10-K. Notwithstanding the foregoing, if the Company subsequently decides to sell Placement
Shares following a Representation Date when the Company relied on such waiver and did not provide
CF&Co with a certificate under this Section 7(n), then before the Company delivers the
Placement Notice or CF&Co sells any Placement Shares, the Company shall provide CF&Co with a
certificate, in the form attached hereto as Exhibit 7(n), dated the date of the Placement
Notice.
(o) Legal Opinion. On or prior to the date that the first Shares are sold pursuant to
the terms of this Agreement and within three (3) Trading Days of each Representation Date with
respect to which the Company is obligated to deliver a certificate in the form attached hereto as
Exhibit 7(n) for which no waiver is applicable, the Company shall cause to be furnished to
CF&Co a written opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇, LLP (“Company Counsel”), or other
counsel satisfactory to CF&Co, in form and substance satisfactory to CF&Co and its counsel, dated
the date that the opinion is required to be delivered, modified, as necessary, to relate to the
Registration Statement and the Prospectus as then amended or supplemented; provided, however, that
in lieu of such opinions for subsequent Representation Dates, counsel may furnish CF&Co with a
letter (a “Reliance Letter”) to the effect that CF&Co may rely on a prior opinion delivered
under this Section 7(o) to the same extent as if it were dated the date of such letter
(except that statements in such prior opinion shall be deemed to relate to the Registration
Statement and the Prospectus as amended or supplemented at such Representation Date).
(p) Comfort Letter. On or prior to the date that the first Shares are sold pursuant to
the terms of this Agreement and within three (3) Trading Days of each Representation Date with
respect to which the Company is obligated to deliver a certificate in the form attached hereto as
Exhibit 7(n) for which no waiver is applicable, the Company shall cause its independent
registered public accounting firm (and any other independent registered public accounting firm
whose report is included in the Registration Statement or the Prospectus) to furnish CF&Co letters
(the “Comfort Letters”), dated the date the Comfort Letter is delivered, in form and
substance satisfactory to CF&Co, (i) confirming that they are an independent registered public
accounting firm within the meaning of the Securities Act, the Exchange Act and the rules adopted by
the PCAOB, (ii) stating, as of such date, the conclusions and findings of such firm with respect to
the financial information and other matters ordinarily covered by accountants’ “comfort letters” to
underwriters in connection with registered public offerings (the first such letter, the
“Initial Comfort Letter”) and (iii) updating the Initial Comfort Letter with any
information that would have been included in the Initial Comfort Letter had it been given on such
date and modified as necessary to relate to the Registration Statement and the Prospectus, as
amended and supplemented to the date of such letter.
(q) Market Activities. The Company will not, directly or indirectly, (i) take any
action designed to cause or result in, or that constitutes or might reasonably be expected to
constitute, the stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares or (ii) sell, bid for, or purchase the Shares to be
issued and sold pursuant to this Agreement, or pay anyone
17
any compensation for soliciting purchases
of the Shares to be issued and sold pursuant to this
Agreement other than CF&Co; provided, however, that the Company may bid for and purchase its Common
Shares in accordance with Rule 10b-18 under the Exchange Act.
(r) Insurance. The Company and its Subsidiaries shall maintain, or cause to be
maintained, insurance in such amounts and covering such risks as is reasonable and customary for
companies engaged in similar businesses in similar industries.
(s) Compliance with Laws. The Company and each of its Subsidiaries shall maintain, or
cause to be maintained, all material environmental permits, licenses and other authorizations
required by federal, state and local law in order to conduct their businesses as described in the
Prospectus, and the Company and each of its Subsidiaries shall conduct their businesses, or cause
their businesses to be conducted, in substantial compliance with such permits, licenses and
authorizations and with applicable environmental laws, except where the failure to maintain or be
in compliance with such permits, licenses and authorizations could not reasonably be expected to
have a Material Adverse Effect.
(t) REIT Treatment. The Company currently intends to continue to elect to qualify as a
real estate investment trust under the Code and will use all reasonable efforts to enable the
Company to continue to meet the requirements for qualification and taxation as a REIT under the
Code for subsequent tax years that include any portion of the term of this Agreement. For the
fiscal year ended December 31, 2010 the Company has retained BDO USA, LLP as its independent
registered public accounting firm. In the course of its audit BDO USA reviewed the Company’s test
procedures and conducted annual compliance reviews designed to determine the Company’s compliance
with REIT provisions of the Code. The Company monitors and maintains appropriate accounting
systems and procedures designed to determine compliance with the REIT provisions of the Code. For
the 2011 fiscal year the Company has engaged BDO USA to prepare an audit, including a review of the
Company’s test procedures and to conduct annual compliance reviews designed to determine the
Company’s compliance with REIT provisions of the Code. The Company will continue to monitor and
maintain appropriate accounting systems and procedures designed to determine compliance with the
REIT provisions of the Code
(u) Investment Company Act. The Company is familiar with the 1940 Act and the rules
and regulations thereunder, and will in the future use its reasonable best efforts to ensure that
the Company will not be an “investment company” within the meaning of the 1940 Act and the rules
and regulations thereunder.
(v) Securities Act and Exchange Act. The Company will use its best efforts to comply
with all requirements imposed upon it by the Securities Act and the Exchange Act as from time to
time in force, so far as necessary to permit the continuance of sales of, or dealings in, the
Placement Shares as contemplated by the provisions hereof and the Prospectus.
(w) No Offer to Sell. Other than a free writing prospectus (as defined in Rule 405
under the Securities Act) approved in advance in writing by the Company and CF&Co in its capacity
as principal or agent hereunder, neither CF&Co nor the Company (including its agents and
representatives, other than CF&Co in its capacity as such) will, directly or indirectly, use,
authorize, approve or refer to any free writing prospectus relating to the Shares to be sold by
CF&Co as principal or agent hereunder.
(x) ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act. The Company, and each of the Material Subsidiaries, will use
reasonable commercial efforts to maintain a system of internal accounting controls sufficient to
provide reasonable assurance that (i) transactions are executed in accordance with management’s
general or specific authorization; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted accounting principles and
to maintain accountability for assets;
18
(iii) access to assets is permitted only in accordance with
management’s general or specific authorization;
and (iv) the recorded book value for assets is compared with the fair market value of such assets
(computed in accordance with generally accepted accounting principles) at reasonable intervals and
appropriate action is taken with respect to any differences. The Company will use reasonable
commercial efforts to comply with all requirements imposed upon it by the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act and
the rules and regulations of the Commission and the Exchange promulgated thereunder.
(y) Register and Transfer Agent. The Company shall maintain, at its expense, a
registrar and transfer agent for the Common Shares.
(z) Renewal of Registration Statement. The date of this Agreement is not more than
three years subsequent to the initial effective date of the Registration Statement (the
“Renewal Date”). If, immediately prior to the Renewal Date, this Agreement has not
terminated and a prospectus is required to be delivered or made available by CF&Co under the
Securities Act or the Exchange Act in connection with the sale of Shares, the Company will, prior
to the Renewal Date, file, if it has not already done so, a new shelf registration statement or, if
applicable, an automatic shelf registration statement relating to the Shares, and, if such
registration statement is not an automatic shelf registration statement, will use its best efforts
to cause such registration statement to be declared effective within 180 days after the Renewal
Date, and will take all other reasonable actions necessary or appropriate to permit the public
offer 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
shelf registration statement or automatic shelf registration statement, as the case may be.
8. Conditions to CF&Co’s Obligations. The obligations of CF&Co hereunder with respect
to a Placement will be subject to the continuing accuracy and completeness of the representations
and warranties made by the Company herein, to the performance by the Company of its obligations
hereunder, to the completion by CF&Co of a due diligence review satisfactory to CF&Co in its
reasonable judgment, and to the continuing satisfaction (or waiver by CF&Co in its sole discretion)
of the following additional conditions:
(a) Registration Statement Effective. The Registration Statement shall be effective
and shall be available for (i) all sales of Placement Shares issued pursuant to all prior Placement
Notices and (ii) the sale of all Placement Shares contemplated to be issued by any Placement
Notice.
(b) No Material Notices. None of the following events shall have occurred and be
continuing: (i) receipt by the Company or any of its Subsidiaries of any request for additional
information from the Commission or any other federal or state governmental authority during the
period of effectiveness of the Registration Statement, the response to which would require any
post-effective amendments or supplements to the Registration Statement or the Prospectus; (ii) the
issuance by the Commission or any other federal or state governmental authority of any stop order
suspending the effectiveness of the Registration Statement or the initiation of any proceedings for
that purpose; (iii) receipt by the Company of any notification with respect to the suspension of
the qualification or exemption from qualification of any of the Placement Shares for sale in any
jurisdiction or the initiation or threatening of any proceeding for such purpose; or (iv) the
occurrence of any event that makes any material statement made in the Registration Statement or the
Prospectus or any material document incorporated or deemed to be incorporated therein by reference
untrue in any material respect or that requires the making of any changes in the Registration
Statement, related Prospectus or such documents so that, in the case of the Registration Statement,
it will not contain any materially untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements therein not
misleading and, that in the case of the Prospectus, it will not contain any materially untrue
statement of a
19
material fact or omit to state any 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.
(c) No Misstatement or Material Omission. CF&Co shall not have advised the Company
that the Registration Statement or Prospectus, or any amendment or supplement thereto, contains an
untrue statement of fact that in CF&Co’s reasonable opinion is material, or omits to state a fact
that in CF&Co’s opinion is material and is required to be stated therein or is necessary to make
the statements therein not misleading.
(d) Material Changes. Except as contemplated in the Prospectus, or disclosed in the
Company’s reports filed with the Commission, there shall not have been any material adverse change,
on a consolidated basis, in the authorized capital stock of the Company or any Material Adverse
Effect, or any development that could reasonably be expected to cause a Material Adverse Effect, or
any downgrading in or withdrawal of the rating assigned to any of the Company’s securities (other
than asset backed securities) by any rating organization or a public announcement by any rating
organization that it has under surveillance or review its rating of any of the Company’s securities
(other than asset backed securities), the effect of which, in the case of any such action by a
rating organization described above, in the reasonable judgment of CF&Co (without relieving the
Company of any obligation or liability it may otherwise have), is so material as to make it
impracticable or inadvisable to proceed with the offering of the Placement Shares on the terms and
in the manner contemplated in the Prospectus.
(e) Legal Opinion. CF&Co shall have received the opinion of Company Counsel required
to be delivered pursuant to Section 7(o) on or before the date on which such delivery of
such opinion is required pursuant to Section 7(o).
(f) Comfort Letter. CF&Co shall have received the Comfort Letter required to be
delivered pursuant Section 7(p) on or before the date on which such delivery of such
Comfort Letter is required pursuant to Section 7(p).
(g) Representation Certificate. CF&Co shall have received the certificate required to
be delivered pursuant to Section 7(n) on or before the date on which delivery of such
certificate is required pursuant to Section 7(n).
(h) No Suspension. Trading in the Common Shares shall not have been suspended on the
Exchange.
(i) Other Materials. On each date on which the Company is required to deliver a
certificate pursuant to Section 7(n), the Company shall have furnished to CF&Co such
appropriate further information, certificates and documents as CF&Co may have reasonably requested.
All such opinions, certificates, letters and other documents shall have been in compliance with the
provisions hereof. The Company shall have furnished CF&Co with such conformed copies of such
opinions, certificates, letters and other documents as CF&Co shall have reasonably requested.
(j) Securities Act Filings Made. All filings with the Commission required by Rule 424
under the Securities Act to have been filed prior to the issuance of any Placement Notice hereunder
shall have been made within the applicable time period prescribed for such filing by Rule 424.
(k) Approval for Listing. The Placement Shares shall either have been (i) approved for
listing on the Exchange, subject only to notice of issuance, or (ii) the Company shall have filed
an application for listing of the Placement Shares on the Exchange at, or prior to, the issuance of
any Placement Notice.
(l) No Termination Event. There shall not have occurred any event that would permit
CF&Co to terminate this Agreement pursuant to Section 11(a).
20
9. Indemnification and Contribution.
(a) Company Indemnification. The Company agrees to indemnify and hold harmless CF&Co,
the directors, officers, partners, employees and agents of CF&Co and each person, if any, who (i)
controls CF&Co within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act, or (ii) is controlled by or is under common control with CF&Co (a “CF&Co Affiliate”)
from and against any and all losses, claims, liabilities, expenses and damages (including, but not
limited to, any and all reasonable investigative, legal and other expenses incurred in connection
with, and any and all amounts paid in settlement (in accordance with Section 9(c)) of, any
action, suit or proceeding between any of the indemnified parties and any indemnifying parties or
between any indemnified party and any third party, or otherwise, or any claim asserted), as and
when incurred, to which CF&Co, or any such person, may become subject under the Securities Act, the
Exchange Act or other federal or state statutory law or regulation, at common law or otherwise,
insofar as such losses, claims, liabilities, expenses or damages arise out of or are based,
directly or indirectly, on (x) any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or the Prospectus or any amendment or supplement to the
Registration Statement or the Prospectus or in any Free Writing Prospectus approved by the Company
in accordance with Section 7(v) hereof, or in any application or other document executed by
or on behalf of the Company or based on written information furnished by or on behalf of the
Company filed in any jurisdiction in order to qualify the Shares under the securities laws thereof
or filed with the Commission, or (y) the omission or alleged omission to state in any such document
a material fact required to be stated in it or necessary to make the statements in it not
misleading; provided, however, that this indemnity agreement shall not apply to the extent that
such loss, claim, liability, expense or damage arises from the sale of the Placement Shares
pursuant to this Agreement and is caused directly or indirectly by an untrue statement or omission
or alleged untrue statement or omission made in reliance upon and in conformity with written
information relating to CF&Co and furnished to the Company by CF&Co expressly for inclusion in any
document as described in clause (x) of this Section 9(a). This indemnity agreement will be
in addition to any liability that the Company might otherwise have.
(b) CF&Co Indemnification. CF&Co agrees to indemnify and hold harmless the Company,
its directors, each officer of the Company that signed the Registration Statement, and each person,
if any, who (i) controls the Company within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act or (ii) is controlled by or is under common control with the Company
(a “Company Affiliate”) from and against any and all losses, claims, liabilities and
expenses and damages described in the indemnity contained in Section 9(a), as and when
incurred, but only with respect to untrue statements or omissions, or alleged untrue statements or
omissions, made in the Registration Statement (or any amendments thereto) or the Prospectus (or any
amendment or supplement thereto) in reliance upon and in conformity with written information
relating to CF&Co and furnished to the Company by CF&Co expressly for inclusion in any document as
described in clause (x) of Section 9(a) or with respect to statements or omissions, or
alleged untrue statements or omissions, made in any Free Writing Prospectus used by CF&Co and not
previously approved by the Company in accordance with Section 7(w) hereof.
(c) Procedure. Any party that proposes to assert the right to be indemnified under
this Section 9 will, promptly after receipt of notice of commencement of any action against
such party in respect of which a claim is to be made against an indemnifying party under this
Section 9, notify such indemnifying party of the commencement of such action, enclosing a
copy of all papers served, but the omission so to notify such indemnifying party will not relieve
the indemnifying party from (i) any liability that it might have to any indemnified party otherwise
than under this Section 9 and (ii) any liability that it may have to
21
any indemnified party under the foregoing provision of this Section 9 unless, and only to
the extent that, such omission results in the forfeiture of substantive rights or defenses by the
indemnifying party. If any such action is brought against any indemnified party and it notifies the
indemnifying party of its commencement, the indemnifying party will be entitled to participate in
and, to the extent that it elects by delivering written notice to the indemnified party promptly
after receiving notice of the commencement of the action from the indemnified party, to assume the
defense of the action, with counsel reasonably satisfactory to the indemnified party, and after
notice from the indemnifying party to the indemnified party of its election to assume the defense,
the indemnifying party will not be liable to the indemnified party for any legal or other expenses
except as provided below and except for the reasonable costs of investigation subsequently incurred
by the indemnified party in connection with the defense. The indemnified party will have the right
to employ its own counsel in any such action, but the fees, expenses and other charges of such
counsel will be at the expense of such indemnified party unless (i) the employment of counsel by
the indemnified party has been authorized in writing by the indemnifying party, (ii) the
indemnified party has reasonably concluded (based on advice of counsel) that there may be legal
defenses available to it or other indemnified parties that are different from or in addition to
those available to the indemnifying party, (iii) a conflict or potential conflict exists (based on
advice of counsel to the indemnified party) between the indemnified party and the indemnifying
party (in which case the indemnifying party will not have the right to direct the defense of such
action on behalf of the indemnified party) or (iv) the indemnifying party has not in fact employed
counsel to assume the defense of such action within a reasonable time after receiving notice of the
commencement of the action, in each of which cases the reasonable fees, disbursements and other
charges of counsel will be at the expense of the indemnifying party or parties. It is understood
that the indemnifying party shall not, in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for the reasonable fees, disbursements and other charges of more
than one separate firm admitted to practice in such jurisdiction at any one time for all such
indemnified party or parties. All such fees, disbursements and other charges will be reimbursed by
the indemnifying party promptly as they are incurred. An indemnifying party will not, in any event,
be liable for any settlement of any action or claim effected without its written consent. No
indemnifying party shall, without the prior written consent of each indemnified party, settle or
compromise or consent to the entry of any judgment in any pending or threatened claim, action or
proceeding relating to the matters contemplated by this Section 9 (whether or not any
indemnified party is a party thereto), unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability arising or that may arise out of
such claim, action or proceeding.
(d) Contribution. In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in the foregoing paragraphs of this
Section 9 is applicable in accordance with its terms but for any reason is held to be
unavailable from the Company or CF&Co, the Company and CF&Co will contribute to the total losses,
claims, liabilities, expenses and damages (including any investigative, legal and other expenses
reasonably incurred in connection with, and any amount paid in settlement of, any action, suit or
proceeding or any claim asserted, but after deducting any contribution received by the Company from
persons other than CF&Co, such as persons who control the Company within the meaning of the
Securities Act, officers of the Company who signed the Registration Statement and directors of the
Company, who also may be liable for contribution) to which the Company and CF&Co may be subject in
such proportion as shall be appropriate to reflect the relative benefits received by the Company on
the one hand, and CF&Co, on the other. The relative benefits received by the Company on the one
hand and CF&Co on the other hand shall be deemed to be in the same proportion as the total net
proceeds from the sale of the Placement Shares (net of commissions to CF&Co but before deducting
expenses) received by the Company bear to the total
22
compensation received by CF&Co from the sale of Placement Shares on behalf of the Company. If, but
only if, the allocation provided by the foregoing sentence is not permitted by applicable law, the
allocation of contribution shall be made in such proportion as is appropriate to reflect not only
the relative benefits referred to in the foregoing sentence but also the relative fault of the
Company on the one hand, and CF&Co, on the other, with respect to the statements or omission that
resulted in such loss, claim, liability, expense or damage, or action in respect thereof, as well
as any other relevant equitable considerations with respect to such offering. Such relative fault
shall be determined by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material fact relates to
information supplied by the Company on the one hand, or CF&Co, on the other, the intent of the
parties and their relative knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Company and CF&Co agree that it would not be just and equitable if
contributions pursuant to this Section 9(d) were to be determined by pro rata allocation or
by any other method of allocation that does not take into account the equitable considerations
referred to herein. The amount paid or payable by an indemnified party as a result of the loss,
claim, liability, expense, or damage, or action in respect thereof, referred to above in this
Section 9(d) shall be deemed to include, for the purpose of this Section 9(d), any
legal or other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim to the extent consistent with Section
9(c) hereof. Notwithstanding the foregoing provisions of this Section 9(d), CF&Co shall
not be required to contribute any amount in excess of the commissions received by it under this
Agreement and no person found guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) will be entitled to contribution from any person who was found not
guilty of such fraudulent misrepresentation. For purposes of this Section 9(d), any person
who controls a party to this Agreement within the meaning of the Securities Act, and any officers,
directors, partners, employees or agents of CF&Co, will have the same rights to contribution as
that party, and each officer and director of the Company who signed the Registration Statement will
have the same rights to contribution as the Company, subject in each case to the provisions hereof.
Any party entitled to contribution, promptly after receipt of notice of commencement of any action
against such party in respect of which a claim for contribution may be made under this Section
9(d), will notify any such party or parties from whom contribution may be sought, but the
omission to so notify will not relieve that party or parties from whom contribution may be sought
from any other obligation it or they may have under this Section 9(d) except to the extent
that the failure to so notify such other party materially prejudiced the substantive rights or
defenses of the party from whom contribution is sought. Except for a settlement entered into
pursuant to the last sentence of Section 9(c) hereof, no party will be liable for
contribution with respect to any action or claim settled without its written consent if such
consent is required pursuant to Section 9(c) hereof.
10. Representations and Agreements to Survive Delivery. The indemnity and contribution
agreements contained in Section 9 of this Agreement and all representations and warranties
of the Company herein or in certificates delivered pursuant hereto shall survive, as of their
respective dates, regardless of (i) any investigation made by or on behalf of CF&Co, any
controlling persons, or the Company (or any of their respective officers, directors or controlling
persons), (ii) delivery and acceptance of the Placement Shares and payment therefor or (iii) any
termination of this Agreement.
11. Termination.
(a) CF&Co shall have the right by giving notice as hereinafter specified at any time to
terminate this Agreement if (i) any Material Adverse Effect, or any development that has actually
occurred and that is reasonably expected to cause a Material Adverse Effect has occurred, that, in
the reasonable judgment of CF&Co, may materially impair the ability of CF&Co to sell the Placement
Shares
23
hereunder; (ii) the Company shall have failed, refused or been unable to perform any agreement on
its part to be performed hereunder; provided, however, in the case of any failure of the Company to
deliver (or cause another person to deliver) any certification, opinion, or letter required under
Sections 7(n), 7(o), or 7(p), CF&Co’s right to terminate shall not
arise unless such failure to deliver (or cause to be delivered) continues for more than thirty (30)
days from the date such delivery was required; or (iii) any other condition of CF&Co’s obligations
hereunder is not fulfilled; or (iv), any suspension or limitation of trading in the Placement
Shares or in securities generally on the Exchange shall have occurred. Any such termination shall
be without liability of any party to any other party except that the provisions of Section
7(h) (Expenses), Section 9 (Indemnification), Section 10 (Survival of
Representations), Section 16 (Applicable Law; Consent to Jurisdiction) and Section
17 (Waiver of Jury Trial) hereof shall remain in full force and effect notwithstanding such
termination.
(b) The Company shall have the right, by giving ten (10) days notice as hereinafter specified
to terminate this Agreement in its sole discretion at any time after the date of this Agreement.
Any such termination shall be without liability of any party to any other party except that the
provisions of Section 7(h), Section 9, Section 10, Section 16 and
Section 17 hereof shall remain in full force and effect notwithstanding such termination.
(c) CF&Co shall have the right, by giving ten (10) days notice as hereinafter specified to
terminate this Agreement in its sole discretion at any time after the date of this Agreement. Any
such termination shall be without liability of any party to any other party except that the
provisions of Section 7(h), Section 9, Section 10, Section 16 and
Section 17 hereof shall remain in full force and effect notwithstanding such termination.
(d) Unless earlier terminated pursuant to this Section 11, this Agreement shall
automatically terminate upon the issuance and sale of all of the Shares through CF&Co on the terms
and subject to the conditions set forth herein; provided that the provisions of Section
7(h), Section 9, Section 10, Section 16 and Section 17 hereof
shall remain in full force and effect notwithstanding such termination.
(e) This Agreement shall remain in full force and effect unless terminated pursuant to
Sections 11(a), (b), (c), or (d) above or otherwise by mutual
agreement of the parties; provided, however, that any such termination by mutual agreement shall in
all cases be deemed to provide that Section 7(h), Section 9, Section 10,
Section 16 and Section 17 shall remain in full force and effect.
(f) Any termination of this Agreement shall be effective on the date of receipt of such notice
by CF&Co or the Company, as the case may be. If such termination shall occur prior to the
Settlement Date for any sale of Placement Shares, such Placement Shares shall settle in accordance
with the provisions of this Agreement.
12. Notices. All notices or other communications required or permitted to be given by
any party to any other party pursuant to the terms of this Agreement shall be in writing, unless
otherwise specified in this Agreement, and if sent to CF&Co, shall be delivered to CF&Co at Cantor
▇▇▇▇▇▇▇▇▇▇ & Co., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, fax no. (▇▇▇) ▇▇▇-▇▇▇▇, Attention: ITD
Capital Markets/▇▇▇▇ ▇▇▇▇▇, with copies to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, General Counsel, at the same address,
and ▇▇▇▇▇ ▇▇▇▇ LLP, One Metropolitan Square, ▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
fax no. (▇▇▇) ▇▇▇-▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇; or if sent to the Company at ▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, attention: General Counsel, facsimile number (▇▇▇)
▇▇▇-▇▇▇▇, with a copy to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇, LLP, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇ III,
facsimile number (▇▇▇) ▇▇▇-▇▇▇▇. Each party to this Agreement may change such address for notices
by sending to the parties to this Agreement written notice of a new address for such purpose. Each
such notice or other communication shall be deemed given (i) when delivered personally or by
verifiable facsimile
24
transmission (with an
original to follow) on or before 4:30 p.m., New York City time, on a Business Day or, if such day
is not a Business Day, on the next succeeding Business Day, (ii) on the next Business Day after
timely delivery to a nationally-recognized overnight courier and (iii) on the Business Day actually
received if deposited in the U.S. mail (certified or registered mail, return receipt requested,
postage prepaid). For purposes of this Agreement, “Business Day” shall mean any day on
which the Exchange and commercial banks in the City of New York are open for business.
13. Successors and Assigns. This Agreement shall inure to the benefit of and be
binding upon the Company and CF&Co and their respective successors and the affiliates, controlling
persons, officers and directors referred to in Section 9 hereof. References to any of the
parties contained in this Agreement shall be deemed to include the successors and permitted assigns
of such party. Nothing in this Agreement, express or implied, is intended to confer upon any party
other than the parties hereto or their respective successors and permitted assigns any rights,
remedies, obligations or liabilities under or by reason of this Agreement, except as expressly
provided in this Agreement. Neither party may assign its rights or obligations under this Agreement
without the prior written consent of the other party; provided, however, that CF&Co may assign its
rights and obligations hereunder to an affiliate of CF&Co without obtaining the Company’s consent.
14. Adjustments for Stock Splits. The parties acknowledge and agree that all
stock-related numbers contained in this Agreement shall be adjusted to take into account any stock
split, stock dividend or similar event effected with respect to the Shares.
15. Entire Agreement; Amendment; Severability. This Agreement (including all schedules
and exhibits attached hereto and Placement Notices issued pursuant hereto) constitutes the entire
agreement and supersedes all prior and contemporaneous agreements and undertakings, both written
and oral, among the parties hereto with regard to the subject matter hereof. Neither this Agreement
nor any term hereof may be amended except pursuant to a written instrument executed by the Company
and CF&Co. In the event that any one or more of the provisions contained herein, or the application
thereof in any circumstance, is held invalid, illegal or unenforceable as written by a court of
competent jurisdiction, then such provision shall be given full force and effect to the fullest
possible extent that it is valid, legal and enforceable, and the remainder of the terms and
provisions herein shall be construed as if such invalid, illegal or unenforceable term or provision
was not contained herein, but only to the extent that giving effect to such provision and the
remainder of the terms and provisions hereof shall be in accordance with the intent of the parties
as reflected in this Agreement.
16. Applicable Law; Consent to Jurisdiction. This Agreement shall be governed by, and
construed in accordance with, the internal laws of the State of New York. Each party hereby
irrevocably submits to the non-exclusive jurisdiction of the state and federal courts sitting in
the City of New York, borough of Manhattan, for the adjudication of any dispute hereunder or in
connection with any transaction contemplated hereby, and hereby irrevocably waives, and agrees not
to assert in any suit, action or proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient
forum or that the venue of such suit, action or proceeding is improper, though neither party shall
be precluded from removing an action that is subject to removal from state to federal court. Each
party hereby irrevocably waives personal service of process and consents to process being served in
any such suit, action or proceeding by mailing a copy thereof (certified or registered mail, return
receipt requested) to such party at the address in effect for notices to it under this Agreement
and agrees that such service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in
any manner permitted by law.
25
17. Waiver of Jury Trial. The Company and CF&Co each hereby irrevocably waives any
right it may have to a trial by jury in respect of any claim based upon or arising out of this
Agreement or any transaction contemplated hereby.
18. Absence of Fiduciary Relationship. The Company agrees that:
(a) CF&Co has been retained solely to act as sales agent in connection with the sale of the
Shares that no fiduciary, advisory or agency relationship between the Company and CF&Co has been
created in respect of any of the transactions contemplated by this Agreement, irrespective of
whether CF&Co has advised or is advising the Company on other matters;
(b) the Company is capable of evaluating and understanding and understands and accepts the
terms, risks and conditions of the transactions contemplated by this Agreement;
(c) the Company has been advised that CF&Co and its affiliates are engaged in a broad range of
transactions which may involve interests that differ from those of the Company and that CF&Co has
no obligation to disclose such interests and transactions to the Company by virtue of any
fiduciary, advisory or agency relationship; and
(d) the Company waives, to the fullest extent permitted by law, any claims it may have against
CF&Co, for breach of fiduciary duty or alleged breach of fiduciary duty and agrees that CF&Co shall
have no liability (whether direct or indirect) to the Company in respect of such a fiduciary claim
or to any person asserting a fiduciary duty claim on behalf of or in right of the Company including
stockholders, partners, employees or creditors of the Company.
19. Counterparts. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute one and the same
instrument. Delivery of an executed Agreement by one party to the other may be made by facsimile
transmission.
20. Definitions. As used in this Agreement, “GAAP” means United States
generally accepted accounting principles.
[Remainder of Page Intentionally Blank]
26
If the foregoing correctly sets forth the understanding between the Company and CF&Co, please
so indicate in the space provided below for that purpose, whereupon this letter shall constitute a
binding agreement between the Company and CF&Co.
| Very truly yours, HEALTHCARE REALTY TRUST INCORPORATED |
||||
| By: | /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | |||
| Name: | ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | |||
| Title: | Executive Vice President and Chief Financial Officer | |||
| ACCEPTED as of the date first-above written: CANTOR ▇▇▇▇▇▇▇▇▇▇ & CO. |
||||
| By: | /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇ | |||
| Name: | ▇▇▇▇▇▇▇ ▇▇▇▇▇ | |||
| Title: | Managing Director | |||
27
SCHEDULE 1
FORM OF PLACEMENT NOTICE
From:
|
[ ] | |
Cc:
|
[ ] | |
To:
|
[ ] |
| Subject: | Controlled Equity Offering—Placement Notice |
Gentlemen:
Pursuant to the terms and subject to the conditions contained in the Controlled Equity
OfferingSM
Sales Agreement dated March 11, 2011 between HEALTHCARE REALTY TRUST
INCORPORATED (the “Company”) and Cantor ▇▇▇▇▇▇▇▇▇▇ & Co. (“CF&CO”) (the
“Agreement”), I hereby request on behalf of the Company that CF&Co sell up to [ ] shares of
the Company’s common stock, par value $0.01 per share, at a minimum market price of
$ per share.
SCHEDULE 2
CANTOR ▇▇▇▇▇▇▇▇▇▇ & CO.
▇▇▇▇ ▇▇▇▇▇
|
▇▇▇▇▇▇@▇▇▇▇▇▇.▇▇▇ | |
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
|
▇▇▇▇▇▇▇▇@▇▇▇▇▇▇.▇▇▇ | |
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
|
▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇.▇▇▇ |
HEALTHCARE REALTY TRUST INCORPORATED
▇▇▇▇▇ ▇. Emery
|
▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ | |
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
|
▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ | |
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
|
▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ | |
▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
|
▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ | |
B. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇
|
▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ | |
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
|
▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ |
SCHEDULE 3
Compensation
CF&Co shall be paid compensation up to two percent (2.0%) of the gross proceeds from the sales of
the Shares.
SCHEDULE 6(ee)
Clive Wellness Campus Building One, LLC
HR Acquisition I Corporation
HR Acquisition of San Antonio, Ltd.
HR Acquisition of Pennsylvania, Inc.
HR of Carolinas, LLC
HR of Indiana, LLC
HR of Iowa, LLC
HR of Los Angeles, Ltd.
HR MAC II, LLC
HR-Pima, LLC
HRT of Illinois, Inc.
HRT of Roanoke, Inc.
HRT of Tennessee Inc.
HRT Properties of Texas, Ltd.
Pennsylvania HRT, Inc.
Roseburg Surgery Center, LLC
▇▇▇▇▇▇▇ Pavilion, LLC
Yakima Valley Subsidiary, LLC
HR Acquisition I Corporation
HR Acquisition of San Antonio, Ltd.
HR Acquisition of Pennsylvania, Inc.
HR of Carolinas, LLC
HR of Indiana, LLC
HR of Iowa, LLC
HR of Los Angeles, Ltd.
HR MAC II, LLC
HR-Pima, LLC
HRT of Illinois, Inc.
HRT of Roanoke, Inc.
HRT of Tennessee Inc.
HRT Properties of Texas, Ltd.
Pennsylvania HRT, Inc.
Roseburg Surgery Center, LLC
▇▇▇▇▇▇▇ Pavilion, LLC
Yakima Valley Subsidiary, LLC
Exhibit 7(n)
OFFICER CERTIFICATE
The undersigned, the duly qualified and elected _____________ of HEALTHCARE REALTY
TRUST INCORPORATED (the “Company”), a Maryland corporation, does hereby certify in such
capacity and on behalf of the Company, pursuant to Section 7(n) of the Sales Agreement
dated March 11, 2011 (the “Sales Agreement”) between the Company and Cantor ▇▇▇▇▇▇▇▇▇▇ &
Co., that to the best of the knowledge of the undersigned:
(i) The representations and warranties of the Company in Section 6 of the Sales Agreement
(A) to the extent such representations and warranties are subject to qualifications and exceptions
contained therein relating to materiality or Material Adverse Effect, are true and correct on and
as of the date hereof with the same force and effect as if expressly made on and as of the date
hereof, except for those representations and warranties that speak solely as of a specific date and
which were true and correct as of such date, and (B) to the extent such representations and
warranties are not subject to any qualifications or exceptions, are true and correct in all
material respects as of the date hereof as if made on and as of the date hereof with the same force
and effect as if expressly made on and as of the date hereof except for those representations and
warranties that speak solely as of a specific date and which were true and correct in all material
respects as of such date; and
(ii) The Company has complied with all agreements and satisfied all conditions on its part to be
performed or satisfied pursuant to the Sales Agreement at or prior to the date hereof.
| By: | ||||
| Name: | ||||
| Title: Date: |
||||