UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 25, 2019
Welltower Inc.
(Exact name of registrant as specified in its charter)
Delaware | 1-8923 | 34-1096634 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) | ||
4500 Dorr Street, Toledo, Ohio | 43615 | |||
(Address of principal executive offices) | (Zip Code) |
Registrants telephone number, including area code: (419) 247-2800
Not Applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 8.01 Other Events.
On February 25, 2019, Welltower Inc. (the Company) entered into separate amended and restated equity distribution agreements (collectively, the Equity Distribution Agreements) with each of (i) Barclays Capital Inc., Citigroup Global Markets Inc., Credit Agricole Securities (USA) Inc., Deutsche Bank Securities Inc., Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC, KeyBanc Capital Markets Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co. LLC, MUFG Securities Americas Inc., RBC Capital Markets, LLC, UBS Securities LLC, and Wells Fargo Securities, LLC (when acting in this capacity, individually, a Sales Agent and collectively, the Sales Agents) as sales agents and forward sellers and (ii) each of Bank of America, N.A., Barclays Bank PLC, Citibank, N.A., Crédit Agricole Corporate and Investment Bank, Deutsche Bank AG, London Branch, Goldman Sachs & Co. LLC, JPMorgan Chase Bank, National Association, KeyBanc Capital Markets Inc., Morgan Stanley & Co. LLC, MUFG Securities EMEA plc, Royal Bank of Canada, UBS AG, London Branch and Wells Fargo Bank, National Association as forward purchasers relating to issuances, offers and sales of shares of the Companys common stock, par value $1.00 per share (the Common Stock). In accordance with the terms of the Equity Distribution Agreements, the Company may offer and sell up to $1,500,000,000 of Common Stock (together with shares of Common Stock that may be sold pursuant to the forward sale agreements described below, the Shares) from time to time through any of the Sales Agents (acting in their capacity as Sales Agents or as Forward Sellers, as described below).
Concurrently with entry into the Equity Distribution Agreements, the Company entered into separate master forward sale confirmations (collectively, the Master Forward Sale Confirmations) between the Company and each of Bank of America, N.A., Barclays Bank PLC, Citibank, N.A., Crédit Agricole Corporate and Investment Bank, Deutsche Bank AG, London Branch, Goldman Sachs & Co. LLC, JPMorgan Chase Bank, National Association, KeyBanc Capital Markets Inc., Morgan Stanley & Co. LLC, MUFG Securities EMEA plc, Royal Bank of Canada, UBS AG, London Branch and Wells Fargo Bank, National Association (when acting in this capacity, individually, a Forward Purchaser and collectively, the Forward Purchasers).
The Equity Distribution Agreements provide that, in addition to the issuance and sale of the Shares by the Company through the Sales Agents, the Company also may enter into forward sale agreements under the Master Forward Sale Confirmations. In connection with each particular forward sale agreement, the relevant forward purchaser or its affiliates will, at the Companys request, borrow from third parties and, through the relevant Sales Agent, sell a number of the Shares equal to the number of Shares underlying the particular forward sale agreement (the Sales Agents, when acting as agents for Forward Purchasers, individually, a Forward Seller and collectively, the Forward Sellers). In no event will the aggregate number of Shares sold through the Sales Agents, whether as an agent for the Company or as a Forward Seller, under the Equity Distribution Agreements and any forward sale agreements, have an aggregate sales price in excess of $1,500,000,000.
The Company will not initially receive any proceeds from the sale of borrowed shares of Common Stock by a Forward Seller. The Company expects to physically settle each particular forward sale agreement with the relevant Forward Purchaser on one or more dates specified by the Company on or prior to the maturity date of that particular
forward sale agreement, in which case the Company would expect to receive per share cash proceeds at settlement equal to the forward sale price under the relevant forward sale agreement. However, the Company may also elect to cash settle or net share settle a particular forward sale agreement, in which case the Company may not receive any proceeds (in the case of cash settlement) or will not receive any proceeds (in the case of net share settlement), and the Company may owe cash (in the case of cash settlement) or shares of common stock (in the case of net share settlement) to the relevant forward purchaser.
Sales of the Shares, if any, will be made by means of ordinary brokers transactions on the New York Stock Exchange at market prices, in block transactions, or as otherwise agreed with the applicable Sales Agent, or by means of any other existing trading market for the Common Stock or to or through a market maker other than on an exchange. The offer and sale of the Shares has been registered on the Companys Registration Statement on Form S-3 (File No. 333-225004), dated May 17, 2018.
The foregoing description of certain terms of the Equity Distribution Agreements and the Master Forward Sale Confirmations and the transactions contemplated by the Equity Distribution Agreements and the Master Forward Sale Confirmations does not purport to be complete and is qualified in its entirety by reference to the terms and conditions of the forms of Equity Distribution Agreements and Master Forward Sale Confirmations, which are filed herewith as Exhibits 1.1 and 1.2, respectively, and are incorporated by reference herein.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
WELLTOWER INC. | ||
By: | /s/ MATTHEW MCQUEEN | |
Name: | Matthew McQueen | |
Title: | Senior Vice President General Counsel & Corporate Secretary |
Date: February 26, 2019
Exhibit 1.1
WELLTOWER INC.
$1,500,000,000
Shares of Common Stock
(par value $1.00 per share)
AMENDED AND RESTATED EQUITY DISTRIBUTION AGREEMENT
February 25, 2019
[Name]
[Address]
Ladies and Gentlemen:
This Amended and Restated Equity Distribution Agreement (this Agreement), dated February 25, 2019, is by and between Welltower Inc., a Delaware corporation (the Company), [Name] (in its capacity as purchaser under any Forward Contract (as defined below), the Forward Purchaser) and [Name] (in its capacity as agent for the Company in connection with the offering and sale of any Issuance Shares (as defined below) hereunder, the Sales Agent, and in its capacity as agent for the Forward Purchaser in connection with the offering and sale of any Forward Hedge Shares (as defined below) hereunder, the Forward Seller). [This Agreement and certain Alternative Distribution Agreements (as defined below) amend and restate the prior amended and restated equity distribution agreements with each of Morgan Stanley & Co. LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Goldman Sachs & Co. LLC, UBS Securities LLC and Wells Fargo Securities, LLC, dated August 3, 2018, that permitted the Company to sell up to $784,083,001 of shares of the Companys common stock, par value $1.00 per share (the Common Stock), from time to time in at the market offerings.]
SECTION 1. Description of Securities
(a) The Company proposes to issue and sell, in the manner contemplated by this Agreement, shares of Common Stock with an aggregate Sales Price (as defined below) of up to $1,500,000,000 (the Maximum Amount) upon the terms and subject to the conditions contained herein.
(b) The Sales Agent has been appointed by the Company as its agent to sell the Issuance Shares and agrees to use commercially reasonable efforts consistent with its normal trading and sales practices to sell the Issuance Shares offered by the Company upon the terms and subject to the conditions contained herein.
(c) The Forward Seller has been appointed by the Company and the Forward Purchaser as its agent to sell the Forward Hedge Shares and agrees with the Company and the Forward Purchaser to use commercially reasonable efforts consistent with its normal trading and sales practices to sell the Forward Hedge Shares to be borrowed by the Forward Purchaser and offered by the Company upon the terms and subject to the conditions contained herein and in the Master Forward Confirmation.
(d) The Company has also entered into separate amended and restated equity distribution agreements (each, an Alternative Distribution Agreement, and collectively, the Alternative Distribution Agreements), dated February 25, 2019, with each of Barclays Capital Inc., Citigroup Global Markets Inc., Credit Agricole Securities (USA) Inc., Deutsche Bank Securities Inc., Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC, KeyBanc Capital Markets Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co. LLC, MUFG Securities Americas Inc., RBC Capital Markets, LLC, UBS Securities LLC and Wells Fargo Securities, LLC (or its respective affiliates) (each in its capacity as agent, forward seller and forward purchaser thereunder, an Alternative Sales Agent), for the issuance (in the case of the Issuance Shares) or borrowing (in the case of Forward Hedge Shares) and sale from time to time through the applicable Alternative Sales Agent of Shares on the terms set forth in the applicable Alternative Distribution Agreement. This Agreement and the Alternative Distribution Agreements are collectively referred to herein as the Distribution Agreements. The shares of Common Stock to be sold by the Sales Agent pursuant to this Agreement and by the Alternative Sales Agents pursuant to the Alternative Distribution Agreements shall have an aggregate Sales Price of up the Maximum Amount.
For purposes of this Agreement, capitalized terms used herein and not otherwise defined shall have the following respective meanings:
Act has the meaning set forth in Section 2(a).
Actual Sold Forward Amount means, for any Forward Hedge Selling Period for any Forward, the number of Forward Hedge Shares that the Forward Seller has sold during such Forward Hedge Selling Period.
Actual Sold Issuance Amount means, for any Issuance Selling Period for any Issuance, the number of Issuance Shares that Sales Agent has sold during such Issuance Selling Period.
Affiliate of a person means another person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such first-mentioned person. The term control (including the terms controlling, controlled by and under common control with) means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract or otherwise.
Agreement has the meaning set forth in the introductory paragraph of this Agreement.
Alternative Distribution Agreement has the meaning set forth in Section 1(d).
Alternative Sales Agent has the meaning set forth in Section 1(d).
Basic Prospectus has the meaning set forth in Section 2(a).
Capped Number with respect to any Forward Contract has the meaning set forth in such Forward Contract.
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Certificate Date has the meaning set forth in Section 6(f).
Claim has the meaning set forth in Section 16.
Closing has the meaning set forth in Section 3(b).
Closing Date means the date on which the Closing occurs.
Code means the Internal Revenue Code of 1986, as amended.
Commission has the meaning set forth in Section 2(a).
Commitment Period means the period commencing on the date of this Agreement and expiring on the earlier to occur of (x) the date on which Sales Agent and the Alternative Sales Agents in the aggregate shall have sold the Maximum Amount pursuant to the Distribution Agreements or (y) the date this Agreement is terminated pursuant to Section 9.
Common Stock has the meaning set forth in the introductory paragraph of this Agreement.
Company has the meaning set forth in the introductory paragraph of this Agreement.
Company Counsel has the meaning set forth in set forth in Section 3(b)(i).
Corporate Records has the meaning set forth in Section 2(dd).
DWAC has the meaning set forth in Section 3(d)(i).
Exchange Act has the meaning set forth in Section 2(a).
FCPA has the meaning set forth in Section 2(ee).
FINRA has the meaning set forth in Section 2(r).
Floor Price means the minimum price per share set by the Company in the Transaction Notice below which Sales Agent (in the case of an Issuance) or the Forward Seller (in the case of a Forward) shall not sell Issuance Shares or Forward Hedge Shares, as the case may be, during the relevant Selling Period, which may be adjusted by the Company at any time during the Selling Period and which in no event shall be less than $1.00.
Forward means the transaction resulting from each occasion on which the Company elects to exercise its right to deliver a Transaction Notice specifying that it relates to a Forward and requiring the Forward Seller to use commercially reasonable efforts consistent with its normal trading and sales practices to sell the Forward Hedge Shares as specified in such Transaction Notice, subject to the terms and conditions of this Agreement.
Forward Contract means, for each Forward, the contract evidencing such Forward between the Company and the Forward Purchaser, which shall be comprised of the Master Forward Confirmation and the related Supplemental Confirmation (as defined in the Master Forward Confirmation) for such Forward.
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Forward Date means any Trading Day during the Commitment Period that a Transaction Notice specifying that it relates to a Forward is deemed delivered pursuant to Section 3(c)(2) hereof.
Forward Hedge Amount means the aggregate Sales Price of the Forward Hedge Shares to be sold by the Forward Seller with respect to any Forward as specified in the Transaction Notice for such Forward, which may not exceed $100,000,000 without the prior written consent of the Forward Seller, which consent may be withheld in the Forward Sellers sole discretion.
Forward Hedge Price means, for any Forward Contract, the product of (x) an amount equal to one (1) minus the Forward Hedge Selling Commission Rate for such Forward Contract; and (y) the Volume-Weighted Hedge Price (as defined in the Master Forward Confirmation) for such Forward Contract.
Forward Hedge Selling Commission means, for any Forward Contract, the product of (x) the Forward Hedge Selling Commission Rate for such Forward Contract and (y) the Volume-Weighted Hedge Price (as defined in the Master Forward Confirmation) for such Forward Contract.
Forward Hedge Selling Commission Rate means, for any Forward Contract, a rate mutually agreed to between the Company and the Forward Seller, as provided for in Schedule C.
Forward Hedge Selling Period means the period of one to 20 consecutive Trading Days (as determined by the Company in the Companys sole discretion and specified in the applicable Transaction Notice specifying that it relates to a Forward) following the Trading Day on which such Transaction Notice is delivered or deemed to be delivered pursuant to Section 3(c)(2) hereof; provided that if, prior to the scheduled end of any Forward Hedge Selling Period (a) any event occurs that would permit the Forward Purchaser to designate a Scheduled Trading Day as an Early Valuation Date (as each such term is defined in the Master Forward Confirmation) under, and pursuant to the provisions opposite the caption Early Valuation in Section 2 of, the Master Forward Confirmation or (b) a Bankruptcy Termination Event (as such term is defined in the Master Forward Confirmation) occurs, then the Forward Hedge Selling Period shall immediately terminate as of the first such occurrence.
Forward Hedge Settlement Date means the second (2nd) Trading Day immediately following the sale of any Forward Hedge Shares pursuant to this Agreement.
Forward Hedge Shares means all Common Stock borrowed by the Forward Purchaser and offered and sold by the Forward Seller in connection with any Forward that has occurred or may occur in accordance with the terms and conditions of this Agreement and the Master Forward Confirmation. Where the context requires, the term Forward Hedge Shares as used herein shall include the definition of the same under the Alternative Distribution Agreements.
Forward Purchaser has the meaning set forth in the introductory paragraph of this Agreement.
Forward Seller has the meaning set forth in the introductory paragraph of this Agreement.
Incorporated Documents has the meaning set forth in Section 2(a).
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Investment Company Act means the Investment Company Act of 1940, as amended, and the rules and regulations of the Commission thereunder.
Issuance means each occasion the Company elects to exercise its right to deliver a Transaction Notice that does not involve a Forward and that specifies that it relates to an Issuance and requires Sales Agent to use commercially reasonable efforts consistent with its normal trading and sales practices to sell the Issuance Shares as specified in such Transaction Notice, subject to the terms and conditions of this Agreement.
Issuance Amount means the aggregate Sales Price of the Issuance Shares to be sold by Sales Agent with respect to any Issuance as specified in the Transaction Notice for such Issuance, which may not exceed in the aggregate the lesser of the Maximum Amount and the aggregate dollar value of shares of Common Stock that may be offered and sold under the currently effective Registration Statement.
Issuance Date means any Trading Day during the Commitment Period that a Transaction Notice specifying that it relates to an Issuance is delivered or deemed delivered pursuant to Section 3(c)(2) hereof.
Issuance Price means the Sales Price less the Issuance Selling Commission.
Issuance Selling Commission means a mutually agreed rate, as provided for in Schedule B.
Issuance Selling Period means the period of one to 20 consecutive Trading Days (as determined by the Company in the Companys sole discretion and specified in the applicable Transaction Notice specifying that it relates to an Issuance) following the Trading Day on which a Transaction Notice specifying that it relates to an Issuance is delivered or deemed to be delivered pursuant to Section 3(c)(2) hereof.
Issuance Settlement Date means, unless the Company and Sales Agent shall otherwise agree, the second (2nd) business day following each Trading Day during the applicable Issuance Selling Period, when the Company shall deliver to Sales Agent the amount of Issuance Shares sold on such Trading Day and Sales Agent shall deliver to the Company the Issuance Price received on such sales.
Issuance Shares means all shares of Common Stock issued or issuable pursuant to an Issuance that has occurred or may occur in accordance with the terms and conditions of this Agreement. Where the context requires, the term Issuance Shares as used herein, shall include the definition of the same under the Alternative Distribution Agreements.
Master Forward Confirmation means the master forward confirmation for Issuer Share Forward Sale Transactions, dated as of the date hereof, by and between the Company and the Forward Purchaser, including all provisions incorporated by reference therein.
Material Adverse Effect has the meaning set forth in Section 2(e).
Maximum Amount has the meaning set forth in Section 1(a).
Money Laundering Laws has the meaning set forth in Section 2(ff).
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NYSE has the meaning set forth in Section 2(e).
OFAC has the meaning set forth in Section 2(gg).
PCAOB has the meaning set forth in Section 2(u).
Permitted Free Writing Prospectus has the meaning set forth in Section 2(a).
Proceeding has the meaning set forth in Section 7(a).
Prospectus has the meaning set forth in Section 2(a).
Prospectus Supplement has the meaning set forth in Section 2(a).
Registration Statement has the meaning set forth in Section 2(a).
Remaining Number of Shares has the meaning set forth in Section 4(r).
Renewal Deadline has the meaning set forth in Section 4(h).
Representation Date has the meaning set forth in Section 4(r).
Rules and Regulations has the meaning set forth in Section 2(a).
Sales Agent has the meaning set forth in the introductory paragraph of this Agreement.
Sales Price means, for each Forward or each Issuance hereunder, the actual sale execution price of each Forward Hedge Share or Issuance Share, as the case may be, sold by Sales Agent or the Forward Seller on the NYSE hereunder in the case of ordinary brokers transactions, or as otherwise agreed by the parties in other methods of sale. Where the context requires, the term Sales Price as used herein shall include the definition of the same under the Alternative Distribution Agreements.
Securities Act means the Securities Act of 1933, as amended.
Selling Period means any Forward Hedge Selling Period or any Issuance Selling Period.
Settlement Date means, unless the Company and Sales Agent shall otherwise agree, any Forward Hedge Settlement Date or any Issuance Settlement Date, as applicable.
Shares means Issuance Shares and Forward Hedge Shares, as applicable. Where the context requires, the term Shares as used herein shall include the definition of the same under the Alternative Distribution Agreements.
Significant Subsidiary has the meaning set forth in Section 2(f).
Suspension Period has the meaning set forth in Section 4(r).
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Tax Counsel has the meaning set forth in Section 4(t).
Time of Sale has the meaning set forth in Section 2(b).
Trading Day means any day which is a trading day on the New York Stock Exchange, other than a day on which trading is scheduled to close prior to its regular weekday closing time.
Transaction means any Issuance or any Forward.
Transaction Date means any Issuance Date or any Forward Date.
Transaction Notice means a written notice to Sales Agent or the Forward Seller delivered in accordance with this Agreement in the form attached hereto as Exhibit A.
SECTION 2. Representations and Warranties of the Company. The Company represents and warrants to and agrees with the Sales Agent, the Forward Seller and the Forward Purchaser that:
(a) An automatic shelf registration statement (the registration statement) as defined in Rule 405 under the Securities Act of 1933, as amended, and the rules and regulations thereunder (collectively, the Act), on Form S-3 (File No. 333-225004) in respect of the Shares, including a form of prospectus, has been prepared and filed by the Company not earlier than three years prior to the date hereof, in conformity with the requirements of the Act, and the Rules and Regulations of the Securities and Exchange Commission (the Commission) thereunder (the Rules and Regulations). The registration statement contains certain information concerning the offering and sale of the Common Stock, including the Shares, and contains additional information concerning the Company and its business; the Commission has not issued an order preventing or suspending the use of any Basic Prospectus (as defined below), the Prospectus Supplement (as defined below), the Prospectus (as defined below) or any Permitted Free Writing Prospectus (as defined below), or the effectiveness of the Registration Statement, and no proceeding for that purpose or pursuant to Section 8A of the Act has been instituted or, to the Companys knowledge, threatened by the Commission. Except where the context otherwise requires, Registration Statement, as used herein, means the registration statement, as amended at the time of such registration statements effectiveness for purposes of Section 11 of the Act, as such section applies to the Sales Agent and the Forward Seller, as well as any new registration statement, post-effective amendment or new automatic shelf registration statement as may have been filed pursuant to Sections 4(g) and (h) of this Agreement, including (1) all documents filed as a part thereof or incorporated or deemed to be incorporated by reference therein, (2) any information contained or incorporated by reference in a prospectus filed with the Commission pursuant to Rule 424(b) under the Act, to the extent such information is deemed, pursuant to Rule 430B or Rule 430C under the Act, to be part of the registration statement at the time of such registration statements effectiveness for purposes of Section 11 of the Act, as such section applies to the Sales Agent and the Forward Seller, and (3) any registration statement filed to register the offer and sale of Shares pursuant to Rule 462(b) under the Act. Except where the context otherwise requires, Basic Prospectus, as used herein, means the
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prospectus filed as part of each Registration Statement, together with any amendments or supplements thereto as of the date of this Agreement. Except where the context otherwise requires, Prospectus Supplement, as used herein, means the final prospectus supplement, relating to the Shares, filed by the Company with the Commission pursuant to Rule 424(b) under the Act on or before the second business day after the date of this Agreement (or such earlier time as may be required under the Act), in the form furnished by the Company to the Sales Agent and the Forward Seller in connection with the offering of the Shares, as well as any new prospectus supplement as may have been filed by the Company to supplement a new registration statement filed pursuant to Sections 4(g) or 4(h) of this Agreement, in the form furnished by the Company to the Sales Agent and the Forward Seller in connection with the offering of the Shares (as provided in Section 4(d) of this Agreement), and such other prospectus supplements relating to the Shares as may have been filed with the Commission by the Company with the consent of the Sales Agent and the Forward Seller. Except where the context otherwise requires, Prospectus, as used herein, means the Prospectus Supplement together with the Basic Prospectus attached to or used with the Prospectus Supplement. Permitted Free Writing Prospectus, as used herein, means the documents listed on Schedule A attached hereto. Any reference herein to the registration statement, the Registration Statement, the Basic Prospectus, the Prospectus Supplement, the Prospectus or any Permitted Free Writing Prospectus shall be deemed to refer to and include the documents, if any, incorporated by reference, or deemed to be incorporated by reference, therein (the Incorporated Documents), including, unless the context otherwise requires, the documents, if any, filed as exhibits to such Incorporated Documents. Any reference herein to the terms amend, amendment or supplement with respect to the Registration Statement, the Basic Prospectus, the Prospectus Supplement, the Prospectus or any Permitted Free Writing Prospectus shall be deemed to refer to and include the filing of any document under the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder (collectively, the Exchange Act) on or after the initial effective date of the Registration Statement, or the date of such Basic Prospectus, the Prospectus Supplement, the Prospectus or such Permitted Free Writing Prospectus, as the case may be, and deemed to be incorporated therein by reference.
(b) The Registration Statement complied when it became effective, complies as of the date hereof and, as amended or supplemented, at each deemed effective date with respect to the Sales Agent and the Forward Seller pursuant to Rule 430(B)(f)(2) of the Act, at each Settlement Date, and at all times during which a prospectus is required by the Act to be delivered (whether physically, deemed to be delivered pursuant to Rule 153 or through compliance with Rule 172 under the Act or any similar rule) in connection with any sale of Shares, will comply, in all material respects, with the requirements of the Act, and the Registration Statement did not and will not, at or during such periods, 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 conditions to the use of Form S-3 in connection with the offering and sale of the Shares as contemplated hereby have been satisfied; the Registration Statement meets, and the offering and sale of the Shares as contemplated hereby complies with, the requirements of Rule 415 under the Act (including, without limitation, Rule 415(a)(5)); the Basic Prospectus complied or will comply, at the time it was or will be filed with the Commission, complies as of the date hereof (if filed with the Commission on or prior to the date hereof) and, as of the time of
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each sale of Shares pursuant to this Agreement (each, a Time of Sale), at each Settlement Date and at all times during which a prospectus is required by the Act to be delivered (whether physically, deemed to be delivered pursuant to Rule 153 or through compliance with Rule 172 under the Act or any similar rule) in connection with any sale of Shares, will comply, in all material respects, with the requirements of the Act; at no time during the period that begins on the earlier of the date of the Basic Prospectus and the date the Basic Prospectus was filed with the Commission and ends on each Settlement Date did or will the Basic Prospectus, as then amended or supplemented, include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, and at no time during such period did or will the Basic Prospectus, as then amended or supplemented, together with any combination of one or more of the then issued Permitted Free Writing Prospectuses, if any, include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; each of the Prospectus Supplement and the Prospectus will comply, as of the date that it is filed with the Commission, the date of the Prospectus Supplement, each Time of Sale, each Settlement Date, and at all times during which a prospectus is required by the Act to be delivered (whether physically, deemed to be delivered pursuant to Rule 153 or through compliance with Rule 172 under the Act or any similar rule) in connection with any sale of Shares, in all material respects, with the requirements of the Act (in the case of the Prospectus, including, without limitation, Section 10(a) of the Act); at no time during the period that begins on the earlier of the date of the Prospectus Supplement and the date the Prospectus Supplement is filed with the Commission and ends at the later of each Settlement Date and the end of the period during which a prospectus is required by the Act to be delivered (whether physically, deemed to be delivered pursuant to Rule 153 or through compliance with Rule 172 under the Act or any similar rule) in connection with any sale of Shares did or will the Prospectus Supplement or the Prospectus, as then amended or supplemented, include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; at no time during the period that begins on the date of such Permitted Free Writing Prospectus and ends at each Settlement Date did or will any Permitted Free Writing Prospectus include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that the Company makes no representation or warranty with respect to any statement contained in the Registration Statement, the Basic Prospectus, the Prospectus or any Permitted Free Writing Prospectus in reliance upon and in conformity with information concerning the Sales Agent, the Forward Seller or the Forward Purchaser and furnished in writing by or on behalf of the Sales Agent, the Forward Seller or the Forward Purchaser expressly for use in the Registration Statement, the Basic Prospectus, the Prospectus or such Permitted Free Writing Prospectus; each Incorporated Document, at the time such document was filed with the Commission or at the time such document became effective, as applicable, complied, in all material respects, with the requirements of the Exchange Act and did not include an untrue statement of a material fact or omit to state a material fact necessary in
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order to make the statements therein, in the light of the circumstances under which they were made, not misleading.
(c) (i) At the time of filing of the Registration Statement, (ii) at the time of the most recent amendment thereto for the purposes of complying with Section 10(a)(3) of the Act (whether such amendment was by post-effective amendment, incorporated report filed pursuant to Section 13 or 15(d) of the Exchange Act or form of prospectus), (iii) at the time the Company or any person acting on its behalf (within the meaning, for this clause only, of Rule 163(c) under the Act) made any offer relating to the Shares in reliance on the exemption of Rule 163 under the Act and (iv) at the date hereof, the Company is a well-known seasoned issuer as defined in Rule 405 under the Act. The Company has not received from the Commission any notice pursuant to Rule 401(g)(2) under the Act objecting to the use of the automatic shelf registration form.
(d) Prior to the execution of this Agreement, the Company has not, directly or indirectly, offered or sold any Shares by means of any prospectus (within the meaning of the Act) or used any prospectus (within the meaning of the Act) in connection with the offer or sale of the Shares, in each case other than the Basic Prospectus, and the Permitted Free Writing Prospectuses, if any; the Company has not, directly or indirectly, prepared, used or referred to any Permitted Free Writing Prospectus except in compliance with Rule 163 or with Rules 164 and 433 under the Act; assuming that such Permitted Free Writing Prospectus is so sent or given after the Registration Statement was filed with the Commission (and after such Permitted Free Writing Prospectus was, if required pursuant to Rule 433(d) under the Act, filed with the Commission), the sending or giving, by the Sales Agent or Forward Seller, of any Permitted Free Writing Prospectus will satisfy the provisions of Rule 164 or Rule 433 (without reliance on subsections (b), (c) and (d) of Rule 164); the conditions set forth in one or more of subclauses (i) through (iv), inclusive, of Rule 433(b)(1) under the Act are satisfied, and the registration statement relating to the offering of the Shares contemplated hereby, as initially filed with the Commission, includes a prospectus that, other than by reason of Rule 433 or Rule 431 under the Act, satisfies the requirements of Section 10 of the Act; none of the Company, the Sales Agent nor the Forward Seller is disqualified, by reason of subsection (f) or (g) of Rule 164 under the Act, from using, in connection with the offer and sale of the Shares, free writing prospectuses (as defined in Rule 405 under the Act) pursuant to Rules 164 and 433 under the Act; the Company is not an ineligible issuer (as defined in Rule 405 under the Act) as of the eligibility determination date for purposes of Rules 164 and 433 under the Act with respect to the offering of the Shares contemplated by the Registration Statement; the parties hereto agree and understand that the content of any and all road shows (as defined in Rule 433 under the Act) related to the offering of the Shares contemplated hereby is solely the property of the Company.
(e) The Company has been duly organized and is validly existing as a corporation in good standing under the laws of the State of Delaware, with corporate power and authority to own its properties and conduct its business as described in the Registration Statement, the Basic Prospectus, the Prospectus and the Permitted Free Writing Prospectuses, if any; the Company is duly qualified to transact business in all jurisdictions in which the conduct of its business requires such qualification, and in which the failure to
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qualify would (a) have a materially adverse effect upon the business of the Company and its subsidiaries, taken as a whole, (b) result in the delisting of shares of Common Stock from the New York Stock Exchange (the NYSE) or (c) prevent or materially interfere with the consummation of the transactions contemplated by this Agreement (each of (a), (b) and (c) above, a Material Adverse Effect).
(f) Each subsidiary of the Company which is a significant subsidiary (each, a Significant Subsidiary) as defined in Rule 1.02 of Regulation S-X has been duly organized and is validly existing and in good standing under the laws of the jurisdiction of its organization and has the power and authority to own its properties and conduct its business as described in the Registration Statement, the Basic Prospectus, the Prospectus and the Permitted Free Writing Prospectuses, if any; each Significant Subsidiary is duly qualified to transact business in all jurisdictions in which the conduct of their business requires such qualification, and in which the failure to qualify would result in a Material Adverse Effect.
(g) The information contained in the line items Preferred Stock and Common Stock set forth in the consolidated balance sheet as of December 31, 2018 or as of the Companys then most recently completed quarter or fiscal year, contained in the Companys quarterly reports on Form 10-Q or the Companys annual report on Form 10-K, as applicable, sets forth the authorized, issued and outstanding capital stock of the Company at the indicated date, and there has been no material change in such information since December 31, 2018 or the Companys then most recently completed quarter or fiscal year; all of the issued shares of capital stock of the Company have been duly and validly authorized and issued and are fully paid and non-assessable; the shares of Common Stock of the Company are duly listed on the NYSE; the Shares to be issued and sold by the Company have been duly authorized and when issued and paid for as contemplated herein will be validly issued, fully-paid and non-assessable; and no preemptive or similar rights of stockholders exist with respect to any of the Shares or the issue and sale thereof.
(h) The Shares of authorized capital stock of the Company, including the Shares, conform in all material respects with the statements concerning them in the Registration Statement, the Basic Prospectus, the Prospectus and the Permitted Free Writing Prospectuses, if any.
(i) The Company has full corporate power and authority to enter into this Agreement, the Master Forward Confirmation and each Supplemental Confirmation executed in connection with the Master Forward Confirmation. Each of this Agreement and the Master Forward Confirmation has been, at the time of execution and delivery thereof, duly authorized, executed and delivered by the Company, and any Supplemental Confirmation executed in connection with the Master Forward Confirmation, at the time of execution and delivery thereof, will have been duly authorized, executed and delivered by the Company. Each of this Agreement and the Master Forward Confirmation constitutes a valid and binding agreement of the Company and are enforceable against the Company in accordance with its terms, except as the enforceability hereof and thereof may be limited by applicable bankruptcy, insolvency, reorganization and similar laws affecting creditors rights generally and moratorium laws in effect from time to time and by equitable
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principles restricting the availability of equitable remedies. Each Supplemental Confirmation executed in connection with the Master Forward Confirmation, at the time of execution and delivery thereof, will constitute a valid and binding agreement of the Company and will be enforceable against the Company in accordance with its terms, except as the enforceability thereof may be limited by applicable bankruptcy, insolvency, reorganization and similar laws affecting creditors rights generally and moratorium laws in effect from time to time and by equitable principles restricting the availability of equitable remedies. Other than the Alternative Distribution Agreements, the Company has not entered into any other sales agency or distribution agreements or similar arrangements with any agent or other representative in respect of the Shares and the equity shelf program established by this Agreement and the Alternative Distribution Agreements.
(j) The Capped Number of Shares of Common Stock deliverable to the Forward Seller pursuant to the Master Forward Confirmation, whether pursuant to Physical Settlement, Net Share Settlement, as a result of an Early Valuation (as such terms are defined in the Master Forward Confirmation) or otherwise, have been duly authorized and reserved for issuance and, when any such shares of Common Stock are issued and delivered by the Company to the Forward Seller pursuant to the Master Forward Confirmation against payment of any consideration required to be paid by the Forward Seller (including, for the avoidance of doubt, any Net Share Settlement thereunder) pursuant to the terms of the Master Forward Confirmation such shares of Common Stock will be validly issued, fully paid and non-assessable, and the issuance thereof is not subject to any preemptive or similar rights.
(k) The financial statements of the Company, together with related notes and schedules, as set forth or incorporated by reference in the Registration Statement, the Basic Prospectus, the Prospectus and the Permitted Free Writing Prospectuses, if any, present fairly in all material respects the consolidated financial position, cash flows and the results of operations of the Company and its subsidiaries at the indicated dates and for the indicated periods. Such financial statements and the related notes and schedules have been prepared in accordance with generally accepted accounting principles, consistently applied throughout the periods involved, and all adjustments necessary for a fair presentation of results for such periods have been made. To the Companys knowledge, the financial statements of Quality Care Properties, Inc. (QCP), together with related notes and schedules, as set forth or incorporated by reference in the Registration Statement, the Basic Prospectus, the Prospectus and the Permitted Free Writing Prospectuses, if any, present fairly in all material respects the consolidated financial position, cash flows and the results of operations of QCP and its subsidiaries at the indicated dates and for the indicated periods. To the Companys knowledge, such financial statements and the related notes and schedules have been prepared in accordance with generally accepted accounting principles, consistently applied throughout the periods involved, and all adjustments necessary for a fair presentation of results for such periods have been made. The summary financial and statistical data included or incorporated by reference in the Registration Statement, the Basic Prospectus, the Prospectus and the Permitted Free Writing Prospectuses, if any, present fairly in all material respects the information shown therein and, to the extent based upon or derived from the financial statements, have been compiled on a basis consistent with the financial statements presented therein. The pro forma financial statements,
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including the notes thereto, included or incorporated by reference in the Registration Statement, the Basic Prospectus, the Prospectus and the Permitted Free Writing Prospectuses, if any, include assumptions that provide a reasonable basis for presenting the significant effects directly attributable to the transactions and events described therein, the related pro forma adjustments give appropriate effect to those assumptions, and the pro forma adjustments reflect the proper application of those adjustments to the historical financial statement amounts in the pro forma financial statements included or incorporated by reference in the Registration Statement, the Basic Prospectus, the Prospectus and the Permitted Free Writing Prospectuses, if any. The pro forma financial statements, including the notes thereto, included or incorporated by reference in the Registration Statement, the Basic Prospectus, the Prospectus, and the Permitted Free Writing Prospectuses, if any, comply as to form in all material respects with the applicable accounting requirements of Regulation S-X under the Securities Act and the pro forma adjustments have been properly applied to the historical amounts in the compilation of those statements. All disclosures contained in the Registration Statement, the Basic Prospectus, the Prospectus and the Permitted Free Writing Prospectuses, if any, including the documents incorporated by reference therein, regarding non-GAAP financial measures (as such term is defined by the Rules and Regulations) comply in all material respects with Regulation G of the Exchange Act and Item 10 of Regulation S-K under the Act, to the extent applicable. Other than the financial statements, together with related notes and schedules, included or incorporated by reference in the Registration Statement, the Basic Prospectus, the Prospectus and the Permitted Free Writing Prospectuses, if any, no other historical or pro forma financial statements or supporting schedules are required to be included or incorporated by reference in the Registration Statement, the Basic Prospectus, the Prospectus and the Permitted Free Writing Prospectuses, if any, under the Act or the Exchange Act.
(l) There is no action or proceeding pending or, to the knowledge of the Company, threatened (a) against the Company or its subsidiaries or (b) involving any property of the Company or its subsidiaries before any court or administrative agency which, if determined adversely to the Company or its subsidiaries, might reasonably be expected to result in any Material Adverse Effect, except as set forth in the Registration Statement, the Basic Prospectus, the Prospectus and the Permitted Free Writing Prospectuses, if any.
(m) The Company and its subsidiaries possess all certificates, authorizations and permits issued by the appropriate federal, state or foreign regulatory authorities necessary to conduct their respective businesses, and neither the Company nor any of its subsidiaries has received any notice of proceedings relating to the revocation or modification of any such certificate, authorization or permit which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would have a Material Adverse Effect, except as described in the Registration Statement, the Basic Prospectus, the Prospectus and the Permitted Free Writing Prospectuses.
(n) The Company, together with its subsidiaries, has good and marketable title to all of the properties and assets reflected in the financial statements hereinabove described (or as described in the Registration Statement, the Basic Prospectus, the Prospectus and the
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Permitted Free Writing Prospectuses, if any, as owned by it), subject to no lien, mortgage, pledge, charge or encumbrance of any kind except those reflected in such financial statements (or as described in the Registration Statement, the Basic Prospectus, the Prospectus and the Permitted Free Writing Prospectuses, if any) or which are not material in amount or which do not materially interfere with the use made or proposed to be made of the property. The leases, agreements to purchase and mortgages to which the Company or any of its subsidiaries is a party, and the guaranties of third parties (a) are the legal, valid and binding obligations of the Company, its subsidiaries and, to the knowledge of the Company, of all other parties thereto, and the Company knows of no default or defenses currently existing with respect thereto which might reasonably be expected to result in any Material Adverse Effect, and (b) conform to any descriptions thereof set forth in the Registration Statement, the Basic Prospectus, the Prospectus and the Permitted Free Writing Prospectuses, if any. To the knowledge of the Company, each mortgage which the Company or any of its subsidiaries holds on the properties described in the Registration Statement, the Basic Prospectus, the Prospectus and the Permitted Free Writing Prospectuses, if any, constitutes a valid mortgage lien for the benefit of the Company or its subsidiary, as the case may be, on such property.
(o) The Company has filed all federal, state and foreign tax returns which have been required to be filed or has requested extensions thereof, except in any case in which the failure to file would not have a Material Adverse Effect, and has paid all taxes indicated by said returns to the extent that such taxes have become due and are not being contested in good faith, except in any case in which the failure to pay would not have a Material Adverse Effect. All tax liabilities have been adequately provided for in the financial statements of the Company in accordance with GAAP.
(p) Since the respective dates as of which information is given in the Registration Statement, the Basic Prospectus, the Prospectus and the Permitted Free Writing Prospectuses, if any, there has not been any material adverse change or any development involving a prospective material adverse change in or affecting the condition, financial or otherwise, of the Company or the earnings, capital stock (except to the extent of any increase in the number of issued and outstanding shares of Common Stock due to option exercises, issuances under the Companys Fifth Amended and Restated Dividend Reinvestment and Stock Purchase Plan and conversions of preferred stock), business affairs, management, or business prospects of the Company, whether or not occurring in the ordinary course of business, and the Company has not incurred any material liabilities or obligations and there has not been any material transaction entered into by the Company, other than transactions in the ordinary course of business and transactions described in the Registration Statement, the Basic Prospectus, the Prospectus and the Permitted Free Writing Prospectuses, if any. The Company has no material contingent obligations which are not disclosed in the Registration Statement, the Basic Prospectus, the Prospectus and the Permitted Free Writing Prospectuses, if any.
(q) The Company is not in violation of its charter or by-laws. No subsidiary is in violation of its charter or by-laws, which violation will have, or after any required notice and passage of any applicable grace period would have, a Material Adverse Effect. Neither the Company nor any of its subsidiaries is (a) in default under any agreement, lease,
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contract, indenture or other instrument or obligation to which it is a party or by which it or any of its properties is bound, (b) in violation of any statute, or (c) in violation of any order, rule or regulation applicable to the Company, its subsidiaries or its properties, of any court or of any regulatory body, administrative agency or other governmental body, any of which defaults or violations described in clauses (a) through (c) will have, or after any required notice and passage of any applicable grace period would have, a Material Adverse Effect. The issue and sale of the Shares and the performance by the Company of all of its obligations under this Agreement, the Master Forward Confirmation and any Supplemental Confirmation executed in connection with the Master Forward Confirmation and the consummation of the transactions herein and therein contemplated (including, without limitation, the issuance of up the Capped Number of Shares of Common Stock upon settlement of any transaction under the Master Forward Confirmation) and the fulfillment of the terms hereof will not after any required notice and passage of any applicable grace period conflict with or constitute a violation of any statute or conflict with or result in a breach of any of the terms or provisions of, constitute a default under or result in the imposition of any lien pursuant to, any indenture, mortgage, deed of trust or other agreement or instrument to which the Company, or any of its subsidiaries, is a party or by which it or any of its properties may be bound, or a violation of its charter or by-laws or any order, rule or regulation applicable to the Company, its subsidiaries or its properties of any court or of any regulatory body, administrative agency or other governmental body.
(r) Each approval, consent, order, authorization, designation, declaration or filing by or with any regulatory, administrative or other governmental body necessary in connection with the execution and delivery by the Company of this Agreement and the consummation of the transactions herein contemplated (except such additional steps as may be required by the Commission, the Financial Industry Regulatory Authority, Inc. (FINRA) or may be necessary to qualify the Shares for public offering by the Sales Agent and the Forward Seller under state securities or Blue Sky laws) has been obtained or made by the Company, and is in full force and effect.
(s) The Company and its subsidiaries hold all material licenses, certificates and permits from governmental authorities which are necessary to the conduct of their businesses and neither the Company nor any of its subsidiaries have received any notice of infringement or of conflict with asserted rights of others with respect to any patents, patent rights, trade names, trademarks or copyrights, which infringement is material to the business of the Company and its subsidiaries.
(t) The Company qualifies as a real estate investment trust pursuant to Sections 856 through 860 of the Code, has so qualified for the taxable years ended December 31, 1984 through December 31, 2018, and no transaction or other event has occurred or is contemplated which would prevent the Company from so qualifying for its current taxable year.
(u) To the best of the Companys knowledge, Ernst & Young LLP ( Ernst & Young), who has certified certain of the financial statements and related schedules of the Company filed with the Commission as part of, or incorporated by reference in, the
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Registration Statement, the Basic Prospectus, the Prospectus and the Permitted Free Writing Prospectuses, if any, is an independent registered public accounting firm with respect to the Company as required by the Act and the Rules and Regulations and the Public Company Accounting Oversight Board (the PCAOB). Each other independent registered public accounting firm, if any, that has certified or reported on any other financial statements included or incorporated by reference in the Registration Statement, the Basic Prospectus, the Prospectus or the Permitted Free Writing Prospectus, if any, is an independent registered public accounting firm with respect to the Company and its subsidiaries or other appropriate entity, as applicable, within the applicable rules and regulations adopted by the Commission and the PCAOB and as required by the Act.
(v) To the best of the Companys knowledge, Deloitte & Touche LLP (Deloitte), who has certified certain of the financial statements and related schedules of QCP filed with the Commission as part of, or incorporated by reference in, the Registration Statement, the Basic Prospectus, the Prospectus and the Permitted Free Writing Prospectuses, if any, is an independent registered public accounting firm with respect to QCP as required by the Act and the Rules and Regulations and the PCAOB.
(w) The Company and its subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with managements 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; (iii) access to assets is permitted only in accordance with managements general or specific authorization; and (iv) the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences.
(x) The Company has established and maintains disclosure controls and procedures (as such term is defined in Rules 13a-15 and 15d-15 under the Exchange Act); such disclosure controls and procedures are designed to ensure that material information relating to the Company, including its subsidiaries, is made known to the Companys Chief Executive Officer and its Chief Financial Officer by others within those entities, and such disclosure controls and procedures are effective to perform the functions for which they were established; the Companys auditors and the Audit Committee of the Board of Directors of the Company have been advised of: (a) any significant deficiencies in the design or operation of internal controls which could adversely affect the Companys ability to record, process, summarize, and report financial data; and (b) any fraud, whether or not material, that involves management or other employees who have a role in the Companys internal controls; any material weaknesses in internal controls have been identified for the Companys auditors; and since the date of the most recent evaluation of such disclosure controls and procedures, there have been no significant changes in internal controls or in other factors that could significantly affect internal controls, including any corrective actions with regard to significant deficiencies and material weaknesses.
(y) The Company has not, directly or indirectly, including through any subsidiary: (a) extended credit, arranged to extend credit, or renewed any extension of credit, in the form of a personal loan, to or for any director or executive officer of the Company, or to or for any family member or affiliate of any director or executive officer of the Company; or (b) made any material modification, including any renewal thereof, to any term of any personal loan to any director or executive officer of the Company, or any family member or affiliate of any director or executive officer.
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(z) To the knowledge of the Company, after inquiry of its officers and directors, there are no affiliations with any FINRA member firm among the Companys officers, directors, or principal stockholders, except as set forth in the Registration Statement, the Basic Prospectus, the Prospectus and the Permitted Free Writing Prospectuses, if any, or as otherwise disclosed in writing to the Sales Agent, the Forward Seller and the Forward Purchaser.
(aa) Neither the Company nor any of its officers or directors has taken nor will any of them take, directly or indirectly, any action resulting in a violation of Regulation M promulgated under the Exchange Act, or designed to cause or result in, or which has constituted or which reasonably might be expected to constitute, the stabilization or manipulation of the price of the Companys Common Stock.
(bb) The Shares (including, in respect of any Forward, a number of shares of Common Stock at least equal to the Capped Number) have been, or as of the Closing Date will be, approved for listing subject to official notice of issuance on the NYSE.
(cc) In connection with entering into any Forward Contract, the Company will not acquire any long position (either directly or indirectly, including through an Affiliate or through a derivative transaction) with respect to shares of Common Stock.
(dd) The Company is not and, after giving immediate effect to the offering and sale of the Shares and the application of the proceeds thereof as described in the Registration Statement and the Prospectus and the consummation of the transactions contemplated by the Master Forward Confirmation and each Supplemental Confirmation executed in connection with the Master Forward Confirmation and any proceeds received under the Forward Contract, will not be required to register as an investment company or an entity controlled by an investment company within the meaning of the Investment Company Act.
(ee) (A) There has been no material security breach or incident, unauthorized access or disclosure, or other compromise of or relating to the Companys or its subsidiaries information technology and computer systems, networks, hardware, software, data and databases (including the data and information of their respective customers, employees, suppliers, vendors and any third party data maintained, processed or stored by the Company or its subsidiaries, and any such data processed or stored by third parties on behalf of the Company or its subsidiaries), equipment or technology (collectively, IT Systems and Data) within the five year period prior to the date of this Agreement: (B) neither the Company nor its subsidiaries have been notified within the five year period prior to the date of this Agreement of, and have no knowledge of any event or condition that would result in, any material security breach or incident, unauthorized access or disclosure or other compromise to their IT Systems and Data and (C) the Company and its subsidiaries have implemented appropriate controls, policies, procedures, and technological safeguards to maintain and protect the integrity, continuous operation, redundancy and security of their IT Systems and Data reasonably consistent in all material respects with industry standards and practices, or as required by applicable regulatory standards. The Company and its subsidiaries are presently in compliance in all material
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respects with all applicable laws or statutes and all judgments, orders, rules and regulations of any court or arbitrator or governmental or regulatory authority, internal policies and contractual obligations relating to the privacy and security of IT Systems and Data and to the protection of such IT Systems and Data from unauthorized use, access, misappropriation or modification.
(ff) The Common Stock is an actively-traded security excepted from the requirements of Rule 101 of Regulation M under the Exchange Act by subsection (c)(1) of such rule.
(gg) All existing minute books of the Company, including all existing minutes of all meetings and actions of the board of directors (including Audit, Compensation, Executive, Nominating/Corporate Governance and other board committees) and stockholders of the Company through the date of the latest meeting and action (collectively, the Corporate Records) have been made available to the Sales Agent, the Forward Seller and the Forward Purchaser and counsel to the Sales Agent, the Forward Seller and the Forward Purchaser. All such Corporate Records are complete and accurate and accurately reflect, in all material respects, all transactions referred to in such Corporate Records. There are no material transactions, agreements or other actions of the Company and its subsidiaries that are not properly approved or recorded in the Corporate Records.
(hh) Neither the Company nor any of its subsidiaries nor, to the knowledge of the Company, any director, officer, agent, employee, affiliate or other person acting on behalf of the Company or any of its subsidiaries is aware of or has taken any action, directly or indirectly, that has resulted or would result in a violation of the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder (the FCPA), including, without limitation, making use of the mails or any means or instrumentality of interstate commerce corruptly in furtherance of an offer, payment, promise to pay or authorization of the payment of any money, or other property, gift, promise to give, or authorization of the giving of anything of value to any foreign official (as such term is defined in the FCPA) or any foreign political party or official thereof or any candidate for foreign political office, in contravention of the FCPA; and the Company and its subsidiaries and, to the knowledge of the Company, the Companys affiliates have conducted their respective businesses in compliance with the FCPA and have instituted and maintain policies and procedures designed to ensure, and which are reasonably expected to continue to ensure, continued compliance therewith.
(ii) The operations of the Company and its subsidiaries are, and have been conducted at all times, in compliance with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the money laundering statutes of all applicable jurisdictions, the rules and regulations thereunder and any related or similar applicable rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, the Money Laundering Laws), and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any of its subsidiaries with respect to the Money Laundering Laws is pending or, to the best knowledge of the Company, threatened.
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(jj) Neither the Company nor any of its subsidiaries nor, to the knowledge of the Company, any director, officer, agent, employee, affiliate or person acting on behalf 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. Treasury Department (OFAC); and the Company will not directly or indirectly use the proceeds from the sale of the Shares or the proceeds, if any, due upon settlement of any Forward Contract, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity, for the purpose of financing the activities of any person currently subject to any U.S. sanctions administered by OFAC.
(kk) The interactive data in eXtensibile Business Reporting Language included or incorporated by reference in the Registration Statement fairly presents the information called for in all material respects and has been prepared in accordance with the Commissions rules and guidelines applicable thereto.
In addition, any certificate signed by any officer of the Company or any of the subsidiaries and delivered to the Sales Agent, the Forward Seller and the Forward Purchaser or counsel for the Sales Agent, the Forward Seller and the Forward Purchaser in connection with the offering of the Shares shall be deemed to be a representation and warranty by the Company, as to matters covered thereby, to the Sales Agent, the Forward Seller and the Forward Purchaser.
SECTION 3. Issuances and Forwards.
(a) (i) Upon the terms and subject to the conditions of this Agreement, the Company may issue Issuance Shares through Sales Agent, and Sales Agent shall use commercially reasonable efforts consistent with its normal trading and sales practices to sell Issuance Shares, with an aggregate Sales Price of up to the Maximum Amount, less the aggregate Sales Price for any Forward Hedge Shares previously sold under the Distribution Agreements, based on and in accordance with such number of Transaction Notices, each specifying that it relates to an Issuance, as the Company in its sole discretion shall choose to deliver during the Commitment Period until the aggregate Sales Price of the Issuance Shares sold under the Distribution Agreements, plus the aggregate Sales Prices for any Forward Hedge Shares previously sold under the Distribution Agreements, equals the Maximum Amount, or this Agreement is otherwise terminated. Subject to the foregoing and the other terms and conditions of this Agreement, upon (1) the delivery of a Transaction Notice specifying that it relates to an Issuance, and (2) Sales Agents acceptance of the terms of such Transaction Notice, and unless the sale of the Issuance Shares described therein has been suspended, cancelled or otherwise terminated in accordance with the terms of this Agreement, Sales Agent will use commercially reasonable efforts consistent with its normal trading and sales practices to sell such Issuance Shares up to the amount specified into the NYSE, and otherwise in accordance with the terms of such Transaction Notice. Sales Agent will use commercially reasonable efforts consistent with its normal trading and sales practices to provide written confirmation to the Company not later than 6:00 p.m. Eastern Time on the Issuance Date, and will in no event provide such confirmation later than the opening of the Trading Day next following the Trading Day on which it has made sales of Issuance Shares hereunder. Such written confirmation will set forth the portion of the Actual Sold Issuance Amount for such Trading Day, the corresponding Sales Price and the Issuance Price payable to the Company in respect thereof. The Company
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acknowledges and agrees that (i) there can be no assurance that Sales Agent will be successful in selling Issuance Shares, and (ii) Sales Agent will incur no liability or obligation to the Company or any other person if it does not sell Issuance Shares for any reason other than a failure by Sales Agent to use commercially reasonable efforts consistent with its normal trading and sales practices to sell such Issuance Shares as required under this Section 3.
(ii) In addition, upon the terms and subject to the conditions of this Agreement and the Master Forward Confirmation, the Forward Purchaser may borrow, offer and sell Forward Hedge Shares through the Forward Seller to hedge each Forward, and the Forward Seller shall use commercially reasonable efforts consistent with its normal trading and sales practices to sell Forward Hedge Shares with an aggregate Sales Price of up to the Maximum Amount, less the aggregate Sales Price for any Issuance Shares previously sold under the Distribution Agreements, based on and in accordance with such number of Transaction Notices, each specifying that it relates to a Forward, as the Company in its sole discretion shall choose to deliver during the Commitment Period until the aggregate Sales Price of the Forward Hedge Shares sold under the Distribution Agreements, plus the aggregate Sales Prices for any Issuance Shares previously sold under the Distribution Agreements, equals the Maximum Amount or this Agreement is otherwise terminated. Subject to the foregoing and the other terms and conditions of this Agreement and the Master Forward Confirmation, upon (1) the delivery of a Transaction Notice specifying that it relates to a Forward, and (2) Forward Purchaser and Forward Sellers acceptance of the terms of such Transaction Notice, and unless the sale of the Forward Hedge Shares described therein has been suspended or otherwise terminated in accordance with the terms of this Agreement or the Master Forward Confirmation (including without limitation as a result of any event described in clause (a) or (b) of the proviso contained in the definition of Forward Hedge Selling Period), the Forward Purchaser will use commercially reasonable efforts consistent with its normal trading and sales practices to borrow Forward Hedge Shares up to the amount specified and the Forward Seller will use commercially reasonable efforts consistent with its normal trading and sales practices to sell such Forward Hedge Shares into the NYSE, and otherwise in accordance with the terms of such Transaction Notice.
(iii) The Forward Seller will provide written confirmation to the Company and the Forward Purchaser no later than the opening of the Trading Day next following each Trading Day on which it has made sales of Forward Hedge Shares hereunder setting forth the number of Forward Hedge Shares sold on such Trading Day, the corresponding Sales Price and the Forward Hedge Price payable to the Forward Purchaser in respect thereof. Each of the Company and the Forward Purchaser acknowledges and agrees that: (A) there can be no assurance that the Forward Purchaser will be successful in borrowing or that the Forward Seller will be successful in selling Forward Hedge Shares; (B) the Forward Seller will incur no liability or obligation to the Company, the Forward Purchasers, or any other person if it does not sell Forward Hedge Shares borrowed by the Forward Purchaser
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for any reason other than a failure by the Forward Seller to use commercially reasonable efforts consistent with its normal trading and sales practices to sell such Forward Hedge Shares as required under this Section 3 and (C) the Forward Purchaser will incur no liability or obligation to the Company, the Forward Seller, or any other person if it does not borrow Forward Hedge Shares for any reason other than a failure by the Forward Purchaser to use commercially reasonable efforts consistent with its normal trading and sales practices to borrow such Forward Hedge Shares as required under this Section 3. In acting hereunder, the Forward Seller will be acting as agent for the Forward Purchaser and not as principal.
(iv) No later than the opening of the Trading Day next following the last Trading Day of each Forward Hedge Selling Period (or, if earlier, the date on which any Forward Hedge Selling Period is suspended or terminated pursuant to Section 3(h)), the Forward Purchaser shall execute and deliver to the Company a Supplemental Confirmation in respect of the Forward for such Forward Hedge Selling Period, which Supplemental Confirmation shall set forth the Trade Date for such Forward (which shall, subject to the terms of the Master Forward Confirmation, be the last Trading Day of such Forward Hedge Selling Period), the Effective Date for such Forward (which shall, subject to the terms of the Master Forward Confirmation, be the date one Settlement Cycle (as such term is defined in the Master Forward Confirmation) immediately following the last Trading Day of such Forward Hedge Selling Period), the initial Number of Shares for such Forward (which shall be the Actual Sold Forward Amount for such Forward Hedge Selling Period), the Maturity Date for such Forward (which shall, subject to the terms of the Master Forward Confirmation, be the date that follows the last Trading Day of such Forward Hedge Selling Period by the number of days or months set forth opposite the caption Term in the Transaction Notice for such Forward, which number of days or months shall in no event be less than three months nor more than two years), the Initial Forward Price for such Forward, the Spread for such Forward, the Volume-Weighted Hedge Price for such Forward, the Threshold Price for such Forward, the Initial Stock Loan Rate for such Forward, the Maximum Stock Loan Rate for such Forward, the Forward Price Reduction Dates for such Forward (which shall be each of the dates set forth below the caption Forward Price Reduction Dates in the Transaction Notice for such Forward) and the Forward Price Reduction Amounts corresponding to such Forward Price Reduction Dates (which shall be each amount set forth opposite each Forward Price Reduction Date and below the caption Forward Price Reduction Amounts in the Transaction Notice for such Forward) and the Regular Dividend Amounts for such Forward (which shall be each of the amount(s) set forth below the caption Regular Dividend Amounts in the Transaction Notice for such Forward).
(v) Notwithstanding anything herein to the contrary, the Forward Purchasers obligation to use commercially reasonable efforts to borrow all or any portion of the Forward Hedge Shares (and the Forward Sellers obligation to use commercially reasonable efforts consistent with its normal trading and sales practices to sell such portion of the Forward Hedge Shares)
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for any Forward hereunder shall be subject in all respects to the Master Forward Confirmation.
(vi) The Shares may be offered and sold by any method permitted by law, including by means of ordinary brokers transactions on the NYSE at the market prices, in block transactions, or as otherwise agreed with the applicable sales agent, or by means of any other existing trading market for our common stock or to or through a market marker other than on an exchange.
(vii) Upon the terms and subject to the conditions set forth herein, on any Trading Day as provided in Section (c)(ii) hereof during the Commitment Period on which (A) the conditions set forth in paragraphs (a) and (b) of Section 6 have been satisfied and (B) no event described in clause (a) or clause (b) of the proviso contained in the definition of Forward Hedge Selling Period shall have occurred, the Company may exercise an Issuance by the delivery of a Transaction Notice specifying that it relates to an Issuance, executed by the Chief Executive Officer, the Chief Financial Officer, the Treasurer, the Secretary or any Vice President of the Company (or such other authorized officers of the Company as may be acceptable to the Sales Agent and the Forward Seller), to Sales Agent. The number of Issuance Shares that Sales Agent shall use commercially reasonable efforts consistent with its normal trading and sales practices to sell pursuant to such Issuance shall have an aggregate Sales Price equal to the Issuance Amount. Each Issuance will be settled on the applicable Settlement Date following the Issuance Date.
(viii) Upon the terms and subject to the conditions set forth herein, on any Trading Day as provided in Section (c)(ii) during the Commitment Period on which the conditions set forth in paragraphs (a) and (b) of Section 6 have been satisfied, the Company may exercise its right to call for a Forward by the delivery of a Transaction Notice specifying that it relates to a Forward, executed by the Chief Executive Officer, the Chief Financial Officer, the Treasurer, the Secretary or any Vice President of the Company (or such other authorized officers of the Company as may be acceptable to the Sales Agent and the Forward Seller), to the Forward Seller and the Forward Purchaser. The number of Forward Hedge Shares that the Forward Purchaser shall use commercially reasonable efforts consistent with its normal trading and sales practices to borrow and that the Forward Seller shall use commercially reasonable efforts consistent with its normal trading and sales practices to sell pursuant to such Forward shall have an aggregate Sales Price equal to the Forward Hedge Amount. Each sale of Forward Hedge Shares will be settled as between the Forward Seller and the Forward Purchaser on each applicable Forward Hedge Settlement Date following the relevant Forward Date.
(b) The effectiveness of this Agreement (the Closing) shall be deemed to take place concurrently with the execution and delivery of this Agreement by the parties hereto and the completion of the closing transactions set forth in the immediately following sentence. At the Closing, the following closing transactions shall take place, each of which
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shall be deemed to occur simultaneously with the Closing: (i) the Company shall deliver to the Sales Agent, the Forward Seller and the Forward Purchaser a certificate executed by any two of the following: the Chief Executive Officer, the Chief Financial Officer, the Treasurer, the Secretary or any Vice President of the Company (or such other authorized officers of the Company as may be acceptable to the Sales Agent, the Forward Seller and the Forward Purchaser), signing in such capacity, dated the date of the Closing, certifying that attached thereto are true and complete copies of the resolutions duly adopted by the Board of Directors of the Company authorizing the execution and delivery of this Agreement, the Master Forward Confirmation and the consummation of the transactions contemplated hereby and thereby, which authorization shall be in full force and effect on and as of the date of such certificate and; (ii) the Company shall deliver to the Sales Agent, the Forward Seller and the Forward Purchaser a certificate executed by any two of the following: the Chief Executive Officer, the Chief Financial Officer, the Treasurer, the Secretary or any Vice President of the Company (or such other authorized officers of the Company as may be acceptable to the Sales Agent, the Forward Seller and the Forward Purchaser), signing in such capacity, dated the date of the Closing, confirming that the representations and warranties of the Company contained in this Agreement and the Master Forward Confirmation are true and correct and that the Company has performed all of its obligations hereunder to be performed on or prior to the Closing Date and as to the matters set forth in Section 6(a)(i) hereof; (iii) Gibson, Dunn & Crutcher LLP, counsel to the Company (Company Counsel), or other counsel satisfactory to the Sales Agent, the Forward Seller and the Forward Purchaser, shall deliver to the Sales Agent, the Forward Seller and the Forward Purchaser a written opinion, dated the date of the Closing, and addressed to the Sales Agent, the Forward Seller and the Forward Purchaser, in form and substance satisfactory to the Sales Agent, the Forward Seller and the Forward Purchaser, of the same tenor as the opinions referred to in Section 6(c) of this Agreement; (iv) Sidley Austin LLP, counsel to the Sales Agent, the Forward Seller and the Forward Purchaser shall deliver to the Sales Agent, the Forward Seller and the Forward Purchaser a written opinion, dated the date of the Closing, and addressed to the Sales Agent, the Forward Seller and the Forward Purchaser, in form and substance satisfactory to the Sales Agent, the Forward Seller and the Forward Purchaser; (v) Ernst & Young shall deliver to the Sales Agent, the Forward Seller and the Forward Purchaser a letter, dated the Closing Date, in form and substance satisfactory to the Sales Agent, the Forward Seller and the Forward Purchaser; (vi) Deloitte shall deliver to the Sales Agent, the Forward Seller and the Forward Purchaser a letter, dated the Closing Date, in form and substance satisfactory to the Sales Agent, the Forward Seller and the Forward Purchaser; and (vii) the Company shall pay the expenses set forth in Section 5(d), (e) and (i) hereof by wire transfer to the account designated by Sales Agent in writing prior to the Closing.
(c) (i) On any Trading Day during the Commitment Period, the Company may deliver a Transaction Notice to Sales Agent (in the case of an Issuance) or the Forward Seller and the Forward Purchaser (in the case of a Forward), subject to the satisfaction of the conditions set forth in Section 6; provided, however, that (1) the Issuance Amount or Forward Hedge Amount, as the case may be, for each Transaction as designated by the Company in the applicable Transaction Notice shall in no event exceed $100,000,000 for any Issuance or Forward, as the case may be, without the prior written consent of the Sales Agent or the Forward Seller, as applicable, which may be withheld in the Sales Agents or
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the Forward Sellers sole discretion and (2) notwithstanding anything in this Agreement or the Master Forward Confirmation to the contrary, none of the Forward Purchaser, the Sales Agent or the Forward Seller shall have any further obligations with respect to any Transaction Notice if and to the extent the aggregate Sales Price of the Shares sold pursuant thereto, together with the aggregate Sales Price of the Shares previously sold under the Distribution Agreements, shall exceed the Maximum Amount. The Company shall have the right, in its sole discretion, to amend at any time and from time to time any Transaction Notice subject to compliance with the limitations set forth in this Agreement; provided, however, that (i) the Company may not amend the Issuance Amount or Forward Hedge Amount, as the case may be, if such amended Issuance Amount or Forward Hedge Amount, as applicable, is less than the Actual Sold Issuance Amount or Actual Sold Forward Amount, as the case may be, as of the date of such amendment; (ii) the Company may not amend the Number of Days in the Issuance Selling Period or Number of Days in the Forward Hedge Selling Period, as the case may be, if such amended Number of Days in the Issuance Selling Period or Number of Days in the Forward Hedge Selling Period, as applicable, is less than the number of days that have previously transpired (in whole or on part) in such Selling Period as of the date of such amendment; (iii) the Company shall not have the right to amend a Transaction Notice initially specifying that it relates to a Forward to be a Transaction Notice specifying that it relates to an Issuance; (iv) the Company shall not have the right to amend a Transaction Notice initially specifying that it relates to an Issuance to be a Transaction Notice specifying that it relates to a Forward; and (v) no increase in the Floor Price shall cause any sales of Shares executed pursuant to such Transaction Notice prior to the date of receipt of such amendment to be a breach of the terms hereof.
(ii) A Transaction Notice shall be deemed delivered on the Trading Day that it is received by e-mail notice (or other method mutually agreed to in writing by the parties) by the Sales Agent (in the case of an Issuance) or the Forward Seller and the Forward Purchaser (in the case of a Forward). No Transaction Notice may be delivered other than on a Trading Day during the Commitment Period, no Transaction Notice may be delivered during an Issuance Selling Period or Forward Hedge Selling Period specified in a previously delivered Transaction Notice, no more than one Transaction Notice may be delivered on any single Trading Day and no Transaction Notice specifying that it relates to a Forward may be delivered if either (x) an ex-dividend date or ex-date, as applicable, for any dividend or distribution payable by the Company on the Common Stock is scheduled to occur during the period from, and including, the first scheduled Trading Day of the related Forward Hedge Selling Period to, and including, the last scheduled Trading Day of such Forward Hedge Selling Period, or (y) such Transaction Notice, together with all prior Transaction Notices delivered by the Company relating to a Forward hereunder and under any other Alternative Distribution Agreements, would result in the aggregate Capped Number under all Forward Contracts entered into or to be entered into between the Company and the Forward Purchaser and any Forward Contracts entered into between the Company and any other Alternative
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Sales Agent exceeding 19.99% of the number of shares of Common Stock outstanding as of the date of this Agreement.
(iii) Neither the Sales Agent nor the Forward Seller shall sell Issuance Shares or Forward Hedge Shares, as the case may be, below the Floor Price during any Selling Period, and, subject to clause (iii) of the proviso to the last sentence of Section 3(c), such Floor Price may be adjusted by the Company at any time during any Selling Period upon written notice to the Sales Agent or the Forward Seller, as the case may be, and confirmation to the Company by the Sales Agent or the Forward Seller, as the case may be.
(iv) The Company consents to the Sales Agent trading in the Companys Common Stock for the Sales Agents own account and the Forward Seller trading in the Companys Common Stock for the Forward Purchasers own account and, in each case, for the account of its respective clients at the same time as sales of Shares occur pursuant to this Agreement; provided, however, that such consent is expressly limited to trading activity that complies with applicable federal and state laws, rules and regulations.
(d) (i) Subject to the provisions of Section 5, on or before each Issuance Settlement Date, the Company will, or will cause its transfer agent to, electronically transfer the Issuance Shares being sold by crediting the Sales Agent or its designees account at The Depository Trust Company through its Deposit/Withdrawal At Custodian System (DWAC), or by such other means of delivery as may be mutually agreed upon by the parties hereto and, upon receipt of such Issuance Shares, which in all cases shall be freely tradable, transferable, registered shares in good deliverable form, the Sales Agent will deliver the related Issuance Price in same day funds delivered to an account designated by the Company prior to the Issuance Settlement Date. If the Company defaults in its obligation to deliver Issuance Shares on an Issuance Settlement Date, the Company agrees that it will (A) hold the Sales Agent harmless against any loss, claim, damage or expense (including, without limitation, reasonable legal fees and expenses), as incurred, arising out of or in connection with such default by the Company, and (B) pay to the Sales Agent any Issuance Selling Commission to which it would otherwise have been entitled absent such default. The parties acknowledge and agree that, in performing its obligations under this Agreement, the Sales Agent may borrow shares of Common Stock from stock lenders, and may use the Issuance Shares to settle or close out such borrowings.
(ii) Subject to the provisions of Section 5, on or before each Forward Hedge Settlement Date, the Forward Purchaser shall, or shall cause its transfer agent to, electronically transfer the Forward Hedge Shares being sold by crediting the Forward Seller or its designees account at The Depository Trust Company through DWAC, or by such other means of delivery as may be mutually agreed upon by the Forward Seller and the Forward Purchaser and, upon receipt of such Forward Hedge Shares, which in all cases shall be freely tradable and transferable, the Forward Seller shall deliver the related aggregate Forward Hedge Price to the Forward Purchaser in same day funds to an account designated by the Forward Purchaser prior to the relevant Forward Hedge Settlement Date.
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(e) None of the Company, the Sales Agent, the Forward Purchaser or the Forward Seller has prepared, used, referred to or distributed, or will prepare, use, refer to or distribute, without the other partys prior written consent, which consent shall not be unreasonably withheld, any written communication which constitutes a free writing prospectus as such terms are defined in Rule 405 under the Securities Act with respect to the offering of Shares contemplated by this Agreement.
(f) The Company agrees that any offer to sell, any solicitation of an offer to buy, or any sales of Shares or any other equity security of the Company shall only be effected by the Sales Agent, the Forward Seller, or any Alternative Sales Agent on any single given day, but in no event by more than one, and the Company shall in no event request that the Sales Agent or the Forward Seller and any Alternative Sales Agent sell Shares on the same day.
(g) The Company agrees that if any party has reason to believe that the exemptive provisions set forth in Rule 101(c)(1) of Regulation M under the Exchange Act are not satisfied with respect to the Shares, it shall promptly notify the other parties and sales of the Shares under this Agreement and any Alternative Distribution Agreement shall be suspended until that or other exemptive provisions have been satisfied in the reasonable judgment of all parties.
(h) The Company, the Sales Agent, the Forward Seller or the Forward Purchaser may, upon notice to the other parties in writing or by telephone (confirmed immediately by verifiable facsimile transmission), suspend any sale of Shares, and the applicable Selling Period shall immediately terminate; provided, however, that such suspension and termination shall not affect or impair any partys obligations with respect to any Shares sold hereunder prior to the receipt of such notice (and, in the case of any Forward Hedge Shares, the resulting Forward Contract).
(i) Notwithstanding any other provision of this Agreement or the Master Forward Confirmation, in the event the Company engages the Sales Agent or the Forward Seller for a sale of Shares that would constitute a distribution within the meaning of Rule 100 of Regulation M under the Exchange Act, the Company and the Sales Agent or the Forward Seller, as the case may be, will agree to compensation that is customary for the Sales Agent or the Forward Seller, as the case may be, with respect to such transactions.
(j) Notwithstanding any other provision of this Agreement, the Sales Agent and the Forward Seller shall not be obligated to sell, and the Forward Purchaser shall not be obligated to borrow and deliver to the Forward Seller, any Shares hereunder during any period in which the Company is, or could be deemed to be, in possession of material non-public information.
(k) Notwithstanding any other provision of this Agreement, any notice required to be delivered by the Company or by an Agent (in the case of an Issuance) or the Forward Seller and the Forward Purchaser (in the case of a Forward) pursuant to this Section 3 may be delivered by telephone (confirmed promptly by facsimile or email), which confirmation
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will be promptly acknowledged by the receiving party) or other method mutually agreed to in writing by the parties.
SECTION 4. Covenants of the Company. The Company agrees during the term of this Agreement and the Master Forward Confirmation (including the term of each Supplemental Confirmation executed in connection with the Master Forward Confirmation) with the Sales Agent, the Forward Seller and the Forward Purchaser:
(a) During the period in which a prospectus relating to the Shares is required to be delivered under the Act (whether physically, deemed to be delivered pursuant to Rule 153 or through compliance with Rule 172 under the Act or any similar rule), to notify the Sales Agent, the Forward Seller and the Forward Purchaser promptly of the time when any subsequent amendment to the Registration Statement has become effective or any subsequent supplement to any Basic Prospectus, the Prospectus or any Permitted Free Writing Prospectus has been filed; to prepare and file with the Commission, promptly upon the request of the Sales Agent, the Forward Seller or the Forward Purchaser, any amendments or supplements to the Registration Statement, any Basic Prospectus, the Prospectus or any Permitted Free Writing Prospectus that, in the reasonable opinion of the Sales Agent, the Forward Seller or the Forward Purchaser, may be necessary or advisable in connection with the offering of the Shares by the Sales Agent, the Forward Seller or the Forward Purchaser; and to cause each amendment or supplement to any Basic Prospectus or the Prospectus to be filed with the Commission as required pursuant to the applicable paragraph of Rule 424(b) of the Act or, in the case of any Incorporated Document, to be filed with the Commission as required pursuant to the Exchange Act, within the time period prescribed.
(b) To promptly advise the Sales Agent, the Forward Seller and the Forward Purchaser, confirming such advice in writing, of the receipt of any comments of, or any request by the Commission for amendments or supplements to the Registration Statement, any Basic Prospectus, the Prospectus or any Permitted Free Writing Prospectus or for additional information with respect thereto, or of notice of institution of proceedings for, or the entry of a stop order suspending the effectiveness of the Registration Statement and, if the Commission should enter a stop order suspending the effectiveness of the Registration Statement, to use its best efforts to obtain the lifting or removal of such order as soon as possible; for so long as a prospectus is required by the Act to be delivered (whether physically, deemed to be delivered pursuant to Rule 153 or through compliance with Rule 172 under the Act or any similar rule) in connection with any sale of Shares, to promptly advise the Sales Agent, the Forward Seller and the Forward Purchaser of any proposal to amend or supplement the Registration Statement, any Basic Prospectus or the Prospectus, and to provide the Sales Agent, the Forward Seller and the Forward Purchaser and their counsel copies of any such documents for review and comment a reasonable amount of time prior to any proposed filing and to file no such amendment or supplement (other than any prospectus supplement relating to the offering of other securities (including, without limitation, the Common Stock)) to which the Sales Agent, the Forward Seller or the Forward Purchaser shall have reasonably objected in writing. Furthermore, until such time as any stop order is lifted, the Sales Agent, the Forward Seller and the Forward Purchaser may cease making sales under this Agreement.
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(c) To furnish to the Sales Agent, the Forward Seller and the Forward Purchaser a copy of each proposed free writing prospectus to be prepared by or on behalf of, used by, or referred to by the Company and not to use or refer to any proposed free writing prospectus to which the Sales Agent, the Forward Seller or the Forward Purchaser reasonably objects. Not to take any action that would result in the Sales Agent, the Forward Seller, the Forward Purchaser or the Company being required to file with the Commission pursuant to Rule 433(d) under the Securities Act a free writing prospectus prepared by or on behalf of the Sales Agent, the Forward Seller or the Forward Purchaser that the Sales Agent, the Forward Seller or the Forward Purchaser otherwise would not have been required to file thereunder.
(d) To make available to the Sales Agent and the Forward Seller, as soon as practicable after this Agreement becomes effective, and thereafter from time to time to furnish to the Sales Agent and the Forward Seller, as many copies of the Prospectus (or of the Prospectus as amended or supplemented if the Company shall have made any amendments or supplements thereto after the effective date of the Registration Statement) as the Sales Agent or the Forward Seller may request for the purposes contemplated by the Act; in case the Sales Agent or the Forward Seller is required to deliver (whether physically, deemed to be delivered pursuant to Rule 153 or through compliance with Rule 172 under the Act or any similar rule), in connection with the sale of the Shares, a prospectus after the nine-month period referred to in Section 10(a)(3) of the Act, or after the time a post-effective amendment to the Registration Statement is required pursuant to Item 512(a) of Regulation S-K under the Act, the Company will prepare, at its expense, promptly upon request such amendment or amendments to the Registration Statement and the Prospectus as may be necessary to permit compliance with the requirements of Section 10(a)(3) of the Act or Item 512(a) of Regulation S-K under the Act, as the case may be.
(e) Subject to Section 4(b) hereof, to file promptly all reports and documents and any preliminary or definitive proxy or information statement required to be filed by the Company with the Commission in order to comply with the Exchange Act for so long as a prospectus is required by the Act to be delivered (whether physically, deemed to be delivered pursuant to Rule 153 or through compliance with Rule 172 under the Act or any similar rule) in connection with any sale of Shares; and to provide the Sales Agent, the Forward Seller and the Forward Purchaser, for its review and comment, with a copy of such reports and statements and other documents to be filed by the Company pursuant to Section 13, 14 or 15(d) of the Exchange Act during such period a reasonable amount of time prior to any proposed filing, and to file no such report, statement or document to which the Sales Agent, the Forward Seller or the Forward Purchaser shall have reasonably objected in writing; and to promptly notify the Sales Agent, the Forward Seller and the Forward Purchaser of such filing.
(f) To pay the fees applicable to the Registration Statement in connection with the offering of the Shares within the time required by Rule 456(b)(1)(i) under the Act (without reliance on the proviso to Rule 456(b)(1)(i) under the Act) and in compliance with Rule 456(b) and Rule 457(r) under the Act.
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(g) If at any time prior to the sale of Shares having an aggregate Sales Price equal to the Maximum Amount the Company receives from the Commission a notice pursuant to Rule 401(g)(2) under the Act or otherwise ceases to be eligible to use the automatic shelf registration statement form, the Company will (a) promptly notify the Sales Agent, the Forward Seller and the Forward Purchaser, (b) promptly file a new registration statement or post-effective amendment on the proper form relating to the Shares, in a form satisfactory to the Sales Agent, the Forward Seller and the Forward Purchaser, (c) use its best efforts to cause such registration statement or post-effective amendment to be declared effective as soon as practicable (if such filing is not otherwise effective immediately pursuant to Rule 462 under the Act), and (d) promptly notify the Sales Agent, the Forward Seller and the Forward Purchaser of such effectiveness. The Company will take all other action necessary or appropriate to permit the public offering and sale of the Shares to continue as contemplated in the Registration Statement that was the subject of the notice under Rule 401(g)(2) under the Act or for which the Company has otherwise become ineligible. References herein to the Registration Statement relating to the Shares shall include such new registration statement or post-effective amendment, as the case may be.
(h) If immediately prior to the third anniversary (the Renewal Deadline) of the initial effective date of the Registration Statement, any of the Shares remain unsold by the Sales Agent, the Alternative Sales Agents, the Forward Seller and the Forward Purchaser, collectively, the Company will, prior to the Renewal Deadline file, if it has not already done so and is eligible to do so, a new automatic shelf registration statement relating to the Shares, in a form satisfactory to the Sales Agent, the Forward Seller and the Forward Purchaser. If the Company is not eligible to file an automatic shelf registration statement, the Company will, prior to the Renewal Deadline, if it has not already done so, file a new shelf registration statement relating to the Shares, in a form satisfactory to the Sales Agent, the Forward Seller and the Forward Purchaser, and will use its best efforts to cause such registration statement to be declared effective within 180 days after the Renewal Deadline. The Company will take all other action necessary or appropriate to permit the public offering and sale of the Shares to continue as contemplated in the expired registration statement. References herein to the Registration Statement shall include such new automatic shelf registration statement or such new shelf registration statement, as the case may be.
(i) To promptly notify the Sales Agent, the Forward Seller and the Forward Purchaser of the happening of any event within the period during which a prospectus is required to be delivered (whether physically, deemed to be delivered pursuant to Rule 153 or through compliance with Rule 172 under the Act or any similar rule) in connection with any sale of Shares, which event could require the making of any change in the Prospectus then being used so that the Prospectus would not include an untrue statement of material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they are made, not misleading, and, during such time, subject to Section 4(b), to prepare and furnish, at the Companys expense, to the Sales Agent, the Forward Seller and the Forward Purchaser promptly such amendments or supplements to such Prospectus as may be necessary to reflect any such change.
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(j) To furnish such information as may be required and otherwise to cooperate in qualifying the Shares for offering and sale under the securities or Blue Sky laws of such states or other jurisdictions as the Sales Agent, the Forward Seller and the Forward Purchaser may designate and to maintain such qualifications in effect so long as required for the distribution of the Shares; provided, however, that the Company shall not be required to qualify as a foreign corporation or to consent to the service of process under the laws of any such jurisdiction (except service of process with respect to the offering and sale of the Shares); and to promptly advise the Sales Agent, the Forward Seller and the Forward Purchaser of the receipt by the Company of any notification with respect to the suspension of the qualification of the Shares for offer or sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose.
(k) To make generally available to its security holders and to the Sales Agent and the Forward Seller as soon as it is practicable to do so, but in any event not later than 15 months after the effective date of the Registration Statement (as defined in Rule 158(c) under the Act), an earnings statement (which need not be audited) in reasonable detail, covering a period of twelve consecutive months beginning after the effective date of the Registration Statement, which earnings statement shall satisfy the requirements of Section 11(a) of the Act and Rule 158 under the Act.
(l) To apply the net proceeds from the sale of the Shares and the consummation of the transactions contemplated by the Master Forward Confirmation and each Supplemental Confirmation executed in connection with the Master Forward Confirmation and any proceeds received under the Forward Contract in the manner set forth under the caption Use of proceeds in the Prospectus Supplement.
(m) At all times when the Company has instructed the Sales Agent or the Forward Seller to make sales of Shares, at all times during which a prospectus is required by the Act to be delivered (whether physically, deemed to be delivered pursuant to Rule 153 or through compliance with Rule 172 under the Act or any similar rule) in connection with any sale of Shares, and at all times when sales of Shares are pending settlement, not to sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant any option to sell or otherwise dispose of or agree to dispose of, directly or indirectly, any shares of the Common Stock or securities convertible into or exchangeable or exercisable for the Common Stock or warrants or other rights to purchase the Common Stock or any other securities of the Company that are substantially similar to the Common Stock or permit the registration under the Act of any shares of the Common Stock, in each case without giving the Sales Agent or the Forward Seller, as applicable, at least three business days prior written notice specifying the nature of the proposed sale and the date of such proposed sale. Notwithstanding the foregoing, the Company may, without providing such prior written notice, (i) register the Shares and the sales through the Sales Agent or the Forward Seller, as applicable, pursuant to this Agreement, an Alternative Distribution Agreement or to the Sales Agent or an Alternative Sales Agent, (ii) file a registration statement on Form S-8 relating to Common Stock that may be issued pursuant to equity plans described in the Companys reports filed with the Commission (iii) issue securities under the Companys equity compensation plans for officers, employees, and non-employee directors described in the Companys reports filed with the Commission under
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the Exchange Act; (iv) issue shares upon the exercise of options or other stock rights pursuant to the Companys equity compensation plans for officers, employees, and non-employee directors described in the Companys reports filed with the Commission under the Exchange Act; (v) sell shares of Common Stock pursuant to the Fifth Amended and Restated Dividend Reinvestment and Stock Purchase Plan or any similar plan as described in the Companys reports filed with the Commission under the Exchange Act; (vi) issue shares of Common Stock upon conversion of any shares of the Companys convertible preferred stock described in the Companys reports filed with the Commission under the Exchange Act; (vii) issue shares of Common Stock upon conversion of any of the Companys convertible notes described in the Companys reports filed with the Commission under the Exchange Act; or (viii) Common Stock issuable by the Company upon settlement of any Forward Contract. For the avoidance of doubt, this Section 4(m) shall not prohibit the sale of Common Stock by the Forward Seller or the Forward Purchaser. In the event that notice of a proposed sale is provided by the Company pursuant to this Section 4(m), the Sales Agent or the Forward Seller, as applicable, may suspend activity under this program for such period of time as may be requested by the Company or as may be deemed appropriate by the Sales Agent or the Forward Seller, as applicable.
(n) Not, at any time at or after the execution of this Agreement, to offer or sell any Shares by means of any prospectus (within the meaning of the Act), or use any prospectus (within the meaning of the Act) in connection with the offer or sale of the Shares, in each case other than the Prospectus.
(o) The Company will not, and will cause its subsidiaries not to, take, directly or indirectly, any action resulting in a violation of Regulation M promulgated under the Exchange Act or designed to, or which will constitute, or has constituted, or might reasonably be expected to cause or result in, the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Shares; provided, however, notwithstanding the foregoing, the Company may elect to net share settle, combination settle or cash settle any Forward Contract.
(p) To use its best efforts to cause the Common Stock (including, in respect of any Forward, a number of shares of Common Stock at least equal to the Capped Number) to be listed on the NYSE and to maintain such listing.
(q) At all times when the Company has instructed the Sales Agent or the Forward Seller to make sales of Shares, at all times during which a prospectus is required by the Act to be delivered (whether physically, deemed to be delivered pursuant to Rule 153 or through compliance with Rule 172 under the Act or any similar rule) in connection with any sale of Shares, and at all times when sales of Shares are pending settlement, to advise the Sales Agent or the Forward Seller immediately after it shall have received notice or obtain knowledge thereof, of any information or fact that would alter or affect any opinion, certificate, letter and other document provided to the Sales Agent or the Forward Seller pursuant to Section 6 herein.
(r) Upon commencement of the offering of the Shares under this Agreement or under any of the Alternative Distribution Agreements (and upon the recommencement of
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the offering of the Shares under this Agreement or under any of the Alternative Distribution Agreements following the termination of a Suspension Period (as defined below)), and each time that (i) the Registration Statement or the Prospectus shall be amended or supplemented (other than pursuant to subclause (ii) below and other than a prospectus supplement filed pursuant to Rule 424(b) under the Act relating solely to the offering of securities other than the Shares), (ii) there is filed with the Commission any document incorporated by reference into the Prospectus (other than a Current Report on Form 8-K, unless the Sales Agent or the Forward Seller shall otherwise reasonably request), or (iii) otherwise as the Sales Agent or the Forward Seller may reasonably request (each such date referred to in subclauses (i), (ii) and (iii) above, a Representation Date), to furnish or cause to be furnished to the Sales Agent, the Forward Seller and the Forward Purchaser forthwith a certificate dated and delivered the date of effectiveness of such amendment, the date of filing with the Commission of such supplement or other document, or promptly upon request, as the case may be, in form satisfactory to the Sales Agent, the Forward Seller and the Forward Purchaser, (x) to the effect that the statements contained in the certificate referred to in Section 6(f) of this Agreement which were last furnished to the Sales Agent, the Forward Seller and the Forward Purchaser are true and correct at the time of such amendment, supplement, filing, or delivery, as the case may be, as though made at and as of such time (except that such statements shall be deemed to relate to the Registration Statement and the Prospectus as amended and supplemented to such time) or, in lieu of such certificate, a certificate of the same tenor as the certificate referred to in said Section 6(f), modified as necessary to relate to the Registration Statement and the Prospectus as amended and supplemented to the time of delivery of such certificate and (y) setting forth the number of shares of Common Stock reserved for issuance by the Company and listed, subject to notice of issuance, on the NYSE in connection with the Transactions less (1) any shares of Common Stock issued in connection with an Issuance hereunder or under the Alternative Distribution Agreements and (2) the aggregate Capped Number under all Forward Contracts entered into between the Company and the Forward Purchaser and any Forward Contracts entered into between the Company and any other Alternative Sales Agent (such number, as updated from time to time immediately following any Issuance or Forward, the Remaining Number of Shares); provided that the obligation of the Company under this subsection (r) shall be deferred for any period that the Company has suspended the offering of Shares pursuant to Section 3(h) hereof (each, a Suspension Period) and shall recommence upon the termination of such suspension.
(s) Upon commencement of the offering of the Shares under this Agreement or under any of the Alternative Distribution Agreements (and upon the recommencement of the offering of the Shares under this Agreement or under any of the Alternative Distribution Agreements following the termination of a Suspension Period), and at each Representation Date, to furnish or cause to be furnished forthwith to the Sales Agent and Forward Seller and to counsel to the Sales Agent and Forward Seller a written opinion of Company Counsel, or other counsel satisfactory to the Sales Agent and the Forward Seller, dated and delivered as of such Representation Date, in form and substance satisfactory to the Sales Agent or Forward Seller, of the same tenor as the opinions referred to in Section 6(c) of this Agreement, but modified as necessary to relate to the Registration Statement and the Prospectus as amended and supplemented to the time of delivery of such opinion; provided
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that the obligation of the Company under this subsection (s) shall be deferred for any Suspension Period and shall recommence upon the termination of such suspension.
(t) Upon commencement of the offering of the Shares under this Agreement or under any of the Alternative Distribution Agreements (and upon the recommencement of the offering of the Shares under this Agreement or under any of the Alternative Distribution Agreements following the termination of a Suspension Period), and at each Representation Date, to furnish or cause to be furnished to the Sales Agent, the Forward Seller and the Forward Purchaser forthwith a certificate of the same tenor as the certificate referred to in Section 6(f), as may be acceptable to the Sales Agent, the Forward Seller and the Forward Purchaser, dated and delivered as of such Representation Date; provided that the obligation of the Company under this subsection (t) shall be deferred for any Suspension Period and shall recommence upon the termination of such suspension.
(u) Upon commencement of the offering of the Shares under this Agreement or under any of the Alternative Distribution Agreements (and upon the recommencement of the offering of the Shares under this Agreement or under any of the Alternative Distribution Agreements following the termination of a Suspension Period), and at each Representation Date, Sidley Austin LLP, counsel to the Sales Agent, the Forward Seller and the Forward Purchaser, shall deliver a written opinion, dated and delivered as of such Representation Date, in form and substance satisfactory to the Sales Agent, the Forward Seller and the Forward Purchaser; provided that the obligation under this subsection (u) shall be deferred for any Suspension Period and shall recommence upon the termination of such suspension.
(v) Upon commencement of the offering of the Shares under this Agreement or under any of the Alternative Distribution Agreements (and upon the recommencement of the offering of the Shares under this Agreement or under any of the Alternative Distribution Agreements following the termination of a Suspension Period if any of the events contemplated by subclauses (i), (ii) or (iii) below have occurred during such Suspension Period), and each time that (i) the Registration Statement or the Prospectus shall be amended or supplemented to include additional or amended financial information, (ii) the Company shall file an annual report on Form 10-K or a quarterly report on Form 10-Q or (iii) at the reasonable request of the Sales Agent, the Forward Seller or the Forward Purchaser and upon reasonable advance notice to the Company, there is filed with the Commission any document (other than an annual report on Form 10-K or a quarterly report on Form 10-Q) incorporated by reference into the Prospectus which contains financial information, to cause Ernst & Young, or other independent accountants satisfactory to the Sales Agent, the Forward Seller and the Forward Purchaser, forthwith to furnish the Sales Agent, the Forward Seller and the Forward Purchaser, a letter, dated the date of effectiveness of such amendment, or the date of filing of such supplement or other document with the Commission, as the case may be, in form satisfactory to the Sales Agent, the Forward Seller and the Forward Purchaser, of the same tenor as the letter referred to in Section 6(e) of this Agreement but modified to relate to the Registration Statement and the Prospectus, as amended and supplemented to the date of such letter; provided that the obligation of the Company under this subsection (v) shall be deferred for any Suspension Period and shall recommence upon the termination of such suspension.
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(w) Upon commencement of the offering of the Shares under this Agreement or under any of the Alternative Distribution Agreements (and upon the recommencement of the offering of the Shares under this Agreement or under any of the Alternative Distribution Agreements following the termination of a Suspension Period if any of the events contemplated by subclauses (i), (ii) or (iii) below have occurred during such Suspension Period), and each time that (i) the Registration Statement or the Prospectus shall be amended or supplemented to include additional or amended financial information, (ii) the Company shall file an annual report on Form 10-K or a quarterly report on Form 10-Q or (iii) at the reasonable request of the Sales Agent, the Forward Seller or the Forward Purchaser and upon reasonable advance notice to the Company, there is filed with the Commission any document (other than an annual report on Form 10-K or a quarterly report on Form 10-Q) incorporated by reference into the Prospectus which contains financial information, to cause Deloitte, or other independent accountants satisfactory to the Sales Agent, the Forward Seller and the Forward Purchaser, forthwith to furnish the Sales Agent, the Forward Seller and the Forward Purchaser, a letter, dated the date of effectiveness of such amendment, or the date of filing of such supplement or other document with the Commission, as the case may be, in form satisfactory to the Sales Agent, the Forward Seller and the Forward Purchaser, of the same tenor as the letter referred to in Section 6(e) of this Agreement but modified to relate to the Registration Statement and the Prospectus, as amended and supplemented to the date of such letter; provided that the obligation of the Company under this subsection (w) shall be deferred for any Suspension Period and shall recommence upon the termination of such suspension.
(x) Upon commencement of the offering of the Shares under this Agreement or under any of the Alternative Distribution Agreements (and upon the recommencement of the offering of the Shares under this Agreement or under any of the Alternative Distribution Agreements following the termination of a Suspension Period), and each time that (i) the Registration Statement or the Prospectus is amended or supplemented (other than pursuant to subclause (ii) below and other than a prospectus supplement filed pursuant to Rule 424(b) under the Act relating solely to the offering of securities other than the Shares), (ii) there is filed with the Commission any document incorporated by reference into the Prospectus (other than a Current Report on Form 8-K, unless the Sales Agent, the Forward Seller or the Forward Purchaser shall otherwise reasonably request) or (iii) otherwise as the Sales Agent, the Forward Seller or the Forward Purchaser shall reasonably request, to conduct a due diligence session, in form and substance, satisfactory to the Sales Agent, the Forward Seller or the Forward Purchaser, which shall include representatives of the management and the accountants of the Company; provided that the obligation of the Company under this subsection (x) shall be deferred for any Suspension Period and shall recommence upon the termination of such suspension.
(y) That it consents to the Sales Agent, the Forward Seller or the Forward Purchaser trading in the Common Stock for the their own account and for the account of their clients at the same time as sales of the Shares occur pursuant to this Agreement.
(z) If to the knowledge of the Company, any condition set forth in Section 6(a) or 6(i) of this Agreement shall not have been satisfied on the applicable Settlement Date, to offer to any person who has agreed to purchase the Shares from the Company as the
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result of an offer to purchase solicited by the Sales Agent, the Forward Seller or the Forward Purchaser the right to refuse to purchase and pay for such Shares.
(aa) To disclose in its quarterly reports on Form 10-Q and in its annual report on Form 10-K the number of the Shares sold through the Sales Agent, the Forward Seller or the Forward Purchaser under this Agreement, the Net Proceeds to the Company and the compensation paid by the Company with respect to sales of the Shares pursuant to this Agreement during the relevant quarter.
(bb) That each acceptance by the Company of an offer to purchase the Shares hereunder shall be deemed to be an affirmation to the Sales Agent that the representations and warranties of the Company contained in or made pursuant to this Agreement are true and correct as of the date of such acceptance as though made at and as of such date, and an undertaking that such representations and warranties will be true and correct as of the Settlement Date for the Shares relating to such acceptance as though made at and as of such date (except that such representations and warranties shall be deemed to relate to the Registration Statement and the Prospectus as amended and supplemented relating to such Shares).
(cc) To ensure that prior to instructing the Sales Agent or the Forward Seller to sell Shares the Company shall have obtained all necessary corporate authority for the offer and sale of such Shares.
(dd) On or before each Representation Date, the Sales Agent, the Forward Seller and the Forward Purchaser and counsel for the Sales Agent, the Forward Seller and the Forward Purchaser shall have received such information, documents and opinions as they may reasonably request (except for any such information, documents or opinions that are subject to confidentiality agreements or to a legal privilege to the extent that such compliance could reasonably be expected to violate a confidentiality agreement or legal privilege) for the purposes of enabling them to pass upon the issuance and sale of the Shares as contemplated herein, or in order to evidence the accuracy of any of the representations and warranties, or the satisfaction of any of the conditions or agreements, herein contained; and all proceedings taken by the Company in connection with the issuance and sale of the Shares as contemplated herein and in connection with the other transactions contemplated by this Agreement shall be satisfactory in form and substance to the Sales Agent, the Forward Seller or the Forward Purchaser and counsel for the Sales Agent, the Forward Seller and the Forward Purchaser.
(ee) The Company agrees that any offer to sell, solicitations of an offer to buy, or any sales of Shares shall only be effected by or through only one of the Sales Agent or the Forward Seller, as the case may be, or an Alternative Sales Agent, on any given day, and in no event by more than one, and the Company shall in no event request that the Sales Agent or the Forward Seller, as the case may be, and any one or more of the Alternative Sales Agents, sell Shares on the same day.
(ff) To reserve for issuance by the Companys board of directors, in respect of any Forward, a number of shares of Common Stock at least equal to the Capped Number.
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SECTION 5. Payment of Expenses; Settlement. (a) The Company agrees with the Sales Agent, the Forward Seller and the Forward Purchaser, whether or not the transactions contemplated hereunder are consummated or this Agreement is terminated, to pay all of its expenses incident to the performance of its obligations hereunder, including, but not limited to, such costs, expenses, fees and taxes in connection with (a) the preparation and filing of the Registration Statement, each Basic Prospectus, the Prospectus, each Prospectus Supplement, each Permitted Free Writing Prospectus and any amendments or supplements thereto, and the printing and furnishing of copies of each thereof to the Sales Agent, the Forward Seller and the Forward Purchaser (including costs of mailing and shipment), (b) the registration, issue, sale and delivery of the Shares including any stock or transfer taxes and stamp or similar duties payable upon the sale, issuance or delivery of the Shares to the Sales Agent or the Forward Seller, (c) the producing, word processing and/or printing of this Agreement, the Master Forward Confirmation, any Powers of Attorney and any closing documents (including compilations thereof) and the reproduction and/or printing and furnishing of copies of each thereof to the Sales Agent, the Forward Seller and the Forward Purchaser (including costs of mailing and shipment), (d) the qualification of the Shares for offering and sale under state laws and the determination of their eligibility for investment under state or foreign law as aforesaid (including the reasonable legal fees and filing fees and other disbursements of counsel for the Sales Agent and counsel for the Forward Seller and Forward Purchaser, respectively) and the printing and furnishing of copies of any blue sky surveys to the Sales Agent, the Forward Seller and the Forward Purchaser, (e) the listing of the Shares (including, in respect of any Forward, a number of shares of Common Stock at least equal to the Capped Number) on any securities exchange or qualification of the Shares for quotation on the NYSE and any registration thereof under the Exchange Act, (f) the costs and charges of any transfer agent, registrar or depositary, (g) the reasonable fees and expenses of counsel for the Sales Agent and counsel for the Forward Seller and the Forward Purchaser, respectively, in connection with its review of the offerings compliance with FINRA rules and the filing fees incident to FINRAs review, if any, and approval of the Sales Agents, Forward Sellers and Forward Purchasers participation in the offering and distribution of the Shares, (h) the reasonable fees and disbursements of the Companys counsel and of the Companys accountants and (i) all reasonable fees and expenses of counsel for the Sales Agent and counsel for the Forward Seller and the Forward Purchaser, respectively, incurred in connection with the negotiation and completion of this Agreement, the Master Forward Confirmation and any Supplemental Confirmation executed in connection with the Master Forward Confirmation.
(b) [The amount of proceeds to be delivered to the Company on an Issuance Settlement Date against receipt of the Issuance Shares sold will be equal to (i) the aggregate offering price received by the Sales Agent at which such Issuance Shares were sold (the Gross Proceeds), after deduction for (A) the Sales Agents commission, discount or other compensation for such sales payable by the Company pursuant to Schedule B hereof, (B) any other amounts due and payable by the Company to the Sales Agent hereunder pursuant to Section 5(a) hereof, and (C) any transaction fees imposed by any governmental or self-regulatory organization in respect of such sales (the Net Proceeds) or (ii) the Gross Proceeds. In the event that the Sales Agent deliver the Gross Proceeds to the Company at an Issuance Settlement Date, the amounts set forth in clauses (i)(A), (B) and (C) of the preceding sentence shall be set forth and invoiced in a periodic statement from the Sales Agent to the Company and payment of such amounts shall be made promptly by the Company after its receipt thereof.]
SECTION 6. Conditions of the Sales Agents, the Forward Sellers and the Forward Purchasers Obligations. The right of the Company to deliver a Transaction Notice hereunder is subject to the satisfaction, on the date of delivery of such Transaction Notice, and the obligations of each of Sales Agent to sell Issuance Shares and the Forward Seller to sell and the Forward Purchaser to borrow the Forward Hedge Shares during the applicable Selling Period is subject to the satisfaction, on the applicable Transaction Date and Settlement Date, of (i) the accuracy of the representations and warranties on the part of the Company on the date hereof, any applicable date referred to in Section 4(r) of this Agreement and as of each Settlement Date, (ii) the performance by the Company of its obligations hereunder and (iii) to the following additional conditions precedent.
(a) (i) No stop order with respect to the effectiveness of the Registration Statement shall have been issued under the Act or proceedings initiated under Section 8(d)
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or 8(e) of the Act, and no order directed at or in relation to any document incorporated by reference therein and no order preventing or suspending the use of the Prospectus has been issued by the Commission, and no suspension of the qualification of the Shares for offering or sale in any jurisdiction, or to the knowledge of the Company, the Sales Agent, the Forward Seller or the Forward Purchaser of the initiation or threatening of any proceedings for any of such purposes, has occurred; (ii) the Registration Statement and all amendments thereto shall 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; (iii) none of the Basic Prospectus or the Prospectus, and no amendment or supplement thereto, shall include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they are made, not misleading; (iv) no Basic Prospectus or Basic Prospectus, together with any combination of one or more of the Permitted Free Writing Prospectuses, if any, and no amendment or supplement thereto, shall include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they are made, not misleading; and (v) none of the Permitted Free Writing Prospectuses, if any, shall include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they are made, not misleading.
(b) Subsequent to the respective dates as of which information is given in the Registration Statement, the Basic Prospectus, the Prospectus and the Permitted Free Writing Prospectuses, if any, no material and unfavorable change, financial or otherwise (other than as referred to in the Registration Statement and Prospectus), in the business, condition or prospects of the Company and each of its subsidiaries taken as a whole, in the judgment of the Sales Agent or the Forward Seller and the Forward Purchaser, shall occur or become known and no transaction which is material and unfavorable to the Company (other than as referred to in the Registration Statement and Prospectus) in the judgment of the Sales Agent or the Forward Seller and the Forward Purchaser, shall have been entered into by the Company or any of its subsidiaries.
(c) The Company shall furnish to the Sales Agent, the Forward Seller and the Forward Purchaser, at every date specified in Section 4(r) of this Agreement, opinions of Company Counsel, addressed to the Sales Agent, the Forward Seller and the Forward Purchaser, and dated as of such date, to the effect set forth in Exhibits B and C.
In rendering such opinion, such counsel may rely, as to matters governed by laws other than the corporate laws of the State of Delaware or federal laws, on local counsel in such jurisdictions, provided that in such case such counsel shall state that they believe that they and the Sales Agent, the Forward Seller and the Forward Purchaser are justified in relying on such other counsel and such other counsel shall indicate that the Sales Agent, the Forward Seller and the Forward Purchaser may rely on such opinion. As to matters of fact, to the extent they deem proper, such counsel may rely on certificates of officers of the Company and public officials so long as such counsel states that they have no reason to believe that either the Sales Agent, the Forward Seller and the Forward Purchaser or they are not justified in relying on such certificates. In addition to the matters set forth above,
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the opinion of Company Counsel shall also include a statement to the effect that nothing has come to the attention of such counsel which leads them to believe that (a) the Registration Statement, as of the time of its effectiveness for purposes of Section 11 of the Act, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading, (b) the Prospectus, as of the date of the Prospectus Supplement and as of the date of the opinion, contained or contains an untrue statement of a material fact or omitted or omits 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, (c) the Basic Prospectus, as of its date, the date of this Agreement and as of the date of the opinion, in each case together with the Permitted Free Writing Prospectus identified on Schedule A hereto and with the information relating to the public offering price of the Shares as set forth on the cover page of the Prospectus, contained or contains an untrue statement of a material fact or omitted 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 (except that such counsel need express no view as to financial statements, schedules and other financial information included therein). With respect to such statement, Company Counsel may state that this statement is based upon the procedures set forth or incorporated by reference therein, but is without independent check and verification.
(d) At the dates specified in Section 4(v) of this Agreement, the Sales Agent, the Forward Seller and the Forward Purchaser shall have received from Ernst & Young letters dated the date of delivery thereof and addressed to the Sales Agent, the Forward Seller and the Forward Purchaser in form and substance satisfactory to the Sales Agent, the Forward Seller and the Forward Purchaser.
(e) At the dates specified in Section 4(w) of this Agreement, the Sales Agent, the Forward Seller and the Forward Purchaser shall have received from Deloitte letters dated the date of delivery thereof and addressed to the Sales Agent, the Forward Seller and the Forward Purchaser in form and substance satisfactory to the Sales Agent, the Forward Seller and the Forward Purchaser.
(f) The Company shall deliver to the Sales Agent, the Forward Seller and the Forward Purchaser, at every date specified in Section 4(r) of this Agreement (each, a Certificate Date), a certificate signed by any two of the following: the Chief Executive Officer, the Chief Financial Officer, the Treasurer, the Secretary or any Vice President of the Company (or such other authorized officers of the Company as may be acceptable to the Sales Agent, the Forward Seller and the Forward Purchaser) to the effect that (i) the representations and warranties of the Company as set forth in this Agreement and the Master Forward Confirmation are true and correct as of the Certificate Date, (ii) the Company has performed such of its obligations under this Agreement as are to be performed at or before each such Certificate Date, and (iii) the conditions set forth in paragraphs (a) and (b) of Section 6 have been met. In addition, on each Certificate Date, the certificate shall also state that the Shares have been duly and validly authorized by the Company, that all corporate action required to be taken for the issuance and sale of the Shares has been validly and sufficiently taken, and that the Companys Board of Directors
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or any other body with authority has not revoked, rescinded or otherwise modified or withdrawn such authorization or corporate action.
(g) The Sales Agent, the Forward Seller and the Forward Purchaser shall have received, at every date specified in Section 4(v) of this Agreement, the favorable opinion of Sidley Austin LLP, counsel to the Sales Agent, the Forward Seller and the Forward Purchaser, dated as of such date, and in form and substance satisfactory to the Sales Agent, the Forward Seller and the Forward Purchaser. In rendering such opinion, such counsel may rely, as to matters governed by the laws of states other than the corporate laws of the State of Delaware or federal laws, on local counsel in such jurisdictions, provided that in such case such counsel shall state that they believe that they and the Sales Agent, the Forward Seller and the Forward Purchaser are justified in relying on such other counsel and such other counsel shall indicate that the Sales Agent, the Forward Seller and the Forward Purchaser may rely on such opinion. As to matters of fact, to the extent they deem proper, such counsel may rely on certificates of officers of the Company and public officials.
(h) The Sales Agent, the Forward Seller and the Forward Purchaser shall have received, at every date specified in Section 4(u) of this Agreement, a certificate of an authorized officer of the Company as may be acceptable to the Sales Agent, the Forward Seller and the Forward Purchaser, dated as of such date, and in form and substance satisfactory to the Sales Agent, the Forward Seller and the Forward Purchaser.
(i) All filings with the Commission required by Rule 424 under the Act to have been filed by the Settlement Date shall have been made within the applicable time period prescribed for such filing by Rule 424.
(j) The Shares (including, in respect of any Forward, a number of shares of Common Stock at least equal to the Capped Number) shall have been approved for listing on the NYSE, subject only to notice of issuance at or prior to the Settlement Date.
(k) In no event may the Company issue a Transaction Notice that relates to an Issuance unless the number of Issuance Shares specified in such Transaction Notice is less than the Remaining Number of Shares as of the date of delivery of such Transaction Notice, and in no event may the Company issue a Transaction Notice that relates to a Forward unless the Capped Number set forth in the Forward Contract to be entered into in connection with such Transaction Notice is less than the Remaining Number of Shares as of the date of delivery of such Transaction Notice.
SECTION 7. Indemnification and Contribution.
(a) The Company agrees to indemnify, defend and hold harmless the Sales Agent, the Forward Seller and the Forward Purchaser and their respective affiliates, directors, officers, employees and agents and any person who controls the Sales Agent, the Forward Seller or the Forward Purchaser within the meaning of Section 15 of the Act or Section 20 of the Exchange Act, and the successors and assigns of all of the foregoing persons, from and against any and all loss, damage, expense, liability or claim (including
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the reasonable cost of investigation) which the Sales Agent, the Forward Seller or the Forward Purchaser or any such person may incur under the Act, the Exchange Act, the common law or otherwise, insofar as such loss, damage, expense, liability or claim arises out of or is based upon (i) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or in the Registration Statement as amended by any post-effective amendment thereof by the Company) or arises out of or is based upon any omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as any such loss, damage, expense, liability or claim arises out of or is based upon any untrue statement or alleged untrue statement of a material fact contained in, and in conformity with information furnished in writing by or on behalf of the Sales Agent, the Forward Seller or the Forward Purchaser, as the case may be, to the Company expressly for use in, the Registration Statement or arises out of or is based upon any omission or alleged omission to state a material fact in the Registration Statement in connection with such information, which material fact was not contained in such information and which material fact was required to be stated in such Registration Statement or was necessary to make such information not misleading or (ii) any untrue statement or alleged untrue statement of a material fact included in any Prospectus (the term Prospectus for the purpose of this Section 7 being deemed to include any Basic Prospectus, the Prospectus Supplement, the Prospectus and any amendments or supplements to the foregoing), in any Permitted Free Writing Prospectus, in any issuer information (as defined in Rule 433 under the Act) of the Company or in any Prospectus together with any combination of one or more of the Permitted Free Writing Prospectuses, if any, or arises out of or is based upon any omission or alleged omission 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, except, with respect to such Prospectus or Permitted Free Writing Prospectus, insofar as any such loss, damage, expense, liability or claim arises out of or is based upon any untrue statement or alleged untrue statement of a material fact contained in, and in conformity with information furnished in writing by or on behalf of the Sales Agent, the Forward Seller or the Forward Purchaser, as the case may be, to the Company expressly for use in, such Prospectus or Permitted Free Writing Prospectus or arises out of or is based upon any omission or alleged omission to state a material fact in such Prospectus or Permitted Free Writing Prospectus in connection with such information, which material fact was not contained in such information and which material fact was necessary in order to make the statements in such information, in the light of the circumstances under which they were made, not misleading.
If any action, suit, proceeding or investigation (together, a Proceeding) is brought against the Sales Agent, the Forward Seller or the Forward Purchaser or any such person in respect of which indemnity may be sought against the Company pursuant to the foregoing paragraph, the Sales Agent, the Forward Seller or the Forward Purchaser or such person shall promptly notify the indemnifying party in writing of the institution of such Proceeding and the Company shall assume the defense of such Proceeding, including the employment of counsel reasonably satisfactory to such indemnified party and payment of all fees and expenses; provided, however, that the omission to so notify the Company shall not relieve the Company from any liability which the Company may have to the Sales Agent, the Forward Seller or the Forward Purchaser or any such person or otherwise except to the
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extent the Company was materially prejudiced by such omission. The Sales Agent, the Forward Seller or the Forward Purchaser or such person shall have the right to employ its or their own counsel in any such case, but the fees and expenses of such counsel shall be at the expense of the Sales Agent, the Forward Seller or the Forward Purchaser or of such person unless the employment of such counsel shall have been authorized in writing by the Company in connection with the defense of such Proceeding or the Company shall not have, within a reasonable period of time in light of the circumstances, employed counsel to have charge of the defense of such Proceeding or such indemnified party or parties shall have reasonably concluded that there may be defenses available to it or them which are different from, additional to or in conflict with those available to the Company (in which case the Company shall not have the right to direct the defense of such Proceeding on behalf of the indemnified party or parties), in any of which events such fees and expenses shall be borne by the Company, and paid as incurred (it being understood, however, that the Company shall not be liable for the expenses of more than one separate counsel (in addition to any local counsel) in any one Proceeding or series of related Proceedings in the same jurisdiction representing the indemnified parties who are parties to such Proceeding). The Company shall not be liable for any settlement of any Proceeding effected without its written consent but if settled with the written consent of the Company, the Company agrees to indemnify and hold harmless the Sales Agent, the Forward Seller or the Forward Purchaser, as the case may be, and any such person from and against any loss or liability by reason of such settlement. Notwithstanding the foregoing sentence, if at any time an indemnified party shall have requested the Company to reimburse the indemnified party for fees and expenses of counsel as contemplated by the second sentence of this paragraph, then the Company agrees that it shall be liable for any settlement of any Proceeding effected without its written consent if (i) such settlement is entered into more than 60 business days after receipt by the Company of the aforesaid request, (ii) the Company shall not have reimbursed the indemnified party in accordance with such request prior to the date of such settlement and (iii) such indemnified party shall have given the indemnifying party at least 30 days prior notice of its intention to settle. The Company shall not, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened Proceeding in respect of which any indemnified party is or may be a party and indemnity could have been sought hereunder by such indemnified party, unless such settlement includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such Proceeding and does not include an admission of fault or culpability or a failure to act, by or on behalf of such indemnified party.
(b) Each of the Sales Agent and the Forward Seller agrees to indemnify, defend and hold harmless the Company, its directors and officers, and any person who controls the Company within the meaning of Section 15 of the Act or Section 20 of the Exchange Act, and the successors and assigns of all of the foregoing persons, from and against any loss, damage, expense, liability or claim (including the reasonable cost of investigation) which, jointly or severally, the Company or any such person may incur under the Act, the Exchange Act, the common law or otherwise, insofar as such loss, damage, expense, liability or claim arises out of or is based upon (i) any untrue statement or alleged untrue statement of a material fact contained in and, in conformity with information furnished in writing by or on behalf of the Sales Agent or the Forward Seller to the Company expressly for use with reference to the Sales Agent or the Forward Seller in the Registration
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Statement (or in the Registration Statement as amended by any post-effective amendment thereof by the Company), or arises out of or is based upon any omission or alleged omission to state a material fact in such Registration Statement in connection with such information, which material fact was not contained in such information and which material fact was required to be stated in such Registration Statement or was necessary to make such information not misleading or (ii) any untrue statement or alleged untrue statement of a material fact contained in, and in conformity with information furnished in writing by or on behalf of the Sales Agent or the Forward Seller to the Company expressly for use in, a Prospectus or a Permitted Free Writing Prospectus, or arises out of or is based upon any omission or alleged omission to state a material fact in such Prospectus or Permitted Free Writing Prospectus in connection with such information, which material fact was not contained in such information and which material fact was necessary in order to make the statements in such information, in the light of the circumstances under which they were made, not misleading.
If any Proceeding is brought against the Company or any such person in respect of which indemnity may be sought against the Sales Agent or the Forward Seller pursuant to the foregoing paragraph, the Company or such person shall promptly notify the Sales Agent or the Forward Seller, as the case may be, in writing of the institution of such Proceeding and the Sales Agent or the Forward Seller, as the case may be, shall assume the defense of such Proceeding, including the employment of counsel reasonably satisfactory to such indemnified party and payment of all fees and expenses; provided, however, that the omission to so notify the Sales Agent or the Forward Seller, as the case may be, shall not relieve the Sales Agent or Forward Seller, as the case may be, from any liability which the Sales Agent or the Forward Seller, as the case may be, may have to the Company or any such person or otherwise. The Company or such person shall have the right to employ its own counsel in any such case, but the fees and expenses of such counsel shall be at the expense of the Company or such person unless the employment of such counsel shall have been authorized in writing by the Sales Agent or the Forward Seller, as the case may be, in connection with the defense of such Proceeding or the Sales Agent of the Forward Seller, as the case may be, shall not have, within a reasonable period of time in light of the circumstances, employed counsel to have charge of the defense of such Proceeding or such indemnified party or parties shall have reasonably concluded that there may be defenses available to it or them which are different from or additional to or in conflict with those available to the Sales Agent or the Forward Seller, as the case may be (in which case the Sales Agent or the Forward Seller, as the case may be, shall not have the right to direct the defense of such Proceeding on behalf of the indemnified party or parties, but the Sales Agent or the Forward Seller, as the case may be, may employ counsel and participate in the defense thereof but the fees and expenses of such counsel shall be at the expense of the Sales Agent or the Forward Seller, as the case may be), in any of which events such fees and expenses shall be borne by the Sales Agent or the Forward Seller, as the case may be, and paid as incurred (it being understood, however, that the Sales Agent or the Forward Seller, as the case may be, shall not be liable for the expenses of more than one separate counsel (in addition to any local counsel) in any one Proceeding or series of related Proceedings in the same jurisdiction representing the indemnified parties who are parties to such Proceeding). The Sales Agent or the Forward Seller, as the case may be, shall not be liable for any settlement of any such Proceeding effected without the written consent of
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the Sales Agent or the Forward Seller, as the case may be, but if settled with the written consent of the Sales Agent or the Forward Seller, as the case may be, the Sales Agent or the Forward Seller, as the case may be, agrees to indemnify and hold harmless the Company and any such person from and against any loss or liability by reason of such settlement. Notwithstanding the foregoing sentence, if at any time an indemnified party shall have requested the Sales Agent or the Forward Seller, as the case may be, to reimburse the indemnified party for fees and expenses of counsel as contemplated by the second sentence of this paragraph, then the Sales Agent or the Forward Seller, as the case may be, agrees that it shall be liable for any settlement of any Proceeding effected without its written consent if (i) such settlement is entered into more than 60 business days after receipt by the Sales Agent or the Forward Seller, as the case may be, of the aforesaid request, (ii) the Sales Agent or the Forward Seller, as the case may be, shall not have reimbursed the indemnified party in accordance with such request prior to the date of such settlement and (iii) such indemnified party shall have given the Sales Agent or the Forward Seller, as the case may be, at least 30 days prior notice of its intention to settle. The Sales Agent or the Forward Seller, as the case may be, shall not, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened Proceeding in respect of which any indemnified party is a party and indemnity could have been sought hereunder by such indemnified party, unless such settlement includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such Proceeding.
(c) If the indemnification provided for in this Section 7 is unavailable to an indemnified party under subsections (a) and (b) of this Section 7 or insufficient to hold an indemnified party harmless in respect of any losses, damages, expenses, liabilities or claims referred to therein, then each applicable indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, damages, expenses, liabilities or claims (i) in such proportion as is appropriate to reflect the relative benefits received by the Company, on the one hand, and the Sales Agent, the Forward Seller or the Forward Purchaser, as the case may be, on the other hand, from the offering of the Shares or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company, on the one hand, and of the Sales Agent, the Forward Seller or the Forward Purchaser, as the case may be, on the other, in connection with the statements or omissions which resulted in such losses, damages, expenses, liabilities or claims, as well as any other relevant equitable considerations.
The relative benefits received by the Company, on the one hand, and the Sales Agent, the Forward Seller or the Forward Purchaser, as the case may be, on the other, shall be deemed to be in the same respective proportions as (i) in the case of the Company, (A) the Actual Sold Forward Amount for each Forward under this Agreement, multiplied by the Forward Hedge Price for such Forward, or (B) the Actual Sold Issuance Amount for each Issuance under this Agreement, multiplied by the Issuance Price for such Issuance, as applicable, (ii) in the case of Sales Agent, the Actual Sold Issuance Amount for each Issuance under this Agreement, multiplied by the Issuance Selling Commission for such Issuance, (iii) in the case of the Forward Seller, the Actual Sold Forward Amount for each Forward under this Agreement, multiplied by the Forward Hedge Selling Commission for such Forward, and (iv) in the case of the Forward Purchaser, the net Spread (as such term is defined in the
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Master Forward Confirmation and net of any related stock borrow costs or other costs or expenses actually incurred) for all Forward Contracts executed in connection with this Agreement. The relative fault of the Company, on the one hand, and of the Sales Agent, the Forward Seller or the Forward Purchaser, as the case may be, on the other, shall be determined by reference to, among other things, whether the untrue statement or alleged untrue statement of a material fact or omission or alleged omission relates to information supplied by the Company or by the Sales Agent, the Forward Seller or the Forward Purchaser, as the case may be, and the parties relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The amount paid or payable by a party as a result of the losses, damages, expenses, liabilities and claims referred to in this subsection shall be deemed to include any legal or other fees or expenses reasonably incurred by such party in connection with investigating, preparing to defend or defending any Proceeding.
(d) The Company, the Sales Agent, the Forward Seller and the Forward Purchaser agree that it would not be just and equitable if contributions pursuant to this Section 7 were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in subsection (c) above. The amount paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities (or actions or proceedings in respect thereof) referred to in subsection (c) above shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 7, (i) neither the Sales Agent nor the Forward Seller shall in any event be required to contribute any amount in excess of the aggregate Issuance Selling Commissions or the aggregate Forward Hedge Selling Commissions, as the case may be, received by it under this Agreement and (ii) the Forward Purchaser shall in no event be required to contribute any amount in excess of the net Spread (as such term is defined in the Master Forward Confirmation and net of any related stock borrow costs or other costs or expenses actually incurred) for all Forward Contracts entered into pursuant to this Agreement. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this Section 7(d), each affiliate, director, officer, employee and agent of the Sales Agent, the Forward Seller or the Forward Purchaser and each person, if any, who controls the Sales Agent, the Forward Seller or the Forward Purchaser, as the case may be, within the meaning of Section 15 of the Act or Section 20 of the Exchange Act shall have the same rights to contribution as the Sales Agent, the Forward Seller or the Forward Purchaser, as the case may be, and each director of the Company, each officer of the Company who signed the Registration Statement, and each person, if any, who controls the Company with the meaning of Section 15 of the Act and Section 20 of the Exchange Act shall have the same rights to contribution as the Company.
(e) Each of the Company, the Sales Agent, the Forward Seller and the Forward Purchaser agree promptly to notify each other, to the extent legally permitted to do so, of the commencement of any Proceeding against it and, in the case of the Company, against any of the Companys officers or directors in connection with the issuance and sale of the Shares, or in connection with the
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Registration Statement, any Basic Prospectus, the Prospectus or any Permitted Free Writing Prospectus.
SECTION 8. Representations and Agreements to Survive Delivery. The indemnity and contribution agreements contained in Section 7 and the covenants, warranties and representations of the Company contained in this Agreement shall remain in full force and effect regardless of any investigation made by or on behalf of the Sales Agent, the Forward Seller or the Forward Purchaser, as the case may be, their respective affiliates, directors, officers, employees and agents or any person (including each affiliate, director, officer, employee and agent of such person) who controls the Sales Agent, the Forward Seller or the Forward Purchaser, as the case may be, within the meaning of Section 15 of the Act or Section 20 of the Exchange Act, or by or on behalf of the Company, its directors or officers or any person who controls the Company within the meaning of Section 15 of the Act or Section 20 of the Exchange Act, and shall survive any termination of this Agreement or the issuance and delivery of the Shares.
SECTION 9. Termination.
(a) The Company shall have the right, by giving written notice as hereinafter specified, to terminate the provisions of this Agreement relating to the solicitation of offers to purchase the Shares in its sole discretion at any time. Any such termination shall be without liability of any party to any other party except that (i) if any of the Shares have been sold through the Sales Agent or the Forward Seller, as the case may be, for the Company, then Section 4(z) shall remain in full force and effect, (ii) with respect to any pending sale, through the Sales Agent or the Forward Seller, as the case may be, for the Company, the obligations of the Company, including in respect of compensation of the Sales Agent or the Forward Seller, shall remain in full force and effect notwithstanding the termination and (iii) the provisions of Sections 5, 7, 8, 10, 11, 12, 16 and 18 of this Agreement shall remain in full force and effect notwithstanding such termination.
(b) The Sales Agent and the Forward Seller shall have the right, by giving written notice as hereinafter specified, to terminate the provisions of this Agreement relating to the solicitation of offers to purchase the Shares in its sole discretion at any time. Any such termination shall be without liability of any party to any other party except that the provisions of Sections 5, 7, 8, 10, 11, 12, 16 and 18 of this Agreement shall remain in full force and effect notwithstanding such termination. Unless earlier terminated pursuant to this Section 9, this Agreement shall automatically terminate upon the issuance and sale of Shares through the Sales Agent, the Forward Seller and the Alternative Sales Agents pursuant to this Agreement and the Alternative Distribution Agreements having an aggregate dollar value equal to the Maximum Amount.
(c) This Agreement shall remain in full force and effect unless terminated pursuant to Sections 9(a) or (b) above or otherwise by mutual agreement of the parties; provided that any such termination by mutual agreement shall in all cases be deemed to provide that Section 5, Section 7 and Section 8 shall remain in full force and effect.
(d) Any termination of this Agreement shall be effective on the date specified in such notice of termination; provided that such termination shall not be effective until the
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close of business on the date of receipt of such notice by the Sales Agent, the Forward Seller, the Forward Purchaser or the Company, as the case may be. If such termination shall occur prior to the Settlement Date for any sale of the Shares, such sale shall settle in accordance with the provisions of Sections 3(a)(iii) and 3(a)(iv) of this Agreement.
SECTION 10. Notices. Except as otherwise herein provided, all statements, requests, notices and agreements under this Agreement and the Master Forward Confirmation shall be in writing and delivered by hand, overnight courier, mail or facsimile. Notices to the Sales Agent or the Forward Seller, shall be sufficient in all respects if delivered or sent to [Name; Notice Information]; notices to the Forward Purchaser shall be sufficient in all respects if delivered or sent to [Name; Notice Information]; notices to the Company, shall be sufficient in all respects if delivered or sent to the Company at the offices of the Company at Welltower Inc., 4500 Dorr Street, Toledo, Ohio 43615, or via fax at (419) 247-2826, Attention: Matthew McQueen, Senior Vice President General Counsel and Corporate Secretary. Each party to this Agreement and the Master Forward Confirmation may change such address for notices by sending to the parties to this Agreement and the Master Forward Confirmation written notice of a new address for such purpose.
SECTION 11. Parties at Interest. The Agreement herein set forth and the Master Forward Confirmation have been and are made solely for the benefit of the Sales Agent, the Forward Seller, the Forward Purchaser and the Company and, to the extent provided in Section 7 of this Agreement, the controlling persons, affiliates, directors, officers, employees and agents referred to in such section, and their respective successors, assigns, heirs, personal representatives and executors and administrators. No other person, partnership, association or corporation (including a purchaser, as such purchaser, from the Sales Agent, the Forward Seller and the Forward Purchaser) shall acquire or have any right under or by virtue of this Agreement.
SECTION 12. No Fiduciary Relationship. The Company hereby acknowledges that each of the Sales Agent, the Forward Seller and the Forward Purchaser is acting solely in the capacity of an arms length contractual counterparty to the Company with respect to the offering of Shares contemplated hereby (including in connection with determining the terms of the transactions contemplated hereby or by the Master Forward Confirmation) and owes the Company only those duties and obligations set forth in this Agreement and prior written agreements (to the extent not superseded by this Agreement), if any. The Company further acknowledges that the Sales Agent, the Forward Seller and the Forward Purchaser are acting pursuant to a contractual relationship created solely by this Agreement and the Master Forward Confirmation, each entered into on an arms length basis, and that the Sales Agent, the Forward Seller and the Forward Purchaser may have interests that differ from the Company, and in no event do the parties intend that the Sales Agent, the Forward Seller or the Forward Purchaser act or be responsible as a fiduciary to the Company, its management, stockholders or creditors or any other person in connection with any activity that the Sales Agent, the Forward Seller and the Forward Purchaser may undertake or have undertaken in furtherance of the purchase and sale of the Companys securities, either before or after the date hereof. The Sales Agent, the Forward Seller and the Forward Purchaser hereby expressly disclaims any fiduciary or similar obligations to the Company, either in connection with the transactions contemplated by this Agreement, the Master Forward Confirmation or any matters leading up to such transactions, and the Company hereby confirms its understanding and agreement to that effect. The Company and each of the Sales Agent, the Forward Seller and the
46
Forward Purchaser agree that they are each responsible for making their own independent judgments with respect to any such transactions and that any opinions or views expressed by the Sales Agent, the Forward Seller or the Forward Purchaser, as the case may be, to the Company regarding such transactions, including, but not limited to, any opinions or views with respect to the price or market for the Companys securities, do not constitute advice or recommendations to the Company. The Company hereby waives and releases, to the fullest extent permitted by law, any claims that the Company may have against the Sales Agent, the Forward Seller and the Forward Purchaser with respect to any breach or alleged breach of any fiduciary or similar duty to the Company in connection with the transactions contemplated by this Agreement or any matters leading up to such transactions.
SECTION 13. Adjustments for Stock Splits. The parties acknowledge and agree that all share related numbers contained in this Agreement shall be adjusted to take into account any stock split effected with respect to the Shares.
SECTION 14. Entire Agreement. This Agreement constitute the entire agreement and supersedes all other prior and contemporaneous agreements and undertakings, both written and oral, among the parties hereto with regard to the subject matter hereof.
SECTION 15. Recognition of the U.S. Special Resolution Regimes.
(a) In the event that any Sales Agent, Forward Seller or Forward Purchaser that is a Covered Entity (as defined below) becomes subject to a proceeding under a U.S. Special Resolution Regime (as defined below), the transfer from such Sales Agent, Forward Seller or Forward Purchaser of this Agreement, and any interest and obligation in or under this Agreement, will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if this Agreement, and any such interest and obligation, were governed by the laws of the United States or a state of the United States.
(b) In the event that any Sales Agent, Forward Seller or Forward Purchaser that is a Covered Entity or a BHC Act Affiliate (as defined below) of such Sales Agent, Forward Seller or Forward Purchaser becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights (as defined below) under this Agreement that may be exercised against such Sales Agent, Forward Seller or Forward Purchaser are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if this Agreement were governed by the laws of the United States or a state of the United States.
For purposes of this Section 15, a BHC Act Affiliate has the meaning assigned to the term affiliate in, and shall be interpreted in accordance with, 12 U.S.C. § 1841(k). Covered Entity means any of the following: (i) a covered entity as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b); (ii) a covered bank as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or (iii) a covered FSI as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b). Default Rights has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable. U.S. Special Resolution Regime means each of (i) the Federal Deposit Insurance Act and the regulations promulgated thereunder and (ii) Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations promulgated thereunder.
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SECTION 16. Counterparts. This Agreement may be signed by the parties in one or more counterparts which together shall constitute one and the same agreement among the parties.
SECTION 17. Law; Construction. This Agreement and any claim, counterclaim or dispute of any kind or nature whatsoever arising out of or in any way relating to this Agreement (Claim), directly or indirectly, shall be governed by, and construed in accordance with, the internal laws of the State of New York.
SECTION 18. Headings. The Section headings in this Agreement have been inserted as a matter of convenience of reference and are not a part of this Agreement.
SECTION 19. Submission to Jurisdiction. Except as set forth below, no Claim may be commenced, prosecuted or continued in any court other than the courts of the State of New York located in the City and County of New York or in the United States District Court for the Southern District of New York, which courts shall have jurisdiction over the adjudication of such matters, and the Company consents to the jurisdiction of such courts and personal service with respect thereto. Each of the Sales Agent, the Forward Seller, the Forward Purchaser and the Company (on its behalf and, to the extent permitted by applicable law, on behalf of its stockholders and affiliates) waives all right to trial by jury in any action, proceeding or counterclaim (whether based upon contract, tort or otherwise) in any way arising out of or relating to this Agreement. The Company agrees that a final judgment in any such action, proceeding or counterclaim brought in any such court shall be conclusive and binding upon the Company and may be enforced in any other courts to the jurisdiction of which the Company is or may be subject, by suit upon such judgment.
SECTION 20. Successors and Assigns. This Agreement shall be binding upon the Sales Agent, the Forward Seller, the Forward Purchaser and the Company and their successors and assigns and any successor or assign of any substantial portion of the Companys, the Sales Agents, the Forward Sellers and the Forward Purchasers respective businesses and/or assets. [The parties hereby agree that Merrill Lynch may, without notice to the Company, assign its rights and obligations under this Agreement to any other registered broker-dealer wholly-owned by Bank of America Corporation to which all or substantially all of Merrill Lynchs investment banking or related business may be transferred following the date of this Agreement.]
[The Remainder of This Page Intentionally Left Blank; Signature Page Follows]
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If the foregoing correctly sets forth the understanding between the Company, the Sales Agent, the Forward Seller and the Forward Purchaser, please so indicate in the space provided below for that purpose, whereupon this Agreement and your acceptance shall constitute a binding agreement between the Company and the Sales Agent, the Forward Seller and the Forward Purchaser. Alternatively, the execution of this Agreement by the Company and its acceptance by or on behalf of the Sales Agent, the Forward Seller and the Forward Purchaser may be evidenced by an exchange of telegraphic or other written communications.
Very truly yours, WELLTOWER INC. | ||
By: |
| |
Name: |
||
Title: |
[Signature Page to Amended and Restated Equity Distribution Agreement]
ACCEPTED as of the date first above written | ||
[NAME] |
By: |
| |
Name: | ||
Title: |
[Signature Page to Amended and Restated Equity Distribution Agreement]
ACCEPTED as of the date first above written | ||
[NAME] |
By: |
| |
Name: |
||
Title: |
[Signature Page to Amended and Restated Equity Distribution Agreement]
EXHIBIT A
TRANSACTION NOTICE
, 20
[Bank Name]
[Address]
Attention: | [ ] | |
(facsimilenumber: [ ]) | ||
Email: |
[ ] |
Reference is made to the Amended and Restated Equity Distribution Agreement among Welltower Inc. (the Company), [Name] (in its capacity as agent for the Company in connection with the offering and sale of any Issuance Shares thereunder, Sales Agent, and in its capacity as agent for the Forward Purchaser in connection with the offering and sale of any Forward Hedge Shares thereunder, the Forward Seller), and [Name], as counterparty under any Forward Contract (the Forward Purchaser), dated as of February 25, 2019 (the Equity Distribution Agreement). Capitalized terms used in this Transaction Notice without definition shall have the respective definitions ascribed to them in the Equity Distribution Agreement. This Transaction Notice relates to [an Issuance](1) [a Forward](2). The Company confirms that all conditions to the delivery of this Transaction Notice are satisfied as of the date hereof.
[The Company confirms that it has not declared and will not declare any dividend, or caused or cause there to be any distribution, on the Common Stock if the ex-dividend date or ex-date, as applicable, for such dividend or distribution will occur during the period from, and including, the first Trading Day of the Forward Hedge Selling Period to, and including, the last Trading Day of the Forward Hedge Selling Period.](3)
The Company represents and warrants that each representation, warranty, covenant and other agreement of the Company contained in the Equity Distribution Agreement [and the Master Forward Confirmation](4) is true and correct on the date hereof, and that the Prospectus and any applicable Permitted Free Writing Prospectus, including the documents incorporated by reference therein, as of the date hereof, do not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.
Effective Date of Delivery of Transaction Notice (determined pursuant to Section 3(c)(ii) of the Equity Distribution Agreement):
Number of Days in [Issuance](5) [Forward Hedge](6) Selling Period:
First Date of [Issuance](7) [Forward Hedge](8) Selling Period:
I-1
[Issuance](9) [Forward Hedge](10) Amount: $
[Forward Hedge Selling Commission Rate: %
Forward Price Reduction Dates |
Forward Price Reduction Amounts |
|||
$ | ||||
$ |
Regular Dividend Amounts:
For any calendar quarter ending on or prior to [December 31, 20[ ]]: |
$ | [ | ] | |
For any calendar quarter ending after [December 31, 20[ ]]: |
$ | [ | ]](10) |
[Term: [Days][Months]](11):
Floor Price (Adjustable by Company during the [Issuance](12) [Forward Hedge](13) Selling Period, and in no event less than $1.00 per share): $ per share
(1) | Insert for a Transaction Notice that relates to an Issuance. |
(2) | Insert for a Transaction Notice that relates to a Forward. |
(3) | Insert for a Transaction Notice that relates to a Forward. |
(4) | Insert for a Transaction Notice that relates to a Forward. |
(5) | Insert for a Transaction Notice that relates to an Issuance. |
(6) | Insert for a Transaction Notice that relates to a Forward. |
(7) | Insert for a Transaction Notice that relates to an Issuance. |
(8) | Insert for a Transaction Notice that relates to a Forward. |
(9) | Insert for a Transaction Notice that relates to an Issuance. |
(10) | Insert for a Transaction Notice that relates to a Forward. |
(11) | Insert for a Transaction Notice that relates to a Forward. |
(12) | Insert for a Transaction Notice that relates to an Issuance. |
(13) | Insert for a Transaction Notice that relates to a Forward. |
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EXHIBIT B
1. The Company is a validly existing corporation in good standing under the laws of the State of Delaware, with corporate power and authority to own its properties and conduct its business as described in the Registration Statement, the Basic Prospectus, the Prospectus and any Permitted Free Writing Prospectus.
2. Each subsidiary listed on Annex A is a validly existing corporation, limited liability company or limited partnership in good standing under the laws of its jurisdiction of formation as set forth opposite its name on Annex A.
3. The Company has an authorized capitalization as set forth in the Prospectus. The Shares have been duly authorized and, when issued and delivered against payment therefor in accordance with the terms of the Distribution Agreements, will be validly issued, fully paid and nonassessable. The Forward Hedge Shares have been duly authorized and, when issued and delivered against payment therefor in accordance with the terms of the Distribution Agreements, will be validly issued, fully paid and nonassessable.
4. The Company has all requisite corporate power to execute and deliver the Distribution Agreements, the Master Forward Confirmations and each Supplemental Confirmation executed in connection with the Master Forward Confirmations and perform its obligations thereunder. The execution and delivery by the Company of the Distribution Agreements and the Master Forward Confirmations have been duly authorized by all necessary corporate action. The Distribution Agreements and the Master Forward Confirmations have been duly executed and delivered by the Company. The execution and delivery by the Company of Supplemental Confirmations executed in connection with the Master Forward Confirmations have been authorized by all necessary corporate action.
5. The execution and delivery by the Company of the Distribution Agreements, the Master Forward Confirmations and each Supplemental Confirmation executed in connection with the Master Forward Confirmation, and the consummation of the transactions therein contemplated, including the issuance and sale of the Shares (including, without limitation, upon settlement of any Forward Contract) and the performance by the Company of its obligations under the Distribution Agreements, the Master Forward Confirmations and each Supplemental Confirmation executed in connection with the Master Forward Confirmation:
(i) do not and will not violate the Certificate of Incorporation or By-Laws of the Company;
(ii) based solely upon review of such agreements, do not and will not result in a breach or default under any agreement to which the Company is a party that is identified as material to the Company and its subsidiaries taken as a whole, which agreements are listed in the Companys Annual Report on Form 10-K for the year ended December 31, 2018;
(iii) do not and will not (A) violate, or require any filing with or approval of any governmental authority or regulatory body of the State of New York or the United States of America under, any law, rule or regulation of the State of New York or the United States of America applicable to the Company that, in our experience, is generally applicable to transactions in the nature of those contemplated by the Distribution Agreements, (B)
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violate, or require any filing with or approval of any governmental authority or regulatory body of the State of Delaware under, the Delaware General Corporation Law or (C) require any filing with or approval of any governmental authority or regulatory body of the United States of America under the Securities Act of 1933, as amended (the Securities Act), except for such filings or approvals as already have been made or obtained.
6. Insofar as the statements in the Registration Statement, the Basic Prospectus, the Prospectus and any Permitted Free Writing Prospectus under the captions Descriptions of our Capital StockCommon Stock purport to summarize the documents referred to therein, such statements fairly present in all material respects the information required to be disclosed under the Securities Act and the rules and regulations of the Commission relating to registration statements on Form S-3 and prospectuses. The Shares conform in all material respects to the description thereof contained in the Registration Statement, the Basic Prospectus, the Prospectus and any Permitted Free Writing Prospectus.
7. The Company is not and, after giving effect to the sale of the Shares and the use of proceeds therefrom as described in the Registration Statement, the Basic Prospectus, the Prospectus and any Permitted Free Writing Prospectus, will not be an investment company that is required to be registered under the Investment Company Act of 1940, as amended (the Investment Company Act). For purposes of this paragraph (7), the term investment company has the meanings ascribed to such term in the Investment Company Act.
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EXHIBIT C
(a) The Company has been organized and has operated in conformity with the requirements for qualification and taxation as a REIT pursuant to sections 856 through 860 of the Code for its taxable years ended December 31, 2011 through December 31, 2018;
(b) The Companys organization and current and proposed method of operations, if continued, will enable the Company to continue to meet the requirements for qualification and taxation as a REIT under the Code for its taxable year ending December 31, 2019 and each taxable year thereafter; and
(c) The discussion contained under the caption Taxation in the Companys Annual Report on Form 10-K to the extent it constitutes matters of U.S. federal income tax law or legal conclusions relating thereto, and subject to the limitations, qualifications and assumptions set forth therein, fairly and accurately summarizes in all material respects the matters set forth therein.
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Schedule A
Permitted Free Writing Prospectuses
None.
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Schedule B
Sales Agent Compensation
The compensation to the Sales Agent, as an agent of the Company, for the sale of the shares shall not exceed 1.50% of the Sales Price of Issuance Shares sold during a Selling Period.
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Schedule C
Forward Hedge Selling Commission Rate
The Forward Hedge Selling Commission Rate means a rate mutually agreed to between the Company and the Forward Seller, not to exceed 1.50%.
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Exhibit 1.2
To: | Welltower Inc. | |
4500 Dorr Street | ||
Toledo, Ohio 43615 | ||
From: | [DEALER] | |
Re: | Issuer Share Forward Sale Transactions | |
Date: | February 25, 2019 |
Ladies and Gentlemen:
The purpose of this communication (this Master Confirmation) is to set forth the terms and conditions of the transactions to be entered into from time to time between [Dealer] (Dealer) and Welltower Inc. (Counterparty) in accordance with the terms of the Amended and Restated Equity Distribution Agreement, dated as of February 25, 2019 (the Equity Distribution Agreement), between Dealer and Counterparty on one or more Trade Dates specified herein (collectively, the Transactions and each, a Transaction). This communication constitutes a Confirmation as referred to in the Agreement specified below. Each Transaction will be evidenced by a supplemental confirmation (each, a Supplemental Confirmation, and each such Supplemental Confirmation, together with this Master Confirmation, a Confirmation for purposes of the Agreement specified below) substantially in the form of Exhibit A hereto. Each Confirmation will be a confirmation for purposes of Rule 10b-10 promulgated under the Securities Exchange Act of 1934, as amended (the Exchange Act).
1. Each Confirmation is subject to, and incorporates, the 2002 ISDA Equity Derivatives Definitions (the Equity Definitions), as published by the International Swaps and Derivatives Association, Inc. (ISDA). For purposes of the Equity Definitions, each Transaction will be deemed to be a Share Forward Transaction.
Each Confirmation shall supplement, form a part of and be subject to an agreement (the Agreement) in the form of the ISDA 2002 Master Agreement (the ISDA Form), as published by ISDA, as if Dealer and Counterparty had executed the ISDA Form on the date hereof (but without any Schedule except for (i) the election of New York law (without regard to New Yorks choice of laws doctrine other than Title 14 of Article 5 of the New York General Obligations Law (the General Obligations Law)) as the governing law and US Dollars (USD) as the Termination Currency and (ii) the election that the Cross Default provisions of Section 5(a)(vi) shall apply to Dealer and Counterparty with a Threshold Amount in respect of Dealer of 3% of the stockholders equity of [Dealer/Dealer Parent] and a Threshold Amount in respect of Counterparty of USD200,000,000; provided that (x) the words , or becoming capable at such time of being declared, shall be deleted from clause (1) thereof, (y) Specified Indebtedness has the meaning specified in Section 14 of the Agreement, except that such term shall not include obligations in respect of deposits received in the ordinary course of Dealers banking business and (z) the following language shall be added to the end of such Section 5(a)(vi): Notwithstanding the foregoing, a default under subsection (2) hereof shall not constitute an Event of Default if (X) the default was caused solely by error or omission of an
administrative or operational nature; (Y) funds were available to enable the party to make the payment when due; and (Z) the payment is made within two Local Business Days of such partys receipt of written notice of its failure to pay;).
All provisions contained in the Agreement are incorporated into and shall govern each Confirmation except as expressly modified below. Each Confirmation evidences a complete and binding agreement between Dealer and Counterparty as to the terms of the relevant Transaction and replaces any previous agreement between the parties with respect to the subject matter hereof.
The Transactions hereunder shall be the sole Transactions under the Agreement. If there exists any ISDA Master Agreement between Dealer or any of its Affiliates and Counterparty or any confirmation or other agreement between Dealer or any of its Affiliates and Counterparty pursuant to which an ISDA Master Agreement is deemed to exist between Dealer or any of its Affiliates and Counterparty, then notwithstanding anything to the contrary in such ISDA Master Agreement, such confirmation or agreement or any other agreement to which Dealer or such other Affiliates and Counterparty are parties, the Transactions shall not be considered Transactions under, or otherwise governed by, such existing or deemed ISDA Master Agreement. In the event of any inconsistency among the Agreement, this Master Confirmation, any Supplemental Confirmation and the Equity Definitions, the following will prevail in the order of precedence indicated: (i) such Supplemental Confirmation; (ii) this Master Confirmation; (iii) the Equity Definitions; and (iv) the Agreement.
2. The terms of the particular Transactions to which this Master Confirmation relates are as follows:
General Terms:
Trade Date: | For each Transaction, as specified in the Supplemental Confirmation for such Transaction, to be, subject to the provisions opposite the caption Early Valuation below, the last Trading Day (as defined in the Equity Distribution Agreement) of the Forward Hedge Selling Period (as defined in the Equity Distribution Agreement) for such Transaction. | |
Effective Date: | For each Transaction, as specified in the Supplemental Confirmation for such Transaction, to be the date that is one Settlement Cycle following the Trade Date for such Transaction, or such later date on which the conditions set forth in Section 3 of this Master Confirmation shall have been satisfied. | |
Buyer: | Dealer | |
Seller: | Counterparty |
Maturity Date: | For each Transaction, as specified in the Supplemental Confirmation for such Transaction, to be the date that follows the Trade Date for such Transaction by the number of days or months set forth in the Transaction Notice (as defined in the Equity Distribution Agreement) for such Transaction (or, if such date is not a Scheduled Trading Day, the next following Scheduled Trading Day). | |
Shares: | The shares of common stock, par value $1.00 per Share, of Counterparty (Ticker: WELL) | |
Number of Shares: | For each Transaction, initially, as specified in the Supplemental Confirmation for such Transaction, to be the number of Shares equal to the Actual Sold Forward Amount (as defined in the Equity Distribution Agreement) for the Forward Hedge Selling Period for such Transaction, as reduced on each Relevant Settlement Date (as defined under Settlement Terms below) by the number of Settlement Shares to which the related Valuation Date relates. | |
Settlement Currency: | USD | |
Exchange: | The New York Stock Exchange | |
Related Exchange: | All Exchanges | |
Prepayment: | Not Applicable | |
Variable Obligation: | Not Applicable | |
Forward Price: | For each Transaction, on the Effective Date for such Transaction, the Initial Forward Price for such Transaction, and on any calendar day thereafter, the product of the Forward Price for such Transaction on the immediately preceding calendar day and | |
1 + the Daily Rate * (1/365); | ||
provided that the Forward Price for such Transaction on each Forward Price Reduction Date for such Transaction shall be the Forward Price for such Transaction otherwise in effect on such date minus the Forward Price Reduction Amount for such Forward Price Reduction Date. | ||
Initial Forward Price: | For each Transaction, as specified in the Supplemental Confirmation for such Transaction, to be the product of (i) an amount equal to 1 minus the Forward Hedge Selling Commission Rate (as defined in the Equity Distribution |
Agreement) applicable to such Transaction; and (ii) the Volume-Weighted Hedge Price, subject to adjustment as set forth herein. | ||
Volume-Weighted Hedge Price: | For each Transaction, as specified in the Supplemental Confirmation for such Transaction, to be the volume-weighted average of the Sales Prices (as defined in the Equity Distribution Agreement) per share of Forward Hedge Shares (as defined in the Equity Distribution Agreement) sold by Dealer (or its agent or affiliates) on each Trading Day of the Forward Hedge Selling Period for such Transaction, as determined by the Calculation Agent; provided that, solely for the purposes of calculating the Initial Forward Price, each such Sales Price (other than the Sales Price for the last day of the relevant Forward Hedge Selling Period) shall be subject to adjustment by the Calculation Agent in the same manner as the Forward Price pursuant to the definition thereof during the period from, and including, the date one Settlement Cycle immediately following the first Trading Day of the relevant Forward Hedge Selling Period on which the Forward Hedge Shares related to such Sales Price are sold to, and including, the Effective Date of such Transaction. | |
Daily Rate: | For any day, the Overnight Bank Funding Rate minus the Spread. | |
Spread: | For each Transaction, as specified in the Supplemental Confirmation for such Transaction. | |
Overnight Bank Funding Funds Rate: | For any day, the rate set forth for the Currency Business Day immediately preceding such day opposite the caption Overnight Bank Funding Rate, as such rate is displayed on the page OBFR01 on the BLOOMBERG Professional Service, or any successor page; provided that if no such rate appears for any day on such page, the rate for the immediately preceding day for which a rate appears shall be used for such day. | |
Forward Price Reduction Dates: | For each Transaction, as specified in Schedule I to the Supplemental Confirmation for such Transaction, to be each date set forth under the heading Forward Price Reduction Date in the Transaction Notice for such Transaction. |
Forward Price Reduction Amount: | For each Forward Price Reduction Date, the Forward Price Reduction Amount set forth opposite such date on Schedule I to the Supplemental Confirmation for such Transaction. | |
Valuation: | ||
Valuation Date: | For any Settlement (as defined below) with respect to any Transaction, if Physical Settlement is applicable, as designated in the relevant Settlement Notice (as defined below); or if Cash Settlement or Net Share Settlement is applicable, the last Unwind Date for such Settlement. Section 6.6 of the Equity Definitions shall not apply to any Valuation Date. | |
Unwind Dates: | For any Cash Settlement or Net Share Settlement with respect to any Settlement of any Transaction, each day on which Dealer (or its agent or affiliate) purchases Shares in the market in connection with unwinding its commercially reasonable hedge position in connection with such Settlement, starting on the First Unwind Date for such Settlement. | |
First Unwind Date: | For any Cash Settlement or Net Share Settlement with respect to any Settlement of any Transaction, as designated in the relevant Settlement Notice. | |
Unwind Period: | For any Cash Settlement or Net Share Settlement with respect to any Settlement of any Transaction, the period starting on the First Unwind Date for such Settlement and ending on the Valuation Date for such Settlement. | |
Valuation Disruption: | If Cash Settlement or Net Share Settlement is applicable with respect to any Transaction and any Unwind Date during the related Unwind Period is a Disrupted Day, the Calculation Agent shall determine whether (i) such Disrupted Day is a Disrupted Day in full, in which case the 10b-18 VWAP for such Disrupted Day shall not be included in the calculation of the Settlement Price, or (ii) such Disrupted Day is a Disrupted Day only in part, in which case the 10b-18 VWAP for such Disrupted Day shall be determined by the Calculation Agent based on Rule 10b-18 eligible transactions (as defined below) in the Shares on such Disrupted Day, taking into account the nature and duration of the relevant Market Disruption Event, and the weightings of the 10b-18 VWAP for each Unwind Date during such Unwind Period shall be adjusted in a commercially reasonable manner by the Calculation Agent |
for purposes of determining the Settlement Price to account for the occurrence of such partially Disrupted Day, with such adjustments based on, among other factors, the duration of any Market Disruption Event and the volume, historical trading patterns and price of the Shares. | ||
Market Disruption Event: | The definition of Market Disruption Event in Section 6.3(a) of the Equity Definitions is hereby amended by deleting the words at any time during the one-hour period that ends at the relevant Valuation Time, Latest Exercise Time, Knock-in Valuation Time or Knock-out Valuation Time, as the case may be and inserting the words at any time on any Exchange Business Day during the Valuation Period after the word material, in the third line thereof. | |
Section 6.3(d) of the Equity Definitions is hereby amended by deleting the remainder of the provision following the term Scheduled Closing Time in the fourth line thereof. | ||
Settlement Terms: | ||
Settlement: | With respect to any Transaction, any Physical Settlement, Cash Settlement or Net Share Settlement of all or any portion of such Transaction. | |
Settlement Notice: | For any Transaction, subject to Early Valuation below, Counterparty may elect to effect a Settlement of all or any portion of such Transaction by designating one or more Scheduled Trading Days following the Effective Date for such Transaction and on or prior to the Maturity Date for such Transaction to be Valuation Dates (or, with respect to Cash Settlements or Net Share Settlements of such Transaction, First Unwind Dates, each of which First Unwind Dates shall occur no later than the 60th Scheduled Trading Day immediately preceding the Maturity Date for such Transaction) in a written notice to Dealer (a Settlement Notice) delivered no later than the applicable Settlement Method Election Date for such Transaction, which notice shall also specify (i) the number of Shares (the Settlement Shares) for such Settlement (not to exceed the number of Undesignated Shares for such Transaction as of the date of such Settlement Notice) and (ii) the Settlement Method applicable to such Settlement; provided that (A) Counterparty may not designate a First Unwind Date for a Cash Settlement or a Net Share Settlement of any Transaction if, as of the date of such Settlement Notice, any Shares have been designated as Settlement Shares for a |
Cash Settlement or a Net Share Settlement of such Transaction for which the related Relevant Settlement Date has not occurred; and (B) if the number of Undesignated Shares as of the Maturity Date for such Transaction is not zero, then the Maturity Date for such Transaction shall be a Valuation Date for a Physical Settlement of such Transaction and the number of Settlement Shares for such Settlement shall be the number of Undesignated Shares for such Transaction as of the Maturity Date for such Transaction (provided that if such Maturity Date occurs during the period from the time any Settlement Notice is given for a Cash Settlement or Net Share Settlement of such Transaction until the related Relevant Settlement Date, inclusive, then the provisions set forth below opposite Early Valuation shall apply to such Transaction as if the Maturity Date for such Transaction were the Early Valuation Date for such Transaction). | ||
Undesignated Shares: | For any Transaction, as of any date, the Number of Shares for such Transaction minus the number of Shares designated as Settlement Shares for Settlements of such Transaction for which the related Relevant Settlement Date has not occurred. | |
Settlement Method Election: | For any Transaction, applicable; provided that: | |
(i) Net Share Settlement shall be deemed to be included as an additional settlement method under Section 7.1 of the Equity Definitions; | ||
(ii) Counterparty may elect Cash Settlement or Net Share Settlement for any Settlement of any Transaction only if Counterparty represents and warrants to Dealer in the Settlement Notice containing such election that, as of the date of such Settlement Notice, (A) Counterparty is not aware of any material nonpublic information concerning itself or the Shares, (B) Counterparty is electing the settlement method and designating the First Unwind Date specified in such Settlement Notice in good faith and not as part of a plan or scheme to evade compliance with Rule 10b-5 under the Exchange Act (Rule 10b-5) or any other provision of the federal securities laws, (C) Counterparty is not insolvent (as such term is defined under Section 101(32) of the U.S. Bankruptcy Code (Title 11 of the United States Code) (the Bankruptcy Code)), (D) Counterparty would be able to purchase a number of Shares equal to the greater of (x) the number of Settlement Shares |
designated in such Settlement Notice and (y) a number of Shares with a value as of the date of such Settlement Notice equal to the product of (I) such number of Settlement Shares and (II) the applicable Relevant Forward Price for such Cash Settlement or Net Share Settlement in compliance with the laws of Counterpartys jurisdiction of organization and (E) such election, and settlement in accordance therewith, does not and will not violate or conflict with any law or regulation applicable to Counterparty, or any order or judgment of any court or other agency of government applicable to it or any of its assets, and any governmental consents that are required to have been obtained by Counterparty with respect to such election or settlement have been obtained and are in full force and effect and all conditions of any such consents have been complied with; and | ||||
(iii) Notwithstanding any election to the contrary in any Settlement Notice, Physical Settlement shall be applicable for any Settlement of any Transaction: | ||||
(A) | to all of the Settlement Shares designated in such Settlement Notice if, at any time from the date such Settlement Notice is received by Dealer until the related First Unwind Date, inclusive, (I) the trading price per Share on the Exchange (as determined by Dealer in a commercially reasonable manner) is below the Threshold Price or (II) Dealer determines, in its good faith and commercially reasonable judgment, that it would, after using commercially reasonable efforts, be unable to purchase a number of Shares in the market sufficient to unwind a commercially reasonable hedge position in respect of the portion of the Transaction represented by such Settlement Shares and satisfy its delivery obligation hereunder, if any, by the Maturity Date (x) in a manner that (A) would, if Dealer were Counterparty or an affiliated purchaser of Counterparty, be subject to the safe harbor provided by Rule 10b-18(b) under the Exchange Act and (B) based on advice of counsel, would not raise material risks under applicable securities laws or (y) due to the lack of sufficient liquidity in the Shares (each, a Trading Condition); or | |||
(B) | to all or a portion of the Settlement Shares designated in such Settlement Notice if, on any day during the |
relevant Unwind Period, (I) the trading price per Share on the Exchange (as determined by Dealer in a commercially reasonable manner) is below the Threshold Price or (II) Dealer determines, in its good faith and commercially reasonable judgment or based on advice of counsel, as applicable, that a Trading Condition has occurred with respect to such Transaction, in which case the provisions set forth below in the fourth paragraph opposite Early Valuation shall apply as if such day were the Early Valuation Date for such Transaction and (x) for purposes of clause (i) of such paragraph, such day shall be the last Unwind Date of such Unwind Period and the Unwound Shares shall be calculated to, and including, such day and (y) for purposes of clause (ii) of such paragraph, the Remaining Shares shall be equal to the number of Settlement Shares designated in such Settlement Notice minus the Unwound Shares determined in accordance with clause (x) of this sentence. | ||||
Threshold Price: | For each Transaction, as specified in the Supplemental Confirmation for such Transaction, to be 50% of the Initial Forward Price for such Transaction. | |||
Electing Party: | Counterparty | |||
Settlement Method Election Date: | With respect to any Settlement of any Transaction, the 2nd Scheduled Trading Day immediately preceding (x) the Valuation Date for such Transaction, in the case of Physical Settlement, or (y) the First Unwind Date for such Transaction, in the case of Cash Settlement or Net Share Settlement. | |||
Default Settlement Method: | Physical Settlement | |||
Physical Settlement: | Notwithstanding Section 9.2(a)(i) of the Equity Definitions, on the Settlement Date for any Physical Settlement of any Transaction, Dealer shall pay to Counterparty an amount in USD equal to the Forward Price for such Transaction on the relevant Settlement Date multiplied by the number of Settlement Shares for such Settlement, and Counterparty shall deliver to Dealer such Settlement Shares. |
Settlement Date: | For any Settlement of any Transaction to which Physical Settlement is applicable, the Valuation Date for such Settlement. | |
Net Share Settlement: | On the Net Share Settlement Date for any Settlement of any Transaction to which Net Share Settlement is applicable, if the Net Share Settlement Amount for such Settlement is greater than zero, Counterparty shall deliver a number of Shares equal to such Net Share Settlement Amount (rounded down to the nearest integer) to Dealer, and if such Net Share Settlement Amount is less than zero, Dealer shall deliver a number of Shares equal to the absolute value of such Net Share Settlement Amount (rounded down to the nearest integer) to Counterparty, in either case, in accordance with Section 9.4 of the Equity Definitions, with such Net Share Settlement Date deemed to be a Settlement Date for purposes of such Section 9.4, and, in either case, plus cash in lieu of any fractional Shares included in such Net Share Settlement Amount but not delivered due to rounding required hereby, valued at the relevant Settlement Price. | |
Net Share Settlement Date: | For any Settlement of any Transaction to which Net Share Settlement is applicable, the date that follows the Valuation Date for such Settlement by one Settlement Cycle. | |
Net Share Settlement Amount: | For any Settlement of any Transaction to which Net Share Settlement is applicable, an amount equal to the Forward Cash Settlement Amount for such Settlement divided by the Settlement Price for such Settlement. | |
Forward Cash Settlement Amount: | Notwithstanding Section 8.5(c) of the Equity Definitions, the Forward Cash Settlement Amount for any Cash Settlement or Net Share Settlement of any Transaction shall be equal to (i) the number of Settlement Shares for such Settlement multiplied by (ii) an amount equal to (A) the Settlement Price for such Settlement minus (B) the Relevant Forward Price for such Settlement. | |
Relevant Forward Price: | For any Cash Settlement or Net Share Settlement of any Transaction, subject to Valuation Disruption above, the arithmetic average of the Forward Prices for such Transaction on each Unwind Date relating to such Settlement. | |
Settlement Price: | For any Cash Settlement or Net Share Settlement of any Transaction, subject to Valuation Disruption above, the |
arithmetic average of the 10b-18 VWAP on each Unwind Date relating to such Settlement, plus a commercially reasonable amount determined by the Calculation Agent that in no event will exceed USD0.03. | ||
10b-18 VWAP: | For any Exchange Business Day, as determined by the Calculation Agent based on the New York 10b-18 Volume Weighted Average Price per Share for the regular trading session (including any extensions thereof) of the Exchange on such Exchange Business Day (without regard to pre-open or after hours trading outside of such regular trading session for such Exchange Business Day), as published by Bloomberg at 4:15 p.m. New York time (or 15 minutes following the end of any extension of the regular trading session) on such Exchange Business Day, on Bloomberg page WELL <Equity> AQR_SEC (or any successor thereto), or if such price is not so reported on such Exchange Business Day for any reason or is, in the Calculation Agents reasonable determination, erroneous, such 10b-18 VWAP shall be as reasonably determined by the Calculation Agent. For purposes of calculating the 10b- 18 VWAP for such Exchange Business Day, the Calculation Agent will include only those trades that are reported during the period of time during which Counterparty could purchase its own shares under Rule 10b-18(b)(2) and are effected pursuant to the conditions of Rule 10b-18(b)(3), each under the Exchange Act (such trades, Rule 10b-18 eligible transactions). | |
Unwind Activities: | The times and prices at which Dealer (or its agent or affiliate) purchases any Shares during any Unwind Period in connection with unwinding its commercially reasonable hedge position in respect of each Transaction shall be determined by Dealer in a commercially reasonable manner. Without limiting the generality of the foregoing, in the event that Dealer concludes, in its reasonable discretion based on advice of counsel, that it is appropriate with respect to any legal, regulatory or self-regulatory requirements or related policies and procedures (whether or not such requirements, policies or procedures are imposed by law or have been voluntarily adopted by Dealer) (a Regulatory Disruption), for it to refrain from purchasing Shares in connection with unwinding its commercially reasonable hedge position in respect of such Transaction on any Scheduled Trading Day that would have been an Unwind Date but for the occurrence of a Regulatory Disruption, Dealer may (but shall not be required to) notify |
Counterparty in writing that a Regulatory Disruption has occurred on such Scheduled Trading Day with respect to such Transaction, in which case Dealer shall, to the extent practicable in its good faith discretion, specify the nature of such Regulatory Disruption, and, for the avoidance of doubt, such Scheduled Trading Day shall not be an Unwind Date for such Transaction and such Regulatory Disruption shall be deemed to be a Market Disruption Event; provided that Dealer may exercise its right to suspend under this sentence only in good faith in relation to events or circumstances that are not the result of actions of it or any of its Affiliates that are taken with the intent to avoid its obligations under the Transactions. | ||
Relevant Settlement Date: | For any Settlement of any Transaction, the Settlement Date, Cash Settlement Payment Date or Net Share Settlement Date for such Settlement, as the case may be. | |
Other Applicable Provisions: | To the extent Dealer is obligated to deliver Shares under any Transaction, the provisions of Sections 9.2 (last sentence only), 9.8, 9.9, 9.10, 9.11 and 9.12 of the Equity Definitions will be applicable as if Physical Settlement applied to such Transaction; provided that the Representation and Agreement contained in Section 9.11 of the Equity Definitions shall be modified by excluding any representations therein relating to restrictions, obligations, limitations or requirements under applicable securities laws that exist as a result of the fact that Counterparty is the issuer of the Shares. | |
Share Adjustments: | ||
Potential Adjustment Events: | An Extraordinary Dividend shall not constitute a Potential Adjustment Event. For the avoidance of doubt, a cash dividend on the Shares that differs from expected dividends as of the first Trading Day of the Forward Hedge Selling Period for such Transaction shall not be a Potential Adjustment Event under Section 11.2(e)(vii) of the Equity Definitions with respect to such Transaction. | |
Extraordinary Dividend: | For any Transaction, any dividend or distribution on the Shares with an ex-dividend date occurring on any day following the first Trading Day of the Forward Hedge Selling Period for such Transaction (other than (i) any dividend or distribution of the type described in Section 11.2(e)(i) or Section 11.2(e)(ii)(A) of the Equity Definitions or (ii) a regular, quarterly cash dividend in an amount equal |
to or less than the Regular Dividend Amount for such calendar quarter for such Transaction that has an ex-dividend date no earlier than the Forward Price Reduction Date occurring in the relevant quarter for such Transaction). | ||
Regular Dividend Amount: | For each Transaction and for each calendar quarter, the amount set forth under the heading Regular Dividend Amount in the Transaction Notice for such Transaction and for such calendar quarter (or, if no such amount is specified, zero), as specified in Schedule I to the Supplemental Confirmation for such Transaction. | |
Method of Adjustment: | Calculation Agent Adjustment | |
Extraordinary Events: | ||
Extraordinary Events: | The consequences that would otherwise apply under Article 12 of the Equity Definitions to any applicable Extraordinary Event (excluding any Failure to Deliver, Increased Cost of Hedging, Increased Cost of Stock Borrow or any Extraordinary Event that also constitutes a Bankruptcy Termination Event, but including, for the avoidance of doubt, any other applicable Additional Disruption Event) shall not apply. | |
Tender Offer: | Applicable; provided that Section 12.1(d) of the Equity Definitions shall be amended by replacing the reference therein to 10% with a reference to 20%. | |
Delisting: | In addition to the provisions of Section 12.6(a)(iii) of the Equity Definitions, it shall also constitute a Delisting if the Exchange is located in the United States and the Shares are not immediately re-listed, re-traded or re-quoted on any of the New York Stock Exchange, the NASDAQ Global Select Market or the NASDAQ Global Market (or their respective successors); if the Shares are immediately re-listed, re-traded or re-quoted on any such exchange or quotation system, such exchange or quotation system shall be deemed to be the Exchange. | |
Additional Disruption Events: | ||
Change in Law: | Applicable; provided that (A) any determination as to whether (i) the adoption of or any change in any applicable law or regulation (including, without limitation, any tax law) or (ii) the promulgation of or any change in or public announcement of the formal or informal interpretation by any court, tribunal or regulatory authority with competent |
jurisdiction of any applicable law or regulation (including any action taken by a taxing authority), in each case, constitutes a Change in Law shall be made without regard to Section 739 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 or any similar legal certainty provision in any legislation enacted, or rule or regulation promulgated, on or after the Trade Date, (B) Section 12.9(a)(ii) of the Equity Definitions is hereby amended (i) by adding the words (including, for the avoidance of doubt and without limitation, adoption or promulgation of new regulations authorized or mandated by existing statute) after the word regulation in the second line thereof and (ii) by replacing the words the interpretation with the words or public announcement of any formal or informal interpretation in the third line thereof and (C) the words , unless the illegality is due to an act or omission of the party seeking to elect termination of the Transaction with the intent to avoid its obligations under the terms of the Transaction are added immediately following the word Transaction in the fifth line thereof; and provided further that Section 12.9(a)(ii) of the Equity Definitions is hereby amended by adding the phrase and/or Hedge Position after the word Shares in clause (X) thereof and (iii) by immediately following the word Transaction in clause (X) thereof, adding the phrase in the manner contemplated by the Hedging Party on the Trade Date. | ||
Failure to Deliver: | Applicable with respect to a Transaction if Dealer is required to deliver Shares under such Transaction; otherwise, Not Applicable. | |
Hedging Disruption: | Applicable | |
Increased Cost of Hedging: | Applicable; provided that Section 12.9(b)(vi) of the Equity Definitions shall be amended by (i) adding the word or before clause (B) of the second sentence thereof, (ii) deleting clause (C) of the second sentence thereof and (iii) deleting the third and fourth sentences thereof. | |
Increased Cost of Stock Borrow: | Applicable; provided that Section 12.9(b)(v) of the Equity Definitions shall be amended by (i) adding the word or before clause (B) of the second sentence thereof, (ii) deleting clause (C) of the second sentence thereof and (iii) deleting the third, fourth and fifth sentences thereof. For the avoidance of doubt, upon the announcement of any event that, if consummated, would result in a Merger Event or |
Tender Offer, the term rate to borrow Shares as used in Section 12.9(a)(viii) of the Equity Definitions shall include any commercially reasonable cost borne or amount payable by the Hedging Party in respect of maintaining or reestablishing its commercially reasonable hedge position with respect to the relevant Transaction, including, but not limited to, any assessment or other amount payable by the Hedging Party to a lender of Shares in respect of any merger or tender offer premium, as applicable. For the avoidance of doubt, for each Transaction, Increased Cost of Stock Borrow shall apply from the beginning of the Forward Hedge Selling Period for such Transaction. | ||
Initial Stock Loan Rate: | For each Transaction, as specified in the Supplemental Confirmation for such Transaction. | |
Loss of Stock Borrow: | Applicable; provided that Section 12.9(b)(iv) of the Equity Definitions shall be amended by (i) deleting clause (A) of the first sentence thereof in its entirety and (ii) deleting the words neither the Non-Hedging Party nor the Lending Party lends Shares in the amount of the Hedging Shares or in the second sentence thereof. For the avoidance of doubt, for each Transaction, Loss of Stock Borrow shall apply from the beginning of the Forward Hedge Selling Period for such Transaction. | |
Maximum Stock Loan Rate: | For each Transaction, as specified in the Supplemental Confirmation for such Transaction. | |
Hedging Party: | For all applicable Additional Disruption Events, Dealer | |
Determining Party: | For all applicable Extraordinary Events, Dealer | |
Early Valuation: | ||
Early Valuation: | For any Transaction, notwithstanding anything to the contrary herein, in the Agreement, in any Supplemental Confirmation or in the Equity Definitions, at any time (x) following the occurrence of a Hedging Event with respect to such Transaction, the declaration by Issuer of an Extraordinary Dividend, or an ISDA Event with respect to such Transaction or (y) if an Excess Section 13 Ownership Position, an Excess NYSE Ownership Position or an Excess Regulatory Ownership Position exists, Dealer (or, in the case of such an ISDA Event that is an Event of Default or Termination Event, the party entitled to designate an Early Termination Date in respect of such event pursuant to |
Section 6 of the Agreement) shall have the right to designate any Scheduled Trading Day to be the Early Valuation Date for such Transaction, in which case the provisions set forth in this Early Valuation section shall apply to such Transaction, in the case of an Event of Default or Termination Event, in lieu of Section 6 of the Agreement. For the avoidance of doubt, any amount calculated pursuant to this Early Valuation section as a result of an Extraordinary Dividend shall not be adjusted by the value associated with such Extraordinary Dividend. | ||
Dealer represents and warrants to and agrees with Counterparty that (i) based upon advice of counsel, Dealer (A) does not know of the existence on the first Trading Day of the relevant Forward Hedge Selling Period of an Excess Section 13 Ownership Position, an Excess NYSE Ownership Position or an Excess Regulatory Ownership Position and (B) based on reasonable internal inquiry in the ordinary course of Dealers business does not know on the first Trading Day of the relevant Forward Hedge Selling Period of any event or circumstance that will cause the occurrence of an Excess Section 13 Ownership Position, an Excess NYSE Ownership Position or an Excess Regulatory Ownership Position on any day during the term of such Transaction; and (ii) Dealer will not knowingly cause the occurrence of an Excess Section 13 Ownership Position, an Excess NYSE Ownership Position or an Excess Regulatory Ownership Position on any day during the term of any Transaction for the purpose, in whole or in part, of causing the occurrence of an Early Valuation Date. | ||
If an Early Valuation Date for a Transaction occurs on a date that is not during an Unwind Period for such Transaction, then such Early Valuation Date shall be a Valuation Date for a Physical Settlement of such Transaction, and the number of Settlement Shares for such Settlement shall be the Number of Shares on such Early Valuation Date; provided that Dealer may in its sole discretion permit Counterparty to elect Cash Settlement or Net Share Settlement in respect of such Transaction. Notwithstanding anything to the contrary in this Master Confirmation, any Supplemental Confirmation, the Agreement or the Equity Definitions, if Dealer designates an Early Valuation Date with respect to a Transaction following the occurrence of an ISDA Event and such Early Valuation Date is to occur before the date that is one Settlement Cycle after the last day of the Forward Hedge |
Selling Period for such Transaction, then, for purposes of such Early Valuation Date, (i) a Supplemental Confirmation relating to such Transaction shall, notwithstanding the provisions under Section 3 below, be deemed to be effective; and (ii) the Forward Price shall be deemed to be the Initial Forward Price (calculated assuming that the last Trading Day of such Forward Hedge Selling Period were the day immediately following the date Dealer so notifies Counterparty of such designation of an Early Valuation Date for purposes of such Early Valuation Date). | ||
If an Early Valuation Date for a Transaction occurs during an Unwind Period for such Transaction, then (i) (A) the last Unwind Date of such Unwind Period shall be deemed to be such Early Valuation Date, (B) a Settlement shall occur in respect of such Unwind Period, and the Settlement Method elected by Counterparty in respect of such Settlement shall apply, and (C) the number of Settlement Shares for such Settlement shall be the number of Unwound Shares for such Unwind Period on such Early Valuation Date, and (ii) (A) such Early Valuation Date shall be a Valuation Date for an additional Physical Settlement of such Transaction (provided that Dealer may in its sole discretion elect that the Settlement Method elected by Counterparty for the Settlement described in clause (i) of this sentence shall apply) and (B) the number of Settlement Shares for such additional Settlement shall be the number of Remaining Shares on such Early Valuation Date. | ||
Notwithstanding the foregoing, in the case of a Nationalization or Merger Event, if at the time of the related Relevant Settlement Date the Shares have changed into cash or any other property or the right to receive cash or any other property, the Calculation Agent shall adjust the nature of the Shares as it determines appropriate to account for such change such that the nature of the Shares is consistent with what shareholders receive in such event. | ||
ISDA Event: | (i) Any Event of Default or Termination Event, other than an Event of Default or Termination Event that also constitutes a Bankruptcy Termination Event, that gives rise to the right of either party to designate an Early Termination Date pursuant to Section 6 of the Agreement or (ii) the announcement of any event or transaction on or after the first Trading Day of the Forward Hedge Selling Period for such Transaction that, if consummated, would result in a Merger Event, Tender Offer, Nationalization, Delisting or |
Change in Law, in each case, as determined by the Calculation Agent. | ||
Amendment to Merger Event: | Section 12.1(b) of the Equity Definitions is hereby amended by deleting the remainder of such Section beginning with the words in each case if the Merger Date is on or before in the fourth to last line thereof. | |
Hedging Event: | In respect of any Transaction, the occurrence of any of the following events on or following the first Trading Day of the Forward Hedge Selling Period: (i) (x) a Loss of Stock Borrow in connection with which Counterparty does not refer the Hedging Party to a satisfactory Lending Party within the required time period as provided in Section 12.9(b)(iv) of the Equity Definitions or (y) a Hedging Disruption, (ii) (A) an Increased Cost of Stock Borrow or (B) an Increased Cost of Hedging in connection with which, in the case of sub-clause (A) or (B), Counterparty does not elect, and so notify the Hedging Party of its election, in each case, within the required time period to either amend such Transaction pursuant to Section 12.9(b)(v)(A) or Section 12.9(b)(vi)(A) of the Equity Definitions, as applicable, or pay an amount determined by the Calculation Agent that corresponds to the relevant Price Adjustment pursuant to Section 12.9(b)(v)(B) or Section 12.9(b)(vi)(B) of the Equity Definitions, as applicable, or (iii) a Market Disruption Event during an Unwind Period for such Transaction and the continuance of such Market Disruption Event for at least eight Scheduled Trading Days. In respect of any Transaction, if a Hedging Event occurs with respect to such Transaction on or after the first Trading Day of the Forward Hedge Selling Period (as each such term is defined in the Equity Distribution Agreement) for such Transaction and prior to the Trade Date for such Transaction, the Calculation Agent may reduce the Initial Forward Price to account for such Hedging Event and any commercially reasonable costs or expenses incurred by Dealer in relation to its commercially reasonable hedge position as a result of such Hedging Event. | |
Remaining Shares: | For any Transaction, on any day, the Number of Shares for such Transaction as of such day (or, if such day occurs during an Unwind Period for such Transaction, the Number of Shares for such Transaction as of such day minus the Unwound Shares for such Transaction for such Unwind Period on such day). |
Unwound Shares: | For any Transaction, for any Unwind Period in respect of such Transaction on any day, the aggregate number of Shares with respect to which Dealer has unwound its commercially reasonable hedge position in respect of such Transaction in connection with the related Settlement as of such day. | |
Acknowledgements: | ||
Non-Reliance: | Applicable | |
Agreements and Acknowledgements Regarding Hedging Activities: | Applicable | |
Additional Acknowledgements: | Applicable | |
Transfer: | Notwithstanding anything to the contrary in the Agreement, Dealer may assign, transfer and set over all rights, title and interest, powers, privileges and remedies of Dealer under any Transaction, in whole or in part, to an affiliate of Dealer whose obligation is guaranteed by Dealer or [Dealers ultimate parent] without the consent of Counterparty; provided that no Event of Default or Potential Event of Default shall have occurred with respect to either party solely as a result of such transfer and assignment. Subsequent to such transfer or assignment, Counterparty will neither, as a result of such transfer or assignment, (1) be required to pay an additional amount in respect of an Indemnifiable Tax under Section 2(d) (i)(4) of the Agreement, except to the extent that such additional amounts were payable to the assignor or transferor immediately before the assignment or transfer, nor (2) receive a payment from which an amount has been deducted or withheld for or on account of any Indemnifiable Tax in respect of which the other party is not required to pay an additional amount, except to the extent that such additional amounts were not payable by the assignor or transferor immediately before the assignment or transfer. In addition, the Dealer shall indemnify Counterparty for any transfer tax imposed as a result of such transfer or assignment. | |
Calculation Agent: | Dealer; provided that, following the occurrence and during the continuation of an Event of Default pursuant to Section 5(a)(vii) of the Agreement with respect to which Dealer is the sole Defaulting Party, Counterparty shall have the right to select a leading dealer in the market for U.S. corporate |
equity derivatives reasonably acceptable to Dealer to replace Dealer as Calculation Agent, and the parties shall work in good faith to execute any appropriate documentation required by such replacement Calculation Agent. Following any determination or calculation by the Calculation Agent hereunder, upon a written request by Counterparty, the Calculation Agent will, within a commercially reasonable period of time following such request, provide to Counterparty by e-mail to the e-mail address provided by Counterparty in such written request a report (in a commonly used file format for the storage and manipulation of financial data) displaying in reasonable detail the basis for such determination or calculation, as the case may be; provided that Dealer shall not be required to disclose any proprietary or confidential models of Dealer or any information that is proprietary or subject to contractual, legal or regulatory obligations to not disclose such information. | ||
Counterparty Payment/Delivery Instructions: | To be provided by Counterparty | |
Dealer Payment/Delivery Instructions: | To be provided by Dealer | |
Counterpartys Contact Details for Purpose of Giving Notice: | To be provided by Counterparty | |
Dealers Contact Details for Purpose of Giving Notice: | To be provided by Dealer |
3. Effectiveness.
The effectiveness of each Supplemental Confirmation and the related Transaction on the Effective Date for such Supplemental Confirmation shall be subject to the following conditions:
(a) the representations and warranties of Counterparty contained in the Equity Distribution Agreement, and any certificate delivered pursuant thereto by Counterparty shall be true and correct on such Effective Date as if made as of such Effective Date;
(b) Counterparty shall have performed all of the obligations required to be performed by it under the Equity Distribution Agreement on or prior to such Effective Date;
(c) all of the conditions set forth in Section 6 of the Equity Distribution Agreement shall have been satisfied;
(d) the Forward Date (as defined in the Equity Distribution Agreement) shall have occurred as provided in the Equity Distribution Agreement;
(e) all of the representations and warranties of Counterparty hereunder and under the Agreement shall be true and correct on such Effective Date as if made as of such Effective Date;
(f) Counterparty shall have performed all of the obligations required to be performed by it hereunder and under the Agreement on or prior to such Effective Date, including without limitation its obligations under Section 6 hereof; and
(g) Counterparty shall have delivered to Dealer an opinion of counsel in form and substance reasonably satisfactory to Dealer, with respect to the matters set forth in Section 3(a) of the Agreement and that the maximum number of Shares initially issuable under such Transaction have been duly authorized and, upon issuance pursuant to the terms of such Transaction, will be validly issued, fully paid and nonassessable.
Notwithstanding the foregoing or any other provision of this Master Confirmation or any Supplemental Confirmation, if in respect of any Transaction (x) on or prior to 9:00 a.m., New York City time, on any Settlement Date (as defined in the Equity Distribution Agreement), in connection with establishing its commercially reasonable hedge position in respect of such Transaction, Dealer, in its sole judgment, is unable, after using commercially reasonable efforts, to borrow and deliver for sale the full number of Shares to be borrowed and sold pursuant to the Equity Distribution Agreement on such Settlement Date or (y) in Dealers sole judgment, it would incur a stock loan cost of more than a rate equal to the Maximum Stock Loan Rate for such Transaction with respect to all or any portion of such full number of Shares, the effectiveness of the related Supplemental Confirmation and such Transaction shall be limited to the number of Shares Dealer is so able to borrow in connection with establishing its commercially reasonable hedge position of such Transaction at a cost of not more than a rate equal to the Maximum Stock Loan Rate for such Transaction, which, for the avoidance of doubt, may be zero.
4. Additional Mutual Representations and Warranties. In addition to the representations and warranties in the Agreement, each party represents and warrants to the other party that it is an eligible contract participant, as defined in the U.S. Commodity Exchange Act (as amended), and an accredited investor as defined in Section 2(a)(15)(ii) of the Securities Act of 1933 (as amended) (the Securities Act), and is entering into each Transaction hereunder as principal and not for the benefit of any third party.
5. Additional Representations and Warranties of Counterparty. The representations and warranties of Counterparty set forth in Section 2 of the Equity Distribution Agreement are true and correct as of the date hereof, each Forward Date (as defined in the Equity Distribution Agreement), each Trade Date for any Transaction and each Forward Hedge Settlement Date (as defined in the Equity Distribution Agreement) and are hereby deemed to be repeated to Dealer as if set forth herein. In addition to the representations and warranties in Section 2 of the Equity Distribution Agreement, the Agreement and those contained elsewhere herein, Counterparty represents and warrants to Dealer, and agrees with Dealer, that:
(a) without limiting the generality of Section 13.1 of the Equity Definitions, it acknowledges that Dealer is not making any representations or warranties with respect to the treatment of any Transaction, including without limitation ASC Topic 260, Earnings Per Share,
ASC Topic 815, Derivatives and Hedging, ASC Topic 480, Distinguishing Liabilities from Equity, ASC 815-40, Derivatives and Hedging Contracts in Entitys Own Equity (or any successor issue statements) or under the Financial Accounting Standards Boards Liabilities & Equity Project;
(b) it shall not take any action to reduce or decrease the number of authorized and unissued Shares below the sum of (i) the aggregate Number of Shares across all Transactions hereunder plus (ii) the total number of Shares issuable upon settlement (whether by physical settlement, net share settlement or otherwise) of any other transaction or agreement to which it is a party;
(c) it will not repurchase any Shares if, immediately following such repurchase, the aggregate Number of Shares across all Transactions hereunder would be equal to or greater than 4.5% of the number of then-outstanding Shares and it will notify Dealer promptly upon the announcement or consummation of any repurchase of Shares in an amount that, taken together with the amount of all repurchases since the date of the last such notice (or, if no such notice has been given, since the Trade Date), exceeds 0.5% of the number of then-outstanding Shares;
(d) it is not entering into this Master Confirmation or any Supplemental Confirmation to create actual or apparent trading activity in the Shares (or any security convertible into or exchangeable for Shares), or to raise or depress or otherwise manipulate the price of the Shares (or any security convertible into or exchangeable for Shares) for the purpose of inducing the purchase or sale of the Shares (or any security convertible into or exchangeable for Shares) by others;
(e) neither it nor any of its officers, directors, managers or similar persons is aware of any material non-public information regarding itself or the Shares; it is entering into this Master Confirmation and each Supplemental Confirmation and will provide any Settlement Notice in good faith and not as part of a plan or scheme to evade compliance with Rule 10b-5 or any other provision of the federal securities laws; it has not entered into or altered any hedging transaction relating to the Shares corresponding to or offsetting any Transaction; and it has consulted with its own advisors as to the legal aspects of its adoption and implementation of this Master Confirmation and each Supplemental Confirmation under Rule 10b5-1 under the Exchange Act (Rule 10b5-1);
(f) as of the date hereof and the Trade Date for each Transaction no state or local (including non-U.S. jurisdictions) law, rule, regulation or regulatory order applicable to the Shares would give rise to any reporting, consent, registration or other requirement (including without limitation a requirement to obtain prior approval from any person or entity) as a result of Dealer or its affiliates owning or holding (however defined) Shares; provided that Counterparty makes no such representation or warranty regarding any such requirement that is applicable generally to the ownership of equity securities by Dealer;
(g) as of the date hereof, the Trade Date for each Transaction and the date of any payment or delivery by Counterparty or Dealer under any Transaction, it is not and will not be insolvent (as such term is defined under Section 101(32) of the Bankruptcy Code);
(h) it is not as of the date hereof, and on the Trade Date for each Transaction and after giving effect to the transactions contemplated hereby and by each Supplemental Confirmation will not be, required to register as an investment company as such term is defined in the Investment Company Act of 1940, as amended;
(i) as of the date hereof and the Trade Date for each Transaction it: (i) is an institutional account as defined in FINRA Rule 4512(c); and (ii) is capable of evaluating investment risks independently, both in general and with regard to all transactions and investment strategies involving a security or securities, and will exercise independent judgment in evaluating any recommendations of Dealer or its associated persons; and
(j) IT UNDERSTANDS AS OF THE DATE HEREOF AND AS OF THE TRADE DATE FOR EACH TRANSACTION THAT EACH TRANSACTION IS SUBJECT TO COMPLEX RISKS WHICH MAY ARISE WITHOUT WARNING AND MAY AT TIMES BE VOLATILE AND THAT LOSSES MAY OCCUR QUICKLY AND IN UNANTICIPATED MAGNITUDE AND IS WILLING TO ACCEPT SUCH TERMS AND CONDITIONS AND ASSUME (FINANCIALLY AND OTHERWISE) SUCH RISKS.
6. Additional Covenants of Counterparty.
(a) Counterparty acknowledges and agrees that any Shares delivered by Counterparty to Dealer on any Settlement Date or Net Share Settlement Date for any Transaction will be (i) newly issued, (ii) approved for listing or quotation on the Exchange, subject to official notice of issuance, and (iii) registered under the Exchange Act, and, when delivered by Dealer (or an affiliate of Dealer) to securities lenders from whom Dealer (or an affiliate of Dealer) borrowed Shares in connection with hedging its exposure to such Transaction, will be freely saleable without further registration or other restrictions under the Securities Act in the hands of those securities lenders, irrespective of whether any such stock loan is effected by Dealer or an affiliate of Dealer. Accordingly, Counterparty agrees that any Shares so delivered will not bear a restrictive legend and will be deposited in, and the delivery thereof shall be effected through the facilities of, the Clearance System. In addition, Counterparty represents and agrees that any such Shares shall be, upon such delivery, duly and validly authorized, issued and outstanding, fully paid and nonassessable, free of any lien, charge, claim or other encumbrance.
(b) Counterparty agrees that Counterparty shall not enter into or alter any hedging transaction relating to the Shares corresponding to or offsetting any Transaction. Without limiting the generality of the provisions set forth opposite the caption Unwind Activities in Section 2 of this Master Confirmation, Counterparty acknowledges that it has no right to, and agrees that it will not seek to, control or influence Dealers decision to make any purchases or sales (within the meaning of Rule 10b5-1(c)(1)(i)(B)(3)) under or in connection with any Transaction, including, without limitation, Dealers decision to enter into any hedging transactions.
(c) Counterparty acknowledges and agrees that any amendment, modification, waiver or termination of this Master Confirmation or any Supplemental Confirmation must be effected in accordance with the requirements for the amendment or termination of a plan as defined in Rule 10b5-1(c). Without limiting the generality of the foregoing, any such amendment,
modification, waiver or termination shall be made in good faith and not as part of a plan or scheme to evade the prohibitions of Rule 10b-5, and no such amendment, modification or waiver shall be made at any time at which Counterparty or any officer, director, manager or similar person of Counterparty is aware of any material non-public information regarding Counterparty or the Shares.
(d) Counterparty shall promptly provide notice thereof to Dealer (i) upon the occurrence of any event that would constitute an Event of Default or a Termination Event in respect of which Counterparty is a Defaulting Party or an Affected Party, as the case may be, and (ii) upon announcement of any event that, if consummated, would constitute an Extraordinary Event or Potential Adjustment Event.
(e) Neither Counterparty nor any of its affiliated purchasers (as defined by Rule 10b-18 under the Exchange Act (Rule 10b-18)) shall take any action that would cause any purchases of Shares by Dealer or any of its Affiliates in connection with any Cash Settlement or Net Share Settlement of any Transaction not to meet the requirements of the safe harbor provided by Rule 10b-18 if such purchases were made by Counterparty. Without limiting the generality of the foregoing, during any Unwind Period for any Transaction, except with the prior written consent of Dealer, Counterparty will not, and will cause its affiliated purchasers (as defined in Rule 10b-18) not to, directly or indirectly (including, without limitation, by means of a derivative instrument) purchase, offer to purchase, place any bid or limit order that would effect a purchase of, or announce or commence any tender offer relating to, any Shares (or equivalent interest, including a unit of beneficial interest in a trust or limited partnership or a depository share) or any security convertible into or exchangeable for the Shares.
(f) Counterparty will not be subject to any restricted period (as such term is defined in Regulation M promulgated under the Exchange Act (Regulation M)) in respect of Shares or any security with respect to which the Shares are a reference security (as such term is defined in Regulation M) during any Unwind Period for any Transaction.
(g) Counterparty shall: (i) prior to the opening of trading in the Shares on any day on which Counterparty makes, or expects to be made, any public announcement (as defined in Rule 165(f) under the Securities Act) of any Merger Transaction, notify Dealer of such public announcement; (ii) promptly notify Dealer following any such announcement that such announcement has been made; (iii) promptly (but in any event prior to the next opening of the regular trading session on the Exchange) provide Dealer with written notice specifying (A) Counterpartys average daily Rule 10b-18 Purchases (as defined in Rule 10b-18) during the three full calendar months immediately preceding the announcement date for the Merger Transaction that were not effected through Dealer or its affiliates and (B) the number of Shares purchased pursuant to the proviso in Rule 10b-18(b)(4) under the Exchange Act for the three full calendar months preceding such announcement date. Such written notice shall be deemed to be a certification by Counterparty to Dealer that such information is true and correct. In addition, Counterparty shall promptly notify Dealer of the earlier to occur of the completion of such transaction and the completion of the vote by target shareholders. Counterparty acknowledges that any such notice may result in a Regulatory Disruption, a Trading Condition or, if such notice relates to an event that is also an ISDA Event, an Early Valuation, or may affect the length of any ongoing Unwind Period; accordingly, Counterparty acknowledges that its delivery of such
notice must comply with the standards set forth in Section 6(c) above. Merger Transaction means any merger, acquisition or similar transaction involving a recapitalization as contemplated by Rule 10b-18(a)(13)(iv) under the Exchange Act. For the avoidance of doubt, a Merger Transaction or the announcement thereof shall not give either party the right to designate an Early Valuation Date for any Transaction and/or to accelerate or preclude an election by Counterparty of Physical Settlement for any Settlement of any Transaction, unless such Merger Transaction or the announcement thereof is also an ISDA Event.
(h) Counterparty will promptly execute each properly completed Supplemental Confirmation delivered to Counterparty by Dealer following the delivery by Counterparty to Dealer of a Transaction Notice (as such term is defined in the Equity Distribution Agreement) relating to a Forward (as such term is defined in the Equity Distribution Agreement), to the extent such Supplemental Confirmation is consistent with Section 3(a)(iv) of the Equity Distribution Agreement.
7. Termination on Bankruptcy. The parties hereto agree that, notwithstanding anything to the contrary in the Agreement or the Equity Definitions, each Transaction constitutes a contract to issue a security of Counterparty as contemplated by Section 365(c)(2) of the Bankruptcy Code and that a Transaction and the obligations and rights of Counterparty and Dealer (except for any liability as a result of breach of any of the representations or warranties provided by Counterparty in Section 4 or Section 5 above) shall immediately terminate, without the necessity of any notice, payment (whether directly, by netting or otherwise) or other action by Counterparty or Dealer, if, on or prior to the final Settlement Date, Cash Settlement Payment Date or Net Share Settlement Date, as the case may be, for such Transaction an Insolvency Filing occurs or any other proceeding commences with respect to Counterparty under the Bankruptcy Code (a Bankruptcy Termination Event).
8. Additional Provisions.
(a) Dealer acknowledges and agrees that Counterpartys obligations under the Transactions are not secured by any collateral and that neither this Master Confirmation nor any Supplemental Confirmation is intended to convey to Dealer rights with respect to the transactions contemplated hereby and by any Supplemental Confirmation that are senior to the claims of common stockholders in any U.S. bankruptcy proceedings of Counterparty; provided that nothing herein shall limit or shall be deemed to limit Dealers right to pursue remedies in the event of a breach by Counterparty of its obligations and agreements with respect to this Master Confirmation, any Supplemental Confirmation or the Agreement; provided further that nothing herein shall limit or shall be deemed to limit Dealers rights in respect of any transaction other than the Transactions.
(b) [Dealer represents and warrants to Counterparty that, as of the date hereof and the Trade Date for each Transaction, the obligations of Dealer under this Master Confirmation and the related Supplemental Confirmation are or will be, as the case may be, fully and unconditionally guaranteed by [Dealers ultimate parent] as set forth in the [Described where guarantee may be obtained] (the Dealer Guarantee). For the avoidance of doubt, the Dealer
Guarantee shall not be a Credit Support Document hereunder, and [Dealers ultimate parent] shall not be a Credit Support Provider of Dealer hereunder.]1
(c) The parties hereto intend for:
(i) each Transaction to be a securities contract as defined in Section 741(7) of the Bankruptcy Code, and the parties hereto to be entitled to the protections afforded by, among other Sections, Sections 362(b)(6), 362(b)(27), 362(o), 546(e), 546(j), 555 and 561 of the Bankruptcy Code;
(ii) the rights given to Dealer pursuant to Early Valuation in Section 2 above to constitute contractual rights to cause the liquidation of a securities contract and to set off mutual debts and claims in connection with a securities contract, as such terms are used in Sections 555 and 362(b)(6) of the Bankruptcy Code;
(iii) any cash, securities or other property provided as performance assurance, credit support or collateral with respect to the Transactions to constitute margin payments and transfers under a securities contract as defined in the Bankruptcy Code;
(iv) all payments for, under or in connection with the Transactions, all payments for Shares and the transfer of Shares to constitute settlement payments and transfers under a securities contract as defined in the Bankruptcy Code; and
(v) any or all obligations that either party has with respect to this Master Confirmation, any Supplemental Confirmation or the Agreement to constitute property held by or due from such party to margin, guaranty or settle obligations of the other party with respect to the transactions under the Agreement (including the Transactions) or any other agreement between such parties.
(d) Notwithstanding any other provision of the Agreement, this Master Confirmation or any Supplemental Confirmation, in no event will Counterparty be required to deliver in the aggregate in respect of all Settlement Dates, Net Share Settlement Dates or other dates on which Shares are delivered in respect of any amount owed under any Transaction a number of Shares greater than two times the Number of Shares for such Transaction as of the Trade Date for such Transaction (the Capped Number). The Capped Number shall be subject to adjustment only on account of (x) Potential Adjustment Events of the type specified in (1) Sections 11.2(e)(i) through (vi) of the Equity Definitions or (2) Section 11.2(e)(vii) of the Equity Definitions so long as, in the case of this sub-clause (2), such event is within Issuers control, (y) Merger Events requiring corporate action of Issuer (or any surviving entity of the Issuer hereunder in connection with any such Merger Event) and (z) Announcement Events that are not outside Issuers control. Counterparty represents and warrants to Dealer (which representation and warranty shall be deemed to be repeated for all Transactions on each day that any Transaction is outstanding) that the aggregate Capped Number across all Transactions hereunder is equal to or less than the number of authorized but unissued Shares that are not reserved for future issuance in connection
1 | Include for Dealer whose obligations are guaranteed. |
with transactions in the Shares (other than the Transactions) on the date of the determination of such aggregated Capped Number. In the event Counterparty shall not have delivered the full number of Shares otherwise deliverable under any Transaction as a result of this Section 8(c) (the resulting deficit for such Transaction, the Deficit Shares), Counterparty shall be continually obligated to deliver Shares, from time to time until the full number of Deficit Shares have been delivered pursuant to this paragraph, on a pro rata basis across all Transactions hereunder, when, and to the extent that, (A) Shares are repurchased, acquired or otherwise received by Counterparty or any of its subsidiaries after the date hereof (whether or not in exchange for cash, fair value or any other consideration), (B) authorized and unissued Shares reserved for issuance in respect of other transactions prior to such date which prior to the relevant date become no longer so reserved and (C) Counterparty additionally authorizes any unissued Shares that are not reserved for transactions other than the Transactions (such events as set forth in clauses (A), (B) and (C) above, collectively, the Share Issuance Events). Counterparty shall promptly notify Dealer of the occurrence of any of the Share Issuance Events (including the number of Shares subject to clause (A), (B) or (C) and the corresponding number of Shares to be delivered for each Transaction) and, as promptly as reasonably practicable, deliver such Shares thereafter. Counterparty shall not, until Counterpartys obligations under the Transactions have been satisfied in full, use any Shares that become available for potential delivery to Dealer as a result of any Share Issuance Event for the settlement or satisfaction of any transaction or obligation other than the Transactions or reserve any such Shares for future issuance for any purpose other than to satisfy Counterpartys obligations to Dealer under the Transactions.
(e) The parties intend for this Master Confirmation and each Supplemental Confirmation to constitute a Contract as described in the letter dated October 6, 2003 submitted on behalf of Goldman, Sachs & Co. to Paula Dubberly of the staff of the Securities and Exchange Commission (the Staff) to which the Staff responded in an interpretive letter dated October 9, 2003.
(f) The parties intend for each Transaction (taking into account purchases of Shares in connection with any Cash Settlement or Net Share Settlement of any Transaction) to comply with the requirements of Rule 10b5-1(c)(1)(i)(A) under the Exchange Act and for this Master Confirmation and each Supplemental Confirmation to constitute a binding contract or instruction satisfying the requirements of 10b5-1(c) and to be interpreted to comply with the requirements of Rule 10b5-1(c).
(g) [Reserved.]2
(h) Counterparty acknowledges that:
(i) during the term of the Transactions, Dealer and its affiliates may buy or sell Shares or other securities or buy or sell options or futures contracts or enter into swaps or other derivative securities in order to establish, adjust or unwind its hedge position with respect to the Transactions;
2 | Agency language to be included for Dealers acting through agents. |
(ii) Dealer and its affiliates may also be active in the market for the Shares and derivatives linked to the Shares other than in connection with hedging activities in relation to the Transactions, including acting as agent or as principal and for its own account or on behalf of customers;
(iii) Dealer shall make its own determination as to whether, when or in what manner any hedging or market activities in Counterpartys securities shall be conducted and shall do so in a manner that it deems appropriate to hedge its price and market risk with respect to the Forward Price and the Settlement Price for each Transaction;
(iv) any market activities of Dealer and its affiliates with respect to the Shares may affect the market price and volatility of the Shares, as well as the Forward Price and the Settlement Price for each Transaction, each in a manner that may be adverse to Counterparty; and
(v) each Transaction is a derivatives transaction; Dealer may purchase or sell shares for its own account at an average price that may be greater than, or less than, the price received by Counterparty under the terms of the relevant Transaction.
(i) Counterparty and Dealer agree and acknowledge that (A) the Transactions contemplated by this Master Confirmation will be entered into in reliance on the fact that this Master Confirmation and each Supplemental Confirmation hereto form a single agreement between Counterparty and Dealer, and Dealer would not otherwise enter into such Transactions; (B) this Master Confirmation, together with each Supplemental Confirmation hereto, is a qualified financial contract, as such term is defined in Section 5-701(b)(2) of the General Obligations Law; (C) each Supplemental Confirmation hereto, regardless of whether transmitted electronically or otherwise, constitutes a confirmation in writing sufficient to indicate that a contract has been made between the parties hereto, as set forth in Section 5-701(b)(3)(b) of the General Obligations Law; and (D) this Master Confirmation and each Supplemental Confirmation hereto constitute a prior written contract, as set forth in Section 5-701(b)(1)(b) of the General Obligations Law, and each party hereto intends and agrees to be bound by this Master Confirmation and such Supplemental Confirmation.
(j) Counterparty and Dealer agree that, upon the delivery of any Transaction Notice (as such term is defined in the Equity Distribution Agreement) relating to a Forward (as such term is defined in the Equity Distribution Agreement) by Counterparty, in respect of the Transaction to which such Transaction Notice relates, each of the representations, warranties, covenants, agreements and other provisions of this Master Confirmation and the Supplemental Confirmation for such Transaction (including, without limitation, Dealers right to designate an Early Valuation Date in respect of such Transaction pursuant to the provisions opposite the caption Early Valuation in Section 2 and the termination of such Transaction following a Bankruptcy Termination Event as described in Section 7) shall govern, and be applicable to, such Transaction as of the first Trading Day of the Forward Hedge Selling Period for such Transaction as if the Trade Date for such Transaction were such first Trading Day.
9. Tax Matters.
(a) | Tax Representations. For the purpose of Section 3(e) of the Agreement, each party makes the following representation: |
It is not required by any applicable law, as modified by the practice of any relevant governmental revenue authority, of any Relevant Jurisdiction to make any deduction or withholding for or on account of any Tax from any payment (other than interest under Section 9(h) of the Agreement or any other payments of interest or penalty charges for late payment) to be made by it to the other party under the Agreement.
In making this representation, a party may rely on:
a. | the accuracy of any representations made by the other party pursuant to Section 3(f) of the Agreement, |
b. | the satisfaction of the agreement contained in Section 4(a)(i) or 4(a)(iii) of the Agreement, and the accuracy and effectiveness of any document provided by the other party pursuant to Section 4(a)(i) or 4(a)(iii) of the Agreement, and |
c. | the satisfaction of the agreement of the other party contained in Section 4(d) of the Agreement; |
provided that it shall not be a breach of this representation where reliance is placed on clause (ii) above and the other party does not deliver a form or document under Section 4(a)(iii) by reason of material prejudice to its legal or commercial position.
(ii) | For the purpose of Section 3(f) of the Agreement: |
(A) | Dealer makes the following representation(s): |
(i) | [ ] |
(B) | Counterparty represents that it is a U.S. person (as that term is used in section 1.1441-4(a)(3)(ii) of United States Treasury Regulations) for United States federal income tax purposes and an exempt recipient under section 1.6049-4(c)(1)(ii) of the United States Treasury Regulations. |
(b) | Document Delivery. For the purpose of Sections 4(a)(i) and 4(a)(ii) of the Agreement: |
(i) | Dealer agrees to complete, accurately and in a manner reasonably satisfactory to Counterparty, to execute and to deliver to Counterparty a valid and duly executed U.S. Internal Revenue Service Form W-9 or W-8ECI, as applicable (or any successor form), and any required attachments thereto (i) upon execution of this Master Confirmation, (ii) promptly upon reasonable demand by Counterparty and (iii) promptly upon learning that the information on any such Form W-9 or W-8ECI, as applicable (or any successor thereto) previously provided by Dealer has become inaccurate or incorrect. |
(ii) | Counterparty agrees to complete, accurately and in a manner reasonably satisfactory to Dealer, to execute and to deliver to Dealer a valid and duly executed U.S. Internal Revenue Service Form W-9 (or any successor form) and any required attachments thereto (i) upon execution of this Master Confirmation, (ii) promptly upon reasonable demand by Dealer and (iii) promptly upon learning that the information on any such Form W-9 (or any successor thereto) previously provided by Counterparty has become inaccurate or incorrect. |
(iii) | Counterparty and Dealer agree to deliver any other form or document, accurately completed and in a manner reasonably satisfactory to the other party, that may be required or reasonably requested in order to allow the other party to make a payment under this Master Confirmation, including any Credit Support Document, without any deduction or withholding for or on account of any Tax or with such deduction at a reduced rate (i) promptly upon the reasonable demand of such other party. |
(c) | Withholding Tax Imposed on Payments to Non-US Counterparties under the United States Foreign Account Tax Compliance Act. Tax as used in the preceding paragraph (a) of this Section (Tax Representations) and Indemnifiable Tax as defined in Section 14 of the Agreement shall not include (i) any U.S. federal withholding tax imposed or collected pursuant to Sections 1471 through 1474 of the U.S. Internal Revenue Code of 1986, as amended (the Code), any current or future regulations or official interpretations thereof, any agreement entered into pursuant to Section 1471(b) of the Code (FATCA), or any fiscal or regulatory legislation or rules adopted pursuant to any intergovernmental agreement entered into in connection with the implementation of FATCA (a FATCA Withholding Tax), or (ii) any tax imposed or collected pursuant to Section 871(m) of the Code or any current or future regulations or official interpretation thereof (a Section 871(m) Withholding Tax). For the avoidance of doubt, a FATCA Withholding Tax and a Section 871(m) Withholding Tax is a Tax the deduction or withholding of which is required by applicable law. |
(d) | Change of Account. Section 2(b) of the Agreement is hereby amended by the addition of the following after the word change in the fourth line thereof: ; provided that if any new account of one party is not in the same tax jurisdiction as the original account, the other party shall not be obliged to pay, for tax reasons, any greater amount and shall not be obliged to accept any lesser amount as a result of such change than would have been the case if such change had not taken place. |
(e) | Tax Documents. Section 4(a)(iii) of the Agreement is hereby amended by adding prior to the existing text: upon the earlier of learning that such form or documents is required or. |
10. Indemnification. Counterparty agrees to indemnify and hold harmless Dealer, its affiliates and its assignees and their respective directors, officers, employees, agents and
controlling persons (Dealer and each affiliate or such person being an Indemnified Party) from and against any and all losses (excluding, for the avoidance of doubt, financial losses resulting from the economic terms of the Transactions), claims, damages and liabilities (or actions in respect thereof), joint or several, incurred by or asserted against such Indemnified Party arising out of, in connection with, or relating to, the execution or delivery of this Master Confirmation and any Supplemental Confirmation, the performance by the parties hereto of their respective obligations under the Transactions, any breach of any covenant or representation made by Counterparty in this this Master Confirmation, any Supplemental Confirmation or the Agreement or the consummation of the transactions contemplated hereby and thereby. Counterparty will not be liable under the foregoing indemnification provision to the extent that any loss, claim, damage, liability or expense is found in a nonappealable judgment by a court of competent jurisdiction to have resulted from Dealers willful misconduct, gross negligence or bad faith in performing the services that are subject of the Transactions. If for any reason the foregoing indemnification is unavailable to any Indemnified Party or insufficient to hold harmless any Indemnified Party, then Counterparty shall contribute, to the maximum extent permitted by law, to the amount paid or payable by the Indemnified Party as a result of such loss, claim, damage or liability. In addition, Counterparty will reimburse any Indemnified Party for all reasonable expenses (including reasonable counsel fees and expenses) as they are incurred in connection with the investigation of, preparation for or defense or settlement of any pending or threatened claim or any action, suit or proceeding arising therefrom, whether or not such Indemnified Party is a party thereto and whether or not such claim, action, suit or proceeding is initiated or brought by or on behalf of Counterparty. Counterparty also agrees that no Indemnified Party shall have any liability to Counterparty or any person asserting claims on behalf of or in right of Counterparty in connection with or as a result of any matter referred to in this Master Confirmation and any Supplemental Confirmation except to the extent that any losses, claims, damages, liabilities or expenses incurred by Counterparty result from the gross negligence, willful misconduct or bad faith of the Indemnified Party. The provisions of this Section 9 shall survive any termination or completion of the Transactions contemplated by this Master Confirmation and any Supplemental Confirmation and any assignment and/or delegation of the Transactions made pursuant to the Agreement, this Master Confirmation or any Supplemental Confirmation shall inure to the benefit of any permitted assignee of Dealer. For the avoidance of doubt, any payments due as a result of this provision may not be used to set off any obligation of Dealer upon settlement of the Transactions.
11. Beneficial Ownership. Notwithstanding anything to the contrary in the Agreement, this Master Confirmation or any Supplemental Confirmation, in no event shall Dealer be entitled to receive, or be deemed to receive, or have the right to acquire (within the meaning of NYSE Rule 312.04(g)) Shares to the extent that, upon such receipt of such Shares, (i) the beneficial ownership (within the meaning of Section 13 of the Exchange Act and the rules promulgated thereunder) of Shares by Dealer, any of its affiliates business units subject to aggregation with Dealer for purposes of the beneficial ownership test under Section 13 of the Exchange Act and all persons who may form a group (within the meaning of Rule 13d-5(b)(1) under the Exchange Act) with Dealer with respect to beneficial ownership of any Shares (collectively, Dealer Group) would be equal to or greater than the lesser of (x) 4.5% of the outstanding Shares (such condition, an Excess Section 13 Ownership Position), and (y) 4.9% of the outstanding Shares as of the Trade Date for any Transaction (such number of Shares, the Threshold Number of Shares and such condition, the Excess NYSE Ownership Position)
or (ii) Dealer, Dealer Group or any person whose ownership position would be aggregated with that of Dealer or Dealer Group (Dealer, Dealer Group or any such person, a Dealer Person) under Section 203 of the Delaware General Corporation Law or any state or federal bank holding company or banking laws, or any federal, state or local laws, regulations or regulatory orders applicable to ownership of Shares (Applicable Laws), would own, beneficially own, constructively own, control, hold the power to vote or otherwise meet a relevant definition of ownership in excess of a number of Shares equal to (x) the lesser of (A) the maximum number of Shares that would be permitted under Applicable Laws and (B) the number of Shares that would give rise to reporting or registration obligations or other requirements (including obtaining prior approval by a state or federal regulator) of a Dealer Person under Applicable Laws and with respect to which such requirements have not been met or the relevant approval has not been received or that would give rise to any consequences under the constitutive documents of Counterparty (including, without limitation, Article VI of Counterpartys Fifth Amended and Restated By-Laws, effective as of October 29, 2015 and as may be amended and/or restated from time to time) or any contract or agreement to which Counterparty is a party, in each case minus (y) 1% of the number of Shares outstanding on the date of determination (such condition described in clause (ii), an Excess Regulatory Ownership Position). If any delivery owed to Dealer under any Transaction is not made, in whole or in part, as a result of this provision, (i) Counterpartys obligation to make such delivery shall not be extinguished and Counterparty shall make such delivery as promptly as practicable after, but in no event later than one Exchange Business Day after, Dealer gives notice to Counterparty that such delivery would not result in (x) Dealer Group directly or indirectly so beneficially owning in excess of the lesser of (A) 4.5% of the outstanding Shares and (B) the Threshold Number of Shares or (y) the occurrence of an Excess Regulatory Ownership Position and (ii) if such delivery relates to a Physical Settlement of any Transaction, notwithstanding anything to the contrary herein, Dealer shall not be obligated to satisfy the portion of its payment obligation with respect to such Transaction corresponding to any Shares required to be so delivered until the date Counterparty makes such delivery.
12. Non-Confidentiality. The parties hereby agree that (i) effective from the date of commencement of discussions concerning the Transactions, Counterparty and each of its employees, representatives, or other agents may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of the Transactions and all materials of any kind, including opinions or other tax analyses, provided by Dealer and its affiliates to Counterparty relating to such tax treatment and tax structure; provided that the foregoing does not constitute an authorization to disclose the identity of Dealer or its affiliates, agents or advisers, or, except to the extent relating to such tax structure or tax treatment, any specific pricing terms or commercial or financial information, and (ii) Dealer does not assert any claim of proprietary ownership in respect of any description contained herein or therein relating to the use of any entities, plans or arrangements to give rise to a particular United States federal income tax treatment for Counterparty.
13. Restricted Shares. If Counterparty is unable to comply with the covenant of Counterparty contained in Section 6 above or Dealer otherwise determines in its reasonable opinion that any Shares to be delivered to Dealer by Counterparty under any Transaction may not be freely returned by Dealer to securities lenders as described in the covenant of Counterparty contained in
Section 6 above, then delivery of any such Settlement Shares (the Unregistered Settlement Shares) shall be effected pursuant to Annex A hereto, unless waived by Dealer.
14. Use of Shares. Dealer acknowledges and agrees that, except in the case of a Private Placement Settlement, Dealer shall use any Shares delivered by Counterparty to Dealer on any Settlement Date to return to securities lenders to close out borrowings created by Dealer in connection with its hedging activities related to exposure under the Transactions or otherwise in compliance with applicable law.
15. Rule 10b-18. In connection with bids and purchases of Shares in connection with any Net Share Settlement or Cash Settlement of any Transaction, Dealer shall use commercially reasonable efforts to conduct its activities, or cause its affiliates to conduct their activities, in a manner consistent with the requirements of the safe harbor provided by Rule 10b-18 under the Exchange Act, as if such provisions were applicable to such purchases and taking into account any applicable Securities and Exchange Commission no-action letters as appropriate, and subject to any delays between the execution and reporting of a trade of the Shares on the Exchange and other circumstances beyond Dealers control.
16. Governing Law. Notwithstanding anything to the contrary in the Agreement, the Agreement, this Master Confirmation, any Supplemental Confirmation and all matters arising in connection with the Agreement this Master Confirmation and any Supplemental Confirmation shall be governed by, and construed and enforced in accordance with, the laws of the State of New York (without reference to its choice of laws doctrine other than Title 14 of Article 5 of the New York General Obligations Law).
17. Set-Off.
(a) The parties agree that upon the occurrence of an Event of Default or Termination Event with respect to a party who is the Defaulting Party or the Affected Party (X), the other party (Y) will have the right (but not be obliged) without prior notice to X or any other person to set-off or apply any obligation of X owed to Y (whether or not matured or contingent and whether or not arising under the Agreement, and regardless of the currency, place of payment or booking office of the obligation) against any obligation of Y owed to X (whether or not matured or contingent and whether or not arising under the Agreement, and regardless of the currency, place of payment or booking office of the obligation). Y will give notice to the other party of any set-off effected under this Section 16.
Amounts (or the relevant portion of such amounts) subject to set-off may be converted by Y into the Termination Currency at the rate of exchange at which such party would be able, acting in a reasonable manner and in good faith, to purchase the relevant amount of such currency. If any obligation is unascertained, Y may in good faith estimate that obligation and set-off in respect of the estimate, subject to the relevant party accounting to the other when the obligation is ascertained. Nothing in this Section 16 shall be effective to create a charge or other security interest. This Section 16 shall be without prejudice and in addition to any right of set-off, combination of accounts, lien or other right to which any party is at any time otherwise entitled (whether by operation of law, contract or otherwise).
(b) Notwithstanding anything to the contrary in the foregoing, Dealer agrees not to set off or net amounts due from Counterparty with respect to any Transaction against amounts due from Dealer to Counterparty with respect to contracts or instruments that are not Equity Contracts. Equity Contract means any transaction or instrument that does not convey to Dealer rights, or the ability to assert claims, that are senior to the rights and claims of common stockholders in the event of Counterpartys bankruptcy and would be classified as equity according to generally accepted accounting principles in the United States.
18. Staggered Settlement. Notwithstanding anything to the contrary herein, Dealer may, by prior notice to Counterparty, satisfy its obligation to deliver any Shares or other securities on any date due (an Original Delivery Date) by making separate deliveries of Shares or such securities, as the case may be, at more than one time on or prior to such Original Delivery Date, so long as the aggregate number of Shares and other securities so delivered on or prior to such Original Delivery Date is equal to the number required to be delivered on such Original Delivery Date.
19. Waiver of Trial by Jury. EACH OF COUNTERPARTY AND DEALER HEREBY IRREVOCABLY WAIVES (ON ITS OWN BEHALF AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ON BEHALF OF ITS STOCKHOLDERS) ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THE TRANSACTION OR THE ACTIONS OF DEALER OR ITS AFFILIATES IN THE NEGOTIATION, PERFORMANCE OR ENFORCEMENT HEREOF.
20. Jurisdiction. THE PARTIES HERETO IRREVOCABLY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND THE UNITED STATES COURT FOR THE SOUTHERN DISTRICT OF NEW YORK IN CONNECTION WITH ALL MATTERS RELATING HERETO AND WAIVE ANY OBJECTION TO THE LAYING OF VENUE IN, AND ANY CLAIM OF INCONVENIENT FORUM WITH RESPECT TO, THESE COURTS. NOTHING IN THIS PROVISION SHALL PROHIBIT A PARTY FROM BRINGING AN ACTION TO ENFORCE A MONEY JUDGMENT IN ANY OTHER JURISDICTION.
21. U.S. Stay Regulations. To the extent that the QFC Stay Rules (as defined below) are applicable hereto, then the parties agree that (i) to the extent that prior to the date hereof both parties have adhered to the 2018 ISDA U.S. Resolution Stay Protocol (the Protocol), the terms of the Protocol are incorporated into and form a part of this Master Confirmation, and for such purposes this Master Confirmation shall be deemed a Protocol Covered Agreement and each party shall be deemed to have the same status as Regulated Entity and/or Adhering Party as applicable to it under the Protocol; (ii) to the extent that prior to the date hereof the parties have executed a separate agreement the effect of which is to amend the qualified financial contracts between them to conform with the requirements of the QFC Stay Rules (the Bilateral Agreement), the terms of the Bilateral Agreement are incorporated into and form a part of this Confirmation and each party shall be deemed to have the status of Covered Entity or Counterparty Entity (or other similar term) as applicable to it under the Bilateral Agreement; or (iii) if clause (i) and clause (ii) do not apply, the terms of Section 1 and Section 2 and the related defined terms (together, the Bilateral Terms) of the form of bilateral template entitled
Full-Length Omnibus (for use between U.S. G-SIBs and Corporate Groups) published by ISDA on November 2, 2018 (currently available on the 2018 ISDA U.S. Resolution Stay Protocol page at www.isda.org and, a copy of which is available upon request), the effect of which is to amend the qualified financial contracts between the parties thereto to conform with the requirements of the QFC Stay Rules, are hereby incorporated into and form a part of this Master Confirmation, and for such purposes this Master Confirmation shall be deemed a Covered Agreement, Dealer shall be deemed a Covered Entity and Counterparty shall be deemed a Counterparty Entity. In the event that, after the date of this Master Confirmation, both parties hereto become adhering parties to the Protocol, the terms of the Protocol will replace the terms of this paragraph. In the event of any inconsistencies between this Master Confirmation and the terms of the Protocol, the Bilateral Agreement or the Bilateral Terms (each, the QFC Stay Terms), as applicable, the QFC Stay Terms will govern. Terms used in this paragraph without definition shall have the meanings assigned to them under the QFC Stay Rules. For purposes of this paragraph, references to this Master Confirmation include any related credit enhancements entered into between the parties or provided by one to the other. In addition, the parties agree that the terms of this paragraph shall be incorporated into any related covered affiliate credit enhancements, with all references to Dealer replaced by references to the covered affiliate support provider.
QFC Stay Rules mean the regulations codified at 12 C.F.R. 252.2, 252.818, 12 C.F.R. 382.1- 7 and 12 C.F.R. 47.1-8, which, subject to limited exceptions, require an express recognition of the stay-and-transfer powers of the Federal Deposit Insurance Corporation under the Federal Deposit Insurance Act and the Orderly Liquidation Authority under Title II of the Dodd Frank Wall Street Reform and Consumer Protection Act and the override of default rights related directly or indirectly to the entry of an affiliate into certain insolvency proceedings and any restrictions on the transfer of any covered affiliate credit Enhancements.
22. Counterparts. This Master Confirmation may be executed in any number of counterparts, all of which shall constitute one and the same instrument, and any party hereto may execute this Master Confirmation by signing and delivering one or more counterparts.
23. Delivery of Cash. For the avoidance of doubt, nothing in this Master Confirmation or any Supplemental Confirmation shall be interpreted as requiring Counterparty to deliver cash or other assets in respect of the settlement of the Transactions, except in circumstances where the required cash or other asset settlement thereof is permitted for classification of the contract as equity by ASC 815-40, Derivatives and Hedging Contracts in Entitys Own Equity, as in effect on the date hereof.
24. Adjustments. For the avoidance of doubt, whenever the Calculation Agent, the Hedging Party or the Determining Party is called upon to make an adjustment pursuant to the terms of this Master Confirmation, any Supplemental Confirmation or the Equity Definitions to take into account the effect of an event, the Calculation Agent, the Hedging Party or the Determining Party, as applicable, shall make such adjustment by reference to the effect of such event on the Hedging Party, assuming that the Hedging Party maintains a commercially reasonable hedge position at the time of the event.
25. Other Forward Transactions. Dealer acknowledges that Counterparty has entered or may enter in the future into one or more substantially identical forward transactions for the Shares (each, an Other Forward and collectively, the Other Forwards) with [OTHER DEALER] and/or [OTHER DEALER], and/or affiliates thereof (each, an Other Dealer and collectively, the Other Dealers). Dealer and Counterparty agree that if Counterparty designates a Settlement Date with respect to one or more Other Forwards for which Cash Settlement or Net Share Settlement is applicable, and the resulting Unwind Period for such Other Forwards coincides for any period of time with an Unwind Period for this Transaction (the Overlap Unwind Period), Counterparty shall notify Dealer at least one Scheduled Trading Day prior to the commencement of such Overlap Unwind Period of the first Scheduled Trading Day and length of such Overlap Unwind Period, and Dealer shall be permitted to purchase Shares to unwind its hedge in respect of this Transaction only on alternating Scheduled Trading Days during such Overlap Unwind Period, commencing on the first, second, third or later Scheduled Trading Day of such Overlap Unwind Period, as notified to Dealer by Counterparty at least one Scheduled Trading Day prior to such Overlap Unwind Period (which alternating Scheduled Trading Days, for the avoidance of doubt, may be every other Scheduled Trading Day if there is only one Other Dealer, every third Scheduled Trading Day if there are two Other Dealers, etc.).
Counterparty hereby agrees (a) to check this Master Confirmation carefully and immediately upon receipt so that errors or discrepancies can be promptly identified and rectified and (b) to confirm that the foregoing (in the exact form provided by Dealer) correctly sets forth the terms of the agreement between Dealer and Counterparty hereunder, by manually signing this Master Confirmation or this page hereof as evidence of agreement to such terms and providing the other information requested herein and immediately returning an executed copy to us.
Yours faithfully, | ||
[DEALER] |
By: |
| |
Name: |
||
Title: |
Agreed and accepted by: | ||
WELLTOWER INC. |
By: |
| |
Name: |
||
Title: |
ANNEX A
PRIVATE PLACEMENT PROCEDURES
If Counterparty delivers Unregistered Settlement Shares pursuant to Section 12 above (a Private Placement Settlement), then:
(a) all Unregistered Settlement Shares shall be delivered to Dealer (or any affiliate of Dealer designated by Dealer) pursuant to the exemption from the registration requirements of the Securities Act provided by Section 4(a)(2) thereof;
(b) as of or prior to the date of delivery, Dealer and any potential purchaser of any such shares from Dealer (or any affiliate of Dealer designated by Dealer) identified by Dealer shall be afforded a commercially reasonable opportunity to conduct a due diligence investigation with respect to Counterparty customary in scope for private placements of equity securities of similar size (including, without limitation, the right to have made available to them for inspection all financial and other records, pertinent corporate documents and other information reasonably requested by them);
(c) as of the date of delivery, Counterparty shall enter into an agreement (a Private Placement Agreement) with Dealer (or any affiliate of Dealer designated by Dealer) in connection with the private placement of such shares by Counterparty to Dealer (or any such affiliate) and the private resale of such shares by Dealer (or any such affiliate), substantially similar to private placement purchase agreements customary for private placements of equity securities of similar size, in form and substance commercially reasonably satisfactory to Dealer, which Private Placement Agreement shall include, without limitation, provisions substantially similar to those contained in such private placement purchase agreements relating, without limitation, to the indemnification of, and contribution in connection with the liability of, Dealer and its affiliates and obligations to use best efforts to obtain customary opinions, accountants comfort letters and lawyers negative assurance letters, and shall provide for the payment by Counterparty of all commercially reasonable fees and expenses in connection with such resale, including all commercially reasonable fees and expenses of counsel for Dealer, and shall contain representations, warranties, covenants and agreements of Counterparty reasonably necessary or advisable to establish and maintain the availability of an exemption from the registration requirements of the Securities Act for such resales; and
(d) in connection with the private placement of such shares by Counterparty to Dealer (or any such affiliate) and the private resale of such shares by Dealer (or any such affiliate), Counterparty shall, if so requested by Dealer, prepare, in cooperation with Dealer, a private placement memorandum in form and substance reasonably satisfactory to Dealer.
In the case of a Private Placement Settlement, Dealer shall, in its good faith discretion, adjust the amount of Unregistered Settlement Shares to be delivered to Dealer hereunder in a commercially reasonable manner to reflect the fact that such Unregistered Settlement Shares may not be freely returned to securities lenders by Dealer and may only be saleable by Dealer at a discount to reflect the lack of liquidity in Unregistered Settlement Shares.
If Counterparty delivers any Unregistered Settlement Shares in respect of a Transaction, Counterparty agrees that (i) such Shares may be transferred by and among Dealer and its affiliates and (ii) after the applicable holding period within the meaning of Rule 144(d) under the Securities Act has elapsed after the applicable Settlement Date, Counterparty shall promptly remove, or cause the transfer agent for the Shares to remove, any legends referring to any transfer restrictions from such Shares upon delivery by Dealer (or such affiliate of Dealer) to Counterparty or such transfer agent of any sellers and brokers representation letters customarily delivered by Dealer or its affiliates in connection with resales of restricted securities pursuant to Rule 144 under the Securities Act, each without any further requirement for the delivery of any certificate, consent, agreement, opinion of counsel, notice or any other document, any transfer tax stamps or payment of any other amount or any other action by Dealer (or such affiliate of Dealer).
SCHEDULE A
SUPPLEMENTAL CONFIRMATION
To: | Welltower Inc. | |
4500 Dorr Street | ||
Toledo, Ohio 43615 | ||
From: | [Dealer] | |
Re: | Issuer Share Forward Sale Transaction | |
Date: | [ ], 20[ ] |
Ladies and Gentlemen:
The purpose of this Supplemental Confirmation is to confirm the terms and conditions of the Transaction entered into between [Dealer] (Dealer) and Welltower Inc. (Counterparty) (together, the Contracting Parties) on the Trade Date specified below. This Supplemental Confirmation is a binding contract between Dealer and Counterparty as of the relevant Trade Date for the Transaction referenced below.
1. This Supplemental Confirmation supplements, forms part of, and is subject to the Master Confirmation dated as of February 25, 2019 (the Master Confirmation) between the Contracting Parties, as amended and supplemented from time to time. All provisions contained in the Master Confirmation govern this Supplemental Confirmation except as expressly modified below.
2. The terms of the Transaction to which this Supplemental Confirmation relates are as follows:
Trade Date: | [ ], 20[ ] | |
Effective Date: | [ ], 20[ ] | |
Maturity Date: | [ ], 20[ ] | |
Number of Shares: | [ ] | |
Initial Forward Price: | USD [ ] | |
Spread: | [ . ]% | |
Volume-Weighted Hedge Price: | USD [ ] | |
Threshold Price: | USD [ ] | |
Initial Stock Loan Rate: | [ ] basis points per annum | |
Maximum Stock Loan Rate: | [ ] basis points per annum |
Schedule I
FORWARD PRICE REDUCTION AMOUNTS
Forward Price Reduction Date: | Forward Price Reduction Amount: |
[ ], 20[ ] |
USD[ | ] | ||||
[ ], 20[ ] |
USD[ | ] | ||||
[ ], 20[ ] |
USD[ | ] | ||||
|
|
|
||||
[ ], 20[ ] |
USD[ | ] |
REGULAR DIVIDEND AMOUNTS |
| |||
For any calendar quarter ending on or prior to [December 31, 20[ ]]: |
USD[ | ] | ||
For any calendar quarter ending after [December 31, 20[ ]]: |
USD[ | ] |
Exhibit 5
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Gibson, Dunn & Crutcher LLP 200 Park Avenue New York, NY 10166-0193 Tel 212.351.4000 www.gibsondunn.com |
Client: 05505-00094
February 25, 2019
Welltower Inc.
4500 Dorr Street
Toledo, Ohio 43615
Re: Welltower Inc.
$1,500,000,000 Shares of Common Stock
Ladies and Gentlemen:
We have acted as counsel to Welltower Inc., a Delaware corporation (the Company), in connection with the offering and sale of shares of common stock, $1.00 par value per share, of the Company having an aggregate offering price of up to $1,500,000,000 (the Shares) pursuant to the prospectus supplement dated February 25, 2019 (the Prospectus Supplement) to the prospectus dated May 17, 2018 (the Prospectus), included in the Companys registration statement on Form S-3 (File No. 333-225004) (the Registration Statement), filed with the Securities and Exchange Commission (the Commission) under the Securities Act of 1933, as amended (the Securities Act). The Shares will be issued pursuant to (1) a separate Amended and Restated Equity Distribution Agreement entered into between the Company and each of (i) Barclays Capital Inc., Citigroup Global Markets Inc., Credit Agricole Securities (USA) Inc., Deutsche Bank Securities Inc., Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC, KeyBanc Capital Markets Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co. LLC, MUFG Securities Americas Inc., RBC Capital Markets, LLC, UBS Securities LLC, and Wells Fargo Securities, LLC as sales agents and forward sellers and (ii) each of Bank of America, N.A., Barclays Bank PLC, Citibank, N.A., Crédit Agricole Corporate and Investment Bank, Deutsche Bank AG, London Branch, Goldman Sachs & Co. LLC, JPMorgan Chase Bank, National Association, KeyBanc Capital Markets Inc., Morgan Stanley & Co. LLC, MUFG Securities EMEA plc, Royal Bank of Canada, UBS AG, London Branch and Wells Fargo Bank, National Association as forward purchasers on February 25, 2019, and (2) a Master Forward Sale Confirmation entered into between the Company and each of Bank of America, N.A., Barclays Bank PLC, Citibank, N.A., Crédit Agricole Corporate and Investment Bank, Deutsche Bank AG, London Branch, Goldman Sachs & Co. LLC, JPMorgan Chase Bank, National Association, KeyBanc Capital Markets Inc., Morgan Stanley & Co. LLC, MUFG Securities EMEA plc, Royal Bank of Canada, UBS AG, London Branch and Wells Fargo Bank, National Association on February 25, 2019.
In arriving at the opinion expressed below, we have examined originals, or copies certified or otherwise identified to our satisfaction as being true and complete copies of the originals, specimen common stock certificates and such other documents, corporate records, certificates of officers of the Company and of public officials and other instruments as we have deemed necessary or advisable to enable us to render the opinion set forth below. In our examination, we have assumed, without independent investigation, the genuineness of all signatures, the legal capacity and competency of all natural persons, the authenticity of all documents submitted to us as originals and the conformity to original documents of all documents submitted to us as copies.
Welltower Inc.
February 25, 2019
Page 2
Based upon the foregoing, and subject to the assumptions, exceptions, qualifications and limitations set forth herein, we are of the opinion that the Shares, when issued against payment therefor as set forth in the Prospectus Supplement and according to the Prospectus, will be validly issued, fully paid and non-assessable.
The opinion expressed above is subject to the following exceptions, qualifications, limitations and assumptions:
A. The effectiveness of the Registration Statement under the Securities Act will not have been terminated or rescinded.
B. We render no opinion herein as to matters involving the laws of any jurisdictions other than the Delaware General Corporation Law (DGCL). This opinion is limited to the effect of the current state of the DGCL and the facts as they currently exist. We assume no obligation to revise or supplement this opinion in the event of future changes in such laws or the interpretations thereof or such facts.
C. We have assumed that all offers and sales of the Shares will comply with the minimum offering price limitation and pricing formula set forth in the authorization of the offering and sale of the Shares by the Companys Board of Directors.
We consent to the filing of this opinion as an exhibit to the Companys Form 8-K to be filed with the Commission on February 25, 2019, and we further consent to the use of our name under the caption Legal Matters in the Prospectus Supplement. In giving these consents, we do not thereby admit that we are within the category of persons whose consent is required under Section 7 of the Securities Act or the Rules and Regulations of the Commission.
Very truly yours,
/s/ Gibson, Dunn & Crutcher LLP
Exhibit 8
February 25, 2019
Welltower Inc.
4500 Dorr Street
Toledo, Ohio 43615
Ladies and Gentlemen:
We have acted as special tax counsel to Welltower Inc., a Delaware corporation (the Company), in connection with the issuance and sale of shares of common stock having an aggregate offering price of up to $1,500,000,000, par value $1.00 per share (the Common Stock), pursuant to a prospectus supplement dated February 25, 2019 to the prospectus dated May 17, 2018 (collectively, the Prospectus) included in the Companys Registration Statement on Form S-3 (File No. 333-225004) (the Registration Statement), filed with the Securities and Exchange Commission under the Securities Act of 1933, as amended. You have requested our opinion regarding certain U.S. federal income tax matters. This opinion is furnished to you pursuant to Section 6 of each Amended and Restated Equity Distribution Agreement, dated February 25, 2019 between the Company and (i) each of Barclays Capital Inc., Citigroup Global Markets Inc., Credit Agricole Securities (USA) Inc., Deutsche Bank Securities Inc., Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC, KeyBanc Capital Markets Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co. LLC, MUFG Securities Americas Inc., RBC Capital Markets, LLC, UBS Securities LLC and Wells Fargo Securities, LLC as sales agents and forward sellers (each a Sales Agent, collectively, not including the Company, the Sales Agents) and (ii) each of Bank of America, N.A., Barclays Bank PLC, Citibank, N.A., Crédit Agricole Corporate and Investment Bank, Deutsche Bank AG, London Branch, Goldman Sachs & Co. LLC, JPMorgan Chase Bank, National Association, KeyBanc Capital Markets Inc., Morgan Stanley & Co. LLC, MUFG Securities EMEA plc, Royal Bank of Canada, UBS AG, London Branch and Wells Fargo Bank, National Association as forward purchasers (each such agreement, as amended, an Agreement, collectively the Agreements), in connection with the fulfillment of one of the conditions precedent to the obligations of the Sales Agents to sell, on behalf of the Company, the Common Stock. Certain capitalized terms used herein without definition are as defined in the Agreement.
In giving this opinion, we have examined and relied upon originals or copies of the following documents (the Reviewed Documents):
| the Second Restated Certificate of Incorporation, as amended, of the Company; |
| the Sixth Amended and Restated By-Laws of the Company; |
| the Companys Annual Report on Form 10-K for the year ended December 31, 2018 (the Annual Report); |
| the Registration Statement and the Prospectus; |
| a certificate (each an Officers Certificate) from each of the Company and certain subsidiaries of the Company that have also elected to be taxed as real estate investment trusts for U.S. federal income tax purposes (each, other than the Company, a REIT |
Welltower Inc.
February 25, 2019
Page 2
Subsidiary), dated on or about the date hereof and executed by a duly appointed officer, setting forth certain factual representations relating to the organization, operations and proposed operations of the Company, the REIT Subsidiaries and their respective subsidiaries; |
| the Companys and each REIT Subsidiarys 2017 U.S. federal income tax return; and |
| such other documents as we have deemed necessary or appropriate for purposes of this opinion. |
In connection with the opinions rendered below, we have assumed with your consent that:
1. each of the Reviewed Documents referred to above has been duly authorized, executed and delivered; is authentic, if an original, or is accurate, if a copy; and has not been amended since our receipt of such documents;
2. all of the factual representations set forth in the Reviewed Documents are true, correct, and complete as of the date hereof, and any representation or statement made as a belief, intention or to the knowledge of or similarly qualified is correct and accurate, without such qualification;
3. each agreement described in the Reviewed Documents is valid, binding and enforceable in accordance with its terms;
4. each of the obligations of the Company and its subsidiaries described in the Reviewed Documents has been or will be performed or satisfied in accordance with its terms without regard to any qualification as to level of effort in satisfying such obligations;
5. the Company, the REIT Subsidiaries and their respective subsidiaries, have operated and will operate, in a manner that has caused or will make, as the case may be, the factual representations relating to the ownership, operation, future method of operations, and compliance of the Company and the REIT Subsidiaries with the real estate investment trust (REIT) provisions of the Internal Revenue Code of 1986, as amended (the Code), and the Treasury Regulations (the Regulations) thereunder, as in effect as of the date hereof, contained in the Officers Certificates, true;
6. neither the Company nor any REIT Subsidiary will make any amendments to its organizational documents after the date of this opinion that would affect its qualification as a REIT under sections 856 through 860 of the Code for any taxable year; and
7. no action will be taken by the Company or a REIT Subsidiary after the date hereof that would have the effect of altering the facts upon which the opinions set forth below are based.
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Welltower Inc.
February 25, 2019
Page 3
In our capacity as special tax counsel to the Company, we have made such legal and factual examinations and inquiries as we have deemed necessary or appropriate for purposes of our opinions rendered below. For the purposes of rendering these opinions, we have not made an independent investigation of the facts set forth in any documents delivered to us, including, without limitation, the Officers Certificates. We have relied completely upon the Companys representations that the information presented in such documents accurately reflects all material facts. In the course of our representation of the Company, we have not been made aware of any facts inconsistent with such factual representations. In addition, where such factual representations involve terms defined or used in the Code, the Regulations, published rulings of the Internal Revenue Service (the IRS) or other relevant authority, we have explained such terms to the Companys representatives and are satisfied that the Companys representatives understand such terms and are capable of making such factual representations.
Based on the Code, Regulations, documents, assumptions, qualifications and statements set forth above and the factual representations set forth in the Officers Certificates and our review of the discussion in the Companys Annual Report on Form 10-K under the caption Taxation, we are of the opinion that:
(a) the Company has been organized and has operated in conformity with the requirements for qualification and taxation as a REIT pursuant to sections 856 through 860 of the Code for its taxable years ended December 31, 2011 through December 31, 2018;
(b) the Companys organization and current and proposed method of operations, if continued, will enable the Company to continue to meet the requirements for qualification and taxation as a REIT under the Code for its taxable year ending December 31, 2019 and each taxable year thereafter; and
(c) the discussion contained under the caption Taxation in the Companys Annual Report on Form 10-K to the extent it constitutes matters of U.S. federal income tax law or legal conclusions relating thereto, and subject to the limitations, qualifications and assumptions set forth therein, fairly and accurately summarizes in all material respects the matters set forth therein.
We will not review on a continuing basis either the Companys or any REIT Subsidiarys compliance with the documents or assumptions set forth above, or the factual representations set forth in the Officers Certificates.
The Companys qualification and taxation as a REIT under the Code depends upon the ability of the Company and each REIT Subsidiary to meet on an ongoing basis (through actual quarterly and annual operating results, distribution levels, diversity of stock ownership and otherwise) the various qualification tests imposed under the Code, and upon the Company and each REIT Subsidiary, as applicable, utilizing any and all appropriate savings provisions (including the provisions of Sections 856(c)(6), 856(c)(7) and 856(g) of the Code, the provision of Section
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Welltower Inc.
February 25, 2019
Page 4
856(c)(4) of the Code (flush language) allowing for the disposal of assets within 30 days after the close of a calendar quarter and all available deficiency dividend procedures) available to the Company and each REIT Subsidiary, as applicable, under the Code to correct violations of specified REIT qualification requirements of Sections 856 and 857 of the Code. Our opinion set forth above does not foreclose the possibility that the Company and/or one or more of the REIT Subsidiaries may have to utilize one or more of the savings provisions in the future, which could require the Company and/or one or more of the REIT Subsidiaries to pay an excise or penalty tax (which could be significant in amount) in order to maintain its REIT qualification.
We have not undertaken to review the Companys or any REIT Subsidiarys compliance with these requirements on a continuing basis, nor will we do so in the future. Accordingly, no assurance can be given that the actual results of the Companys operations for any given taxable year will satisfy the requirements under the Code for qualification and taxation as a REIT.
The foregoing opinions are based on current provisions of the Code and the Regulations, published administrative interpretations thereof and published court decisions and assume that none of these will change. No assurance, however, can be given that the law will not change, possibly with retroactive effect, in a way that will prevent the Company from qualifying as a REIT. Any change occurring after the date hereof in, or a variation from, any of the foregoing bases for our opinions could affect the conclusions expressed herein. The foregoing opinions do not foreclose the possibility of a contrary determination by the IRS or a court of competent jurisdiction, or of a contrary position taken by the IRS or the Treasury Department in Regulations or rulings issued in the future. In this regard, an opinion of counsel with respect to an issue represents counsels best professional judgment with respect to the outcome on the merits with respect to such issue, if such issue were to be litigated, but an opinion is not binding on the IRS or the courts, and is not a guarantee that the IRS will not assert a contrary position with respect to such issue or that a court will not sustain such a position asserted by the IRS.
The foregoing opinions are limited to the U.S. federal income tax matters addressed herein, and no other opinions are rendered with respect to other federal tax matters or to any issues arising under the tax laws of any other country, or any state or locality. You must judge for yourselves whether the matters addressed in this opinion letter are sufficient for your purposes. This letter has been prepared solely for your use in connection with the filing of the Registration Statement and speaks only as of this date.
We undertake no obligation to update the opinions expressed herein after the date of this letter. This opinion letter is given for the sole benefit of the Company and the Underwriters pursuant to Section 6 of the Agreement.
We hereby consent to the filing of this opinion as an exhibit to Form 8-K to be filed with the Securities and Exchange Commission on or about the date hereof. In giving this consent, we do not acknowledge that we are in the category of persons whose consent is required by Section 7 of the Securities Act of 1933, as amended, or the rules and regulations promulgated thereunder by the U.S. Securities and Exchange Commission.
Very truly yours,
/s/ GIBSON, DUNN & CRUTCHER LLP
GIBSON, DUNN & CRUTCHER LLP
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