Exhibit 10.3

 

 

 

EQUITY LIFESTYLE PROPERTIES, INC.

Shares of Common Stock

(Par Value $.01 Per Share)

EQUITY DISTRIBUTION AGREEMENT

Dated: September 6, 2012

 

 

 

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Table of Contents

 

     Page   SECTION 1. Description of Securities      1    SECTION 2. Placements
     2    SECTION 3. Sale of Placement Securities by Wells Fargo Securities     
3    SECTION 4. Suspension of Sales      4    SECTION 5. Representations and
Warranties      4    SECTION 6. Sale and Delivery to Wells Fargo Securities;
Settlement      21    SECTION 7. Covenants of the Company and the Operating
Partnership      24    SECTION 8. Payment of Expenses      31    SECTION 9.
Conditions of Wells Fargo Securities’ Obligations      32    SECTION 10.
Indemnification      34    SECTION 11. Representations and Indemnities to
Survive Delivery      37    SECTION 12. Termination of Agreement      37   
SECTION 13. Notices      38    SECTION 14. Parties      38    SECTION 15.
Adjustments for Stock Splits      39    SECTION 16. Governing Law and Time     
39    SECTION 17. Effect of Headings      39    SECTION 18. Permitted Free
Writing Prospectuses      39    SECTION 19. Absence of a Fiduciary Relationship
     39    SECTION 20. Miscellaneous      40   

 

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EXHIBITS

 

Exhibit A   –    Form of Placement Notice Exhibit B   –    Authorized
Individuals for Placement Notices Exhibit C   –    Compensation Exhibit D   –   
Form of Opinion of Clifford Chance US LLP Exhibit E   –    Officers’ Certificate
Exhibit F   –    Permitted Free Writing Prospectuses

 

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Equity LifeStyle Properties, Inc.

(a Maryland corporation)

Common Stock

(Par Value $.01 Per Share)

EQUITY DISTRIBUTION AGREEMENT

September 6, 2012

Wells Fargo Securities, LLC

375 Park Avenue

New York, NY 10152

Ladies and Gentlemen:

Equity LifeStyle Properties, Inc., a Maryland corporation (the “Company”), and
MHC Operating Limited Partnership, an Illinois limited partnership (the
“Operating Partnership”), each confirms its agreement (this “Agreement”) with
Wells Fargo Securities, LLC, (“Wells Fargo Securities”), as follows:

SECTION 1. Description of Securities.

Each of the Company and the Operating Partnership agrees that, from time to time
during the term of this Agreement, on the terms and subject to the conditions
set forth herein, the Company may issue and sell through Wells Fargo Securities,
acting as agent and/or principal, shares (the “Securities”) of the Company’s
common stock, par value $.01 per share (the “Common Stock”), having an aggregate
offering price of up to $125,000,000 (the “Maximum Amount”). Notwithstanding
anything to the contrary contained herein, the parties hereto agree that
compliance with the limitations set forth in this Section 1 regarding the
aggregate offering price of the Securities issued and sold under this Agreement
shall be the sole responsibility of the Company, and Wells Fargo Securities
shall have no obligation in connection with such compliance. The issuance and
sale of the Securities through Wells Fargo Securities will be effected pursuant
to the Registration Statement (as defined below) that was filed by the Company
and became effective upon filing under Rule 462(e) (“Rule 462(e)”) under the
Securities Act of 1933, as amended (collectively with the rules and regulations
thereunder, the “Securities Act”), although nothing in this Agreement shall be
construed as requiring the Company to use the Registration Statement to issue
the Securities.

The Company has filed, in accordance with the provisions of the Securities Act,
with the Securities and Exchange Commission (the “Commission”) an automatic
shelf registration statement on Form S-3ASR (File No. 333-181242), including a
base prospectus, relating to certain securities, including the Securities to be
issued from time to time by the Company, and which incorporates by reference
documents that the Company has filed or will file in accordance

 

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with the provisions of the Securities Exchange Act of 1934, as amended, and the
rules and regulations thereunder (collectively, the “Exchange Act”). The Company
has prepared a prospectus supplement specifically relating to the Securities
dated September 6, 2012 (the “Prospectus Supplement”) to the base prospectus
included as part of such automatic shelf registration statement. The Company
will furnish to Wells Fargo Securities, for use by Wells Fargo Securities,
copies of the prospectus included as part of such registration statement, as
supplemented by the Prospectus Supplement, relating to the Securities. Except
where the context otherwise requires, such automatic shelf registration
statement, as amended when it became effective, including all documents filed as
part thereof or incorporated by reference therein, and including any information
contained in a Prospectus (as defined below) subsequently filed with the
Commission pursuant to Rule 424(b) under the Securities Act (“Rule 424(b)”) or
deemed to be a part of such automatic shelf registration statement pursuant to
Rule 430B (the “Rule 430B Information”), is herein called the “Registration
Statement.” The Registration Statement at the time it originally became
effective is herein called the “Original Registration Statement.” The base
prospectus, including all documents incorporated therein by reference, included
in the Registration Statement, as it may be supplemented by the Prospectus
Supplement, in the form in which such prospectus and/or Prospectus Supplement
have most recently been filed by the Company with the Commission pursuant to
Rule 424(b) is herein called the “Prospectus.” Any reference herein to the
Registration Statement, the Prospectus or any amendment or supplement thereto
shall be deemed to refer to and include the documents incorporated by reference
therein, and any reference herein to the terms “amend,” “amendment” or
“supplement” with respect to the Registration Statement or the Prospectus shall
be deemed to refer to and include the filing after the execution hereof of any
document with the Commission deemed to be incorporated by reference therein. For
purposes of this Agreement, all references to the Registration Statement, the
Prospectus or to any amendment or supplement thereto shall be deemed to include
any copy filed with the Commission pursuant to the Commission’s Electronic Data
Gathering, Analysis and Retrieval system (“EDGAR”).

The Company and the Operating Partnership have also entered into separate equity
distribution agreements (collectively, the “Alternative Distribution
Agreements”), dated as of even date herewith, with RBC Capital Markets, LLC,
Merrill Lynch, Pierce, Fenner & Smith Incorporated and RBS Securities Inc.
(collectively, the “Alternative Managers”). The aggregate offering price of the
Securities that may be sold pursuant to this Agreement and the Alternative
Distribution Agreements shall not exceed the Maximum Amount.

The Company and the Operating Partnership hereby reserve the right to issue and
sell securities other than through or to the Wells Fargo Securities and any
Alternative Manager during the term of this Agreement and any Alternative
Distribution Agreement subject to the notice provision contained in Section 7(k)
herein and therein.

SECTION 2. Placements.

Each time that the Company wishes to issue and sell the Securities hereunder
(each, a “Placement”), it will notify Wells Fargo Securities by email notice (or
other method mutually agreed to in writing by the parties) containing the
parameters in accordance with which it desires the Securities to be sold, which
shall at a minimum include the maximum number of Securities to be issued (the
“Placement Securities”), the time period during which sales are requested to be

 

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made, any limitation on the number of Securities that may be sold in one day and
any minimum market price per share below which sales may not be made (a
“Placement Notice”), a form of which containing such minimum sales parameters
necessary is attached hereto as Exhibit A. The Placement Notice shall originate
from any of the individuals from the Company set forth on Exhibit B (with a copy
to each of the other individuals from the Company listed on such schedule), and
shall be addressed to each of the individuals from Wells Fargo Securities set
forth on Exhibit B, as such Exhibit B may be amended from time to time.

A Placement Notice shall not set forth a number of Placement Securities that,
when added to the aggregate number of Securities previously sold and to be sold
pursuant to pending Placement Notices (if any) hereunder and any Alternative
Distribution Agreement results in an aggregate offering price of Securities that
exceeds the Maximum Amount.

A Placement Notice shall be effective upon receipt and prompt confirmation by
Wells Fargo Securities, unless and until (i) the entire amount of the Placement
Securities has been sold, (ii) the Company terminates the Placement Notice by
email (or other method agreed to in writing by Wells Fargo Securities) to all of
the individuals from Wells Fargo Securities set forth in Exhibit B, (iii) the
Company issues a subsequent Placement Notice with parameters superseding those
on the earlier dated Placement Notice, (iv) this Agreement has been terminated
under the provisions of Section 12 or (v) either party shall have suspended the
sale of the Placement Securities in accordance with Section 4 below. The amount
of any commission, discount or other compensation to be paid by the Company to
Wells Fargo Securities, when Wells Fargo Securities is acting as agent, in
connection with the sale of the Placement Securities shall be determined in
accordance with the terms set forth in Exhibit C. The amount of any commission,
discount or other compensation to be paid by the Company to Wells Fargo
Securities and the other terms and conditions, when Wells Fargo Securities is
acting as principal, in connection with the sale of the Placement Securities
shall be as separately agreed among the parties hereto at the time of any such
sales. It is expressly acknowledged and agreed that neither the Company nor
Wells Fargo Securities will have any obligation whatsoever with respect to a
Placement or any Placement Securities unless and until the Company delivers a
Placement Notice to Wells Fargo Securities, receipt of which is promptly
confirmed by Wells Fargo Securities pursuant to the terms set forth above, and
then only upon the terms specified therein and herein. In the event of a
conflict between the terms of this Agreement and the terms of a Placement
Notice, the terms of the Placement Notice will control.

SECTION 3. Sale of Placement Securities by Wells Fargo Securities.

Subject to the provisions of Section 6(a), Wells Fargo Securities, for the
period specified in the Placement Notice, will use its commercially reasonable
efforts consistent with its normal trading and sales practices to sell the
Placement Securities in negotiated transactions or transactions that are deemed
to be “at the market” offerings up to the amount specified in, and otherwise in
accordance with the terms of, such Placement Notice. Wells Fargo Securities will
provide written confirmation to the Company no later than the opening of the
Trading Day (as defined below) immediately following the Trading Day on which it
has made sales of Placement Securities hereunder setting forth the number of
Placement Securities sold on such day, the compensation payable by the Company
to Wells Fargo Securities pursuant to Section 2 with respect to such sales, and
the Net Proceeds (as defined below) payable to the Company, with an

 

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itemization of the deductions made by Wells Fargo Securities (as set forth in
Section 6(b)) from the gross proceeds that it receives from such sales. Subject
to the terms of the Placement Notice, Wells Fargo Securities may sell Placement
Securities by any method permitted by law deemed to be an “at the market”
offering as defined in Rule 415 under the Securities Act (“Rule 415”), including
without limitation sales made directly on the New York Stock Exchange, Inc. (the
“NYSE”), on any other existing trading market for the Common Stock or to or
through a market maker. Subject to the terms of the Placement Notice, Wells
Fargo Securities may also sell Placement Securities by any other method
permitted by law, including but not limited to privately negotiated
transactions. For the purposes hereof, “Trading Day” means any day on which
common equity securities are purchased and sold on the principal market on which
the Common Stock is listed or quoted.

SECTION 4. Suspension of Sales. The Company or Wells Fargo Securities may, upon
notice to the other party in writing (including by email correspondence to each
of the individuals of the other party set forth on Exhibit B, if receipt of such
correspondence is actually acknowledged by any of the individuals to whom the
notice is sent, other than via auto-reply) or by telephone (confirmed
immediately by verifiable facsimile transmission or email correspondence to each
of the individuals of the other party set forth on Exhibit B), suspend any sale
of Placement Securities under this Agreement; provided, however, that such
suspension shall not affect or impair either party’s obligations with respect to
any Placement Securities sold hereunder prior to the receipt of such notice or
any securities sold under an Alternative Distribution Agreement. Each of the
parties agrees that no such notice under this Section 4 shall be effective
against the other unless it is made to one of the individuals of the other party
named on Exhibit B hereto, as such Exhibit may be amended from time to time.

SECTION 5. Representations and Warranties.

(a) Representations and Warranties by the Company and the Operating Partnership.
Each of the Company and the Operating Partnership (the Operating Partnership,
together with the Company and MHC Trust, a Maryland real estate investment trust
and a majority owned subsidiary of the Company (“MHC Trust”), the “Transaction
Entities”), jointly and severally represents and warrants to Wells Fargo
Securities as of the date hereof and as of each Representation Date (as defined
below) on which a certificate is required to be delivered pursuant to
Section 7(o) of this Agreement, as of the time of each sale of any Securities
pursuant to this Agreement (the “Applicable Time”) and as of each Settlement
Date (as defined below), and agrees with Wells Fargo Securities, as follows:

(1) The Company meets the requirements for use of Form S-3ASR under the
Securities Act. The Original Registration Statement was filed by the Company
with the Commission not earlier than three years prior to the date hereof. The
Original Registration Statement became effective under the Securities Act upon
filing with the Commission. The Registration Statement is an “automatic shelf
registration statement,” as defined in Rule 405 under the Securities Act (“Rule
405”), and the Securities have been and remain eligible for registration by the
Company on an automatic shelf registration statement. No stop order suspending
the effectiveness of the Registration Statement or any part thereof has been
issued under the Securities Act and no proceedings for that purpose have been
instituted or are pending or, to the knowledge of

 

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the Company, are contemplated by the Commission, and no notice of objection of
the Commission to the use of such registration statement or any post-effective
amendment thereto pursuant to Rule 401(g)(2) under the Securities Act has been
received by the Company. No order preventing or suspending the use of any
preliminary prospectus or the Prospectus has been issued and no proceeding for
that purpose has been instituted or, to the knowledge of the Company, threatened
or contemplated by the Commission or the securities authority of any
jurisdiction. Any request on the part of the Commission for additional
information has been complied with.

At the respective times the Original Registration Statement and any
post-effective amendments thereto became effective, at each deemed effective
date with respect to Wells Fargo Securities and the Securities pursuant to Rule
430B(f)(2) and at each Settlement Date, the Original Registration Statement and
any amendments and supplements thereto complied, complies and will comply in all
material respects with the requirements under the Securities Act, and did not,
does not and will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading. Neither the Prospectus nor any amendments or
supplements thereto, at the time the Prospectus or any such amendment or
supplement was issued or at each Settlement Date, included or will include an
untrue statement of a material fact or omitted or will omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.

Any preliminary prospectus (including the base prospectus filed as part of the
Original Registration Statement or any amendment thereto) complied when so filed
in all material respects with the Securities Act and any such preliminary
prospectus and the Prospectus delivered or made available to Wells Fargo
Securities for use in connection with the offering of any Securities was and
will, at the time of such delivery, be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to EDGAR, except
to the extent permitted by Regulation S-T.

Each Issuer Free Writing Prospectus (as defined below), as of its issue date and
as of the relevant Applicable Time and Settlement Date, or until any earlier
date that the issuer notified or notifies Wells Fargo Securities as described in
Section 7(d) hereof, did not, does not and will not (i) include any information
that conflicted, conflicts or will conflict with the information contained in
the Registration Statement or the Prospectus, including any document
incorporated by reference therein that has not been superseded or modified or
(ii) when taken together with the 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.

The representations and warranties in the preceding three paragraphs shall not
apply to statements in or omissions from the Original Registration Statement, or
any post-effective amendment thereto, or the Prospectus, made in reliance upon
and in conformity with information furnished to the Company in writing by Wells
Fargo Securities or any Alternative Manager expressly for use therein (that
information being limited to that described in Section 10(b) hereof).

 

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As used herein, “Issuer Free Writing Prospectus” means any “issuer free writing
prospectus,” as defined in Rule 433 under the Securities Act (“Rule 433”),
relating to the Securities (including any identified on Exhibit F hereto) that
(i) is required to be filed with the Commission by the Company, or (ii) is a
“road show that is a written communication” within the meaning of Rule
433(d)(8)(i), whether or not required to be filed with the Commission, or
(iii) is exempt from filing with the Commission pursuant to Rule 433(d)(5)(i)
because it contains a description of the Securities or of the offering that does
not reflect the final terms, in each case in the form filed or required to be
filed with the Commission or, if not required to be filed, in the form retained
in the Company’s records pursuant to Rule 433(g).

(2) The documents incorporated or deemed to be incorporated by reference in the
Registration Statement and the Prospectus, at the time they were or hereafter
are filed with the Commission, complied and will comply in all material respects
with the requirements under the Exchange Act and, when read together with the
other information in the Registration Statement and the Prospectus (a) at the
time the Registration Statement became effective, (b) at each Applicable Time
and (c) at each relevant Settlement Date, did not and will not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading.

(3) (A) At the effectiveness of the Original Registration Statement, (B) at the
time of the most recent amendment thereto for the purposes of complying with
Section 10(a)(3) of the Securities Act (whether such amendment was by
post-effective amendment, incorporated report filed pursuant to Section 13 or
15(d) of the Exchange Act or form of prospectus), (C) 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 Securities Act) made any offer relating to the Securities
in reliance on the exemption of Rule 163 under the Securities Act, and (D) as of
the execution of this Agreement, the Company was and is a “well-known seasoned
issuer,” as defined in Rule 405.

(4) (A) At the effectiveness of the Original Registration Statement, (B) at the
earliest time after the effectiveness of the Original Registration Statement
that the Company or another offering participant made a bona fide offer (within
the meaning of Rule 164(h)(2) under the Securities Act) of the Securities and
(C) as of the execution of this Agreement (with such time of execution being
used as the determination date for purposes of this clause (C)), the Company was
not and is not an “ineligible issuer,” as defined in Rule 405, without taking
account of any determination by the Commission pursuant to Rule 405 that it is
not necessary that the Company be considered an ineligible issuer.

(5) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Maryland, with full
power and authority (corporate and other) to own or lease, as the case may be,
its properties and to operate its properties and conduct its business as
described in the Registration Statement and the Prospectus and to enter into and
perform its obligations under this Agreement;

 

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and the Company is duly qualified to do business as a foreign corporation and is
in good standing in all other jurisdictions in which its ownership or lease of
property or the operation of its properties or the conduct of its business
requires such qualification, except where the failure to so qualify would not
have, or reasonably be expected to have, individually or in the aggregate, a
material adverse effect on the condition (financial or otherwise), business,
earnings, properties, assets or prospects of the Transaction Entities and each
direct or indirect subsidiary of the Company, other than MHC Trust and the
Operating Partnership (each, a “Subsidiary” and collectively, the
“Subsidiaries”), taken as a whole, whether or not arising from transactions in
the ordinary course of business (“Material Adverse Effect”).

(6) The Operating Partnership has been duly formed and is validly existing as a
limited partnership in good standing under the laws of the State of Illinois, is
duly qualified to do business and is in good standing as a foreign limited
partnership in each jurisdiction in which its ownership or lease of property or
the operation of its properties or the conduct of its business requires such
qualification, except where the failure to so qualify would not have, or
reasonably be expected to have, a Material Adverse Effect, and has full power
and authority necessary to own or lease, as the case may be, its properties and
to operate its properties and conduct its business as described in the
Registration Statement and the Prospectus and to enter into and perform its
obligations under this Agreement; MHC Trust has been duly formed and is validly
existing as a real estate investment trust in good standing under the laws of
the State of Maryland, is duly qualified to do business and is in good standing
in each jurisdiction in which its ownership or lease of property or the
operation of its properties or the conduct of its business requires such
qualification, except where the failure to so qualify would not have, or
reasonably be expected to have, a Material Adverse Effect, and has full power
and authority necessary to own or lease, as the case may be, its properties and
to operate its properties and conduct its business as described in the
Registration Statement and the Prospectus; and MHC Trust is the sole general
partner of the Operating Partnership. Additionally, on each Settlement Date, the
Company will contribute the Net Proceeds from the sale of the Securities to MHC
Trust and MHC Trust will contribute the Net Proceeds to the Operating
Partnership in exchange for a number of common units of limited partnership in
the Operating Partnership (“OP Units”) equal to the number of Securities issued.

(7) Each direct or indirect significant subsidiary (as such term is defined in
Rule 1-02 of Regulation S-X under the Securities Act) of the Company and the
subsidiaries included on Exhibit 21 to the Company’s annual report on Form-10-K
for the year ended December 31, 2011, other than MHC Trust and the Operating
Partnership (each, a “Significant Subsidiary” and collectively, the “Significant
Subsidiaries”), has been duly formed and is validly existing as a corporation,
limited partnership or limited liability company, as the case may be, in good
standing under the laws of the jurisdiction of its organization, with full power
and authority (corporate and other) to own, lease and operate its properties and
conduct its business as described in the Registration Statement and the
Prospectus, except where the failure to be in good standing would not have, or
be reasonably expected to have, a Material Adverse Effect, and is duly qualified
to do business as a foreign corporation, partnership or limited liability
company in good

 

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standing in all other jurisdictions in which its ownership, lease or operation
of property or the conduct of its business requires such qualification, except
where the failure to so qualify would not have, or be reasonably expected to
have, a Material Adverse Effect; all of the issued and outstanding capital stock
or other ownership interests of MHC Trust and each Significant Subsidiary have
been duly authorized and validly issued and are fully paid and nonassessable and
were offered in compliance with all applicable laws (including, without
limitation, federal and state securities laws) in all material respects; and
except as described in the Registration Statement and the Prospectus, MHC
Trust’s ownership interests and each Significant Subsidiary’s capital stock or
other ownership interests are currently owned and will, at each Applicable Time
and immediately following each Settlement Date, continue to be owned by the
Company, directly or through subsidiaries, free and clear of any security
interests, liens, mortgages, encumbrances, pledges, claims, defects or other
restrictions of any kind (collectively, “Liens”), except where such Liens would
not have, or reasonably be expected to have, a Material Adverse Effect. None of
such equity interests were issued in violation of the preemptive or other
similar rights of any securityholder of MHC Trust or such Significant
Subsidiary. Except as described in the Registration Statement and the
Prospectus, there are no outstanding options, rights (preemptive or otherwise)
or warrants to purchase or subscribe for equity interests or other securities of
MHC Trust or any Significant Subsidiary.

(8) The Company’s authorized capitalization is as set forth in the documents
incorporated by reference in the Registration Statement and the Prospectus and
has not changed except for subsequent issuances, if any, pursuant to this
Agreement or the Alternative Distribution Agreements or pursuant to
reservations, agreements or benefit plans referred to in the Registration
Statement and the Prospectus; the capital stock of the Company conforms in all
material respects to the description thereof contained in the Registration
Statement and the Prospectus under the caption “Description of Common Stock;”
the outstanding shares of Common stock are duly listed and admitted and
authorized for trading on the NYSE and, at each Settlement Date, the Securities
will have been approved for listing on the NYSE or any successor exchange
thereto, subject to official notice of issuance; and, except as set forth in the
Registration Statement and the Prospectus, no options, warrants or other rights
to purchase, agreements or other obligations to issue, or rights to convert any
obligations into or exchange any securities for, shares of capital stock of or
ownership interests in the Company are outstanding.

(9) The Securities to be issued pursuant to this Agreement and any Alternative
Distribution Agreement and all outstanding shares of capital stock of the
Company, including any restricted shares of Common Stock, have been duly and
validly authorized. All outstanding shares of capital stock of the Company were
validly issued, are fully paid and nonassessable and have been offered and sold
in compliance with all applicable laws (including, without limitation, federal
and state securities laws) in all material respects. When the Securities to be
issued and sold by the Company pursuant to this Agreement are issued, delivered
and paid for in accordance with this Agreement on each Settlement Date, such
Securities will have been validly issued, fully paid and nonassessable, such
Securities will be offered and sold in compliance with all applicable laws
(including, without limitation, federal and state securities laws) in all
material respects, will conform,

 

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in all material respects, to the description thereof contained in the
Registration Statement and the Prospectus; and the stockholders of the Company
have no preemptive or other similar rights with respect to the Securities to be
issued and sold by the Company. Upon payment of the purchase price and issuance
and delivery of the Securities to be issued and sold by the Company in
accordance with this Agreement, the purchaser will receive good, valid and
marketable title to such Securities, free and clear of all Liens. The
certificates to be used to evidence the Securities will be in substantially the
form filed as an exhibit to the Registration Statement and will, on each
Settlement Date, be in proper form and will comply in all material respects with
all applicable legal requirements, the requirements of the charter and by-laws
of the Company and the requirements of the NYSE.

(10) The outstanding OP Units have been duly authorized for issuance by the
Operating Partnership, and are validly issued. The OP Units have been offered,
issued and sold in compliance with all applicable laws (including, without
limitation, federal and state securities laws) in all material respects and
conform to the description thereof contained in the Registration Statement and
the Prospectus in all material respects. None of the OP Units were issued in
violation of the preemptive or other similar rights of any securityholder of the
Operating Partnership. Except as disclosed in the Registration Statement and the
Prospectus, there are no outstanding options, rights (preemptive or otherwise)
or warrants to purchase or subscribe for OP Units or other securities of the
Operating Partnership.

(11) The OP Units to be issued by the Operating Partnership to MHC Trust in
connection with the Company’s contribution of the Net Proceeds from the sale of
the Securities and MHC Trust’s contribution of the Net Proceeds from the sale of
Securities to the Operating Partnership have been duly authorized for issuance
by the Operating Partnership to the Company, and at each Settlement Date, will
be validly issued and fully paid. Such OP Units will be exempt from registration
or qualification under the Securities Act and applicable state securities laws.
None of the OP Units will be issued in violation of the preemptive or other
similar rights of any securityholder of the Operating Partnership.

(12) Except as disclosed in the Registration Statement and the Prospectus, there
are no contracts, agreements or understandings, other than the Alternative
Distribution Agreements, between the Transaction Entities and any person that
would give rise to a valid claim against the Transaction Entities or Wells Fargo
Securities for a brokerage commission, finder’s fee or other like payment in
connection with the transactions contemplated by this Agreement.

(13) Except as disclosed in the Registration Statement and the Prospectus, there
are no contracts, agreements or understandings between the Company and any
person granting such person the right to require the Company to file a
registration statement under the Securities Act with respect to any securities
or to require the Company to include such securities in the securities
registered pursuant to the Registration Statement.

 

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(14) None of the Transaction Entities or the Subsidiaries (i) is in violation of
its charter, declaration of trust, by-laws, certificate of formation, operating
agreement or partnership agreement or similar organizational or governing
documents, (ii) to the knowledge of the Company, is in default (whether with or
without the giving of notice or passage of time or both) in the performance or
observance of any obligation, agreement, term, covenant or condition contained
in a contract, indenture, mortgage, deed of trust, loan or credit agreement,
note, lease, ground lease, development agreement, reciprocal easement agreement,
deed restriction, utility agreement, management agreement or other agreement or
instrument to which it is a party or by which it is bound, or to which any of
the Properties (as hereinafter defined) or any of its other property or assets
is subject (collectively, “Agreements and Instruments”), or (iii) to the
knowledge of the Company, is in violation of any statute, law, ordinance, rule,
regulation, judgment, order or decree of any court, regulatory body,
administrative agency, governmental body, arbitrator or other authority to which
it or the Properties or any of its other properties or assets is subject,
except, in the case of clauses (ii) and (iii), for such defaults or violations
that would not have, or reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect.

(15) No consent, approval, authorization, filing with or order of any court or
governmental agency or body is required to be made or obtained by the
Transaction Entities or the Subsidiaries in connection with the transactions
contemplated by this Agreement or any Alternative Distribution Agreement, except
such consents, approvals, authorizations, filings or orders (i) as have been
obtained under the Securities Act, or (ii) as may be required under the state
securities or blue sky laws of any jurisdiction in connection with the purchase
and distribution of the Securities by Wells Fargo Securities or any Alternative
Manager in the manner contemplated herein and in the Prospectus.

(16) The execution, delivery and performance of this Agreement by the
Transaction Entities party hereto and consummation of the transactions
contemplated hereby do not and will not (whether with or without the giving of
notice or passage of time or both) conflict with or result in a breach or
violation of any of the terms and provisions of, or constitute a default (or
give rise to any right of termination, acceleration, cancellation, repurchase or
redemption) or Repayment Event (as hereinafter defined) under, or result in the
creation or imposition of a Lien (other than those described in the Registration
Statement and the Prospectus) upon any of the properties or assets of any of the
Transaction Entities or the Subsidiaries pursuant to, (i) any statute, law,
rule, ordinance, regulation, judgment, order or decree of any court, domestic or
foreign, regulatory body, administrative agency, governmental body, arbitrator
or other authority, domestic or foreign, having jurisdiction over any of the
Transaction Entities or the Subsidiaries or any of their properties or assets,
(ii) any term, condition or provision of any Agreements or Instruments, or
(iii) the charter, declaration of trust, by-laws, certificate of formation,
operating agreement or partnership agreement or similar organizational or
governing documents, as applicable, of any of the Transaction Entities or the
Subsidiaries, except, in the case of clauses (i) and (ii), for such conflicts,
breaches, violations, defaults, rights, Repayment Events or Liens that are
disclosed in the Registration Statement and the Prospectus or as would not have,
or reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect. The

 

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Company has full power and authority to authorize, issue and sell the Securities
as contemplated by this Agreement. As used herein, “Repayment Event” means any
event or condition which, without regard to compliance with any notice or other
procedural requirements, gives the holder of any note, debenture or other
evidence of indebtedness (or any person acting on such holder’s behalf) the
right to require the repurchase, redemption or repayment of all or a portion of
such indebtedness by any of the Transaction Entities or the Subsidiaries.

(17) This Agreement has been duly and validly authorized, executed and delivered
by the Company and the Operating Partnership, and the Second Amended and
Restated Agreement of Limited Partnership of the Operating Partnership, as the
same has been or may be amended and/or restated from time to time (the
“Operating Partnership Agreement”), has been duly and validly authorized,
executed and delivered by the Transaction Entities party thereto; and each of
this Agreement and the Operating Partnership Agreement, assuming due
authorization, execution and delivery by the parties thereto (other than the
Transaction Entities), is a valid and binding agreement of each of the
Transaction Entities party thereto, enforceable against the Transaction Entities
party thereto in accordance with its terms, except to the extent that such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, or other similar laws relating to creditors’ rights and general
principles of equity and except as rights to indemnify and contribution
thereunder may be limited by applicable law or policies underlying such law.

(18) The Transaction Entities and the Subsidiaries possess all certificates,
authorities, licenses, consents, approvals, permits and other authorizations
(“Licenses”) issued by appropriate governmental agencies or bodies or third
parties necessary to conduct the business now operated by them, are in
compliance with the terms and conditions of all such Licenses, and have not
received any notice of proceedings relating to the revocation or modification of
any such Licenses except where the failure to possess any such License or to
comply with any of its terms and conditions, or an adverse determination in any
proceeding, would not individually or in the aggregate have, or reasonably be
expected to have, a Material Adverse Effect.

(19) The consolidated financial statements of the Company and its subsidiaries
included or incorporated or deemed to be incorporated by reference in the
Registration Statement and the Prospectus, together with the related schedules
and notes, present fairly in all material respects the consolidated financial
position of the Company at the dates indicated and the consolidated statements
of operations, changes in stockholders’ equity and cash flows of the Company for
the periods specified; and said financial statements have been prepared in
conformity with U.S. generally accepted accounting principles (“GAAP”) applied
on a consistent basis throughout the periods involved (except as may be
indicated in the notes thereto and subject to normal year-end adjustments in the
case of any unaudited interim financial statements) and have been prepared on a
consistent basis with the books and records of the Company. The supporting
schedules included or incorporated or deemed to be incorporated by reference in
the Registration Statement and the Prospectus present fairly in accordance with
GAAP the information required to be stated therein. The selected financial data
and the summary financial information

 

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included or incorporated or deemed to be incorporated by reference in the
Registration Statement and the Prospectus present fairly the information shown
therein and have been compiled on a basis consistent with that of the financial
statements included or incorporated or deemed to be incorporated by reference in
the Registration Statement and the Prospectus. The pro forma financial
statements and the related notes thereto included in the Registration Statement
and the Prospectus present fairly the information shown therein, have been
prepared in accordance with the Commission’s rules and guidelines with respect
to pro forma financial statements and have been properly compiled on the bases
described therein, and the assumptions used in the preparation thereof are
reasonable and the adjustments used therein are appropriate to give effect to
the transactions and circumstances referred to therein. The statements of
certain revenues and expenses of the properties acquired or proposed to be
acquired, if any, included in, or incorporated by reference into, the
Registration Statement and the Prospectus present fairly in all material
respects the information set forth therein and have been prepared, in all
material respects, in accordance with the applicable financial statement
requirements of Rule 3-14 under the Exchange Act with respect to real estate
operations acquired or to be acquired. No other historical or pro forma
financial statements (or schedules) are required by the Securities Act or the
Exchange Act to be included or incorporated or deemed to be incorporated by
reference in the Registration Statement or the Prospectus. All disclosures
contained in the Registration Statement and the Prospectus, if any, regarding
“non-GAAP financial measures” (as such term is defined by the rules and
regulations of the Commission) comply with Regulation G under the Exchange Act
and Item 10 of Regulation S-K under the Securities Act, to the extent
applicable. The interactive data in eXtensible Business Reporting Language to
the extent included or incorporated or deemed to be incorporated by reference in
the Registration Statement and the Prospectus fairly presents the information
called for in all materials respects and has been prepared in accordance with
the Commission’s rules and guidelines applicable thereto.

(20) Ernst & Young LLP, who certified the financial statements, and supporting
schedules and historical summaries of revenues and certain operating expenses
for the properties related thereto included or incorporated or deemed to be
incorporated by reference in the Registration Statement and the Prospectus and
delivered the initial letter referred to in Section 7(r) hereof, are independent
registered certified public accountants as required by the Securities Act and
the Exchange Act.

(21) The Company, beginning with its taxable year ended December 31, 1993 has
been organized and operated, and as of each Applicable Time and Settlement Date,
will continue to be organized and operated, in conformity with the requirements
for qualification and taxation as a real estate investment trust (a “REIT”)
under the Internal Revenue Code 1986, as amended (the “Code”), and the current
and proposed method of operation of the Company, as described in the
Registration Statement and the Prospectus, will permit the Company to continue
to meet the requirements for qualification and taxation as a REIT under the Code
for so long as the Board of Directors of the Company deems it in the best
interests of the Company’s stockholders to remain so qualified for taxation as a
REIT under the Code.

 

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(22) All federal, state, local and foreign tax returns or valid extensions filed
for, and reports required to be filed by any of the Transaction Entities or the
Subsidiaries, in each case, to the extent material (“Returns”), have been timely
filed (to the extent certain Returns were not timely filed, any delay has not
had, and is not reasonably expected to have, a Material Adverse Effect); all
such Returns are true, correct and complete in all material respects; and all
federal, state, county, local or foreign taxes, charges, fees, levies, fines,
penalties or other assessments, including all net income, gross income, sales
and use, ad valorem, transfer, gains, profits, excise, franchise, real and
personal property, gross receipts, capital stock, disability, employment,
pay-roll, license, estimated, stamp, custom duties, severance or withholding
taxes or charges imposed by any Governmental Authority (as defined hereafter)
(including any interest and penalties (civil or criminal) on or additions to any
such taxes and any expenses incurred in connection with the determination,
settlement or litigation of any tax liability), in each case, to the extent
material (“Taxes”), shown in such Returns or on assessments received by any of
the Transaction Entities or the Subsidiaries or otherwise due and payable or
claimed to be due and payable by any Governmental Authority, have been paid,
except for any such tax, charge, fee, levy, fine, penalty or other assessment
that (i) is currently being contested in good faith, (ii) would not have, or
reasonably be expected to have, a Material Adverse Effect or (iii) is described
in the Registration Statement and the Prospectus. None of the Transaction
Entities or the Subsidiaries has requested any extension of time within which to
file any Return, which Return has not since been filed within the extended time
(to the extent any such Returns were not filed within the extended time, it has
not had, and is not reasonably expected to have a Material Adverse Effect). None
of the Transaction Entities or the Subsidiaries has executed any outstanding
waivers or comparable consents regarding the application of the statute of
limitations with respect to any Taxes or Returns that has had or is reasonably
expected to have, a Material Adverse Effect. No audits or other administrative
proceedings or court proceedings are presently pending or threatened against any
of the Transaction Entities or the Subsidiaries with regard to any Taxes or
Returns of any of the Transaction Entities or the Subsidiaries that has had or
is reasonably expected to have, a Material Adverse Effect.

(23) Each of the Transaction Entities and the Subsidiaries has complied in all
material respects with the provisions of the Code relating to the payment and
withholding of Taxes, including, without limitation, the withholding and
reporting requirements under Sections 1441 through 1446, 3401 through 3406, and
6041 and 6049 of the Code, as well as similar provisions under any other laws,
and has, within the time and in the manner prescribed by law, withheld and paid
over to the proper governmental authorities all material amounts required in
connection with amounts paid or owing to any employee, independent contractor,
creditor, stockholder, or other third party.

(24) None of the Transaction Entities or the Subsidiaries (including any
predecessor entities) has distributed, or prior to the completion of the
distribution of the Securities, will distribute, any offering material in
connection with the offering or sale of the Securities other than the
Registration Statement and the Prospectus and any other written materials
consented to by Wells Fargo Securities pursuant to Section 18 hereof).

 

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(25) Each of the Transaction Entities and the Subsidiaries is in compliance, in
all material respects, with all presently applicable provisions of the Employee
Retirement Income Security Act of 1974, as amended, including the regulations
and published interpretations thereunder (“ERISA”); no “reportable event” (as
defined in ERISA) has occurred with respect to any “pension plan” (as defined in
ERISA) for which any of the Transaction Entities would have any liability, other
than as would not reasonably be expected to have a Material Adverse Effect; none
of the Transaction Entities or the Subsidiaries has incurred or expects to incur
liability under (i) Title IV of ERISA with respect to termination of, or
withdrawal from, any “pension plan” or (ii) Sections 412 or 4971 of the Code,
including the regulations and published interpretations thereunder other than as
would not reasonably be expected to have a Material Adverse Effect; and each
“pension plan” for which any of the Transaction Entities or the Subsidiaries
would have any liability and that is intended to be qualified under
Section 401(a) of the Code is so qualified in all material respects, and nothing
has occurred, whether by action or by failure to act, which would cause the loss
of such qualification, except where the failure to be so qualified would not
have, or reasonably be expected to have, a Material Adverse Effect.

(26) The assets of the Transaction Entities and the Subsidiaries do not
constitute “plan assets” of an ERISA regulated employee benefit plan.

(27) (A) The Transaction Entities or the Subsidiaries or any other subsidiary or
joint venture in which the Transaction Entities or any Subsidiary owns an
interest, as the case may be, will have good and marketable fee simple title or
leasehold title to all of the properties and other assets owned or leased by the
Transaction Entities, the Subsidiaries or the applicable subsidiary or joint
venture (the “Properties”), in each case, free and clear of all Liens, except as
disclosed in the Registration Statement and the Prospectus or such as would not
have, or reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect; (B) all Liens on or affecting the Properties that are
required to be disclosed in the Registration Statement and the Prospectus are
disclosed therein and none of the Transaction Entities or the Subsidiaries is in
default under any such Lien except for such defaults that would not have, or
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect; (C) all of the leases and subleases material to the business of
the Transaction Entities and the Subsidiaries, taken as a whole, and under which
the Transaction Entities or any of the Subsidiaries hold properties described in
the Registration Statement and the Prospectus, are in full force and effect, and
none of the Transaction Entities or any Subsidiary has any notice of any
material claim of any sort that has been asserted by anyone adverse to the
rights of any of the Transaction Entities or any Subsidiary under any of such
leases or subleases, or affecting or questioning the rights of any of the
Transaction Entities or such Subsidiary to the continued possession of the
leased or subleased premises under any such lease or sublease; (D) except as
disclosed in the Registration Statement and the Prospectus, none of the
Transaction Entities or the Subsidiaries is in violation of any municipal, state
or federal law, rule or regulation concerning the Properties or any part thereof
which violation would have, or reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect; (E) except as disclosed in the
Registration Statement and the Prospectus, each of the Properties complies with
all applicable zoning laws, laws,

 

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ordinances, regulations, development agreements, reciprocal easement agreements,
ground or airspace leases and deed restrictions or other covenants, except where
the failure to comply would not have, or reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect or could not result
in a forfeiture or reversion of title; and (F) except as disclosed in the
Registration Statement and the Prospectus, none of the Transaction Entities or
the Subsidiaries has received from any Governmental Authority any written notice
of any condemnation of or zoning change materially affecting the Properties or
any part thereof, and none of the Transaction Entities or the Subsidiaries knows
of any such condemnation or zoning change which is threatened and which if
consummated would have, or reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect.

(28) Each of the Transaction Entities and the Subsidiaries is insured by
insurers of recognized financial responsibility against such losses and risks
and in such amounts as are generally deemed prudent and customary in the
businesses in which they are or will be engaged as described in the Registration
Statement and the Prospectus; all policies of insurance and fidelity or surety
bonds insuring any of the Transaction Entities or the Subsidiaries or their
respective businesses, assets, employees, officers and directors are in full
force and effect; each of the Transaction Entities and the Subsidiaries is in
compliance with the terms of such policies and instruments in all material
respects; except as described in the Registration Statement and the Prospectus,
there are no material claims by any of the Transaction Entities or the
Subsidiaries under any such policy or instrument as to which any insurance
company is denying liability or defending under a reservation of rights clause;
and, except as disclosed in the Registration Statement and the Prospectus, none
of the Transaction Entities or the Subsidiaries has been refused any insurance
coverage sought or applied for; and none of the Transaction Entities or the
Subsidiaries has any reason to believe that any of them will not be able to
renew its existing insurance coverage as and when such coverage expires or to
obtain similar coverage from similar insurers as may be necessary to continue to
conduct its business as currently conducted or as proposed to be conducted in
the Registration Statement and the Prospectus at a cost that would not have a
Material Adverse Effect.

(29) Except as set forth in the Registration Statement and the Prospectus, the
mortgages and deeds of trust encumbering the Properties owned or leased by any
of the Transaction Entities or the Subsidiaries are described in the
Registration Statement and the Prospectus and are not convertible and none of
the Transaction Entities, the Subsidiaries, or any person affiliated therewith
holds a participating interest therein, and such mortgages and deeds of trust
are not cross-defaulted or cross-collateralized to any property other than the
Properties except as would not have a Material Adverse Effect.

(30) The Operating Partnership or a Subsidiary has title insurance on the fee
interests and/or leasehold interests in each of the Properties covering such
risks and in such amounts as are commercially reasonable for the assets owned or
leased by them and that are consistent with the types and amounts of insurance
typically maintained by owners and operators of similar properties, and in each
case such title insurance is in full force and effect except as would not have a
Material Adverse Effect.

 

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(31) Except as otherwise disclosed in the Registration Statement and the
Prospectus, (i) the Transaction Entities and the Subsidiaries and the Properties
have been and are in material compliance with, and none of the Transaction
Entities or the Subsidiaries has any material liability under, applicable
Environmental Laws (as defined below), (ii) none of the Transaction Entities,
the Subsidiaries, or, to the knowledge of the Transaction Entities, the prior
owners or occupants of the Properties at any time or any other person or entity
has at any time released (as such term is defined in Section 101(22) of the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended, 42 U.S.C. §§ 9601-9675 (“CERCLA”)) or otherwise disposed of or dealt
with, Hazardous Materials (as hereinafter defined) on, to or from the Properties
or other assets owned by the Transaction Entities or the Subsidiaries, except
for such releases or dispositions as would not be reasonably likely to cause the
Transaction Entities or the Subsidiaries to incur material liability, (iii) the
Transaction Entities do not intend to use the Properties or other assets owned
by any of the Transaction Entities or the Subsidiaries or any subsequently
acquired properties, other than in material compliance with applicable
Environmental Laws, (iv) none of the Transaction Entities or the Subsidiaries
knows of any seepage, leak, discharge, release, emission, spill, or dumping of
Hazardous Materials into waters (including, but not limited to, groundwater and
surface water) on, beneath or adjacent to the Properties, or onto lands or other
assets owned by the Transaction Entities or the Subsidiaries from which
Hazardous Materials might seep, flow or drain into such waters except for such
as would not be reasonably likely to cause the Transaction Entities or the
Subsidiaries to incur material liability, (v) none of the Transaction Entities
or the Subsidiaries has received any notice of, or has any knowledge of any
occurrence or circumstance which, with notice or passage of time or both, would
give rise to a claim under or pursuant to any Environmental Law or common law by
any governmental or quasi-governmental body or any third party with respect to
the Properties or other assets described in the Registration Statement and the
Prospectus or arising out of the conduct of the Transaction Entities or the
Subsidiaries, except for such claims that would not be reasonably likely to
cause the Transaction Entities to incur material liability and (vi) neither the
Properties nor any other assets currently owned by any of the Transaction
Entities or the Subsidiaries is included or, to the best of the Transaction
Entities’ and the Subsidiaries’ knowledge, proposed for inclusion on the
National Priorities List issued pursuant to CERCLA by the United States
Environmental Protection Agency (the “EPA”) or, to the best of the Transaction
Entities’ and the Subsidiaries’ knowledge, proposed for inclusion on any similar
list or inventory issued pursuant to any other applicable Environmental Law or
issued by any other Governmental Authority. To the knowledge of the Transaction
Entities and the Subsidiaries, there have been no and are no (i) aboveground or
underground storage tanks, (ii) polychlorinated biphenyls (“PCBs”) or
PCB-containing equipment, (iii) asbestos or asbestos containing materials,
(iv) lead based paints, (v) dry-cleaning facilities, or (vi) wet lands, in each
case in, on, under, or adjacent to any Property or other assets owned by the
Transaction Entities or the Subsidiaries the existence of which has had, or is
reasonably expected to have, a Material Adverse Effect.

As used herein, “Hazardous Material” shall include, without limitation, any
flammable explosives, radioactive materials, hazardous materials, hazardous
wastes, toxic substances, or related materials, asbestos or any hazardous
material as defined by

 

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any applicable federal, state or local environmental law, ordinance, statute,
rule or regulation including, without limitation, CERCLA, the Hazardous
Materials Transportation Act, as amended, 49 U.S.C. §§5101-5128, the Solid Waste
Disposal Act, as amended, 42 U.S.C. §§ 6901-6992k, the Emergency Planning and
Community Right-to-Know Act of 1986, 42 U.S.C. §§ 11001-11050, the Toxic
Substances Control Act, 15 U.S.C. §§ 2601-2692, the Federal Insecticide,
Fungicide and Rodenticide Act, 7 U.S.C. §§ 136-136y, the Clean Air Act, 42
U.S.C. §§ 7401-7671q, the Clean Water Act (Federal Water Pollution Control Act),
33 U.S.C. §§ 1251-1387, the Safe Drinking Water Act, 42 U.S.C. §§ 300f-300j-26,
and the Occupational Safety and Health Act, 29 U.S.C. §§ 651-678, as any of the
above statutes may be amended from time to time, and in the regulations
promulgated pursuant to any of the foregoing (including environmental statutes
not specifically defined herein) (individually, an “Environmental Law” and
collectively, “Environmental Laws”) or by any federal, state or local
governmental authority having or claiming jurisdiction over the Properties and
other assets described in the Registration Statement and the Prospectus (a
“Governmental Authority”).

(32) No labor problem or dispute with the employees of any of the Transaction
Entities or the Subsidiaries exists or, to the knowledge of the Transaction
Entities, is threatened or imminent, and the Transaction Entities are not aware
of any existing or, to the knowledge of the Transaction Entities, imminent labor
disturbance by the employees of any of their or their Subsidiaries’ principal
suppliers, contractors or customers, that would have, individually or in the
aggregate, a Material Adverse Effect, except as set forth in or contemplated in
the Registration Statement and the Prospectus.

(33) The Transaction Entities and the Subsidiaries own, possess, license or have
other rights to use, on reasonable terms, all patents, patent applications,
trade and service marks, trade and service mark registrations, trade names,
copyrights, licenses, inventions, trade secrets, technology, know-how and other
intellectual property (collectively, the “Intellectual Property”) necessary for
the conduct of the Transaction Entities’ business as now conducted or as
proposed in the Registration Statement and the Prospectus to be conducted.
Except as set forth in the Registration Statement and the Prospectus, (A) to the
knowledge of the Company, there are no material rights of third parties to any
such Intellectual Property, (B) to the knowledge of the Company, there is no
material infringement by third parties of any such Intellectual Property,
(C) there is no pending or, to the knowledge of the Company, threatened action,
suit, proceeding or claim by others challenging the Transaction Entities’ rights
in or to any such Intellectual Property, that would result, individually or in
the aggregate, in a Material Adverse Effect, and the Transaction Entities are
unaware of any facts which would form a reasonable basis for any such claim,
(D) there is no pending or, to the knowledge of the Company, threatened action,
suit, proceeding or claim by others challenging the validity or scope of any
such Intellectual Property, that would result, individually or in the aggregate,
in a Material Adverse Effect, and the Transaction Entities are unaware of any
facts which would form a reasonable basis for any such claim and (E) there is no
pending or, to the knowledge of the Company, threatened action, suit, proceeding
or claim by others that the Transaction Entities infringe or otherwise violate
any patent, trademark, copyright, trade secret or other proprietary rights of
others, that would result, individually or in the aggregate, in a Material
Adverse Effect, and the Transaction Entities are unaware of any other fact which
would form a reasonable basis for any such claim.

 

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(34) Except as disclosed in the Registration Statement and the Prospectus, there
are no pending actions, suits or proceedings against or affecting any of the
Transaction Entities, the Subsidiaries or any of the Properties or other assets
that, if determined adversely to any of the Transaction Entities or the
Subsidiaries, would have, or reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect, or would materially and adversely
affect the ability of the Transaction Entities to perform their obligations
under this Agreement, or which are required under the Securities Act or the
Exchange Act to be described in the Registration Statement or the Prospectus;
and no such actions, suits or proceedings are, to the Transaction Entities’
knowledge, threatened or contemplated.

(35) Except as disclosed in the Registration Statement and the Prospectus, since
the date of the latest audited financial statements included or incorporated or
deemed to be incorporated by reference in the Registration Statement and the
Prospectus, (A) there has been no Material Adverse Effect, (B) there have been
no transactions entered into by any of the Transaction Entities or the
Subsidiaries which are material with respect to the Transaction Entities and
their Subsidiaries taken as a whole, (C) none of the Transaction Entities or the
Subsidiaries has incurred any obligation or liability, direct, contingent or
otherwise that is or would be material to the Transaction Entities and the
Subsidiaries taken as a whole and (D) there has been no dividend or distribution
of any kind declared, paid or made by the Transaction Entities on any class of
its capital stock or by the Operating Partnership or any of its subsidiaries
with respect to its OP Units.

(36) None of the Transaction Entities nor any Subsidiary is or, after giving
effect to the offering and sale of the Securities pursuant to this Agreement or
any Alternative Distribution Agreement and the application of the net proceeds
therefrom, none of the Transaction Entities will be, an “investment company” as
defined in the Investment Company Act of 1940, as amended (the “Investment
Company Act”).

(37) There is no contract or other document to which any of the Transaction
Entities or the Subsidiaries is a party that is required by the Securities Act
or the Exchange Act to be described in the Registration Statement or the
Prospectus, or to be filed as an exhibit thereto, which is not described or
filed as required.

(38) No relationship, direct or indirect, exists between or among any of the
Transaction Entities on the one hand, and the directors, officers or
stockholders of the Transaction Entities on the other hand, which is required
pursuant to the Securities Act or the Exchange Act to be described in the
Registration Statement or the Prospectus which is not so described.

(39) Except (i) to the extent not required to be described or filed pursuant to
the Securities Act or the Exchange Act, (ii) as described in the Registration
Statement and the Prospectus or (iii) for the agreements referred to herein,
none of the Transaction Entities’ or the Subsidiaries’ directors, officers,
interest holders, stockholders, members,

 

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partners, members of management, other employees or their respective affiliates
is a party to any contracts or agreements with any of the Transaction Entities
or the Subsidiaries.

(40) Each of the Transaction Entities and the Subsidiaries (i) makes and keeps
accurate books and records in all material respects and (ii) maintains internal
accounting controls which provide reasonable assurance that (A) transactions are
executed in accordance with management’s authorization, (B) transactions are
recorded as necessary to permit preparation of its financial statements in
conformity with GAAP and to maintain accountability for its assets, (C) access
to its assets is permitted only in accordance with management’s authorization,
(D) the reported accountability for its assets is compared with existing assets
at reasonable intervals and appropriate action is taken with respect to any
differences and (E) the interactive data in eXtensible Business Reporting
Language to the extent included or incorporated or deemed to be incorporated by
reference in the Registration Statement and the Prospectus fairly presents the
information called for in all material respects and is prepared in accordance
with the Commission’s rule and guidelines applicable thereto. Since the end of
the Company’s most recent audited fiscal year, there has been (I) no material
weakness in the Company’s internal control over financial reporting (whether or
not remediated) and (II) no change in the Company’s internal control over
financial reporting that has materially affected, or is reasonably likely to
materially affect, the Company’s internal control over financial reporting.

(41) The operations of the Transaction Entities and the Subsidiaries are and
have been conducted at all times in compliance in all material respects with
applicable financial recordkeeping and reporting requirements of the Currency
and Foreign Transactions Reporting Act of 1970, as amended, the money laundering
statutes of all jurisdictions, the rules and regulations thereunder and any
related or similar rules, regulations or guidelines issued, administered or
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 any of the Transaction Entities or
the Subsidiaries with respect to the Money Laundering Laws is pending or, to the
best knowledge of the Company, threatened.

(42) 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.

(43) None of the Transaction Entities, the Subsidiaries or, to the knowledge of
the Transaction Entities, their respective officers, directors, members or
controlling persons has taken, or will take, directly or indirectly, any action
designed to or that might reasonably be expected to result in a violation of
Regulation M under the Exchange Act or cause or result in stabilization or
manipulation of the price of the Common Stock to facilitate the sale or resale
of the Securities.

(44) Except as otherwise disclosed in the Registration Statement or the
Prospectus, with respect to stock options (the “Stock Options”) granted pursuant
to the

 

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stock-based compensation plans of the Company and the subsidiaries (the “Company
Stock Plans”), (i) each Stock Option designated by the Company or the relevant
subsidiary of the Company at the time of grant as an “incentive stock option”
under Section 422 of the Code, so qualifies, (ii) each grant of a Stock Option
was duly authorized no later than the date on which the grant of such Stock
Option was by its terms to be effective (the “Grant Date”) by all necessary
corporate action, including, as applicable, approval by the board of directors
of the Company or the relevant subsidiary of the Company (or a duly constituted
and authorized committee thereof) and any required stockholder approval by the
necessary number of votes or written consents, and the award agreement governing
such grant (if any) was duly executed and delivered by each party thereto,
(iii) each such grant was made in accordance with the terms of the Company Stock
Plans, the Exchange Act and all other applicable laws and regulatory rules or
requirements, including the rules of the NYSE and any other exchange on which
the securities of the Company or the relevant subsidiary are traded, (iv) the
per share exercise price of each Stock Option was equal to or greater than the
fair market value of a share of Common Stock on the applicable Grant Date and
(v) each such grant was properly accounted for in accordance with GAAP in the
consolidated financial statements (including the related notes) of the Company
and disclosed in the Company’s filings with the Commission in accordance with
the Exchange Act and all other applicable laws. Neither the Company nor any of
the subsidiaries has knowingly granted, and there is no and has been no policy
or practice of the Company or any of the subsidiaries of granting, Stock Options
prior to, or otherwise coordinating the grant of Stock Options with, the release
of other public announcement of material information regarding the Company or
the subsidiaries or their results of operations or prospects.

(45) The Company intends to apply the Net Proceeds from the sale of the
Securities substantially in accordance with the description set forth in the
Prospectus under the heading “Use of Proceeds.”

(46) Throughout the period from its formation through the date hereof and as of
each Applicable Time and each Settlement Date, each of the Operating Partnership
and any other Subsidiary that is a partnership or a limited liability company
has been properly classified either as a partnership or as an entity disregarded
as separate from the Company for federal income tax purposes and is not a
“publicly traded partnership” within the meaning of Section 7704(b) of the Code
that is treated as an association taxable as a corporation for federal income
tax purposes.

(47) Except as disclosed in the Registration Statement and the Prospectus, none
of the Operating Partnership or the Subsidiaries are currently prohibited,
directly or indirectly, from paying any distributions to the Company to the
extent permitted by applicable law, from making any other distribution on the
Operating Partnership’s partnership interests, or from repaying to the Company
any loans or advances made by the Company to the Operating Partnership or any
such Subsidiary.

(48) There is and has been no failure on the part of the Company or any of the
Company’s directors or officers, in their capacities as such, to comply in all
material respects with any provision of the Sarbanes-Oxley Act of 2002 and the
rules and

 

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regulations promulgated in connection therewith (the “Sarbanes-Oxley Act”),
including Section 402 related to loans and Sections 302 and 906 related to
certifications, in each case, to the extent the Sarbanes-Oxley Act applies to
the Company.

(49) None of the Transaction Entities has directed Wells Fargo Securities to
reserve shares for purchase by any director, officer or employee of any of the
Transaction Entities or any third party.

(b) Certificates. Any certificate signed by any officer of the Company or the
Operating Partnership and delivered to Wells Fargo Securities or to counsel for
Wells Fargo Securities in connection with the offering of Securities as
contemplated by this Agreement shall be deemed a representation and warranty by
the Company and the Operating Partnership, as the case may be, to Wells Fargo
Securities as to the matters covered thereby.

SECTION 6. Sale and Delivery to Wells Fargo Securities; Settlement.

(a) Sale of Placement Securities. On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, upon Wells Fargo Securities’ receipt and prompt confirmation of the terms
of a Placement Notice and unless the sale of the Placement Securities described
therein has been declined, suspended, or otherwise terminated in accordance with
the terms of this Agreement, Wells Fargo Securities, for the period specified in
the Placement Notice, will use its commercially reasonable efforts consistent
with its normal trading and sales practices to sell such Placement Securities in
negotiated transactions or transactions that are deemed to be “at the market”
offerings up to the amount specified in, and otherwise in accordance with the
terms of, such Placement Notice. Each of the Company and the Operating
Partnership acknowledges and agrees that (i) there can be no assurance that
Wells Fargo Securities will be successful in selling Placement Securities,
(ii) Wells Fargo Securities will incur no liability or obligation to the
Company, the Operating Partnership or any other person or entity if it does not
sell Placement Securities for any reason other than a failure by Wells Fargo
Securities to use its commercially reasonable efforts consistent with its normal
trading and sales practices to sell such Placement Securities as required under
this Section 6 and (iii) Wells Fargo Securities shall be under no obligation to
purchase Securities on a principal basis pursuant to this Agreement, except as
otherwise agreed by Wells Fargo Securities in the Placement Notice.

(b) Settlement of Placement Securities. Unless otherwise specified in the
applicable Placement Notice, settlement for sales of Placement Securities will
occur on the third (3rd) Trading Day (or such earlier day as is industry
practice for regular-way trading) following the date on which such sales are
made (each, a “Settlement Date”). The amount of proceeds to be delivered to the
Company on a Settlement Date against receipt of the Placement Securities sold
(the “Net Proceeds”) will be equal to the aggregate offering price received by
Wells Fargo Securities at which such Placement Securities were sold, after
deduction for (i) Wells Fargo Securities’ commission, discount or other
compensation for such sales payable by the Company pursuant to Section 2 hereof
and (ii) any transaction fees imposed by any governmental or self-regulatory
organization in respect of such sales.

 

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(c) Delivery of Placement Securities. On or before each Settlement Date, the
Company will, or will cause its transfer agent to, electronically transfer the
Placement Securities being sold by crediting Wells Fargo Securities’ or its
designee’s account (provided Wells Fargo Securities shall have given the Company
written notice of such designee prior to the Settlement Date) at The Depository
Trust Company through its Deposit and Withdrawal at Custodian System or by such
other means of delivery as may be mutually agreed upon by the parties hereto
which in all cases shall be freely tradable, transferable, registered shares in
good deliverable form. On each Settlement Date, Wells Fargo Securities will
deliver the related Net Proceeds in same day funds to an account designated by
the Company prior to the Settlement Date. If the Company, or its transfer agent
(if applicable), defaults in its obligation to deliver Placement Securities on a
Settlement Date in accordance with the terms of this Agreement, the Company
agrees that in addition to and in no way limiting the rights and obligations set
forth in Section 10(a) and Section 10(e) hereto, it will (i) hold Wells Fargo
Securities harmless against any loss, liability, claim, damage, or expense
whatsoever (including reasonable legal fees and expenses), as incurred, arising
out of or in connection with such default by the Company or its transfer agent
(if applicable) and (ii) pay to Wells Fargo Securities any commission, discount,
or other compensation to which it would otherwise have been entitled absent such
default.

(d) Denominations; Registration. The Securities shall be in such denominations
and registered in such names as Wells Fargo Securities may request in writing at
least one full business day before the Settlement Date. The Company shall
deliver the Securities, if any, through the facilities of The Depository Trust
Company unless Wells Fargo Securities shall otherwise instruct.

(e) Limitations on Offering Size. Under no circumstances shall the Company cause
or request the offer or sale of any Securities, if after giving effect to the
sale of such Securities, the aggregate offering price of the Securities sold
pursuant to this Agreement would exceed the lesser of (A) together with all
sales of Securities under this Agreement and each of the Alternative
Distribution Agreements, the Maximum Amount and (B) the amount available for
offer and sale under the currently effective Registration Statement, (C) the
amount authorized from time to time to be issued and sold under this Agreement
by the Company and notified to Wells Fargo Securities in writing. Under no
circumstances shall the Company cause or request the offer or sale of any
Securities pursuant to this Agreement at a price lower than the minimum price
authorized from time to time by the Company and notified to Wells Fargo
Securities in writing. Further, under no circumstances shall the aggregate
offering price of Securities sold pursuant to this Agreement and the Alternative
Distribution Agreements, including any separate underwriting or similar
agreement covering principal transactions described in Section 1 of this
Agreement, exceed the Maximum Amount.

(f) Limitations on Managers. The Company agrees that any offer to sell, any
solicitation of an offer to buy or any sales of Securities under this Agreement
shall only be effected by or through only one of Wells Fargo Securities or an
Alternative Manager on any single given day, but in no event more than one, and
the Company shall in no event request that Wells Fargo Securities and one or
more of the Alternative Managers sell Securities on the same day.

 

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(g) Certain Blackout Periods. Notwithstanding any other provision of this
Agreement, the Company shall not offer, sell or deliver, or request the offer or
sale of, any Placement Securities and, by notice to Wells Fargo Securities given
by telephone (confirmed promptly by facsimile transmission or email), shall
cancel any instructions for the offer or sale of any Securities, and Wells Fargo
Securities shall not be obligated to offer or sell any Securities, (i) during
any period in which the Company’s insider trading policy, as it exists on the
date of this Agreement, would prohibit the purchases or sales of the Company’s
Common Stock by its officers or directors provided that, unless otherwise agreed
between the Company and Wells Fargo Securities, for purposes of this clause (i),
such period shall be deemed to end 24 hours after the date on which the
Company’s next subsequent Annual Report on Form 10–K or Quarterly Report on Form
10–Q, as the case may be, is filed with the Commission or (ii) during any other
period in which the Company is in possession of material non-public information
or (iii) except as provided in Section 6(h) below, at any time from and
including the date (each, an “Announcement Date”) on which the Company shall
issue a press release containing, or shall otherwise publicly announce, its
earnings, revenues or other results of operations (each, an “Earnings
Announcement”) through and including the time that is 24 hours after the time
that the Company files (a “Filing Time”) a Quarterly Report on Form 10-Q or an
Annual Report on Form 10-K that includes consolidated financial statements as of
and for the same period or periods, as the case may be, covered by such Earnings
Announcement.

(h) Filing of Earnings 8-K. If the Company wishes to offer, sell or deliver
Securities at any time during the period from and including an Announcement Date
through and including the time that is 24 hours after the corresponding Filing
Time, the Company shall (i) prepare and deliver to Wells Fargo Securities (with
a copy to its counsel) a Current Report on Form 8-K which shall include
substantially the same financial and related information as was set forth in the
relevant Earnings Announcement (other than any earnings projections, similar
forward-looking data and officers’ quotations) (each, an “Earnings 8-K”), in
form and substance reasonably satisfactory to Wells Fargo Securities,
(ii) provide Wells Fargo Securities with the officers’ certificate,
opinions/letters of counsel and accountant’s letter called for by Sections 7(o),
(p), (q) and (r) hereof; respectively, (iii) afford Wells Fargo Securities the
opportunity to conduct a due diligence review in accordance with Section 7(m)
hereof and (iv) file such Earnings 8-K with the Commission, then the provisions
of clause (iii) of Section 6(g) shall not be applicable for the period from and
after the time at which the foregoing conditions shall have been satisfied (or,
if later, the time that is 24 hours after the time that the relevant Earnings
Announcement was first publicly released) through and including the time that is
24 hours after the Filing Time of the relevant Quarterly Report on Form 10-Q or
Annual Report on Form 10-K, as the case may be. For purposes of clarity, the
parties hereto agree that (A) the delivery of any officers’ certificate,
opinions/letters of counsel and accountant’s letter pursuant to this
Section 6(h) shall not relieve the Company from any of its obligations under
this Agreement with respect to any Quarterly Report on Form 10-Q or Annual
Report on Form 10-K, as the case may be, including, without limitation, the
obligation to deliver officers’ certificates, opinions/letters of counsel and
accountants’ letters as provided in Section 7 hereof and (B) this Section 6(h)
shall in no way affect or limit the operation of the provisions of clauses
(i) and (ii) of Section 6(g), which shall have independent application.

 

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SECTION 7. Covenants of the Company and the Operating Partnership. Each of the
Company and the Operating Partnership covenants with Wells Fargo Securities as
follows:

(a) Registration Statement Amendments. After the date of this Agreement and
during any period in which a Prospectus relating to any Placement Securities is
required to be delivered by Wells Fargo Securities under the Securities Act
(including in circumstances where such requirement may be satisfied pursuant to
Rule 172 under the Securities Act), (i) the Company will notify Wells Fargo
Securities promptly of the time when any subsequent amendment to the
Registration Statement, other than documents incorporated by reference, has been
filed with the Commission and/or has become effective or any subsequent
supplement to the Prospectus has been filed and of any comment letter from the
Commission or any request by the Commission for any amendment or supplement to
the Registration Statement or Prospectus or for additional information provided,
however, if any such supplement to the Prospectus does not relate to the
Placement Securities and no Placement Notice is pending, the Company may satisfy
this Section 7(a)(i) by notifying Wells Fargo Securities, of such supplement to
the Prospectus no later than the close of business on the date of first use of
such supplement; (ii) at any time during which a Placement Notice is pending,
the Company will not file any amendment or supplement to the Registration
Statement or Prospectus, other than documents incorporated by reference,
relating to the Placement Securities or a security convertible into Common Stock
unless a copy thereof has been submitted to Wells Fargo Securities within a
reasonable period of time before the filing and Wells Fargo Securities has not
reasonably objected thereto and the Company will furnish to Wells Fargo
Securities at the time of filing thereof a copy of any document that upon filing
is deemed to be incorporated by reference into the Registration Statement or
Prospectus, except for those documents available via EDGAR; and (iii) the
Company will cause each amendment or supplement to the Prospectus, other than
documents incorporated by reference, to be filed with the Commission as required
pursuant to the applicable paragraph of Rule 424(b) (without reliance on
Rule 424(b)(8) under the Securities Act).

(b) Notice of Commission Stop Orders. The Company will advise Wells Fargo
Securities, promptly after it receives notice or obtains knowledge thereof, of
the issuance or threatened issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or of any other order
preventing or suspending the use of the Prospectus or any Issuer Free Writing
Prospectus, or of the suspension of the qualification of the Placement
Securities for offering or sale in any jurisdiction or of the loss or suspension
of any exemption from any such qualification, or of the initiation or
threatening of any proceedings for any of such purposes, or of any examination
pursuant to Section 8(e) of the Securities Act concerning the Registration
Statement or if the Company becomes the subject of a proceeding under Section 8A
of the Securities Act in connection with the offering of the Securities. The
Company will make every reasonable effort to prevent the issuance of any stop
order, the suspension of any qualification of the Securities for offering or
sale and any loss or suspension of any exemption from any such qualification,
and if any such stop order is issued or any such suspension or loss occurs, to
obtain the lifting thereof as soon as reasonably practicable.

(c) Delivery of Registration Statement and Prospectus. The Company will furnish
to Wells Fargo Securities and its counsel (at the expense of the Company) copies
of the Registration Statement, the Prospectus (including all documents
incorporated or deemed to be incorporated by reference therein) and all
amendments and supplements to the Registration

 

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Statement or Prospectus, and any Issuer Free Writing Prospectuses, that are
filed with the Commission during any period in which a Prospectus relating to
the Placement Securities is required to be delivered under the Securities Act,
in each case as soon as reasonably practicable and in such quantities and at
such locations as Wells Fargo Securities may from time to time reasonably
request; provided, however, that the Company shall not be required to furnish
any document (other than the Prospectus) to Wells Fargo Securities to the extent
such document is available on EDGAR. The copies of the Registration Statement
and the Prospectus and any supplements or amendments thereto furnished to Wells
Fargo Securities will be identical to the electronically transmitted copies
thereof filed with the Commission pursuant to EDGAR, except to the extent
permitted by Regulation S-T.

(d) Continued Compliance with Securities Laws. If at any time when a Prospectus
is required by the Securities Act or the Exchange Act to be delivered in
connection with a pending sale of the Placement Securities (including, without
limitation, pursuant to Rule 172 under the Securities Act), any event shall
occur or condition shall exist as a result of which it is necessary, in the
opinion of counsel for Wells Fargo Securities or for the Company, to amend the
Registration Statement or amend or supplement the Prospectus in order that the
Prospectus will not include any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein not
misleading in the light of the circumstances existing at the time it is
delivered to a purchaser, or if it shall be necessary, in the opinion of such
counsel, at any such time to amend the Registration Statement or amend or
supplement the Prospectus in order to comply with the requirements of the
Securities Act, the Company will promptly notify Wells Fargo Securities to
suspend the offering of Placement Securities during such period and the Company
will promptly prepare and file with the Commission such amendment or supplement
as may be necessary to correct such statement or omission or to make the
Registration Statement or the Prospectus comply with such requirements, and the
Company will furnish to Wells Fargo Securities such number of copies of such
amendment or supplement as Wells Fargo Securities may reasonably request. If at
any time following issuance of an Issuer Free Writing Prospectus such Issuer
Free Writing Prospectus conflicts with the information contained in the
Registration Statement or the Prospectus or includes an untrue statement of a
material fact or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances, prevailing at that
subsequent time, not misleading, the Company will promptly notify Wells Fargo
Securities to suspend the offering of Placement Securities during such period
and the Company will, subject to Section 7(a) hereof, promptly amend or
supplement such Issuer Free Writing Prospectus to eliminate or correct such
conflict, untrue statement or omission.

(e) Blue Sky and Other Qualifications. The Company will use its commercially
reasonable efforts, in cooperation with Wells Fargo Securities, to qualify the
Placement Securities for offering and sale, or to obtain an exemption for the
Securities to be offered and sold, under the applicable securities laws of such
states and other jurisdictions (domestic or foreign) as Wells Fargo Securities
may designate and to maintain such qualifications and exemptions in effect for
so long as required for the distribution of the Placement Securities; provided,
however, that the Company shall not be obligated to file any general consent to
service of process or to qualify as a foreign corporation or as a dealer in
securities in any jurisdiction in which it is not so qualified or to subject
itself to taxation in respect of doing business in any jurisdiction in which it
is not otherwise so subject. In each jurisdiction in which the Placement

 

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Securities have been so qualified or exempt, the Company will file such
statements and reports as may be required by the laws of such jurisdiction to
continue such qualification or exemption, as the case may be, in effect for so
long as required for the distribution of the Placement Securities.

(f) Rule 158. The Company will timely file such reports pursuant to the Exchange
Act as are necessary in order to make generally available to its securityholders
as soon as practicable an earnings statement for the purposes of, and to provide
to Wells Fargo Securities the benefits contemplated by, the last paragraph of
Section 11(a) of the Securities Act.

(g) Use of Proceeds. The Company will use the Net Proceeds received by it from
the sale of the Securities in the manner specified in the Prospectus under “Use
of Proceeds.”

(h) Listing. During any period in which the Prospectus relating to the Placement
Securities is required to be delivered by Wells Fargo Securities under the
Securities Act with respect to a pending sale of the Placement Securities
(including in circumstances where such requirement may be satisfied pursuant to
Rule 172 under the Securities Act), the Company will use its commercially
reasonable efforts to cause the Placement Securities to be listed on the NYSE.

(i) Filings with the NYSE. The Company will timely file with the NYSE all
material documents and notices required by the NYSE of companies that have or
will issue securities that are traded on the NYSE.

(j) Reporting Requirements. The Company, during any period when the Prospectus
is required to be delivered under the Securities Act or the Exchange Act
(including in circumstances where such requirement may be satisfied pursuant to
Rule 172 under the Securities Act), will file all documents required to be filed
with the Commission pursuant to the Exchange Act within the time periods
required by the Exchange Act.

(k) Notice of Other Sales. During each period commencing on the date of each
Placement Notice and ending after the close of business on the Settlement Date
for the related transaction, the Company will not, without (i) giving Wells
Fargo Securities at least one (1) business days’ prior written notice specifying
the date of such proposed sale and (ii) directing Wells Fargo Securities to
suspend activity under this Agreement for such period of time as requested by
the Company, (A) offer, pledge, announce the intention to sell, sell, contract
to sell, sell any option or contract to purchase, purchase any option or
contract to sell, grant any option, right or warrant to purchase, or lend or
otherwise transfer or dispose of any Common Stock or securities convertible into
or exchangeable or exercisable for such shares or (B) enter into any swap or
other agreement or any transaction that transfers in whole or in part, directly
or indirectly, any of the economic consequence of ownership of Common Stock, or
any securities convertible into or exchangeable or exercisable for or repayable
with Common Stock, whether any such swap or transaction described in clause
(A) or (B) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise. The foregoing sentence shall not apply to
(i) the Common Stock to be offered and sold through Wells Fargo Securities
pursuant to this Agreement or any Alternative Distribution Agreement, (ii) the
issuance of securities in connection with an acquisition, merger or sale or
purchase of assets described in the Prospectus,

 

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(iii) Common Stock issuable or sold pursuant to the Company’s dividend
reinvestment plan as it may be amended or replaced from time to time, or
(iv) issuance, grant or sale of Common Stock, options to purchase Common Stock
or Common Stock issuable upon the exercise of options or other equity awards
pursuant to any stock option, stock bonus or other stock or compensatory plan or
arrangement of the Company, including Common Stock issuable or sold upon
redemption of OP Units of the Operating Partnership, provided such stock or
compensatory plans or arrangements are disclosed in the Registration Statement
and the Prospectus.

(l) Change of Circumstances. The Company will, at any time during a fiscal
quarter in which the Company intends to tender a Placement Notice or sell
Placement Securities, advise Wells Fargo Securities promptly after it shall have
received notice or obtained knowledge thereof, of any information or fact that
would alter or affect in any material respect any opinion, certificate, letter
or other document provided to Wells Fargo Securities pursuant to this Agreement.

(m) Due Diligence Cooperation. The Company will cooperate with any reasonable
due diligence review conducted by Wells Fargo Securities or its agents in
connection with the transactions contemplated hereby, including, without
limitation, providing information and making available documents and senior
officers, during regular business hours and at the Company’s principal offices,
as Wells Fargo Securities may reasonably request after consultation with the
Company.

(n) Disclosure of Sales. The Company will disclose in its quarterly reports on
Form 10-Q, in its annual report on Form 10-K and/or in a Current Report on Form
8-K, the number of Placement Securities sold through Wells Fargo Securities and
the Alternative Managers pursuant to this Agreement and the Alternative
Distribution Agreements and the net proceeds received by the Company with
respect to sales of Common Stock pursuant to this Agreement and the Alternative
Distribution Agreements, together with any other information that the Company
reasonably believes is required to comply with the Securities Act.

(o) Representation Dates; Certificates. On or prior to the date that the first
Securities are sold pursuant to the terms of this Agreement and:

(1) each time the Company:

 

  (i) files the Prospectus relating to the Securities or amends or supplements
the Registration Statement or the Prospectus relating to the Securities by means
of a post-effective amendment, sticker, or supplement but not by means of
incorporation of documents by reference into the Registration Statement or the
Prospectus relating to the Securities;

 

  (ii) files an Annual Report on Form 10-K under the Exchange Act;

 

  (iii) files a Quarterly Report on Form 10-Q under the Exchange Act; or

 

  (iv) files an Earnings 8-K or a report on Form 8-K containing amended
financial information (other than an Earnings Announcement, to “furnish”
information pursuant to Item 2.02 or 7.01 of Form 8-K under the Exchange Act);
and

 

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(2) at any other time reasonably requested by Wells Fargo Securities (each such
date of filing of one or more of the documents referred to in clauses
(1)(i) through (iv) and any time of request pursuant to this Section 7(o) shall
be a “Representation Date”),

the Company shall furnish Wells Fargo Securities with a certificate, in the form
attached hereto as Exhibit E as soon as practicable and in no event later than
three (3) Trading Days after any Representation Date. The requirement to provide
a certificate under this Section 7(o) shall be waived for any Representation
Date occurring at a time at which no Placement Notice is pending, which waiver
shall continue until the earlier to occur of the date the Company delivers a
Placement Notice hereunder (which for such calendar quarter shall be considered
a Representation Date) and the next occurring Representation Date; provided,
however, that such waiver shall not apply for any Representation Date on which
the Company files its annual report on Form 10-K. Notwithstanding the foregoing,
if the Company subsequently decides to sell Placement Securities following a
Representation Date when the Company relied on such waiver and did not provide
Wells Fargo Securities with a certificate under this Section 7(o), then before
the Company delivers the Placement Notice or Wells Fargo Securities sells any
Placement Securities, the Company shall provide Wells Fargo Securities with a
certificate, in the form attached hereto as Exhibit E, dated the date of the
Placement Notice.

(p) Company Counsel Legal Opinion. On or prior to the date that the first
Securities are sold pursuant to the terms of this Agreement, as soon as
practicable and in no event later than three (3) Trading Days after each
Representation Date with respect to which the Company is obligated to deliver a
certificate in the form attached hereto as Exhibit E for which no waiver is
applicable, the Company shall cause to be furnished to Wells Fargo Securities
the written opinion of Clifford Chance US LLP (“Company Counsel”), or other
counsel satisfactory to Wells Fargo Securities, in form and substance reasonably
satisfactory to Wells Fargo Securities and its counsel, dated the date that the
opinion is required to be delivered, substantially similar to the form attached
hereto as Exhibit D, modified, as necessary, to relate to the Registration
Statement and the Prospectus as then amended or supplemented; provided, however,
that in lieu of such opinions for subsequent Representation Dates, any such
counsel may furnish Wells Fargo Securities with a letter (a “Reliance Letter”)
to the effect that Wells Fargo Securities may rely on a prior opinion delivered
under this Section 7(p) to the same extent as if it were dated the date of such
letter (except that statements in such prior opinion shall be deemed to relate
to the Registration Statement and the Prospectus as amended or supplemented at
such Representation Date). In rendering such opinion, such counsel may rely as
to matters of fact, to the extent it deems proper, on certificates of
responsible officers of the Company or the general partner of the Operating
Partnership and public officials. Such opinion shall also cover any amendments
or supplements thereto.

In addition, Company Counsel shall state that, although such counsel has not
independently verified and is not passing upon and assumes no responsibility for
the accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus, no facts have come to such counsel’s
attention that have caused such counsel to believe that (i) the Registration
Statement or any amendment thereto, at the time the Registration Statement or
any such amendment became effective, 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, or (ii) the Prospectus,
or any amendment or supplement

 

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thereto, as of the date of such opinion, included 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 (in each case, other than the financial statements,
schedules and other financial information included or incorporated by reference
therein or excluded therefrom, as to which such counsel need express no
statement).

(q) Manager Counsel Legal Opinion. On or prior to the date that the first
Securities are sold pursuant to the terms of this Agreement, as soon as
practicable and in no event later than three (3) Trading Days after each
Representation Date with respect to which the Company is obligated to deliver a
certificate in the form attached hereto as Exhibit E for which no waiver is
applicable, Wells Fargo Securities shall have received a letter of Sidley Austin
LLP, counsel to Wells Fargo Securities, dated the date that the opinion is
required to be delivered, in customary form and substance satisfactory to Wells
Fargo Securities, and the Company shall have furnished to such counsel such
documents as it reasonably requests for the purpose of enabling them to pass
upon such matters.

(r) Comfort Letter. On or prior to the date that the first Securities are sold
pursuant to the terms of this Agreement, and as soon as practicable and in no
event later than three (3) Trading Days after each Representation Date with
respect to which the Company is obligated to deliver a certificate in the form
attached hereto as Exhibit E for which no waiver is applicable, the Company
shall cause its independent accountants to furnish Wells Fargo Securities a
letter (a “Comfort Letter”), dated the date the Comfort Letter is delivered, in
form and substance reasonably satisfactory to Wells Fargo Securities,
(i) confirming that they are an independent registered public accounting firm
within the meaning of the Securities Act, the Exchange Act and the PCAOB,
(ii) stating, as of such date, the conclusions and findings of such firm with
respect to the financial information and other matters ordinarily covered by
accountants’ “comfort letters” to underwriters in connection with registered
public offerings (the first such letter, the “Initial Comfort Letter”) and
(iii) updating the Initial Comfort Letter with any information that would have
been included in the Initial Comfort Letter had it been given on such date and
modified as necessary to relate to the Registration Statement and the
Prospectus, as amended and supplemented to the date of such letter.

(s) Market Activities. Neither the Company nor the Operating Partnership will,
directly or indirectly, (i) take any action designed to cause or result in, or
that constitutes or might reasonably be expected to constitute, the
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Securities or (ii) sell, bid for, or
purchase the Securities to be issued and sold pursuant to this Agreement, or pay
anyone any compensation for soliciting purchases of the Securities to be issued
and sold pursuant to this Agreement other than Wells Fargo Securities; provided,
however, that the Company may bid for and purchase its Common Stock in
accordance with Rule 10b-18 under the Exchange Act.

(t) Insurance. The Company, the Operating Partnership and the Subsidiaries shall
use its commercially reasonable efforts to maintain, or cause to be maintained,
insurance by insurers of recognized financial responsibility against such losses
and risks and in such amounts as are generally deemed prudent and customary in
the business in which each is or will be engaged.

 

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(u) Investment Company Act. Each of the Company and the Operating Partnership
will conduct its affairs in such a manner so as to reasonably ensure that none
of the Company, the Operating Partnership nor any of the Subsidiaries will be or
become, at any time prior to the termination of this Agreement, required to
register as an “investment company,” as such term is defined in the Investment
Company Act, assuming no change in the Commission’s current interpretation as to
entities that are not considered an investment company.

(v) Securities Act and Exchange Act. The Company will use its best efforts to
comply with all requirements imposed upon it by the Securities Act and the
Exchange Act as from time to time in force, so far as necessary to permit the
continuance of sales of, or dealings in, the Placement Securities as
contemplated by the provisions hereof and the Prospectus.

(w) No Offer to Sell. Other than a free writing prospectus (as defined in Rule
405) approved in advance in writing by the Company and Wells Fargo Securities in
its capacity as principal or agent hereunder, the Company (including its agents
and representatives, other than Wells Fargo Securities in its capacity as such)
will not make, use, prepare, authorize, approve or refer to any free writing
prospectus relating to the Securities to be sold by Wells Fargo Securities as
principal or agent hereunder.

(x) Sarbanes-Oxley Act. The Company, the Operating Partnership and the
Subsidiaries shall comply in all material respects with all effective applicable
provisions of the Sarbanes-Oxley Act.

(y) Regulation M. If the Company 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 Company or the Common Stock, it shall
promptly notify Wells Fargo Securities and sales of the Placement Securities
under this Agreement shall be suspended until that or other exemptive provisions
have been satisfied in the judgment of each party.

(z) REIT Treatment. The Company will use its best efforts to enable the Company
to continue to meet the requirements for qualification and taxation as a “real
estate investment trust” under the Code for each of its taxable years for so
long as the Board of Directors deems it in the best interests of the Company’s
securityholders to remain so qualified.

(aa) Renewal of Registration Statement. The date of this Agreement is not more
than three years subsequent to the initial effective date of the Registration
Statement (the “Renewal Date”). If, immediately prior to the third anniversary
of the Renewal Date, this Agreement has not terminated and a prospectus is
required to be delivered or made available by Wells Fargo Securities under the
Securities Act or the Exchange Act in connection with the sale of Securities,
the Company will, prior to the Renewal Date, file, if it has not already done
so, a new shelf registration statement or, if applicable, an automatic shelf
registration statement relating to such Securities, and, if such registration
statement is not an automatic shelf registration statement, will use its best
efforts to cause such registration statement to be declared effective within
180 days after the Renewal Date, and will take all other reasonable actions
necessary or appropriate to permit the public offer and sale of such Securities
to continue as contemplated in the expired registration statement relating to
such Securities. References herein to the “Registration Statement” shall include
such new shelf registration statement or automatic shelf registration statement,
as the case may be.

 

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(bb) Rights to Refuse Purchase. If, to the knowledge of the Company, all filings
required by Rule 424 under the Securities Act in connection with the offering of
the Securities shall not have been made or the representations and warranties of
the Company and the Operating Partnership in Section 5 hereof shall not be true
and correct on any applicable Settlement Date, the Company will offer to any
person who has agreed to purchase Securities from the Company as a result of an
offer to purchase solicited by Wells Fargo Securities the right to refuse to
purchase and pay for such Securities.

SECTION 8. Payment of Expenses.

(a) Expenses. The Company agrees to pay the costs, expenses and fees relating to
the following matters: (i) the preparation, printing or reproduction and filing
with the Commission of the Registration Statement (including financial
statements and exhibits thereto), the Prospectus, any Permitted Free Writing
Prospectus and all amendments or supplements to any of them; (ii) the printing
(or reproduction) and delivery (including postage, air freight charges and
charges for counting and packaging) of such copies of the Registration
Statement, the Prospectus, any Permitted Free Writing Prospectus and all
amendments or supplements to any of them, as may, in each case, be reasonably
requested for use in connection with the offering and sale of the Placement
Securities; (iii) the preparation, printing, authentication, issuance and
delivery of certificates for the Placement Securities to Wells Fargo Securities,
including any stamp or transfer taxes in connection with the original issuance
and sale of the Placement Securities; (iv) the printing (or reproduction) and
delivery of this Agreement, any blue sky memorandum or any supplement thereto
and all other agreements or documents printed (or reproduced) and delivered in
connection with the offering of the Placement Securities; (v) the registration
of the Placement Securities under the Exchange Act and the listing of the
Placement Securities on NYSE; (vi) any registration or qualification of the
Placement Securities for offer and sale under the securities or blue sky laws of
the jurisdictions referenced in Section 7(e) hereof (including filing fees and
the reasonable fees and expenses of counsel for Wells Fargo Securities relating
to such registration and qualification); (vii) any filings required to be made
with the Financial Industry Regulatory Authority, Inc. (“FINRA”) (including
filing fees and the reasonable fees and expenses of counsel for Wells Fargo
Securities relating to such filings); (viii) the fees and expenses of the
Company’s accountants, counsel (including local and special counsel) and
transfer agent and registrar; (ix) any travel expenses of the officers and
employees of the Transaction Entities and any other expenses of the Transaction
Entities in connection with attending or hosting meetings with prospective
purchasers of the Placement Securities; (x) all other costs and expenses
incident to the performance by the Transaction Entities of their obligations
hereunder; and (xi) if Securities having an aggregate offering price of
$25,000,000 or more have not been offered and sold under this Agreement by the
first anniversary of this Agreement (or such earlier date at which the Company
terminates this Agreement) (the “Determination Date”), the Company shall
reimburse Wells Fargo Securities for all of its reasonable out-of-pocket
expenses, including the reasonable fees and disbursements of counsel incurred by
Wells Fargo Securities in connection with the transactions contemplated by this
Agreement (the “Expenses”); The Expenses shall be due and payable by the Company
within five (5) business days of the Determination Date.

 

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(b) Termination of Agreement. If this Agreement is terminated by Wells Fargo
Securities in accordance with the provisions of Section 9 or Section 12(a)(i)
(solely with respect to trading of the Company’s Common Stock) or (iv) hereof,
the Company shall reimburse Wells Fargo Securities for all of its out-of-pocket
expenses, including the reasonable fees and disbursements of counsel for Wells
Fargo Securities.

SECTION 9. Conditions of Wells Fargo Securities’ Obligations. The obligations of
Wells Fargo Securities hereunder with respect to a Placement will be subject to
the continuing accuracy and completeness of the representations and warranties
of the Company and the Operating Partnership contained in this Agreement or in
certificates of any officer of the Company, the Operating Partnership or any
Subsidiary of the Company delivered pursuant to the provisions hereof, to the
performance by the Company of its covenants and other obligations hereunder, and
to the following further conditions:

(a) Effectiveness of Registration Statement; Payment of Filing Fee. The
Registration Statement shall have become effective and shall be available for
(i) all sales of Placement Securities issued pursuant to all prior Placement
Notices and (ii) the sale of all Placement Securities contemplated to be issued
by any Placement Notice. The Company shall have paid the required Commission
filing fees relating to the Securities within the time required by
Rule 456(b)(1)(i) under the Securities Act without regard to the proviso therein
and otherwise in accordance with Rules 456(b) and 457(r) under the Securities
Act (including, if applicable, by updating the “Calculation of Registration Fee”
table in accordance with Rule 456(b)(1)(ii) either in a post-effective amendment
to the Registration Statement or on the cover page of the Prospectus).

(b) No Material Notices. None of the following events shall have occurred and be
continuing: (i) receipt by the Company or any of the Subsidiaries of any request
for additional information from the Commission or any other federal or state
governmental authority during the period of effectiveness of the Registration
Statement, the response to which would require any post-effective amendments or
supplements to the Registration Statement or the Prospectus; (ii) the issuance
by the Commission or any other federal or state governmental authority of any
stop order suspending the effectiveness of the Registration Statement or the
initiation of any proceedings for that purpose; (iii) receipt by the Company of
any notification with respect to the suspension of the qualification or
exemption from qualification of any of the Placement Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose; (iv) the occurrence of any event that makes any material statement made
in the Registration Statement, the Prospectus, any Issuer Free Writing
Prospectus, or any material document incorporated or deemed to be incorporated
therein by reference untrue in any material respect or that requires the making
of any changes in the Registration Statement, the Prospectus, any Issuer Free
Writing Prospectus, or such documents so that, in the case of the Registration
Statement, it will not contain any materially untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading and, that in the case of
the Prospectus and any Issuer Free Writing Prospectus, it will not contain any
materially untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading.

 

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(c) Material Changes. Except as contemplated by the Prospectus, or disclosed in
the Company’s reports filed with the Commission, there shall not have been any
Material Adverse Effect.

(d) Opinion of Counsel for Company. Wells Fargo Securities shall have received
the favorable opinion of Company Counsel, required to be delivered pursuant to
Section 7(p) on or before the date on which such delivery of such opinion is
required pursuant to Section 7(p).

(e) Opinion of Counsel for Wells Fargo Securities. Wells Fargo Securities shall
have received the favorable opinion of Sidley Austin LLP required to be
delivered pursuant to Section 7(q) on or before the date on which the delivery
of such opinion is required pursuant to Section 7(q).

(f) Representation Certificate. Wells Fargo Securities shall have received the
certificate required to be delivered pursuant to Section 7(o) on or before the
date on which delivery of such certificate is required pursuant to Section 7(o).

(g) Accountant’s Comfort Letter. Wells Fargo Securities shall have received the
Comfort Letter required to be delivered pursuant Section 7(r) on or before the
date on which such delivery of such Comfort Letter is required pursuant to
Section 7(r).

(h) Approval for Listing. The Placement Securities shall either have been
(i) approved for listing on the NYSE, subject only to notice of issuance, or
(ii) the Company shall have filed an application for listing of the Placement
Securities on the NYSE at, or prior to, the issuance of any Placement Notice.

(i) No Suspension. Trading in the Common Stock shall not have been suspended on
the NYSE.

(j) Additional Documents. On each date on which the Company is required to
deliver a certificate pursuant to Section 7(o), counsel for Wells Fargo
Securities shall have been furnished with such documents and opinions as they
may reasonably request for the purpose of enabling them to deliver the opinion
herein contemplated, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the conditions,
contained in this Agreement.

(k) Securities Act Filings Made. All filings with the Commission required by
Rule 424 under the Securities Act to have been filed prior to the issuance of
any Placement Notice hereunder shall have been made within the applicable time
period prescribed for such filing by Rule 424 under the Securities Act.

(l) Termination of Agreement. If any condition specified in this Section 9 shall
not have been fulfilled when and as required to be fulfilled, this Agreement may
be terminated by Wells Fargo Securities by written notice to the Company to each
of the

 

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individuals set forth on Exhibit B, and such termination shall be without
liability of any party to any other party except as provided in Section 8 hereof
and except that, in the case of any termination of this Agreement, Sections 5,
10, 11 and 19 hereof shall survive such termination and remain in full force and
effect.

SECTION 10. Indemnification.

(a) Each of the Transaction Entities agrees, jointly and severally, to indemnify
and hold harmless Wells Fargo Securities , the directors, officers, employees
and agents of the Wells Fargo Securities, each person who controls Wells Fargo
Securities within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act and each affiliate of Wells Fargo Securities
within the meaning of Rule 405 (i) against any and all losses, claims, damages
or liabilities, joint or several, to which they or any of them may become
subject under the Securities Act, the Exchange Act or other federal or state
statutory law or regulation, at common law or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement, or in any amendment to the
Registration Statement, any preliminary prospectus, the Prospectus, any Issuer
Free Writing Prospectus or in any amendment thereof or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein (other than with respect to the
Registration Statement or any amendment thereto, in light of the circumstances
under which they were made) or necessary to make the statements therein not
misleading, (ii) against any and all loss, claim, damage, liability and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim whatsoever
based upon any such untrue statement or omission, or any such alleged untrue
statement or omission; provided that (subject to Section 10(d) below) any such
settlement is effected with the written consent of the Company) and
(iii) against any and all expense whatsoever, as incurred (including the
reasonable fees and disbursements of counsel chosen by Wells Fargo Securities),
reasonably incurred in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or omission,
to the extent that any such expense is not paid under (i) or (ii) of this
Section 10(a); provided, however, none of the Transaction Entities will be
liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon any such untrue statement or alleged
untrue statement or omission or alleged omission made therein in reliance upon
and in conformity with written information furnished to the Company by or on
behalf of Wells Fargo Securities or any Alternative Manager specifically for
inclusion therein (that information being limited to that described in the last
sentence of Section 10(b) hereof). This indemnity agreement will be in addition
to any liability which any Transaction Entities may otherwise have.

 

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(b) Wells Fargo Securities agrees to indemnify and hold harmless each of the
Transaction Entities and each of the Company’s directors and each of the
Company’s officers who signed the Registration Statement, each person who
controls the Transaction Entities within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act and each affiliate of the
Transaction Entities within the meaning of Rule 405 to the same extent as the
foregoing indemnity from the Transaction Entities to Wells Fargo Securities, but
only with reference to written information relating to Wells Fargo Securities
furnished to the Company by or on behalf of Wells Fargo Securities specifically
for inclusion in the documents referred to in the foregoing indemnity. This
indemnity agreement will be in addition to any liability which Wells Fargo
Securities may otherwise have. The Company acknowledges that the statements set
forth in the seventh paragraph under the caption “Plan of Distribution”
beginning on page S-8 of the Prospectus Supplement constitute the only
information furnished in writing by or on behalf of Wells Fargo Securities for
inclusion in the Prospectus.

(c) Promptly after receipt by an indemnified party under this Section 10 of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 10, notify the indemnifying party in writing of the commencement
thereof; but the failure so to notify the indemnifying party (i) will not
relieve it from liability under paragraph (a) or (b) above to the extent it is
not materially prejudiced thereof and (ii) will not, in any event, relieve the
indemnifying party from any obligations to any indemnified party other than the
indemnification obligation provided in paragraph (a) or (b) above. The
indemnifying party shall be entitled to appoint counsel of the indemnifying
party’s choice at the indemnifying party’s expense to represent the indemnified
party in any action for which indemnification is sought (in which case the
indemnifying party shall not thereafter be responsible for the fees and expenses
of any separate counsel retained by the indemnified party or parties except as
set forth below); provided, however, that such counsel shall be reasonably
satisfactory to the indemnified party. Notwithstanding the indemnifying party’s
election to appoint counsel to represent the indemnified party in an action, the
indemnified party shall have the right to employ separate counsel (including
local counsel), and the indemnifying party shall bear the reasonable fees, costs
and expenses of such separate counsel if (i) the use of counsel chosen by the
indemnifying party to represent the indemnified party would present such counsel
with a conflict of interest, (ii) the actual or potential defendants in, or
targets of, any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, (iii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of the institution of such action or (iv) the
indemnifying party shall authorize the indemnified party to employ separate
counsel at the expense of the indemnifying party. An indemnifying party will
not, without the prior written consent of the indemnified parties, which consent
shall not be unreasonably withheld, settle or compromise or consent to the entry
of any judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding and does not include a
statement as to or an admission of fault, culpability or a failure to act, by or
on behalf of any indemnified party.

 

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(d) If at any time an indemnified party shall have requested an indemnifying
party to reimburse the indemnified party for fees and expenses of counsel, such
indemnifying party agrees that it shall be liable for any settlement of the
nature contemplated by Section 10(a)(ii) effected without its written consent if
(i) such settlement is entered into more than 45 days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party shall
have received notice of the terms of such settlement at least 30 days prior to
such settlement being entered into and (iii) such indemnifying party shall not
have reimbursed such indemnified party in accordance with such request prior to
the date of such settlement.

(e) In the event that the indemnity provided in paragraph (a) or (b) of this
Section 10 is unavailable to or insufficient to hold harmless an indemnified
party for any reason, the Transaction Entities and Wells Fargo Securities agree
to contribute to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in connection with
investigating or defending the same) (collectively, “Losses”) to which the
Transaction Entities and Wells Fargo Securities may be subject in such
proportion as is appropriate to reflect the relative benefits received by the
Transaction Entities on the one hand and by Wells Fargo Securities on the other
from the offering of the Securities; provided, however, that in no case shall
Wells Fargo Securities be responsible for any amount in excess of the discount
or commission applicable to the Securities distributed by Wells Fargo Securities
hereunder. If the allocation provided by the immediately preceding sentence is
unavailable for any reason, the Transaction Entities and Wells Fargo Securities
severally shall contribute in such proportion as is appropriate to reflect not
only such relative benefits, but also the relative fault of the Transaction
Entities on the one hand and of Wells Fargo Securities on the other in
connection with the statements or omissions which resulted in such Losses as
well as any other relevant equitable considerations. Benefits received by the
Transaction Entities shall be deemed to be equal to the total net proceeds from
the offering of the Securities (before deducting expenses) received by it; and
benefits received by Wells Fargo Securities shall be deemed to be equal to the
total discounts and commissions received by it under this Agreement. Relative
fault shall be determined by reference to, among other things, whether any
untrue or any alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information provided by the
Transaction Entities on the one hand or Wells Fargo Securities on the other, the
intent of the parties and their relative knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission. The
Transaction Entities and Wells Fargo Securities agree that it would not be just
and equitable if contribution were determined by pro rata allocation or any
other method of allocation which does not take account of the equitable
considerations referred to above. Notwithstanding the provisions of this
paragraph (e), no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act ) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 10, each person who controls
Wells Fargo Securities within the meaning of either

 

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Section 15 of the Securities Act or Section 20 of the Exchange Act, each
affiliate of Wells Fargo Securities within the meaning of Rule 405 and each
director, officer, employee and agent of Wells Fargo Securities shall have the
same rights to contribution as Wells Fargo Securities, and each person who
controls the Transaction Entities within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, each affiliate of the
Transaction Entities within the meaning of Rule 405, each officer of the Company
who shall have signed the Registration Statement and each director of the
Company shall have the same rights to contribution as the Transaction Entities
subject in each case to the applicable terms and conditions of this paragraph
(e).

SECTION 11. Representations and Indemnities to Survive Delivery. The respective
agreements, representations, warranties, indemnities and other statements of the
Transaction Entities or any officer or representative of any of the Transaction
Entities and of Wells Fargo Securities set forth in or made pursuant to this
Agreement will remain in full force and effect, regardless of any investigation
made by or on behalf of Wells Fargo Securities or the Transaction Entities or
any of their respective officers, directors, employees, agents or controlling
persons referred to in Section 10 hereof, and will survive delivery of and
payment for the Securities.

SECTION 12. Termination of Agreement.

(a) Termination; General. Wells Fargo Securities may terminate this Agreement,
by written notice to the Company, as hereinafter specified (a) at any time if at
any time prior to such time, (i) trading in the Common Stock of the Company
shall have been suspended or materially limited by the Commission or the NYSE or
trading in securities generally on the NYSE shall have been suspended or limited
or minimum or maximum prices shall have been established on such exchange, or
maximum ranges of prices have been required, by such exchange or by order of the
Commission, (ii) a banking moratorium shall have been declared either by federal
or New York State authorities, (iii) there shall have occurred any outbreak or
escalation of hostilities, declaration by the United States of a national
emergency or war, or other calamity or crisis or any change or development
involving a prospective change in national or international political, financial
or economic condition, the effect of which on financial markets is such as to
make it, in the judgment of Wells Fargo Securities, impractical or inadvisable
to proceed with the offering or delivery of the Securities as contemplated by
the Registration Statement or the Prospectus, or (iv) if there has been, since
the date hereof or since the respective dates as of which information is given
in the Registration Statement or the Prospectus, a Material Adverse Effect or
(b) as provided in Section 9.

(b) Termination by the Company. Subject to Section 12(f) hereof, the Company
shall have the right to terminate this Agreement in its sole discretion at any
time after the date of this Agreement.

(c) Termination by Wells Fargo Securities. Subject to Section 12(f) hereof,
Wells Fargo Securities shall have the right to terminate this Agreement in its
sole discretion at any time after the date of this Agreement.

(d) Automatic Termination. Unless earlier terminated pursuant to this
Section 12, this Agreement shall automatically terminate upon the issuance and
sale of Placement Securities

 

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through Wells Fargo Securities or other financial institutions on the terms and
subject to the conditions set forth herein or in Alternative Distribution
Agreements with such other institutions equal to the Maximum Amount or upon
three years having elapsed since the Registration Statement became effective
pursuant to Rule 462(e) under the Securities Act.

(e) Continued Force and Effect. This Agreement shall remain in full force and
effect unless terminated pursuant to Sections 12(a), (b), (c), or (d) above or
otherwise by mutual agreement of the parties.

(f) Effectiveness of Termination. Any termination of this Agreement shall be
effective on the date specified in such notice of termination; provided,
however, that such termination shall not be effective until the close of
business on the date of receipt of such notice by Wells Fargo Securities or the
Company, as the case may be. If such termination shall occur prior to the
Settlement Date for any sale of Placement Securities, such Placement Securities
shall settle in accordance with the provisions of this Agreement.

(g) Liabilities. If this Agreement is terminated pursuant to this Section 12,
such termination shall be without liability of any party to any other party
except as provided in Section 8 hereof, and except that, in the case of any
termination of this Agreement, Section 5, Section 10, Section 11 and Section 19,
hereof shall survive such termination and remain in full force and effect.

SECTION 13. Notices. Except as otherwise provided in this Agreement, all notices
and other communications hereunder shall be in writing and shall be deemed to
have been duly given if mailed or transmitted by any standard form of
telecommunication. Notices to Wells Fargo Securities shall be directed to Wells
Fargo Securities at, Wells Fargo Securities, LLC, 375 Park Avenue, 4th Floor,
New York, NY 10152, Attention: Equity Capital Markets, (facsimile:
(212) 214-5918); notices to the Company and the Operating Partnership shall be
directed to it at Two North Riverside Plaza, Suite 800, Chicago, Illinois 60606,
Attention: Paul Seavey, Senior Vice President—Treasurer (email:
paul_seavey@equitylifestyle.com, facsimile: 312-279-1489), Ken Kroot, Senior
Vice President—Legal (email: kenneth_kroot@equitylifestyle.com, facsimile:
(312-279-1653), Walter Jaccard, Vice President—Associate General Counsel
(walter_jaccard@equitylifestyle.com, facsimile: 312-279-1675) and Mark Connolly,
Director of Cash Management (mark_connolly@equitylifestyle.com, facsimile:
312-279-1659).

SECTION 14. Parties. This Agreement shall inure to the benefit of and be binding
upon Wells Fargo Securities, the Company, the Operating Partnership and their
respective successors. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person, firm or corporation, other
than Wells Fargo Securities, the Company, the Operating Partnership and their
respective successors and the controlling persons and officers, directors,
employees or agents referred to in Section 10 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. This Agreement and
all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of Wells Fargo Securities, the Company, the Operating
Partnership and their respective successors, and said controlling persons and
officers, directors, employees or affiliates and their heirs and legal
representatives, and for the benefit of no other person, firm or corporation. No
purchaser of Securities through or from Wells Fargo Securities shall be deemed
to be a successor by reason merely of such purchase.

 

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SECTION 15. Adjustments for Stock Splits. The parties acknowledge and agree that
all stock-related numbers contained in this Agreement shall be adjusted to take
into account any stock split, stock dividend or similar event effected with
respect to the Securities.

SECTION 16. Governing Law and Time. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SPECIFIED TIMES
OF DAY REFER TO NEW YORK CITY TIME.

SECTION 17. Effect of Headings. The Section and Exhibit headings herein are for
convenience only and shall not affect the construction hereof.

SECTION 18. Permitted Free Writing Prospectuses. Each of the Company and the
Operating Partnership represents and warrants that it has not made, and each of
the Company and the Operating Partnership agrees that unless it obtains the
prior consent of Wells Fargo Securities and Wells Fargo Securities agrees that
unless it obtains the prior written of the Company, it will not make any offer
relating to the Securities that would constitute an “issuer free writing
prospectus,” as defined in Rule 433, or that would otherwise constitute a “free
writing prospectus,” as defined in Rule 405, required to be filed with the
Commission other than the Issuer Free Writing Prospectuses, if any, identified
on Exhibit F hereto. Each of the Issuer Free Writing Prospectuses, if any,
identified on Exhibit F hereto and free writing prospectuses, if any, consented
to by the Company and Wells Fargo Securities is referred to herein as a
“Permitted Free Writing Prospectus.” The Company represents and warrants that it
has treated or agrees that it will treat each Permitted Free Writing Prospectus
as an “issuer free writing prospectus,” as defined in Rule 433, and has complied
and will comply with the requirements of Rule 433 applicable to any Permitted
Free Writing Prospectus, including timely filing with the Commission where
required, legending and record keeping. For the purposes of clarity, the parties
hereto agree that all free writing prospectuses, if any, listed in Exhibit F
hereto are Permitted Free Writing Prospectuses.

SECTION 19. Absence of a Fiduciary Relationship. Each of the Company and the
Operating Partnership, acknowledges and agrees that:

(a) Wells Fargo Securities is acting solely as agent and/or principal in
connection with the public offering of the Securities and in connection with
each transaction contemplated by this Agreement and the process leading to such
transactions, and no fiduciary or advisory relationship among the Company, the
Operating Partnership or any of their respective affiliates, stockholders (or
other equity holders), creditors or employees or any other party, on the one
hand, and Wells Fargo Securities, on the other hand, has been or will be created
in respect of any of the transactions contemplated by this Agreement,
irrespective of whether or not Wells Fargo Securities has advised or is advising
the Company and/or the Operating Partnership on other matters, and Wells Fargo
Securities has no obligation to the Company or the Operating Partnership with
respect to the transactions contemplated by this Agreement except the
obligations expressly set forth in this Agreement;

 

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(b) the public offering price of any Securities sold pursuant to this Agreement
will not be established by Wells Fargo Securities;

(c) it is capable of evaluating and understanding, and understands and accepts,
the terms, risks and conditions of the transactions contemplated by this
Agreement;

(d) Wells Fargo Securities has not provided any legal, accounting, regulatory or
tax advice with respect to the transactions contemplated by this Agreement and
it has consulted its own legal, accounting, regulatory and tax advisors to the
extent it has deemed appropriate;

(e) it is aware that Wells Fargo Securities and its respective affiliates are
engaged in a broad range of transactions which may involve interests that differ
from those of the Company and the Operating Partnership and Wells Fargo
Securities has no obligation to disclose such interests and transactions to the
Company or the Operating Partnership by virtue of any advisory or agency
relationship or otherwise; and

(f) it waives, to the fullest extent permitted by law, any claims it may have
against Wells Fargo Securities for breach of fiduciary duty or alleged breach of
fiduciary duty in connection with the sale of Securities under this Agreement
and agrees that Wells Fargo Securities shall not have any liability (whether
direct or indirect, in contract, tort or otherwise) to it in respect of such a
fiduciary duty claim or to any person asserting a fiduciary duty claim on its
behalf or in right of it or the Company, the Operating Partnership, employees or
creditors of the Company or the Operating Partnership.

SECTION 20. Miscellaneous.

All references in this Agreement to financial statements and schedules and other
information that is “contained,” “included” or “stated” in the Registration
Statement or the Prospectus (and all other references of like import) shall be
deemed to mean and include all such financial statements and schedules and other
information that is incorporated or deemed to be incorporated by reference in
the Registration Statement or the Prospectus, as the case may be.

All references in this Agreement to the Registration Statement, the Prospectus
or any amendment or supplement to any of the foregoing shall be deemed to
include the copy filed with the Commission pursuant to EDGAR; all references in
this Agreement to any Permitted Free Writing Prospectus (other than any Issuer
Free Writing Prospectuses that, pursuant to Rule 433, are not required to be
filed with the Commission) shall be deemed to include the copy thereof filed
with the Commission pursuant to EDGAR; and all references in this Agreement to
“supplements” to the Prospectus shall include, without limitation, any
supplements, “wrappers” or similar materials prepared in connection with any
offering, sale or private placement of any Placement Securities by Wells Fargo
Securities outside of the United States.

[Signature Page Follows]

 

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If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement among
Wells Fargo Securities, the Operating Partnership and the Company in accordance
with its terms.

 

Very truly yours, EQUITY LIFESTYLE PROPERTIES, INC. By  

/s/ Paul Seavey

Name:   Paul Seavey Title:   Senior Vice President and Treasurer

 

MHC OPERATING LIMITED PARTNERSHIP By: MHC Trust, its general partner, on behalf
of the Operating Partnership By  

/s/ Paul Seavey

Name:   Paul Seavey Title:   Senior Vice President and Treasurer

CONFIRMED AND ACCEPTED, as of the

    date first above written:

 

WELLS FARGO SECURITIES, LLC

By  

/s/ Chris Flouhouse

Name:   Chris Flouhouse Title:   Director

 

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