Subject to the terms and conditions of the 2022 Agreements, the Managers will use their commercially reasonable efforts to sell the Shares. The sales, if any, of the Shares made under the 2022 Agreements will be made by means of ordinary brokers’ transactions or otherwise at market prices prevailing at the time of sale, at prices related to prevailing market prices or at negotiated prices. Actual sales of Primary Shares will depend on a variety of factors to be determined by the Company from time to time.
The 2022 Agreements provide each Manager will be entitled to compensation for its services which will not exceed, but may be lower than, 1.5% of the gross sales price of all Primary Shares sold through it as sales agent. In connection with each forward sale agreement, the Company will pay the relevant Forward Seller, in the form of a reduced initial forward sale price under the related forward sale agreement with the related Forward Purchaser, commissions at a mutually agreed rate which will not exceed, but may be lower than, 1.5% of the gross sales price of all Forward Hedge Shares sold through such Forward Seller. The Company has no obligation to sell any of the Shares under the 2022 Agreements, and may at any time suspend solicitation and offers under the 2022 Agreements.
The Company intends to use the net proceeds from the sale of Common Shares under the 2022 Agreements for general corporate purposes, which may include reducing borrowings under its $900 million unsecured line of credit, the repayment of other indebtedness, the redemption or other repurchase of outstanding debt or equity securities, funding for development activities and financing for acquisitions.
The Shares will be issued pursuant to the registration statement on Form S-3 of the Company filed with the Securities and Exchange Commission on May 14, 2020. The Company filed a prospectus supplement (the “Prospectus Supplement”), dated May 13, 2022, with the Securities and Exchange Commission in connection with the offer and sale of the Shares.
The 2022 Agreements contain customary representations, warranties, and agreements of the Company, the Managers and the Forward Purchasers, indemnification rights and obligations of the parties and termination provisions. Copies of the 2022 Agreements, including the respective form of forward sales agreement (if applicable), are filed as Exhibits 1.1, 1.2, 1.3 and 1.4 to this Current Report, and the descriptions of the terms of the 2022 Agreements and the forms of forward sales agreement in this Item 1.01 are qualified in their entirety by reference to such Exhibits, which are incorporated herein by reference.
This Current Report shall not constitute an offer to sell or the solicitation of an offer to buy any security nor shall there be any sale of these securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.
Certain of the Managers and their affiliates have engaged in, and may in the future engage in, financial advisory and investment banking services, lending and other commercial dealings in the ordinary course of business with the Company or its affiliates. They have received, or may in the future receive, customary fees and commissions for these transactions. In addition, the Managers and their respective affiliates are full service financial institutions engaged in various activities, which may include securities trading, commercial and investment banking, financial advisory, investment management, principal investment, hedging, financing
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