AMENDED AND RESTATED EQUITY DISTRIBUTION AGREEMENT
Dated as of July 18, 2025
among
FAIRWATER REAL ESTATE INVESTMENT TRUST a Maryland real estate investment trust
FAIRWATER OPERATING PARTNERSHIP, L.P. a Maryland limited partnership
PEMBERTON ZANTHOR & CO. as Lead Agent
CLARENDON SECURITIES LLC as Co-Agent
VELTRANO CAPITAL PARTNERS LLC as Co-Agent
Common Shares of Beneficial Interest Par Value $0.01 Per Share Up to $500,000,000
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AMENDED AND RESTATED EQUITY DISTRIBUTION AGREEMENT
This Amended and Restated Equity Distribution Agreement (this "Agreement") is dated as of July 18, 2025, among Fairwater Real Estate Investment Trust, a Maryland real estate investment trust (the "Company"), Fairwater Operating Partnership, L.P., a Maryland limited partnership (the "Operating Partnership"), Pemberton Zanthor & Co., a New York corporation ("Pemberton Zanthor"), as Lead Agent, Clarendon Securities LLC, a Delaware limited liability company ("Clarendon"), as Co-Agent, and Veltrano Capital Partners LLC, a Delaware limited liability company ("Veltrano" and, together with Pemberton Zanthor and Clarendon, collectively the "Agents" and each individually an "Agent").
RECITALS
WHEREAS, the Company is a Maryland real estate investment trust organized in 2003, with its principal executive office located at 7200 Chesapeake Centre Drive, Suite 400, Annapolis, Maryland 21401, and its common shares of beneficial interest, par value $0.01 per share, are listed on the New York Stock Exchange (the "NYSE") under the ticker symbol "FRWT";
WHEREAS, the Operating Partnership is a Maryland limited partnership through which the Company conducts substantially all of its business operations and owns, directly or through subsidiaries, substantially all of its assets; the Company serves as the sole general partner of the Operating Partnership and owns approximately 96.3% of the outstanding common units of the Operating Partnership (consisting of 134,270,000 common units owned by the Company out of 139,450,000 total outstanding common units, with 5,180,000 common units held by third-party limited partners);
WHEREAS, the Company, the Operating Partnership, Pemberton Zanthor, Clarendon, and Veltrano previously entered into that certain Equity Distribution Agreement dated as of November 15, 2019, as amended by the First Amendment thereto dated as of August 5, 2022, and as further amended by the Second Amendment thereto dated as of March 12, 2023 (as so amended, the "Original Agreement");
WHEREAS, pursuant to the Original Agreement, the Agents sold on behalf of the Company approximately $200,000,000 in aggregate gross sales proceeds of the Company's common shares of beneficial interest, consisting of approximately 7,520,000 common shares at a weighted average price of approximately $26.60 per share, under the Company's prior shelf registration statement on Form S-3 (File No. 333-265410), which was declared effective by the Securities and Exchange Commission (the "Commission") on August 1, 2022, and which registration statement will expire on August 1, 2025, pursuant to Rule 415(a)(5) under the Securities Act of 1933, as amended (the "Act");
WHEREAS, the Company has filed (or will file on or about July 18, 2025) a new universal shelf registration statement on Form S-3 (the "Registration Statement") with the Commission as an automatic shelf registration statement for well-known seasoned issuers pursuant to Rule 462(e) under the Act, registering up to $2,000,000,000 in securities of the Company and the Operating Partnership, including common shares of beneficial interest, preferred shares of beneficial interest, depositary shares, debt securities, warrants, and units;
WHEREAS, the parties desire to amend and restate the Original Agreement in its entirety to provide for the offer and sale of up to $500,000,000 in aggregate gross sales proceeds of the Company's common shares of beneficial interest, par value $0.01 per share (the "Shares"), from time to time through the Agents, acting as agents and/or principals, under and pursuant to the Registration Statement and the related ATM Prospectus Supplement (as defined below), on the terms and subject to the conditions set forth herein; and
WHEREAS, this Agreement shall supersede in its entirety the Original Agreement, and from and after the date hereof, the Original Agreement shall be of no further force or effect, except as expressly provided herein with respect to obligations and liabilities arising prior to the date hereof.
NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I — DEFINITIONS
Section 1.1 — Definitions
As used in this Agreement, the following terms shall have the meanings set forth below:
"Act" means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
"Affiliate" has the meaning ascribed to such term in Rule 405 under the Act.
"Agent" and "Agents" mean Pemberton Zanthor & Co., Clarendon Securities LLC, and Veltrano Capital Partners LLC, individually and collectively, as the context requires.
"Agents' Counsel" means Dunmore Caldwell LLP, 601 Lexington Avenue, 35th Floor, New York, New York 10022 (Gregory Lassiter, Partner; Amy Zhou, Associate), or such other counsel as the Agents may designate from time to time by written notice to the Company.
"Agreement" means this Amended and Restated Equity Distribution Agreement, including all schedules and exhibits hereto, as the same may be amended, supplemented, or otherwise modified from time to time in accordance with the terms hereof.
"Applicable Time" means, with respect to any sale of Shares under this Agreement, the time of sale of such Shares, or such other time as may be agreed by the Company and the applicable Agent for purposes of Rule 159A under the Act.
"ATM Prospectus Supplement" means the prospectus supplement relating to the Shares to be filed with the Commission pursuant to Rule 424(b)(5) under the Act, describing the terms and conditions of the at-the-market offering program contemplated by this Agreement, as the same may be amended or supplemented from time to time.
"Base Prospectus" means the base prospectus included as part of the Registration Statement at the time the Registration Statement became or becomes effective, as the same may be amended or supplemented from time to time.
"Bring-Down Certificate" has the meaning ascribed to such term in Section 6.1(d).
"Bring-Down Date" means each date on which a Bring-Down Certificate, bring-down comfort letter, bring-down legal opinion, or bring-down negative assurance letter is required to be delivered under Article VI of this Agreement.
"Business Day" means any day other than a Saturday, a Sunday, or a day on which banking institutions in New York, New York or Annapolis, Maryland are authorized or required by law, regulation, or executive order to close.
"Clarendon" means Clarendon Securities LLC, a Delaware limited liability company, registered as a broker-dealer with the Commission and a member of the Financial Industry Regulatory Authority, Inc. ("FINRA"), with principal offices at 200 Vesey Street, Suite 3100, New York, New York 10281 (Michael Stavros, Managing Director, Real Estate Capital Markets).
"Commission" means the Securities and Exchange Commission of the United States or any successor agency.
"Commission Rate" means (a) with respect to at-the-market sales of Shares pursuant to Section 3.1, 2.0% of Gross Sales Proceeds, and (b) with respect to Forward Sales of Shares pursuant to Section 3.2, 2.25% of Gross Sales Proceeds (consisting of 2.0% base commission plus 0.25% forward premium).
"Common Shares" means common shares of beneficial interest, par value $0.01 per share, of the Company.
"Company" means Fairwater Real Estate Investment Trust, a Maryland real estate investment trust (CIK: 0001387204; EIN: 52-2384761), together with its successors and permitted assigns.
"Company Counsel" means Calderwood & Harkness LLP, 1750 K Street, N.W., Suite 800, Washington, D.C. 20006 (Vivienne St. Claire, Partner; Natasha Forbes, Senior Associate), or such other counsel as the Company may designate from time to time by written notice to the Agents.
"Declaration of Trust" means the Declaration of Trust of the Company, as filed with the State Department of Assessments and Taxation of Maryland, as amended, supplemented, and restated from time to time, governed by the laws of the State of Maryland.
"Disclosure Package" means, with respect to any Applicable Time, (a) the Prospectus, as then amended or supplemented, (b) the documents then incorporated by reference therein, (c) any Issuer Free Writing Prospectus, and (d) such other information as the Company and the applicable Agent may agree should be considered part of the Disclosure Package for purposes of Rule 159A under the Act.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
"FINRA" means the Financial Industry Regulatory Authority, Inc., or any successor thereto.
"Fiscal Year" means the Company's fiscal year ending December 31 of each calendar year.
"Forward Buyer" has the meaning ascribed to such term in Section 3.2(a).
"Forward Contract" has the meaning ascribed to such term in Section 3.2(a).
"Forward Maturity Date" means, with respect to any Forward Contract, the date that is up to twelve (12) months following the applicable Forward Trade Date for such Forward Contract, as specified in the applicable Forward Sale Confirmation.
"Forward Sale" means a sale of Shares pursuant to Section 3.2 involving a Forward Contract.
"Forward Sale Commission" means 2.25% of the Gross Sales Proceeds attributable to a Forward Sale, consisting of a 2.0% base commission plus a 0.25% forward premium.
"Forward Seller" means the applicable Agent acting as a forward seller in connection with a Forward Sale pursuant to Section 3.2.
"Forward Trade Date" means, with respect to any Forward Contract, the date on which such Forward Contract is entered into between the Company and the applicable Forward Buyer.
"Free Writing Prospectus" has the meaning ascribed to such term in Rule 405 under the Act.
"Gross Sales Proceeds" means the aggregate gross proceeds from the sale of Shares pursuant to this Agreement, before deduction of the applicable Commission and any other expenses payable by the Company.
"Indenture" means that certain base indenture dated as of March 15, 2020, by and among the Operating Partnership, as issuer, the Company, as guarantor, and Meridian Trust Company, as trustee, as supplemented by each supplemental indenture entered into in connection with the issuance of any series of senior unsecured notes thereunder.
"Independent Registered Public Accounting Firm" means Hargrove & Tillman LLP, 155 North Wacker Drive, Suite 3200, Chicago, Illinois 60606 (Brian Ogilvie, Audit Partner), or such other independent registered public accounting firm as may be appointed by the Company and approved by the Audit Committee of the Board of Trustees.
"Issuer Free Writing Prospectus" has the meaning ascribed to such term in Rule 433 under the Act.
"Lead Agent" means Pemberton Zanthor & Co.
"Material Adverse Effect" means any event, occurrence, fact, condition, change, or development that, individually or in the aggregate, has had or would reasonably be expected to have a material adverse change in or material adverse effect on (a) the business, properties, assets, financial condition, or results of operations of the Company and its subsidiaries, taken as a whole, (b) the ability of the Company or the Operating Partnership to perform their respective obligations under this Agreement, or (c) the validity or enforceability of this Agreement.
"Material Time of Sale Information" means, as of any Applicable Time, the information included in the Disclosure Package at such Applicable Time, including any information that the Company and the applicable Agent have agreed should be considered "Material Time of Sale Information" for purposes of this Agreement.
"Maximum Amount" means $500,000,000 in aggregate Gross Sales Proceeds from the sale of Shares under this Agreement.
"NYSE" means the New York Stock Exchange or any successor exchange.
"Operating Partnership" means Fairwater Operating Partnership, L.P., a Maryland limited partnership (EIN: 52-2384805), together with its successors and permitted assigns.
"Original Agreement" means the Equity Distribution Agreement dated as of November 15, 2019, among the Company, the Operating Partnership, and the Agents, as amended by the First Amendment thereto dated as of August 5, 2022, and as further amended by the Second Amendment thereto dated as of March 12, 2023.
"Pemberton Zanthor" means Pemberton Zanthor & Co., a New York corporation, registered as a broker-dealer with the Commission and a member of FINRA, with principal offices at 390 Madison Avenue, 22nd Floor, New York, New York 10017 (Rachel Dominguez, Managing Director; Thomas Ng, Director, Equity Capital Markets).
"Placement Notice" has the meaning ascribed to such term in Section 3.1(b).
"Prior Shelf" means the Company's prior shelf registration statement on Form S-3 (File No. 333-265410), which was declared effective by the Commission on August 1, 2022, and which will expire on August 1, 2025, pursuant to Rule 415(a)(5) under the Act.
"Prospectus" means the Base Prospectus, as supplemented by the ATM Prospectus Supplement and by any other applicable prospectus supplement, including all documents incorporated by reference therein.
"Registration Statement" means the Company's universal shelf registration statement on Form S-3, including all exhibits thereto and all amendments thereto (including any post-effective amendments), filed with the Commission as an automatic shelf registration statement for a well-known seasoned issuer pursuant to Rule 462(e) under the Act.
"Regulation M" means Regulation M under the Exchange Act (Rules 100–105 thereunder), as the same may be amended or supplemented from time to time.
"REIT" means a real estate investment trust as defined in Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the "Code").
"Veltrano" means Veltrano Capital Partners LLC, a Delaware limited liability company, registered as a broker-dealer with the Commission and a member of FINRA, with principal offices at 1500 Market Street, Suite 2800, Philadelphia, Pennsylvania 19102 (Karen Albrecht, Managing Director).
"Selling Agent" means the Agent designated by the Company in a Placement Notice to sell Shares in an at-the-market transaction pursuant to Section 3.1.
"Settlement Date" means, with respect to any sale of Shares, the second Business Day following the date of execution of such sale (i.e., T+2), or such other settlement date as may be agreed upon by the Company and the applicable Selling Agent in the applicable Placement Notice or otherwise in writing.
"Shares" means common shares of beneficial interest, par value $0.01 per share, of the Company, to be offered, issued, and sold from time to time under this Agreement.
"Transfer Agent" means Meridian Trust Company, 55 Elm Street, Hartford, Connecticut 06106 (Paula Jennings, Vice President, Corporate Trust Services), or such other transfer agent and registrar for the Common Shares as the Company may appoint from time to time.
"WKSI" means a well-known seasoned issuer as defined in Rule 405 under the Act.
Section 1.2 — Rules of Construction
Unless the context otherwise requires: (a) a term has the meaning assigned to it; (b) "or" is not exclusive; (c) words in the singular include the plural, and words in the plural include the singular; (d) "herein," "hereof," "hereunder," and words of similar import refer to this Agreement as a whole and not to any particular provision; (e) references to "Articles," "Sections," "Schedules," and "Exhibits" are to Articles and Sections of, and Schedules and Exhibits to, this Agreement unless otherwise specified; (f) references to any law, rule, or regulation include any amendment, modification, or successor thereto; and (g) all dollar amounts are stated in United States dollars.
ARTICLE II — REPRESENTATIONS AND WARRANTIES
Section 2.1 — Representations and Warranties of the Company and the Operating Partnership
The Company and the Operating Partnership, jointly and severally, represent and warrant to each Agent as of the date of this Agreement, and as of each Applicable Time and each Bring-Down Date (except to the extent any such representation or warranty speaks as of a specific date, in which case such representation or warranty shall be made only as of such date), as follows:
(a) Organization and Good Standing. The Company is a real estate investment trust duly organized, validly existing, and in good standing under the laws of the State of Maryland, having been organized in 2003, and has all requisite power and authority to own, lease, and operate its properties and to carry on its business as now conducted and as described in the Registration Statement and the Prospectus. The Operating Partnership is a limited partnership duly formed, validly existing, and in good standing under the laws of the State of Maryland and has all requisite power and authority to own, lease, and operate its properties and to carry on its business as now conducted and as described in the Registration Statement and the Prospectus. The Company is the sole general partner of the Operating Partnership and owns approximately 96.3% of the outstanding common units of the Operating Partnership, consisting of 134,270,000 common units owned by the Company out of 139,450,000 total outstanding common units of the Operating Partnership (with 5,180,000 common units held by third-party limited partners). Each of the Company and its subsidiaries is duly qualified and in good standing as a foreign entity in each jurisdiction where the character of its properties or the nature of its business makes such qualification necessary, except where the failure to be so qualified or in good standing would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(b) Capitalization. As of March 31, 2025, the authorized capital stock of the Company consists of the number of shares set forth in the Declaration of Trust. As of such date, (i) the Company has 134,270,000 Common Shares outstanding, par value $0.01 per share, (ii) the Company has 4,000,000 shares of 6.50% Series A Cumulative Redeemable Preferred Shares outstanding, with a liquidation preference of $25.00 per share (representing an aggregate liquidation preference of $100,000,000), and (iii) the Operating Partnership has 139,450,000 total outstanding common units, consisting of 134,270,000 common units owned by the Company and 5,180,000 common units held by third-party limited partners. All outstanding Common Shares have been duly authorized, validly issued, and are fully paid and nonassessable. No holder of outstanding Common Shares is entitled to any preemptive or similar rights with respect to the Shares to be sold under this Agreement. The Common Shares are listed on the NYSE under the ticker symbol "FRWT." Except as disclosed in the Registration Statement, the Prospectus, or the documents incorporated by reference therein, there are no outstanding options, warrants, rights, contracts, commitments, or other agreements obligating the Company to issue, sell, or otherwise dispose of any Common Shares or any securities convertible into or exercisable or exchangeable for Common Shares, other than (A) common units of the Operating Partnership that are redeemable for Common Shares or cash at the election of the Company and (B) awards outstanding under the Company's equity incentive plan.
(c) Authorization; Valid Issuance. The Company has full corporate power and authority to execute, deliver, and perform its obligations under this Agreement and to issue and sell the Shares as contemplated hereby. The Operating Partnership has full partnership power and authority to execute, deliver, and perform its obligations under this Agreement. The Board of Trustees of the Company has duly authorized the execution and delivery of this Agreement and the issuance and sale of the Shares from time to time pursuant hereto. The Shares, when issued and delivered in accordance with the terms of this Agreement against payment of the consideration set forth herein, will be duly authorized, validly issued, fully paid, and nonassessable, and will be free and clear of all liens, encumbrances, equities, or claims (other than restrictions on transfer under applicable securities laws and the Declaration of Trust). This Agreement has been duly authorized, executed, and delivered by each of the Company and the Operating Partnership and constitutes a valid and binding obligation of each of the Company and the Operating Partnership, enforceable against each in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, and other similar laws relating to or affecting creditors' rights generally and to general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).
(d) Registration Statement and Prospectus. The Registration Statement has been filed with the Commission as an automatic shelf registration statement for a WKSI pursuant to Rule 462(e) under the Act and became effective upon filing with the Commission. The Registration Statement registers up to $2,000,000,000 in securities of the Company and the Operating Partnership, including Common Shares. At the time the Registration Statement became effective, at the time of each amendment thereto (whether by post-effective amendment, incorporated document filed under the Exchange Act, or otherwise), and at the date hereof, the Registration Statement complied and complies in all material respects with the requirements of the Act and the rules and regulations of the Commission thereunder, and neither the Registration Statement nor any amendment thereto contains or contained an untrue statement of a material fact or omits or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading. The Prospectus, as supplemented by the ATM Prospectus Supplement, does not, as of its date and as of each Applicable Time, contain 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 ATM Prospectus Supplement describes the offering of up to $500,000,000 in aggregate Gross Sales Proceeds of Common Shares through the Agents. The documents incorporated by reference in the Registration Statement and the Prospectus, when they were filed with the Commission, conformed in all material respects with the requirements of the Exchange Act and the rules and regulations of the Commission thereunder, and none of such documents 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, in the light of the circumstances under which they were made, not misleading.
(e) Incorporated Documents. The documents incorporated by reference in the Registration Statement and the Prospectus, at the time they were or hereafter are filed with the Commission, complied or will comply in all material respects with the requirements of the Exchange Act and the rules and regulations of the Commission thereunder. Each document filed and incorporated by reference in the Registration Statement and the Prospectus after the date hereof, when such document is filed with the Commission, will conform in all material respects with the requirements of the Exchange Act and the rules and regulations of the Commission thereunder 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, in the light of the circumstances under which they were made, not misleading. Any further documents so filed and incorporated by reference in the Registration Statement and the Prospectus, when such documents become effective or are filed with the Commission, as the case may be, will conform in all material respects with the requirements of the Act or the Exchange Act, as applicable.
(f) No Material Adverse Effect. Since the date of the most recent audited or unaudited financial statements included or incorporated by reference in the Registration Statement and the Prospectus (and any amendments or supplements thereto), (i) there has not been any Material Adverse Effect, whether or not arising in the ordinary course of business, (ii) the Company and its subsidiaries, considered as one entity, have not incurred any material liability or obligation, direct or contingent, other than as disclosed in such financial statements, and (iii) there has not been any material change in the capital shares, short-term debt, or long-term debt of the Company or any of its subsidiaries, except as described in or contemplated by the Registration Statement and the Prospectus.
(g) WKSI Status. The Company meets the requirements to be, and is, a WKSI as defined in Rule 405 under the Act. The Company's aggregate worldwide market value of voting and non-voting common equity held by non-affiliates (i.e., its public float) exceeds $700,000,000, as evidenced by an equity market capitalization of approximately $3,819,981,500, based on 134,270,000 Common Shares outstanding at a closing price of $28.45 per share as of June 13, 2025. The Company is not, and at the time of filing the Registration Statement was not, an "ineligible issuer" as defined in Rule 405 under the Act. The Company has not received from the Commission any notice pursuant to Rule 401(g)(1) under the Act objecting to the use of the shelf registration statement form.
(h) No Stop Orders. No stop order suspending the effectiveness of the Registration Statement has been issued by the Commission, and no proceedings for that purpose have been instituted or, to the knowledge of the Company, are contemplated or threatened by the Commission. No order preventing or suspending the use of the Base Prospectus, the ATM Prospectus Supplement, or any Issuer Free Writing Prospectus has been issued by the Commission.
(i) Independent Registered Public Accounting Firm. Hargrove & Tillman LLP, which has audited the consolidated financial statements of the Company and the Operating Partnership included or incorporated by reference in the Registration Statement and the Prospectus, is an independent registered public accounting firm with respect to the Company and the Operating Partnership within the meaning of the Act, the Exchange Act, and the applicable rules and regulations adopted by the Commission and the Public Company Accounting Oversight Board (United States).
(j) Internal Controls and Disclosure Controls. The Company maintains a system of internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management's general or specific authorization, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain accountability for assets, (iii) access to assets is permitted only in accordance with management's general or specific authorization, and (iv) the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences. The Company maintains disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under the Exchange Act) that are effective in ensuring that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported, within the time periods specified in the Commission's rules and forms, and is accumulated and communicated to the Company's management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Since the date of the most recent evaluation of such disclosure controls and procedures, there have been no significant changes in internal controls or in other factors that could significantly affect internal controls, including any corrective actions with regard to significant deficiencies and material weaknesses.
(k) Real Estate Investment Trust Status. The Company has been organized and has operated in conformity with the requirements for qualification and taxation as a REIT under Sections 856 through 860 of the Code for each taxable year commencing with the taxable year ended December 31, 2003, through and including the taxable year ended December 31, 2024. The Company's current and proposed method of operation, as described in the Registration Statement and the Prospectus, will enable it to continue to meet the requirements for qualification and taxation as a REIT under the Code for the current taxable year and subsequent taxable years. The Operating Partnership has been treated, and will continue to be treated, as a partnership or disregarded entity for federal income tax purposes for each taxable year of its existence.
(l) Properties. As of March 31, 2025, the Company's portfolio comprises 47 multifamily communities totaling approximately 14,800 apartment units located in the states of Maryland, Virginia, North Carolina, Georgia, and Florida. The Company and its subsidiaries have good and marketable title in fee simple absolute to, or valid and enforceable leasehold interests in, all real properties described in the Prospectus as being owned or leased by them, free and clear of all liens, encumbrances, and defects, except such as are described in the Prospectus or that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. All real property held under lease by the Company and its subsidiaries is held under valid, subsisting, and enforceable leases, with such exceptions as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(m) Compliance with Laws. The Company and each of its subsidiaries are in compliance with all applicable federal, state, local, and foreign laws, rules, regulations, orders, judgments, and decrees, including without limitation those relating to zoning, building, land use, environmental protection, occupational health and safety, fire safety, accessibility, and fair housing, except where the failure to be in compliance would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Neither the Company nor any of its subsidiaries has received any notice of any violation of any such law, rule, regulation, order, judgment, or decree that would, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(n) No Conflicts. The execution, delivery, and performance of this Agreement by the Company and the Operating Partnership and the issuance and sale of the Shares as contemplated hereby will not (i) conflict with or result in a violation of any provision of the Declaration of Trust, the Bylaws of the Company, or the Agreement of Limited Partnership of the Operating Partnership, as amended, (ii) conflict with, result in a breach or violation of, constitute (with or without notice or passage of time or both) a default under, give rise to a right of termination, cancellation, or acceleration of any obligation under, or result in the creation or imposition of any lien, charge, or encumbrance upon any of the properties or assets of the Company or any of its subsidiaries pursuant to, any agreement, indenture, mortgage, deed of trust, loan agreement, lease, license, or other instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries or any of their respective properties or assets may be bound, or (iii) conflict with or result in a violation of any federal, state, local, or foreign statute, law, rule, regulation, order, judgment, or decree applicable to the Company or any of its subsidiaries or any of their respective properties or assets, except, in the case of clauses (ii) and (iii), as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(o) Material Agreements. All agreements, contracts, indentures, leases, and other instruments described in or filed as exhibits to the documents incorporated by reference in the Registration Statement and the Prospectus that are material to the Company and its subsidiaries, taken as a whole (the "Material Agreements"), are in full force and effect and enforceable in accordance with their respective terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, and similar laws relating to or affecting creditors' rights generally and to general principles of equity. Neither the Company nor any of its subsidiaries is in default in the performance or observance of any obligation, agreement, covenant, or condition contained in any Material Agreement, nor, to the Company's knowledge, is any other party to any Material Agreement in default in the performance or observance of any obligation, agreement, covenant, or condition contained therein, except where such default would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(p) Tax Matters. The Company and each of its subsidiaries have timely filed (taking into account any applicable extensions) all federal, state, local, and foreign tax returns that are required to be filed, and all such tax returns are complete and correct in all material respects. The Company and each of its subsidiaries have paid all taxes due (whether or not shown on any such tax returns) and all assessments received by them, except for any such taxes or assessments that are being contested in good faith and for which adequate reserves have been established in accordance with generally accepted accounting principles. There are no pending or, to the Company's knowledge, threatened audits, examinations, or assessments by any taxing authority that would, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(q) Environmental Matters. The Company and its subsidiaries (i) are in compliance with all applicable federal, state, local, and foreign laws, rules, regulations, requirements, decisions, judgments, decrees, and orders relating to pollution, protection of the environment, or hazardous or toxic substances or wastes, pollutants, or contaminants ("Environmental Laws"), (ii) have received and hold all permits, licenses, certificates, and other governmental authorizations required under applicable Environmental Laws for the conduct of their business and the ownership or operation of their properties, (iii) are in compliance with all terms and conditions of such permits, licenses, certificates, and authorizations, and (iv) have not received notice of, and are not aware of, any past, present, or future conditions, events, activities, practices, or incidents that would reasonably be expected to give rise to any material liability under any Environmental Law, except, in each case, where the failure to comply or the existence of such conditions would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(r) Insurance. The Company and its subsidiaries maintain insurance underwritten by insurers of recognized financial responsibility, with such coverages and deductibles and in such amounts and covering such risks as are reasonable and customary for companies of comparable size engaged in similar businesses and operating in the same geographic areas, including property insurance, general liability insurance, umbrella liability insurance, workers' compensation insurance, and such other insurance as is described in the Prospectus. All such insurance policies are in full force and effect, all premiums due thereon have been paid, and neither the Company nor any of its subsidiaries has received notice of cancellation or nonrenewal of any such policy. The Company and its subsidiaries have not been refused any material insurance coverage sought or applied for, and the Company has no reason to believe that it will not be able to renew its existing insurance coverages as and when they expire or to obtain similar coverage from similar insurers on commercially reasonable terms.
(s) intellectual Property. The Company and its subsidiaries own or possess, or have valid rights to use, all trademarks, trade names, service marks, patents, patent applications, copyrights, licenses, approvals, trade secrets, domain names, and other intellectual property rights (collectively, "intellectual Property") necessary for the conduct of their respective businesses as now conducted and as described in the Registration Statement and the Prospectus, except where the failure to own, possess, or have such rights would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Neither the Company nor any of its subsidiaries has received any notice of infringement of, or conflict with, asserted rights of others with respect to any intellectual Property that would, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(t) No Undisclosed Relationships. No relationship, direct or indirect, exists between or among the Company or any of its subsidiaries, on the one hand, and any Agent, on the other hand, that is required by the Act or the rules and regulations of the Commission to be described in the Registration Statement, the Prospectus, or the documents incorporated by reference therein and that is not so described. No relationship, direct or indirect, exists between or among the Company or any of its subsidiaries, on the one hand, and the directors, officers, trustees, or shareholders of the Company, on the other hand, that is required by the Act or the Exchange Act to be described in the Registration Statement, the Prospectus, or the documents incorporated by reference therein and that is not so described.
(u) Absence of Manipulation. Neither the Company nor any of its Affiliates has taken, directly or indirectly, any action that is designed to or that has constituted or that might reasonably be expected to cause or result in the stabilization or manipulation of the price of any security of the Company in connection with the offering of the Shares, whether in violation of Regulation M under the Exchange Act or otherwise.
(v) Sarbanes-Oxley Compliance. The Company is in compliance in all material respects with all applicable provisions of the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated thereunder that are effective as of the date hereof. The Company's principal executive officer and principal financial officer have made all certifications required by Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 with respect to all reports filed under the Exchange Act. The statements contained in such certifications are complete and correct in all material respects. Neither the Company nor any of its subsidiaries has any "off-balance sheet arrangement" (as defined in Item 303 of Regulation S-K under the Act) that is not described in the Registration Statement and the Prospectus and that would, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(w) Investment Company Act. The Company is not, and after giving effect to the offering and sale of the Shares and the application of the proceeds thereof as described in the Prospectus will not be, required to register as an "investment company" within the meaning of the Investment Company Act of 1940, as amended, and the rules and regulations of the Commission thereunder.
(x) Indebtedness. As of March 31, 2025, the consolidated indebtedness of the Company and its subsidiaries is as follows:
(i) Senior Unsecured Notes. The Operating Partnership has outstanding $750,000,000 in aggregate principal amount of senior unsecured notes issued under the Indenture, consisting of: (A) $250,000,000 aggregate principal amount of 3.875% Senior Notes due 2028, (B) $300,000,000 aggregate principal amount of 4.250% Senior Notes due 2031, and (C) $200,000,000 aggregate principal amount of 5.100% Senior Notes due 2034, in each case with Meridian Trust Company serving as trustee under the Indenture.
(ii) Unsecured Revolving Credit Facility. The Operating Partnership maintains a $600,000,000 unsecured revolving credit facility, of which $175,000,000 was drawn and $425,000,000 was undrawn as of March 31, 2025.
(iii) Secured Mortgage Debt. The Company's subsidiaries had outstanding approximately $480,000,000 in aggregate principal amount of secured mortgage indebtedness.
(iv) Total Consolidated Debt. The total consolidated debt of the Company and its subsidiaries was approximately $1,405,000,000 as of March 31, 2025.
The Company and the Operating Partnership have received credit ratings of BBB with a stable outlook from Brindoval Advisory Group and Baa2 with a stable outlook from Pinnacle Rating Services, in each case with respect to the Operating Partnership's senior unsecured debt obligations. The Company is not aware of any pending or threatened change in such credit ratings.
(y) FINRA Matters. To the Company's knowledge, no officer, trustee, or beneficial owner of 5% or more of the Company's outstanding Common Shares has any affiliation or association with any member of FINRA that would require disclosure in connection with the offering of the Shares. The Company has not made, and will not make, any "payments to FINRA members" (as such term is defined in FINRA Rule 5110) in connection with the offering of the Shares, other than the Commission payable to the Agents as set forth in this Agreement and as disclosed in the ATM Prospectus Supplement.
Section 2.2 — Representations and Warranties of the Agents
Each Agent, severally and not jointly, represents and warrants to the Company and the Operating Partnership, as of the date of this Agreement and as of each Applicable Time and each Bring-Down Date, as follows:
(a) Organization and Registration. Such Agent is duly organized, validly existing, and in good standing under the laws of its jurisdiction of organization (Pemberton Zanthor: the State of New York; Clarendon: the State of Delaware; Veltrano: the State of Delaware). Such Agent is duly registered as a broker-dealer with the Commission pursuant to the Exchange Act and is a member in good standing of FINRA. Such Agent has all requisite power and authority to execute, deliver, and perform its obligations under this Agreement and to consummate the transactions contemplated hereby.
(b) Authority. The execution, delivery, and performance of this Agreement by such Agent have been duly authorized by all necessary corporate or limited liability company action on the part of such Agent, and this Agreement has been duly executed and delivered by such Agent and constitutes a valid and binding obligation of such Agent, enforceable against such Agent in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, and similar laws relating to or affecting creditors' rights generally and to general principles of equity.
(c) No Conflicts. The execution, delivery, and performance of this Agreement by such Agent and the consummation of the transactions contemplated hereby will not (i) conflict with or result in a violation of the certificate of incorporation, bylaws, operating agreement, or other organizational documents of such Agent, (ii) conflict with, result in a breach or violation of, or constitute a default under any material agreement, indenture, or other instrument to which such Agent is a party or by which such Agent is bound, or (iii) conflict with or result in a violation of any applicable federal, state, local, or foreign law, rule, regulation, order, judgment, or decree applicable to such Agent.
(d) Compliance with Applicable Law. Such Agent will offer and sell Shares only in compliance with the Act, the Exchange Act, Regulation M, applicable FINRA rules, and all other applicable federal and state laws, rules, and regulations. Without limiting the generality of the foregoing, such Agent will comply with all applicable requirements of Regulation M in connection with each sale of Shares under this Agreement.
(e) No Manipulation. Such Agent has not taken, and will not take, directly or indirectly, any action designed to, or that might reasonably be expected to, cause or result in the stabilization or manipulation of the price of the Common Shares in violation of Regulation M or otherwise in connection with the offering of the Shares.
ARTICLE III — ISSUANCE AND SALE OF SHARES
Section 3.1 — At-the-Market Sales
(a) Engagement and Agency. Subject to the terms and conditions of this Agreement, the Company hereby engages the Agents, and each Agent hereby agrees, to act as agent for the Company in connection with the offer and sale of Shares from time to time during the term of this Agreement. Sales of Shares may be made in at-the-market transactions on or through the facilities of the NYSE, in negotiated transactions at market prices prevailing at the time of sale or at prices related to such prevailing market prices, or as otherwise agreed between the Company and the applicable Selling Agent consistent with the requirements of Rule 415(a)(4) under the Act. Unless otherwise agreed in writing between the Company and the applicable Agent in connection with a block trade or other special transaction, each Agent shall act solely as agent for the Company and not as principal with respect to any sale of Shares. The aggregate Gross Sales Proceeds from the sale of Shares under this Agreement (whether through at-the-market sales pursuant to this Section 3.1 or Forward Sales pursuant to Section 3.2, or any combination thereof) shall not exceed the Maximum Amount of $500,000,000.
(b) Placement Notices. The Company may, from time to time during the term of this Agreement, deliver to any Agent a written notice (each, a "Placement Notice"), substantially in the form attached hereto as Schedule A, designating such Agent as the Selling Agent and specifying the following parameters for the sale of Shares during the period specified therein:
(i) the maximum number of Shares to be sold or the maximum dollar amount of Gross Sales Proceeds to be generated during the period covered by the Placement Notice;
(ii) the minimum price per Share below which sales shall not be made (the "Floor Price");
(iii) the time period during which sales are requested to be made, including the beginning and ending dates and times;
(iv) whether the Placement Notice involves a Forward Sale election pursuant to Section 3.2; and
(v) any other parameters, instructions, or conditions as the Company may specify.
Placement Notices may be given by Sandra Ellerby, Senior Vice President, Capital Markets & Treasurer, or by such other authorized officers of the Company as the Company may designate by written notice to the Agents from time to time. Each Placement Notice shall be delivered by email (with a confirmation copy by telephone) to the contact persons designated by the applicable Selling Agent. The Company shall not have more than one active Placement Notice with any single Agent at any given time.
(c) Agent Allocation. The Company has designated the following capacity allocations among the Agents for the purpose of allocating sales of Shares under this Agreement: Pemberton Zanthor — 50%; Clarendon Securities — 30%; Veltrano Capital Partners — 20%. Notwithstanding the foregoing capacity allocations, the actual allocation of sales among the Agents shall be determined by the Company in its sole discretion through the delivery of Placement Notices to individual Agents, and the Company shall not be required to allocate any particular volume of sales to any Agent. The Company is under no obligation to deliver any Placement Notice to any Agent and may, in its sole discretion, determine whether to sell any Shares and, if so, the timing, amount, and manner of any such sale.
(d) Manner of Sale. Upon receipt of a Placement Notice that has not been suspended or terminated, the Selling Agent shall use commercially reasonable efforts, consistent with its normal trading and sales practices and applicable law, to sell the Shares specified in such Placement Notice in accordance with the terms and conditions set forth therein. Sales of Shares pursuant to this Section 3.1 shall be effected as "at the market offerings" as defined in Rule 415(a)(4) under the Act, including sales made directly on or through the facilities of the NYSE, at market prices prevailing at the time of sale, through any other existing trading market for the Common Shares, or to or through a market maker. In no event shall the Selling Agent sell Shares at a price per Share lower than the Floor Price set forth in the applicable Placement Notice without the prior written consent of the Company. The Selling Agent shall not be required to sell any Shares on any day on which, in the Selling Agent's reasonable judgment, market conditions are not appropriate for such sales.
(e) Suspension and Termination of Placement Notices. The Company may suspend any outstanding Placement Notice at any time upon written notice (including by email) to the Selling Agent, and such suspension shall be effective upon receipt of such notice by the Selling Agent (or, in the case of a notice delivered by email, upon confirmation of receipt). The Company may thereafter reinstate a suspended Placement Notice by written notice to the Selling Agent, subject to satisfaction or waiver of the conditions set forth in Section 6.1 as of the date of reinstatement. A Placement Notice shall terminate automatically (i) upon the expiration of the time period specified therein, (ii) upon the sale of the maximum number or dollar amount of Shares specified therein, (iii) upon the delivery by the Company to the Selling Agent of notice of suspension or termination of such Placement Notice, or (iv) upon termination of this Agreement pursuant to Article VIII.
(f) Reporting. Following each day during which the Selling Agent has made sales of Shares pursuant to a Placement Notice, the Selling Agent shall provide to the Company (attention: Sandra Ellerby, SVP, Capital Markets & Treasurer) a written confirmation (which may be delivered by email) specifying the following: (i) the number of Shares sold on such day, (ii) the aggregate Gross Sales Proceeds from such sales, (iii) the volume-weighted average price per Share for such sales, (iv) the amount of Commission due to the Selling Agent with respect to such sales, and (v) the net proceeds payable to the Company (Gross Sales Proceeds minus Commission). Such written confirmation shall be delivered no later than 8:00 a.m. (New York City time) on the Business Day immediately following such day of sales.
(g) Settlement. Unless otherwise agreed in writing between the Company and the applicable Selling Agent, settlement of each sale of Shares pursuant to this Section 3.1 shall occur on the Settlement Date (i.e., the second Business Day following the date of execution of such sale). On each Settlement Date, the Company shall deliver (or cause to be delivered) through the facilities of The Depository Trust Company ("DTC") the Shares to be sold on such Settlement Date to or for the account of the Selling Agent. Concurrently therewith, the Selling Agent shall deliver to the Company, by wire transfer of immediately available funds to an account designated by the Company, the net proceeds from such sale, which shall equal the Gross Sales Proceeds minus the applicable Commission. The Company shall not be obligated to deliver any Shares on a Settlement Date until it has received confirmation that payment has been initiated by the Selling Agent.
(h) Commission. As compensation for the services of each Agent acting as Selling Agent in at-the-market sales pursuant to this Section 3.1, the Company shall pay to such Selling Agent a commission at the Commission Rate of 2.0% of Gross Sales Proceeds for each sale of Shares effected by such Selling Agent. The applicable Commission shall be deducted by the Selling Agent from the Gross Sales Proceeds prior to remittance of net proceeds to the Company on the applicable Settlement Date. No separate payment of Commission by the Company shall be required.
Section 3.2 — Forward Sales
(a) Forward Sale Mechanics. In addition to at-the-market sales pursuant to Section 3.1, the Company may from time to time elect to enter into forward sale transactions with respect to the Shares by providing written notice to the applicable Agent in a Placement Notice or by separate written notice. In a Forward Sale, the applicable Agent, acting in its capacity as "Forward Seller," shall borrow Common Shares and sell such borrowed Shares on behalf of a forward purchaser (the "Forward Buyer") designated by the Agent, in accordance with the terms of the Placement Notice, and the Company shall enter into a forward sale agreement (each, a "Forward Contract"), substantially in the form set forth in Schedule B, with the Forward Buyer, pursuant to which the Company shall agree to issue and sell Common Shares to the Forward Buyer on one or more future settlement dates specified therein. Each Forward Contract shall have a Forward Maturity Date of up to twelve (12) months from the applicable Forward Trade Date, as specified in the applicable Forward Sale Confirmation.
(b) Forward Sale Commission. As compensation for the services of each Agent acting as Forward Seller in a Forward Sale pursuant to this Section 3.2, the Company shall pay to such Forward Seller a commission at the Forward Sale Commission rate of 2.25% of Gross Sales Proceeds attributable to such Forward Sale, consisting of 2.0% base commission plus 0.25% forward premium. The Forward Sale Commission shall be deducted from the Gross Sales Proceeds in the manner specified in the applicable Forward Contract and Forward Sale Confirmation.
(c) Physical Settlement; Net Share Settlement; Cash Settlement. Unless otherwise specified in the applicable Forward Contract or Forward Sale Confirmation, the Company may elect, in its sole discretion and upon written notice to the Forward Buyer, to settle any Forward Contract by one of the following methods:
(i) Physical Settlement. The Company shall issue and deliver newly issued Common Shares to the Forward Buyer against payment by the Forward Buyer of the applicable forward price per Share (as adjusted through the settlement date) multiplied by the number of Shares to be physically settled.
(ii) Net Share Settlement. The Company or the Forward Buyer, as applicable, shall deliver a number of Common Shares equal to the quotient of (A) the settlement amount (calculated as the difference between the forward price and the then-current market price multiplied by the number of Shares underlying the Forward Contract) divided by (B) the then-current market price per Common Share.
(iii) Cash Settlement. The Company or the Forward Buyer, as applicable, shall pay to the other party a cash amount equal to the settlement amount (calculated as described in clause (ii) above), without the issuance or delivery of any Common Shares.
The specific settlement method, timing, and mechanics shall be as set forth in the applicable Forward Contract and Forward Sale Confirmation.
(d) Forward Pricing. The initial forward price under each Forward Contract shall be the volume-weighted average price at which the Forward Seller sells the borrowed Common Shares during the applicable selling period, less the Forward Sale Commission, as further adjusted on a daily basis for (i) a floating interest rate factor based on the federal funds effective rate (or such other equivalent benchmark rate as may be specified in the applicable Forward Sale Confirmation) and (ii) expected dividend adjustments reflecting the amount of any cash dividends or other distributions declared on the Common Shares for which the ex-dividend date falls during the period from the Forward Trade Date to the applicable settlement date. The specific pricing formula and adjustment mechanics shall be set forth in the applicable Forward Sale Confirmation.
(e) Representations Deemed Repeated. All representations and warranties of the Company and the Operating Partnership set forth in Section 2.1 shall be deemed to have been made and repeated as of each Forward Trade Date and as of each settlement date under each Forward Contract, with the same force and effect as if made on and as of each such date, except to the extent that any such representation or warranty expressly speaks as of a specific earlier date.
Section 3.3 — Capacity; Limitations
In no event shall the aggregate Gross Sales Proceeds from the sale of Shares under this Agreement, whether effected through at-the-market sales pursuant to Section 3.1, Forward Sales pursuant to Section 3.2, or any combination thereof, exceed the Maximum Amount of $500,000,000. The Company shall maintain a running record of the cumulative Gross Sales Proceeds from all sales of Shares under this Agreement and shall not deliver any Placement Notice or enter into any Forward Contract if the aggregate Gross Sales Proceeds from all prior sales, plus the maximum Gross Sales Proceeds contemplated by such Placement Notice or Forward Contract, would exceed the Maximum Amount. The Company shall not be required to sell any Shares and may at any time limit or cease sales of Shares for any reason or no reason.
Section 3.4 — Regulation M Compliance
During any period in which the Company has delivered a Placement Notice that has not been suspended or terminated, or during any period in which a Forward Sale is pending settlement, the Company shall not, and shall cause each of its Affiliates not to, directly or indirectly, (a) bid for, purchase, or attempt to induce any person to bid for or purchase any Common Shares or any security that is convertible into or exchangeable for Common Shares, or (b) effect any other transaction in the Common Shares, in each case in violation of Regulation M under the Exchange Act. Each Agent shall comply with the applicable provisions of Regulation M in connection with each sale of Shares under this Agreement and shall not engage in any activity that would constitute a violation of Regulation M in connection with the distribution of the Shares.
ARTICLE IV — COVENANTS OF THE COMPANY AND THE OPERATING PARTNERSHIP
The Company and the Operating Partnership, jointly and severally, covenant and agree with each Agent as follows:
Section 4.1 — Compliance with Securities Laws
The Company shall use its commercially reasonable efforts to maintain the effectiveness of the Registration Statement and to prevent the issuance of any stop order suspending the effectiveness of the Registration Statement. The Company shall timely file all reports, schedules, statements, and other documents required to be filed by the Compa