Exhibit 4.1
EXCHANGE AGREEMENT
This Exchange Agreement (this
“ Agreement ”) is made this 27th day of July,
2010, by and among Digital Realty Trust, Inc., a Maryland
corporation (the “ Company ”), Digital Realty
Trust, L.P., a Maryland limited partnership (the “
Operating Partnership ”), and Basso Holdings Ltd., a
Cayman Islands exempted company (the “ Holder
”).
R E C I T A L S
A. The Holder holds $7,500,000 in
aggregate principal amount of the Operating Partnership’s
4.125% Exchangeable Senior Debentures due 2026 (the “
Notes ”).
B. The Holder desires to sell to the
Operating Partnership and the Operating Partnership desires to
purchase from the Holder $7,500,000 aggregate principal amount of
the Notes (the “ Repurchased Notes ”) in
exchange for (i) 236,444 restricted shares (the “
Shares ”) of the Company’s common stock, par
value $0.01 per share, (ii) an incentive fee payable in cash
equal to $37,515.54 and (iii) accrued and unpaid interest on
the Repurchased Notes to but excluding the Closing Date (as
hereinafter defined) equal to $138,359.38 ((ii) and
(iii) together, the “ Cash Consideration
”), upon the terms and subject to the conditions hereinafter
set forth (the “ Exchange ”).
NOW, THEREFORE, in consideration of
the premises and the mutual agreements and obligations contained
herein, the parties agree as follows:
1. Purchase and Sale of the
Repurchased Notes .
1.1 General . On the terms
and subject to the conditions set forth in this Agreement and upon
the representations and warranties made herein by each of the
parties to the other, on the Closing Date (i) the Holder shall
convey, assign, transfer and deliver to the Operating Partnership,
and the Operating Partnership shall purchase and acquire from the
Holder, the Repurchased Notes, and (ii) in exchange, the
Operating Partnership shall deliver to the Holder the Shares and
the Cash Consideration.
1.2 Closing . The closing of
the transaction contemplated hereby (the “ Closing
”) shall take place at 7:00 a.m., Pacific time, on
July 27, 2010, at the offices of Latham & Watkins
LLP, 505 Montgomery Street, Suite 2000, San Francisco,
California 94111, or at such other time and place as mutually
agreed upon by the parties. The date and time of closing are
referred to herein as the “ Closing Date
.”
1.3 Closing: Delivery of
Documents .
(a) At the Closing, the Holder shall
deliver or cause to be delivered to the account of the Operating
Partnership the Repurchased Notes, registered in the name of the
Holder or for which the Holder is the beneficial owner. Delivery of
such Repurchased Notes may be made in one or more separate
transfers.
(b) At the Closing, the Operating
Partnership shall deliver the Shares to the Holder in book-entry
form to the account set forth on Schedule A hereto. Delivery
of such Shares may be made in one or more separate
transfers.
(c) At the Closing, the Operating
Partnership shall deliver the Cash Consideration to the Holder by
wire transfer in immediately available funds to the Holder’s
broker pursuant to the wire transfer instructions set forth on
Schedule A hereto. Delivery of such Cash Consideration may
be made in one or more separate transfers.
2. Representations and Warranties
of the Holder . The Holder hereby represents and warrants to
the Company as follows:
2.1 Existence and Authority
Relative to Agreement . The Holder is a Cayman Islands exempted
company duly formed, validly existing and in good standing under
the laws of the Cayman Islands. The Holder has all necessary power
and authority to execute and deliver this Agreement and each other
agreement, document or instrument to be executed in connection
herewith and to perform the obligations to be performed by it
hereunder and thereunder. The execution, delivery and performance
of this Agreement by the Holder and the sale of the Repurchased
Notes by the Holder pursuant hereto have been duly authorized by
all necessary action. This Agreement and each other instrument or
document to be executed in connection herewith have been duly and
validly executed and delivered by a duly authorized officer of the
Holder. This Agreement and each other instrument or document to be
executed in connection herewith shall, upon the execution and
delivery thereof by the Holder, constitute the legal, valid and
binding obligations of the Holder enforceable against the Holder in
accordance with the respective terms thereof, except as the
enforceability thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting
the enforcement of creditors’ rights generally and general
equitable principles.
2.2 No Conflicts . Neither
the execution, delivery and performance of this Agreement, nor the
consummation of the transactions contemplated hereby nor compliance
by the Holder with any provisions hereof, will (i) violate
(with or without the giving of notice or the lapse of time or
both), or conflict with, or result in any violation of or default
under, any indenture, mortgage, deed of trust, loan agreement,
joint venture agreement, partnership agreement, limited liability
company agreement or any other agreement or instrument to which the
Holder is a party or by which the Holder is bound or to which any
of the property or assets of the Holder is subject, except for such
conflicts, breaches or violations which would not, singly or in the
aggregate, result in a material adverse effect on the consolidated
financial position, results of operations or business of the
Holder, (ii) result in any violation of the provisions of the
charter, by-laws, certificate of limited partnership, partnership
agreement or other organizational documents of the Holder, as the
case may be, or (iii) result in any violation of any statute
or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Holder, except where
such noncompliance or violation of any such statute, order, rule or
regulation would not, singly or in the aggregate, result in a
material adverse effect on the consolidated financial position,
results of operations or business of the Holder.
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2.3 No Consents Required . No
application, notice, order, registration, qualification, waiver,
consent, approval or other action (collectively, “
Consent ”) is required to be filed, given, obtained or
taken by the Holder by virtue of the execution, delivery and
performance of this Agreement or the consummation of the
transactions contemplated hereby, which has not already been
obtained.
2.4 Title to Interests . At
the Closing Date, the Holder is the record or beneficial owner of
the Repurchased Notes, and the sale of the Repurchased Notes to the
Operating Partnership hereunder will transfer title to the
Repurchased Notes free and clear of all liens, claims, charges or
encumbrances whatsoever.
2.5 Brokers and Finders . The
Holder has not employed any broker or finder who will seek
compensation from the Company or the Operating Partnership, and the
Holder has not otherwise entered into any arrangement regarding the
payment of any brokerage fees, commissions or finder’s fees
in connection with the sale of the Repurchased Notes that will
result in any liability on the part of the Company or the Operating
Partnership.
2.6 [Intentionally Left
Blank]
2.7 Ownership Limit . The
issuance of the Shares to the Holder, together with any other
shares of Common Stock of the Company held by the Holder, shall not
cause the Holder to own shares of capital stock of the Company in
violation of the Company’s ownership limits as set forth in
Section 6.2.1 of Article VI of the Company’s Articles of
Amendment and Restatement (the “ Articles ”).
The Holder acknowledges that the issuance of the Shares pursuant to
this Agreement is subject to the provisions and remedies in
the Company’s Articles, to the extent the issuance
violates the restrictions on ownership and transfer set forth in
the Articles, and the application of any such remedies shall
not be a breach of this Agreement by the Company.
2.8 Investor Questionnaire .
The representations contained in the Investor Questionnaire set
forth as Exhibit A attached hereto are true and
correct.
2.9 No General Solicitation .
Neither the Holder nor any of its advisors is aware of or has
engaged in or will engage in any form of general solicitation or
advertising in connection with the issuance of the Shares to the
Holder, including (i) any advertisement, article, notice or
other communication published in any newspaper, magazine or similar
media or broadcast over television or radio; and (ii) any
seminar or meeting whose attendees were invited by any general
solicitation or general advertising.
2.10 No Agreements to Sell .
The Holder has no contract, understanding, agreement or arrangement
with any person or entity to sell, transfer or grant a
participation to such person or entity or any other person or
entity, with respect to any or all of the Shares it will receive in
accordance with the provisions hereof.
2.11 ERISA . No part of the
Repurchased Notes to be used by the Holder to purchase the Shares
constitutes “plan assets”, as defined in Department of
Labor Regulation Section 2510.3-101 (29 C.F.R. 2510.3-101), of
any “employee benefit plan,” subject to Title I of
ERISA or an individual retirement account or plan which is subject
to Section 4975 of the Code (collectively, a “
Benefit Plan ”) or of any account or entity whose
underlying assets constitute “plan assets” of a Benefit
Plan by reason of the Benefit Plan’s investment in the
account or entity. The Holder is not an employee benefit plan
subject to ERISA or Section 4975 of the Code.
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2.12 Advisors . The Holder is
relying upon the advice of its own personal, legal and tax advisors
with respect to the legal, tax and other aspects of the sale of the
Repurchased Notes and an investment in the Company.
2.13 Qualified Institutional
Buyer . The Holder is a “qualified institutional
buyer” within the meaning of Rule 144A(a)(1) under the
Securities Act of 1933, as amended (the “ Securities
Act ”).
2.14 Determination of Price .
In connection with the purchase of the Repurchased Notes by the
Operating Partnership and the purchase of the Shares by the Holder,
the Holder has independently determined an acceptable price for the
Repurchased Notes and the Shares, and such price is based upon such
independent determination.
3. Representations and Warranties
of the Company and the Operating Partnership . The Company and
the Operating Partnership hereby represent and warrant to the
Holder as follows:
3.1 Existence and Authority
Relative to Agreement . The Company is a corporation duly
incorporated, validly existing and in good standing under the laws
of the State of Maryland, and the Operating Partnership is a
limited partnership duly formed, validly existing and in good
standing under the laws of the State of Maryland. The Company and
the Operating Partnership have all necessary corporate power and
authority and limited partnership power and authority,
respectively, to execute and deliver this Agreement and each other
agreement, document or instrument to be executed in connection
herewith and to perform the obligations to be performed by the
Company and the Operating Partnership, respectively, hereunder and
thereunder. The execution, delivery and performance of this
Agreement by the Company and the Operating Partnership have been
duly authorized by all necessary corporate and limited partnership
action, respectively. This Agreement and each other instrument or
document to be executed in connection herewith have been duly and
validly executed and delivered by a duly authorized officer of the
Company, on the Company’s behalf and, as the sole general
partner of the Operating Partnership, on the behalf of the
Operating Partnership. This Agreement and each other instrument or
document to be executed in connection herewith shall, upon the
execution and delivery thereof by the Company and the Operating
Partnership, constitute the legal, valid and binding obligations of
the Company and the Operating Partnership enforceable against the
Company and the Operating Partnership in accordance with the
respective terms thereof, except as the enforceability thereof may
be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of
creditors’ rights generally and general equitable
principles.
3.2 No Conflicts . Neither
the execution, delivery and performance of this Agreement, nor the
consummation of the transactions contemplated hereby nor compliance
by the Company and the Operating Partnership with any provisions
hereof, will (i) violate (with or without the giving of notice
or the lapse of time or both), or conflict with, or result in any
violation of or default under, any indenture, mortgage, deed of
trust, loan agreement, joint venture agreement,
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partnership agreement, limited liability company
agreement or any other agreement or instrument to which the Company
or the Operating Partnership is a party or by which the Company or
the Operating Partnership is bound or to which any of the property
or assets of the Company or the Operating Partnership is subject,
except for such conflicts, breaches or violations which would not,
singly or in the aggregate, result in a material adverse effect on
the consolidated financial position, results of operations or
business of the Company, the Operating Partnership and their
subsidiaries taken as a whole (a “ Material Adverse
Effect ”), (ii) result in any violation of the
provisions of the charter, by-laws, certificate of limited
partnership, partnership agreement or other organizational
documents of the Company, the Operating Partnership or any
Subsidiary (as defined below), as the case may be, or
(iii) result in any violation of any statute or any order,
rule or regulation of any court or governmental agency or body
having jurisdiction over the Company, except where such
noncompliance or violation of any such statute, order, rule or
regulation would not, singly or in the aggregate, have a Material
Adverse Effect. “ Subsidiary ” means each of the
subsidiaries of the Company and the Operating Partnership which is
a “significant subsidiary” as defined in Rule 405 of
Regulation C under the Act.
3.3 No Consents Required .
Except for the filing with the Securities and Exchange Commission
(the “ Commission ”) of a prospectus supplement
and payment of the fees as contemplated by Section 5.2 hereof,
no Consent is required to be filed, given, obtained or taken by the
Company or the Operating Partnership by virtue of the execution,
delivery and performance of this Agreement or the consummation of
the transactions contemplated hereby, which has not already been
obtained.
3.4 Brokers and Finders . The
Company and the Operating Partnership have not employed any broker
or finder who will seek compensation from the Holder and the
Company and the Operating Partnership have not otherwise entered
into any arrangement regarding the payment of any brokerage fees,
commissions or finder’s fees in connection with the sale of
the Repurchased Notes that will result in any liability on the part
of the Holder.
3.5 Shares . The issuance and
sale of the Shares to the Holder pursuant to this Agreement have
been duly authorized by the Company. When the Shares are duly paid
for and delivered as provided herein, the Shares will be validly
issued, fully paid and nonassessable. The issuance of the Shares is
not subject to preemptive or similar rights. At the Closing Date,
the Operating Partnership is the beneficial owner of the Shares,
and the sale of the Shares to the Holder hereunder will transfer
title to the Shares free and clear of all liens, claims, charges or
encumbrances whatsoever.
3.6 WKSI Status . (i) At
the time of filing the Registration Statement, (ii) at the
time of the most recent amendment thereto for the purposes of
complying with Section 10(a)(3) of the Securities, and
(iii) as of the date hereof, the Company was or is (as the
case may be) a “well-known seasoned issuer” as defined
in Rule 405 under the Securities Act.
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4. Covenants .
4.1 Tax Matters . The Holder
shall cooperate, as and to the extent reasonably requested by the
Company and the Operating Partnership, in connection with the
filing of any tax returns, tax elections or other tax reporting
matters related to the transactions contemplated by this Agreement.
Such cooperation shall include the retention and (upon the
Company’s or the Operating Partnership’s reasonable
request) the provision of records and information which are
reasonably relevant to any such tax matter and making employees
available on a mutually convenient basis to provide additional
information and explanation of any material provided
hereunder.
4.2 Withholding . At the
Closing, the Holder shall deliver to the Operating Partnership a
properly executed applicable Internal Revenue Service Form W-8
together with any applicable underlying forms. The Operating
Partnership shall be entitled to withhold taxes to the extent
required by applicable law from any payment made to the Holder
pursuant to this Agreement.
5. Registration Rights
.
5.1 Shelf Registration . The
Company shall prepare and file with the Commission as soon as
practicable after the execution hereof a prospectus supplement to
its effective “shelf” registration statement (No.
333-158958) for an offering of the Shares to be made on a
continuous or delayed basis by the Holder pursuant to Rule 415
under the Securities Act. Such registration statement, including
the exhibits thereto and the documents, if any, incorporated by
reference therein, as amended (or deemed to have been amended
pursuant to Rules 430A, 430B or 430C under the Securities Act) from
time to time, is hereinafter referred to as the “ Shelf
Registration Statement .” The Company shall use its
commercially reasonable efforts to keep the Shelf Registration
Statement continuously effective (subject to
Section 5.3 hereof) until the earliest of (A) such
time as all of the Shares have been sold pursuant to the Shelf
Registration Statement or Rule 144 and (B) the date on which
the Shares may be sold by non-affiliates without volume
restrictions in accordance with Rule 144. As a condition to the
filing the prospectus supplement to the Shelf Registration
Statement pursuant to this Section 5.1 , the Holder
agrees to deliver to the Company a completed Notice and
Questionnaire in the form attached as Exhibit B hereto and
such other information as the Company may reasonably request in
writing, if any, at least two business days prior to the
anticipated filing date of the prospectus supplement, and
thereafter shall notify the Company as promptly as practicable of
any inaccuracies or changes to such information previously provided
that occur subsequent to the filing of the prospectus supplement
and prior to the sale of the Shares thereunder.
5.2 Registration Expenses .
In connection with any registration statement required to be filed
hereunder, the Company shall pay the following registration
expenses incurred in connection with the registration hereunder:
(i) all registration and filing fees, (ii) printing
expenses, (iii) internal expenses (including, without
limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), (iv) the fees and
expenses incurred in connection with the listing of the Shares on
each securities exchange on which similar securities issued by the
Company are then listed, (v) reasonable fees and disbursements
of counsel for the Company and customary fees and expenses for
independent certified public accountants retained by the Company
and (vi) the reasonable fees and expenses of any special
experts retained by the Company in connection with such
registration. The Company shall have no obligation to pay any
underwriting fees, discounts or commissions attributable to the
sale of Shares, or any out-of-pocket expenses of the Holder (or the
agents who manage its accounts) or any transfer taxes relating to
the registration or sale of the Shares.
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5.3 Holdback Agreements
.
(a) If the Company determines in its
good faith judgment that the filing of the Shelf Registration
Statement or
