Exhibit 1.1
MID-AMERICA APARTMENT
COMMUNITIES, INC.
2,000,000 SHARES
CONTROLLED EQUITY
OFFERING SM
SALES
AGREEMENT
November 3, 2006
CANTOR FITZGERALD &
CO.
110 East 59th Street
New York, NY 10022
Ladies and Gentlemen:
MID-AMERICA APARTMENT COMMUNITIES,
INC., a Tennessee corporation (the “ Company
”), and MID-AMERICA APARTMENTS, L.P., a Tennessee limited
partnership, the sole general partner of which is the Company (the
“ Operating Partnership ”) , confirm
their agreement (this “ Agreement ”) with
Cantor Fitzgerald & Co. (“ CF&Co
”), as follows:
1. Issuance and Sale of
Shares . The Company agrees that, from time to time during the
term of this Agreement, on the terms and subject to the conditions
set forth herein, it may issue and sell through CF&Co, acting
as agent and/or principal, up to 2,000,000 shares (the “
Shares ”) of the Company’s common stock,
par value $0.01 per share (the “ Common Stock
”). Notwithstanding anything to the contrary contained
herein, the parties hereto agree that compliance with the
limitation set forth in this Section 1 on the number
and aggregate market value of the Shares issued and sold under this
Agreement shall be the sole responsibility of the Company, and
CF&Co shall have no obligation in connection with such
compliance. The issuance and sale of Shares through CF&Co will
be effected pursuant to the Registration Statement (as defined
below) filed by the Company and declared effective by the
Securities and Exchange Commission (the “
Commission ”), although nothing in this
Agreement shall be construed as requiring the Company to use the
Registration Statement to issue Shares.
The Company has filed, in accordance
with the provisions of the Securities Act of 1933, as amended, and
the rules and regulations thereunder (collectively, the “
Securities Act ”), with the Commission a
registration statement on Form S-3 (File No. 333-133834),
including a base prospectus, relating to certain securities,
including the Shares 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 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 Shares (the “
Prospectus Supplement ”) to the base prospectus
included as part of such registration statement. The Company will
furnish to CF&Co, for use by CF&Co, copies of the
prospectus included as part of such registration statement, as
supplemented by the Prospectus Supplement, relating to the Shares.
Except where the context otherwise requires, such 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 or deemed to be a part of
such registration statement pursuant to Rule 430B of the Securities
Act, is herein called the “ 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) under the Securities Act 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 its Electronic Data Gathering Analysis
and Retrieval System (“ EDGAR
”).
2. Placements . Each
time that the Company wishes to issue and sell the Shares hereunder
(each, a “ Placement ”), it will notify
CF&Co by email notice (or other method mutually agreed to in
writing by the parties) containing the parameters in accordance
with which it desires the Shares to be sold, which shall at a
minimum include the number of Shares to be issued (the “
Placement Shares ”), the time period during
which sales are requested to be made, any limitation on the number
of Shares that may be sold in any one day and any minimum price
below which sales may not be made (a “ Placement
Notice ”), a form of which containing such minimum
sales parameters necessary is attached hereto as Schedule
1 . The Placement Notice shall originate from any of the
individuals from the Company set forth on Schedule 2
(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 CF&Co set forth on Schedule 2 ,
as such Schedule 2 may be amended from time to time.
The Placement Notice shall be effective upon receipt by CF&Co
unless and until (i) in accordance with the notice
requirements set forth in Section 4 , CF&Co
declines to accept the terms contained therein for any reason, in
its sole discretion, (ii) the entire amount of the Placement
Shares have been sold, (iii) in accordance with the notice
requirements set forth in Section 4 , the Company
suspends or terminates the Placement Notice, (iv) the Company
issues a subsequent Placement Notice with parameters superseding
those on the earlier dated Placement Notice, or (iv) the
Agreement has been terminated under the provisions of
Section 11 . The amount of any discount, commission or
other compensation to be paid by the Company to CF&Co in
connection with the sale of the Placement Shares shall be
calculated in accordance with the terms set forth in Schedule
3 . It is expressly acknowledged and agreed that neither
the Company nor CF&Co will have any obligation whatsoever with
respect to a Placement or any Placement Shares unless and until the
Company delivers a Placement Notice to CF&Co and CF&Co does
not decline such Placement Notice 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.
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3. Sale of Placement Shares
by CF&Co. Subject to the terms and conditions herein set
forth, upon the Company’s issuance of a Placement Notice, and
unless the sale of the Placement Shares described therein has been
declined, suspended, or otherwise terminated in accordance with the
terms of this Agreement, CF&Co, 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 Shares up to the amount specified, and otherwise in
accordance with the terms of such Placement Notice. CF&Co 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 Shares
hereunder setting forth the number of Placement Shares sold on such
day, the compensation payable by the Company to CF&Co pursuant
to Section 2 with respect to such sales, and the Net
Proceeds (as defined below) payable to the Company, with an
itemization of the deductions made by CF&Co (as set forth in
Section 5(a) ) from the gross proceeds that it receives
from such sales. After consultation to the Company and subject to
the terms of the Placement Notice, CF&Co may sell Placement
Shares by any method permitted by law deemed to be an “at the
market” offering as defined in Rule 415 of the Securities
Act, including without limitation sales made directly on the New
York Stock Exchange (the “ Exchange ”),
on any other existing trading market for the Common Stock or to or
through a market maker. After consultation with the Company and
subject to the terms of the Placement Notice, CF&Co may also
sell Placement Shares in privately negotiated transactions. The
Company acknowledges and agrees that (i) there can be no
assurance that CF&Co will be successful in selling Placement
Shares, and (ii) CF&Co will incur no liability or
obligation to the Company or any other person or entity if it does
not sell Placement Shares for any reason other than a failure by
CF&Co to use its commercially reasonable efforts consistent
with its normal trading and sales practices to sell such Placement
Shares as required under this Section 3 . For the
purposes hereof, “ Trading Day ” means
any day on which shares of Common Stock are purchased and sold on
the principal market on which the Common Stock is listed or
quoted.
4. Suspension of Sales
. The Company or CF&Co 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 Schedule
2 , 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
Schedule 2 ), suspend any sale of Placement Shares;
provided, however , that such suspension shall not affect or
impair either party’s obligations with respect to any
Placement Shares sold hereunder prior to the receipt of such
notice. 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 named on Schedule
2 hereto, as such Schedule may be amended from time to
time.
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5.
Settlement.
(a) Settlement of Placement
Shares . Unless otherwise specified in the applicable Placement
Notice, settlement for sales of Placement Shares will occur on the
third (3 rd ) 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
Shares sold (the “ Net Proceeds ”) will
be equal to the aggregate sales price received by CF&Co at
which such Placement Shares were sold, after deduction for
(i) CF&Co’s commission, discount or other
compensation for such sales payable by the Company pursuant to
Section 2 hereof, (ii) any other amounts due and
payable by the Company to CF&Co hereunder pursuant to
Section 7(h) (Expenses) hereof, and (iii) any
transaction fees imposed by any governmental or self-regulatory
organization in respect of such sales.
(b) Delivery of Placement
Shares . On or before each Settlement Date, the Company will,
or will cause its transfer agent to, electronically transfer the
Placement Shares being sold by crediting CF&Co’s or its
designee’s account (provided CF&Co 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 tradeable, transferable, registered shares in
good deliverable form. On each Settlement Date, CF&Co will
deliver the related Net Proceeds in same day funds to an account
designated by the Company on, or prior to, the Settlement Date. The
Company agrees that if the Company, or its transfer agent (if
applicable), defaults in its obligation to deliver Placement Shares
on a Settlement Date, the Company agrees that in addition to and in
no way limiting the rights and obligations set forth in
Section 9(a) (Indemnification and Contribution) hereto,
it will (i) hold CF&Co harmless against any loss, claim,
damage, or expense (including reasonable legal fees and expenses),
as incurred, arising out of or in connection with such default by
the Company and (ii) pay to CF&Co any commission,
discount, or other compensation to which it would otherwise have
been entitled absent such default.
6. Representations and
Warranties of the Company and the Operating Partnership . The
Company and the Operating Partnership jointly and severally
represent and warrant to, and agree with, CF&Co that as of the
date of this Agreement and as of each Representation Date (as
defined in Section 7(n) below) on which a certificate
is required to be delivered pursuant to Section 7(n) of
this Agreement and as of each Applicable Time (as defined in
Section 20(a) ) as the case may be:
(a) The Company satisfies all
of the requirements of the Securities Act for use of Form S-3 for
the offering of the Shares contemplated hereby. At the time of the
initial filing of the Registration Statement, 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), at the time the Company or any person acting on its
behalf (within the meaning, for this clause only, of Rule 163(c) of
the Securities Act) made any offer relating to the Shares in
reliance on the exemption of Rule 163 of the Securities Act and at
the date hereof, the Company was and is a “well-known
seasoned issuer” as defined in Rule 405 of the
Securities
4
Act, including not having been and not being an
“ineligible issuer,” as defined in Rule 405 of the
Securities Act. The Registration Statement is an “automatic
shelf registration statement,” as defined in Rule 405 of the
Securities Act, and the Shares, since their registration on the
Registration Statement, have been and remain eligible for
registration by the Company on a Rule 405 “automatic shelf
registration statement.” The Company has not received from
the Commission any notice pursuant to Rule 401(g)(2) of the
Securities Act objecting to the use of the automatic shelf
registration statement form. The Company has paid or will pay the
required Commission filing fees relating to the Shares within the
time required by Rule 456(b)(1)(i) of the Securities Act without
regard to the proviso therein and otherwise in accordance with
Rules 456(b) and 457(r) of the Securities Act (including, if
applicable, by updating the “Calculation of Registration
Fee” table in accordance with Rule 456(b)(1)(ii) of the
Securities Act either in a post-effective amendment to the
Registration Statement or on the cover page of the
Prospectus).
(b) The Registration Statement
became effective upon filing under Rule 462(e) of the Securities
Act on May 5, 2006, and any post-effective amendment thereto
also became effective upon filing under Rule 462(e). No stop order
suspending the effectiveness of the Registration Statement has been
issued under the Securities Act and no proceedings for that purpose
have been instituted or are pending or, to the knowledge of the
Company, are contemplated by the Commission, and any request on the
part of the Commission for additional information has been complied
with.
(c) Any offer that is a written
communication relating to the Shares made prior to the initial
filing of the Registration Statement by the Company or any person
acting on its behalf (within the meaning, for this paragraph only,
of Rule 163(c) of the Securities Act) has been filed with the
Commission in accordance with the exemption provided by Rule 163 of
the Securities Act and otherwise complied with the requirements of
Rule 163 of the Securities Act, including without limitation the
legending requirement.
(d) The Company has delivered
to CF&Co one complete copy of the Registration Statement and a
copy of each consent and certificate of experts filed as a part
thereof, and conformed copies of the Registration Statement
(without exhibits) and the Prospectus, as amended or supplemented,
in such quantities and at such places as CF&Co has reasonably
requested. The Prospectus delivered to CF&Co for use in
connection with the offering of Shares 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.
(e) At the respective times the
Registration Statement and each amendment thereto became effective,
at each deemed effective date with respect to CF&Co pursuant to
Rule 430B(f)(2) of the Securities Act, as the case may be, the
Registration Statement complied and will comply in all material
respects with the requirements of the Securities Act, and 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
to make the statements therein not misleading. The preceding
sentence does not apply to statements in or omissions from the
Registration Statement or any amendment thereto in reliance upon
and in conformity with written information relating to CF&Co
furnished to the Company in writing by CF&Co expressly for
inclusion in any of the aforementioned documents.
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(f) Neither the Prospectus nor
any amendments or supplements thereto, at the time the Prospectus
or any such amendment or supplement was issued, as of the date
hereof, and at each Representation Date, as the case may be,
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. The preceding sentence
does not apply to statements in or omissions from the Prospectus,
as amended or supplemented, in reliance upon and in conformity with
written information relating to CF&Co furnished to the Company
in writing by CF&Co expressly for inclusion in any of the
aforementioned documents.
(g) Each document incorporated
by reference in the Registration Statement or the Prospectus
heretofore filed, when it was filed (or, if any amendment with
respect to any such document was filed, when such amendment was
filed), conformed in all material respects with the requirements of
the Exchange Act and the rules and regulations thereunder, and any
further documents so filed and incorporated after the date of this
Agreement will, when they are filed, conform in all material
respects with the requirements of the Exchange Act and the rules
and regulations thereunder; no such document when it was filed (or,
if an amendment with respect to any such document was filed, when
such amendment was filed), contained an untrue statement of a
material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein
not misleading; and no such document, when it is filed, will
contain an untrue statement of a material fact or will omit to
state a material fact required to be stated therein or necessary in
order to make the statements therein not misleading.
(h) Each issuer free writing
prospectus (as defined in Rule 433 of the Securities Act
Regulations (“ Rule 433 ”)), as of its
issue date and as of each Applicable Time (as defined in
Section 20 below), did not, does not and will not
include any information that conflicted, conflicts or will conflict
with the information contained in the Registration Statement or the
Prospectus, including any incorporated document deemed to be a part
thereof that has not been superseded or modified. The foregoing
sentence does not apply to statements in or omissions from any
issuer free writing prospectus based upon and in conformity with
written information furnished to the Company by CF&Co
specifically for use therein.
(i) All of the issued and
outstanding shares of capital stock of the Company have been duly
authorized and validly issued, are fully paid and nonassessable and
have been issued in compliance with applicable federal and state
securities laws. None of the Company’s outstanding shares of
Common Stock or preferred stock (the “ Preferred
Stock ”) were issued in violation of any preemptive
rights, rights of first refusal or other similar rights; except as
set forth in the Prospectus, the Company is not a party to or bound
by any outstanding options, warrants or similar rights to subscribe
for, or contractual obligations to issue, sell, transfer or
acquire, any of its capital stock or any securities convertible
into or exchangeable for any of such capital stock; the Shares to
be issued and sold by the Company hereunder have been duly
authorized and, when issued and delivered against full payment
therefor in accordance with the terms hereof will be validly
issued, fully paid and nonassessable and free of any preemptive
rights, rights of first refusal or other or similar rights; the
capital stock (including the Shares) of the Company conforms to the
description thereof contained in the Prospectus; and the delivery
of the Shares being sold by the Company against payment therefor
pursuant to the terms of this Agreement will pass valid title to
the Shares being sold by the Company, free and clear of
any
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claim, encumbrance or defect in title, and
without notice of any lien, claim or encumbrance. The certificates
used by the Company to evidence the Common Stock or the Preferred
Stock are in valid and sufficient form.
(j) Immediately after the
transactions contemplated by this Agreement, all of the issued and
outstanding Common Units (as defined below) will be validly issued,
fully paid and nonassessable. Immediately after the transactions
contemplated by this Agreement, none of the outstanding common
units of limited partnership interest in the Operating Partnership
( “ Common Units ” ) or preferred units
of limited partnership interest in the Operating Partnership (
“ Preferred Units ” ) has been or will be
issued or is owned or held in violation of any preemptive right,
right of first refusal or other similar right; and the outstanding
Common Units and Preferred Units have been or will be offered, sold
and issued by the Operating Partnership in compliance with
applicable federal and state securities laws.
(k) Each of the Company and its
subsidiaries is duly organized and validly existing in good
standing under the laws of the state of its incorporation or
organization with full corporate, partnership or entity power and
authority, as the case may be, to own, lease and operate its
properties and to conduct its business as presently conducted and
as described in the Prospectus and is duly registered and qualified
to conduct its business and is in good standing in each
jurisdiction or place where the nature of its properties or the
conduct of its business requires such registration or
qualification, except where the failure to so register or qualify
has not had or will not have a material adverse effect on the
condition (financial or other), business, properties, or results of
operations of the Company and its subsidiaries, taken as a whole (a
“ Material Adverse Effect ”). The Company
is the sole general partner of the Operating Partnership, and the
Company and MAC II of Delaware, L.P. ( “ MAC II
” ) collectively own a percentage interest in the
Operating Partnership disclosed in the Prospectus. Except as
disclosed in the Prospectus, the Company and MAC II own all of the
outstanding Preferred Units. Except as described above, the Company
or the Operating Partnership is the sole direct or indirect owner
of all of the equity interests in each of the subsidiaries other
than the Operating Partnership.
(l) The outstanding equity
interests of each of the Company’s subsidiaries have been
duly authorized and validly issued, are fully paid and
nonassessable and are owned by the Company, directly or through
subsidiaries, free and clear of any security interests, liens,
encumbrances, equities or claims. The Company does not have any
subsidiaries and does not own a material interest in or control,
directly or indirectly, any other corporation, partnership, joint
venture (other than Mid-America CH/Realty II, L.P. in which the
Company owns a 33.33% ownership interest), association, trust or
other business organization, except as set forth in Exhibit 21 to
the Company’s most recent Annual Report on Form 10-K
incorporated by reference into the Registration Statement. As used
in this Agreement, subsidiaries shall mean direct and indirect
subsidiaries of the Company.
(m) Except as described in the
Prospectus, there is no action, suit, inquiry, proceeding or
investigation by or before any court or governmental or other
regulatory or administrative agency or commission pending or, to
the best knowledge of the Company, threatened, against or involving
the Company or its subsidiaries, which might individually or in the
aggregate prevent or adversely affect the transactions contemplated
by this Agreement or result in a Material Adverse Effect, nor to
the Company’s knowledge, is there any basis for any such
action, suit,
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inquiry, proceeding or investigation. There are
no agreements, contracts, indentures, leases or other instruments
that are required to be described in the Prospectus or to be filed
as an exhibit to the Registration Statement that are not described,
filed or incorporated by reference in the Registration Statement
and the Prospectus as required by the Securities Act. All such
contracts to which the Company or any of its subsidiaries is a
party have been duly authorized, executed and delivered by the
Company or the applicable subsidiary, constitute valid and binding
agreements of the Company or the applicable subsidiary and are
enforceable against the Company or the applicable subsidiary in
accordance with the terms thereof, except as enforceability thereof
may be limited by (i) the application of bankruptcy,
reorganization, insolvency and other laws affecting
creditors’ rights generally and (ii) equitable
principles being applied at the discretion of a court before which
any proceeding may be brought. Neither the Company nor the
applicable subsidiary has received notice or been made aware that
any other party is in breach of or default to the Company or its
subsidiaries under any of such contracts.
(n) Neither the Company nor any
of its subsidiaries is (i) in violation of (A) its
Organizational Documents, (B) to the Company’s knowledge
any law, ordinance, administrative or governmental rule or
regulation applicable to the Company or any of its subsidiaries,
the violation of which would have a Material Adverse Effect or
(C) any decree of any court or governmental agency or body
having jurisdiction over the Company or any of its subsidiaries; or
(ii) in default in any material respect in the performance of
any obligation, agreement or condition contained in (A) any
bond, debenture, note or any other evidence of indebtedness or
(B) any agreement, indenture, lease or other instrument (each
of (A) and (B), an “ Existing Instrument
” ) to which the Company or any of its subsidiaries is a
party or by which any of their properties may be bound, which
default would have a Material Adverse Effect; and, to the
Company’s knowledge, there does not exist any state of facts
that constitutes a default or an event of default on the part of
the Company or any of its subsidiaries as defined in such documents
or that, with notice or lapse of time or both, would constitute
such a default or event of default which would have a Material
Adverse Effect.
(o) The Company and the
Operating Partnership have full legal right, power and authority to
enter into and perform this Agreement and to consummate the
transactions contemplated herein, including the issuance, sale and
delivery of the Shares as provided herein and the Operating
Partnership’s issuance of the Common Units to the Company.
The Company’s and the Operating Partnership’s execution
and delivery of this Agreement and the performance by the Company
and the Operating Partnership of their obligations under this
Agreement have been duly and validly authorized by the Company and
the Operating Partnership and this Agreement has been duly executed
and delivered by the Company and the Operating Partnership, and
constitutes a valid and legally binding agreement of the Company
and the Operating Partnership, enforceable against the Company and
the Operating Partnership in accordance with its terms, except to
the extent enforceability may be limited by (i) the
application of bankruptcy, reorganization, insolvency and other
laws affecting creditors’ rights generally and
(ii) equitable principles being applied at the discretion of a
court before which any proceeding may be brought, and except as
rights to indemnity and contribution hereunder may be limited by
federal or state securities laws.
(p) The Second Amended and
Restated Agreement of Limited Partnership of the Operating
Partnership, including all amendments thereto (the “
Partnership Agreement ”), has
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been duly and validly authorized, executed and
delivered by or on behalf of the partners of the Operating
Partnership and constitutes a valid and binding agreement of the
parties thereto, enforceable in accordance with its terms, except
to the extent that enforceability may be limited by bankruptcy,
insolvency, reorganization or other laws of general applicability
relating to or affecting creditors’ rights or by general
equity principles.
(q) No consent, approval,
authorization, order, license, certificate, permit, registration,
designation or filing by or with any governmental agency or body is
required for the execution, delivery and performance by the Company
and the Operating Partnership of their respective obligations under
this Agreement and the consummation by the Company and the
Operating Partnership of the transactions contemplated hereby,
including the valid authorization, issuance, sale and delivery of
the Shares, except such as may be required by the Exchange and the
securities or Blue Sky laws of the various states in connection
with the offer and sale of the Shares, all of which will be, or
have been effected, in accordance with this Agreement.
(r) Neither the issuance and
sale of the Shares by the Company, the execution, delivery or
performance of this Agreement by the Company and the Operating
Partnership nor the consummation by the Company and the Operating
Partnership of the transactions contemplated hereby
(i) conflicts with or will conflict with or constitutes or
will constitute a breach of, or a default under, the
Company’s charter or bylaws, the Operating
Partnership’s certificate of limited partnership or the
Partnership Agreement, or any Existing Instrument to which the
Company or any of its subsidiaries is a party or by which any of
its or their properties may be bound, (iii) violates any
statute, law, regulation, ruling, filing, judgment, injunction,
order or decree applicable to the Company or any of its
subsidiaries or any of their properties, or (iv) results in a
breach of, or default or Debt Repayment Triggering Event (as
defined below) under, or results in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the
Company or any of its subsidiaries pursuant to, or requires the
consent of any other party to, any Existing Instrument, except for
such conflicts, breaches, defaults, liens, charges or encumbrances
that will not, individually or in the aggregate, result in a
Material Adverse Effect. As used herein, a “ Debt
Repayment Triggering Event ” means any event or
condition that gives, or with the giving of notice or lapse of time
would give, 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 the Company or any of its
subsidiaries.
(s) No holder of any securities
of the Company has rights to the registration of any securities of
the Company or other similar rights as a result of or in connection
with the filing of the Registration Statement or the consummation
of the transactions contemplated hereby that have not been
satisfied or heretofore waived in writing. No person or entity has
a right of participation or first refusal with respect to the sale
of the Shares by the Company.
(t) KPMG LLP and
Ernst & Young LLP, as applicable, who have audited the
financial statements (including the related notes thereto and
supporting schedules) incorporated by reference in the Registration
Statement and the Prospectus, are and were, during the periods
covered by their reports incorporated by reference in the
Registration Statement and the Prospectus, independent registered
public accountants as required by the Securities Act, the Exchange
Act and the Public Company Accounting Oversight Board ( “
PCAOB ” ); any other
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public accountants who have audited the
financial statements incorporated by reference in the Registration
Statement and the Prospectus, are and were, during the periods
covered by their reports incorporated by reference in the
Registration Statement and the Prospectus, independent registered
public accountants as required by the Securities Act, the Exchange
Act and the PCAOB.
(u) The financial statements,
together with related schedules and notes, included or incorporated
by reference in the Registration Statement and the Prospectus,
present fairly the financial condition, results of operations, cash
flows and changes in financial position of the Company on the basis
stated in the Registration Statement at the respective dates or for
the respective periods to which they apply; except as disclosed
therein, such statements and related schedules and notes have been
prepared in accordance with generally accepted accounting
principles consistently applied throughout the periods involved and
the other financial and statistical information and data set forth
in the Registration Statement and Prospectus is accurately
presented and prepared on a basis consistent with such financial
statements and the books and records of the Company. The financial
statements have not been restated for prior periods to reflect the
reclassification of two properties characterized as held for sale
as discontinued operations in accordance with Statement of
Financial Accounting Standards No. 144, “Accounting for
the Impairment or Disposal of Long-Lived Assets.” The Company
has determined that the reclassification described in the
immediately preceding sentence would not have a material
effect on total assets, total revenue, incoming from continuing
operations, or cash generated from operations for the periods
covered by the financial statements incorporated by referenced into
the Prospectus and Prospectus Supplement and that therefore, a
restatement is not required. In addition, the Company has
determined that the adjustments would have no effect whatsoever on
net income or funds from operations. No other financial statements
or schedules are required by Form S-3 or otherwise to be included
in the Registration Statement or the Prospectus. The
Company’s consolidated ratio of combined fixed charges and
preferred stock distributions and consolidated ratio of earnings to
fixed charges set forth in the Registration Statement and the
Prospectus and Exhibit 12.1 to the Registration Statement have been
calculated in compliance with Item 503(d) of Regulation S-K
under the Securities Act.
(v) Except as disclosed in the
Registration Statement and the Prospectus, subsequent to the
respective dates as of which such information is given in the
Registration Statement and the Prospectus, (i) neither the
Company nor any of its subsidiaries has incurred any material
liabilities or obligations, indirect, direct or contingent, or
entered into any transaction that is not in the ordinary course of
business, (ii) neither the Company nor any of its subsidiaries
has sustained any material loss or interference with its business
or properties from fire, flood, windstorm, accident or other
calamity, whether or not covered by insurance, (iii) neither
the Company nor any of its subsidiaries has paid or declared any
dividends or other distributions with respect to its capital stock
and the Company is not in default under the terms of any class of
capital stock of the Company or any outstanding debt obligations,
(iv) there has not been any change in the authorized or
outstanding capital stock of the Company or any material change in
the indebtedness of the Company (other than in the ordinary course
of business) and (v) there has not been any material adverse
change, or any development involving or that may reasonably be
expected to result in a Material Adverse Effect.
10
(w) The Shares to be sold under
this Agreement have been approved for trading and listing on the
Exchange, subject to official notice of issuance, and are
registered pursuant to Section 12(b) of the Exchange Act, and
the Company has taken no action designed to, or likely to have the
effect of, terminating the registration of the Shares under the
Exchange Act or delisting any such securities from the Exchange,
nor has the Company received any notification that the Commission
or the Exchange is contemplating terminating such registration or
listing.
(x) The Company has not
distributed and will not distribute, and has not authorized
CF&Co. to distribute, any offering material in connection with
the offering and sale of the Shares to be sold hereunder by
CF&Co. as principal or agent for the Company, other than the
Prospectus and any Issuer Free Writing Prospectus (as defined in
Rule 433 of the Securities Act) reviewed and consented to by
CF&Co.
(y) Other than excepted
activity pursuant to Regulation M under the Exchange Act, the
Company has not taken and will not take, directly or indirectly,
any action that constituted, or any action designed to, or that
might reasonably be expected to cause or result in or constitute
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Shares or for any
other purpose.
(z) The Company and each of its
subsidiaries have filed all tax returns required to be filed (other
than certain state or local tax returns, as to which the failure to
file, individually or in the aggregate, would not have a Material
Adverse Effect), which returns are complete and correct in all
material respects, and neither the Company nor any subsidiary is in
default in the payment of any taxes that were payable pursuant to
said returns or any assessments with respect thereto. Except as
disclosed in the Prospectus (as amended or supplemented), all
deficiencies asserted as a result of any federal, state, local or
foreign tax audits have been paid or finally settled and no issue
has been raised in any such audit that, by application of the same
or similar principles, reasonably could be expected to result in a
proposed deficiency for any other period not so audited. There are
no outstanding agreements or waivers extending the statutory period
of limitation applicable to any federal, state, local or foreign
tax return for any period. On each Settlement Date, all stock
transfer and other taxes that are required to be paid in connection
with the sale of the Shares will have been fully paid by the
Company and all laws imposing such taxes will have been complied
with.
(aa) Except as set forth in the
Prospectus (as amended or supplemented), there are no transactions
with “affiliates” (as defined in Rule 405 promulgated
under the Securities Act) or any officer, director or security
holder of the Company (whether or not an affiliate) that are
required by the Securities Act to be disclosed in the Prospectus
that have not been disclosed as required. Additionally, no
relationship, direct or indirect, exists between the Company or any
of its subsidiaries on the one hand, and the directors, officers,
stockholders, customers or suppliers of the Company or any
subsidiary on the other hand that is required by the Securities Act
to be disclosed in the Prospectus that is not so
disclosed.
(bb) None of the Company nor
any of its subsidiaries is an “investment company”, a
company “controlled” by an “investment
company” or an “affiliated person” of, or
“promoter” or “principal underwriter” for,
an investment company within the meaning of the Investment Company
Act of 1940, as amended.
11
(cc) Each of the Company and
its subsidiaries has good and valid title to all property (real and
personal) described in the Prospectus as being owned by it, free
and clear of all liens, claims, security interests or other
encumbrances except (i) such as are described in the
Prospectus or (ii) such as are not materially burdensome and
do not have or will not adversely affect the Company’s or
subsidiaries’ use of the property or the conduct of the
business of the Company. All property (real and personal) leased by
the Company and its subsidiaries is held under valid, subsisting
and enforceable leases with only such exceptions as in the
aggregate are not materially burdensome and do not or will not
adversely affect the use of the property or the conduct of the
business of the Company.
(dd) The Company and its
subsidiaries have all permits, licenses, franchises, approvals,
consents and authorizations of governmental or regulatory
authorities (hereinafter “ permit ” or “
permits ”) as are necessary to own their properties
and to conduct their business in the manner described in the
Prospectus, subject to such qualifications as may be set forth in
the Prospectus, except where the failure to have obtained any such
permit has not had and will not have a Material Adverse Effect;
each of the Company and its subsidiaries has operated and is
operating its business in material compliance with all of its
obligations with respect to each such permit and no event has
occurred that allows, or after notice or lapse of time would allow,
revocation or termination of any such permit and except where such
revocation or termination would not have a Material Adverse Effect
or result in any other material impairment of the rights of any
such permit, subject in each case to such qualification as may be
set forth in the Prospectus; and, except as described in the
Prospectus, such permits contain no restrictions that are
materially burdensome to the Company or any of its
subsidiaries.
(ee) The Company and its
subsidiaries have implemented controls and other procedures that
are designed to ensure 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, or persons performing similar
functions, as appropriate to allow timely decisions regarding
required disclosure; and the Company makes and keeps books,
records, and accounts which, in reasonable detail, accurately and
fairly reflect the transactions and dispositions of the assets of
the Company and its subsidiaries; and the Company and its
subsidiaries maintain a system of internal accounting controls
sufficient to provide reasonable assurances 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; and, to the Company’s
and the Operating Partnership’s knowledge, neithe
