EXHIBIT 10.3
ESSEX
PROPERTY TRUST, INC.
7,500,000 SHARES
CONTROLLED EQUITY
OFFERING SM
SALES
AGREEMENT
May 6, 2009
ESSEX PROPERTY TRUST, INC., a Maryland
corporation (the “ Company ”), confirms
its 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, (a) up to 7,500,000 shares of the
Company’s common stock, par value $0.0001 per share (the
“ Common Stock ”); and (b) such preferred
stock as the Company may subsequently designate (the “
Preferred Stock ”; and together with the Common
Stock, the “ Shares
”). 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 of
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 (as defined below) to
issue the 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. 333-141726), 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 has
furnished 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 or 462(b) 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, together with any “issuer
free writing prospectus,” as defined in Rule 433 of the
Securities Act Regulations (“Rule 433”), relating to
the Shares that (i) is required to be filed with the Commission by
the Company or (ii) is exempt from filing pursuant to Rule
433(d)(5)(i), in each case in the form filed or required to be
filed with the Commission or, if not required to be filed, in the
form retained in the Company’s records pursuant to Rule
433(g), 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 either the Electronic Data Gathering
Analysis and Retrieval System or Interactive Data Electronic
Applications (collectively “ IDEA
”).
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) (a “ Placement Notice ”)
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 Trading Day (as defined in Section 3) and any minimum price
below which sales may not be made, 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 (v) 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.
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 and
applicable state and federal laws, rules and regulations and the
rules of the New York Stock Exchange (the “
NYSE ”) 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 (including by email correspondence to
each of the individuals of the Company 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) 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. 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 NYSE, on any other existing trading market for the Common Stock
or to or through a market maker. 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 the Company’s
Common Stock is 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.
(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 ” and the first such settlement date, the
“ First Delivery 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(g) (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, 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 . The Company represents and warrants to,
and agrees with, CF&Co that as of the date of this Agreement
and as of each Representation Date (as defined in Section 7(m)
below) on which a certificate is required to be delivered pursuant
to Section 7(m) of this Agreement, as the case may be:
(a)
Compliance with
Registration Requirements . The Registration Statement and any
Rule 462(b) Registration Statement have been declared effective by
the Commission under the Securities Act. The Company has
complied to the Commission’s satisfaction with all requests
of the Commission for additional or supplemental
information. No stop order suspending the effectiveness
of the Registration Statement or any Rule 462(b) Registration
Statement is in effect and no proceedings for such purpose have
been instituted or are pending or, to the best knowledge of the
Company, are contemplated or threatened by the
Commission.
(b)
No Misstatement or
Omission . The Prospectus when filed complied and,
as amended or supplemented, if applicable, will comply in all
material respects with the Securities Act. Each of the
Registration Statement, any Rule 462(b) Registration Statement and
any post-effective amendment thereto, at the time it became
effective, complied and, as of each of the Settlement Dates, if
any, will comply in all material respects with the Securities Act
and did not and, as of each of the Settlement Dates, if any, will
not contain any 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 Prospectus, as
amended or supplemented, as of its date, did not and, as of each of
the Settlement Dates, if any, will not contain any untrue statement
of a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The
representations and warranties set forth in the two immediately
preceding sentences do not apply to statements in or omissions from
the Registration Statement, any Rule 462(b) Registration Statement,
or any post-effective amendment thereto, or the Prospectus, or any
amendments or supplements thereto, made in reliance upon and in
conformity with information relating to CF&Co furnished to the
Company in writing by CF&Co expressly for use
therein. There are no contracts or other documents
required to be described in the Prospectus or to be filed as
exhibits to the Registration Statement which have not been
described or filed as required.
(c)
Offering Materials Furnished to CF&Co . 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.
(d)
Distribution of
Offering Material By the Company . The Company has not
distributed and will not distribute, prior to the later of the
Closing Date and the completion of CF&Co’s distribution
of the Shares, any offering material in connection with the
offering and sale of the Shares other than the Prospectus or the
Registration Statement.
(e)
The Sales Agreement . This Agreement has been
duly authorized, executed and delivered by, and is a valid and
binding agreement of, the Company, enforceable in accordance with
its terms, except as rights to indemnification hereunder may be
limited by applicable law and except as the enforcement hereof may
be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws relating to or affecting the rights and remedies
of creditors or by general equitable principles.
(f)
Authorization of the Shares . The Shares
to be sold by CF&Co, acting as agent and/or principal for the
Company, have been duly authorized for issuance and sale pursuant
to this Agreement and, when issued and delivered by the Company to
CF&Co pursuant to this Agreement, will be validly issued, fully
paid and nonassessable.
(g)
No Applicable Registration or
Other Similar Rights . There are no persons with registration
or other similar rights to have any equity or debt securities
registered for sale under the Registration Statement or included in
the offering contemplated by this Agreement, except for such rights
as have been duly waived.
(h)
No Material Adverse Change
. Except as otherwise disclosed in the Prospectus,
subsequent to the respective dates as of which information is given
in the Prospectus: (i) there has been no material adverse change,
or any development that could reasonably be expected to result in a
material adverse change, in the condition, financial or otherwise,
or in the earnings, business, operations or prospects, whether or
not arising from transactions in the ordinary course of business,
of the Company and its subsidiaries, considered as one entity (any
such change is called a “ Material Adverse
Change ”); (ii) the Company and its subsidiaries,
considered as one entity, have not incurred any material liability
or obligation, indirect, direct or contingent, not in the ordinary
course of business nor entered into any material transaction or
agreement not in the ordinary course of business: and (iii) there
has been no dividend or distribution of any kind declared, paid or
made by the Company or, except for regular quarterly dividends
publicly announced by the Company or dividends paid to the Company
or other subsidiaries, any of its subsidiaries on any class of
capital stock or repurchase or redemption by the Company or any of
its subsidiaries of any class of capital stock.
(i)
Independent Accountants
. KPMG LLP, who have expressed their opinion with
respect to the financial statements (which term as used in this
Agreement includes the related notes thereto) and supporting
schedules filed with the Commission or incorporated by reference as
a part of the Registration Statement and included in the
Prospectus, is an independent registered public accounting firm as
required by the Securities Act and the Exchange Act.
(j)
Preparation of the Financial
Statements . The financial statements filed with the Commission
as a part of or incorporated within the Registration Statement and
included in the Prospectus present fairly the consolidated
financial position of the Company and its subsidiaries as of and at
the dates indicated and the results of their operations and cash
flows for the periods specified. The supporting
schedules included in or incorporated in the Registration Statement
present fairly the information required to be stated
therein. Such financial statements and supporting
schedules have been prepared in conformity with generally accepted
accounting principles as applied in the United States applied on a
consistent basis throughout the periods involved, except as may be
expressly stated in the related notes thereto. No other
financial statements or supporting schedules are required to be
included in or incorporated in the Registration
Statement. The financial data set forth or incorporated
in the Prospectus under the captions “Ratio of Earnings to
Fixed Charges” and “Selected Financial Data”
fairly present the information set forth therein on a basis
consistent with that of the audited financial statements contained,
incorporated or deemed to be incorporated in the Registration
Statement.
(k)
Incorporation and Good Standing
of the Company and its Subsidiaries . The Company has been duly
incorporated and is validly existing as a corporation in good
standing under the laws of the State of Maryland and is in good
standing with the State Department of Assessments and Taxation of
Maryland and has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in
the Prospectus and to enter into and perform its obligations under
this Agreement. Essex Portfolio, L.P. is the Company’s only
significant subsidiary (as defined in Rule 1-02 (w) of Regulation
S-X of the Exchange Act) (the “ Significant
Subsidiary ”). The Significant Subsidiary
has been duly organized and is validly existing as a partnership in
good standing under the laws of the jurisdiction of its
organization and has the requisite power and authority to own,
lease and operate its properties and to conduct its business as
described in the Prospectus. Each of the Company and the
Significant Subsidiary is duly qualified as a foreign corporation
or foreign partnership to transact business and is in good standing
in the State of California and each other jurisdiction in which
such qualification is required, whether by reason of the ownership
or leasing of property or the conduct of business, except for such
jurisdictions (other than the State of California) where the
failure to so qualify or to be in good standing would not,
individually or in the aggregate, result in a Material Adverse
Change. Except as described in the Prospectus, all of
the issued and outstanding partnership interests in the Significant
Subsidiary have been duly authorized and validly issued and are
fully paid and nonassessable. The partnership interests in the
Significant Subsidiary that are owned by the Company are free and
clear of any security interest, mortgage, pledge, lien, encumbrance
or claim. The Company does not own or control, directly
or indirectly, any corporation, association or other entity other
than the subsidiaries listed in Exhibit 21.1 to the Company’s
Annual Report on Form 10-K for the most recently ended fiscal year
and other than (i) those subsidiaries not required to be listed on
Exhibit 21.1 by Item 601 of Regulation S-K under the Exchange Act
and (ii) those subsidiaries formed since the last day of the most
recently ended fiscal year.
(l)
Capital Stock Matters . The Shares
conforms in all material respects to the description thereof
contained in the Prospectus. All of the issued and
outstanding shares of Common Stock and Preferred Stock have been
duly authorized and validly issued, are fully paid and
nonassessable and have been issued in compliance with federal and
state securities laws. None of the outstanding shares of
Common Stock and Preferred Stock were issued in violation of any
preemptive rights, rights of first refusal or other similar rights
to subscribe for or purchase securities of the
Company. There are no authorized or outstanding options,
warrants, preemptive rights, rights of first refusal or other
rights to purchase, or equity or debt securities convertible into
or exchangeable or exercisable for, any capital stock of the
Company or any of its subsidiaries other than those accurately
described in all material respects in the
Prospectus. The description of the Company’s stock
option, stock bonus and other stock plans or arrangements, and the
options or other rights granted thereunder, set forth in the
Prospectus accurately and fairly presents in all material respects
the information required to be shown with respect to such plans,
arrangements, options and rights.
(m)
Non-Contravention of Existing Instruments; No Further
Authorizations or Approvals Required . Neither
the Company nor any of its subsidiaries is in violation of its
charter or by-laws or is in default (or, with the giving of notice
or lapse of time, would be in default) (“
Default ”) under any indenture, mortgage, loan
or credit agreement, note, contract, franchise, lease or other
instrument to which the Company or any of its subsidiaries is a
party or by which it or any of them may be bound, or to which any
of the property or assets of the Company or any of its subsidiaries
is subject (each, an “ Existing Instrument
”), except for such Defaults as would not, individually or in
the aggregate, result in a Material Adverse Change. The
Company’s execution, delivery and performance of this
Agreement and consummation of the transactions contemplated hereby
and by the Prospectus (i) have been duly authorized by all
necessary corporate action and will not result in any violation of
the provisions of the charter or by-laws of the Company or any
subsidiary, (ii) will not conflict with or constitute a breach of,
or Default under, or result 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 require the
consent of any other party to, any Existing Instrument, except for
such conflicts, breaches, Defaults, liens, charges or encumbrances
as would not, individually or in the aggregate, result in a
Material Adverse Change and (iii) will not result in any violation
of any law, administrative regulation or administrative or court
decree applicable to the Company or any subsidiary. No
consent, approval, authorization or other order of, or registration
or filing with, any court or other governmental or regulatory
authority or agency, is required for the Company’s execution,
delivery and performance of this Agreement and consummation of the
transactions contemplated hereby and by the Prospectus, except such
as have been obtained or made by the Company and are in full force
and effect under the Securities Act, applicable state securities or
blue sky laws and from the NASD.
(n)
No Material Actions
or Proceedings . Except as disclosed in the
Prospectus, there are no legal or governmental actions, suits or
proceedings pending or, to the best of the Company’s
knowledge, threatened (i) against or affecting the Company or any
of its subsidiaries, (ii) which has as the subject thereof any
officer or director of, or property owned or leased by, the Company
or any of its subsidiaries or (iii) relating to environmental or
discrimination matters, where in any such case (A) there is a
reasonable possibility that such action, suit or proceeding might
be determined adversely to the Company or such subsidiary and (B)
any such action, suit or proceeding, if so determined adversely,
would reasonably be expected to result in a Material Adverse Change
or adversely affect the consummation of the transactions
contemplated by this Agreement. No material labor
dispute with the employees of the Company or any of its
subsidiaries exists or, to the best of the Company’s
knowledge, is threatened or imminent.
(o)
All Necessary Permits, etc
. The Company and each subsidiary possess such valid and
current certificates, authorizations or permits issued by the
appropriate state, federal or foreign regulatory agencies or bodies
necessary to conduct their respective businesses, other than those
the failure to possess or own would not result in a Material
Adverse Change, and neither the Company nor any subsidiary has
received any notice of proceedings relating to the revocation or
modification of, or non-compliance with, any such certificate,
authorization or permit which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, could result
in a Material Adverse Change.
(p)
Tax Law Compliance . The
Company and its consolidated subsidiaries have filed all necessary
federal, state and foreign income, property and franchise tax
returns and have paid all taxes required to be paid by any of them
and, if due and payable, any related or similar assessment, fine or
penalty levied against any of them except as may be being contested
in good faith and by appropriate proceedings. The
Company has made adequate charges, accruals and reserves in the
applicable financial statements referred to in Section 1 (i) above
in respect of all federal, state and foreign income, property and
franchise taxes for all periods as to which the tax liability of
the Company or any of its consolidated subsidiaries has not been
finally determined.
(q)
Company is a REIT . Commencing
with the Company’s taxable year beginning January 1, 1994,
the Company has been organized and has operated in conformity with
the requirements for qualification as a “real estate
investment trust,” and its organization and proposed method
of operation will enable it to meet the requirements for the
qualification and taxation as a “real estate investment
trust” under the Internal Revenue Code of 1986, as amended
(the “ Code ”).
(r)
Company Not an “Investment Company
”. The Company has been advised of the rules and requirements
under the Investment Company Act of 1940, as amended (the “
Investment Company Act ”). The
Company is not, and after receipt of payment for the Shares will
not be, an “investment company” within the meaning of
Investment Company Act and will conduct its business in a manner so
that it will not become subject to the Investment Company
Act.
(s)
Insurance . Except as
otherwise described in the Prospectus, each of the Company and its
subsidiaries are insured by insurers of recognized financial
responsibility with policies in such amounts and with such
deductibles and covering such risks as are generally deemed prudent
and customary for the business for which it is engaged including,
but not limited to, policies covering real and personal property
owned or leased by the Company and its subsidiaries against theft,
damage, destruction and acts of vandalism. The Company
has no reason to believe that it or any subsidiary will not be able
(i) to renew its existing insurance coverage as and when such
policies expire or (ii) to obtain comparable coverage from similar
institutions as may be necessary or appropriate to conduct its
business as now conducted and at a cost that would not result in a
Material Adverse Change.
(t)
No Price Stabilization or Manipulation
. The Company has not taken and will not take, directly
or indirectly, any action designed to or that might be reasonably
expected to cause or result in stabilization or manipulation of the
price of any security of the Company to facilitate the sale or
resale of the Shares.
(u)
Related Party Transactions
. There are no business relationships or related-party
transactions involving the Company or any subsidiary or any other
person required to be described in the Prospectus which have not
been described as required.
(v)
Exchange Act Compliance . The
documents incorporated or deemed to be incorporated by reference in
the Prospectus, at the time they were or hereafter are filed with
the Commission, complied and will comply in all material respects
with the requirements of the Exchange Act, and, when read together
with the other information in the Prospectus, at the Closing Dates,
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 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.
(w)
No Unlawful Contributions or Other Payments
. Neither the Company nor any of its subsidiaries nor,
to the best of the Company’s knowledge, any employee or agent
of the Company or any subsidiary, has made any contribution or
other payment to any official of, or candidate for, any federal,
state or foreign office in violation of any law or of the character
required to be disclosed in the Prospectus.
(x)
Company’s Accounting System . The Company
maintains a system of 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 as applied in the United
States 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.
(y)
Title to Properties
. Except as otherwise disclosed in the Prospectus and
except as would not have a material adverse effect on the
condition, financial or otherwise, or on the earnings, business
affairs or business prospects of the Company and its subsidiaries
considered as one enterprise: (i) all properties and assets
described in the Prospectus are owned with good and marketable
title by the Company, its subsidiaries and/or a joint venture or
partnership in which any such party is a participant (a “
Related Entity ”); (ii) all of the leases under
which any of the Company, its subsidiaries or, to the knowledge of
the Company, Related Entities holds or uses real properties or
assets as a lessee are in full force and effect, and neither the
Company, nor any of its subsidiaries or, to the knowledge of the
Company, Related Entities is in material default in respect of any
of the terms or provisions of any of such leases and no claim has
been asserted by anyone adverse to any such party’s rights as
lessee under any of such leases, or affecting or questioning any
such party’s right to the continued possession or use of the
leased property or assets under any such leases; (iii) all liens,
charges, encumbrances, claims or restrictions on or affecting the
properties and assets of any of the Company, its subsidiaries or
Related Entities which are required to be disclosed in the
Prospectus are disclosed therein; (iv) neither the Company, nor any
of its subsidiaries or, to the knowledge of the Company, Related
Entities nor any lessee of any portion of any such party’s
properties is in default under any of the leases pursuant to which
any of the Company, its subsidiaries or, to the knowledge of the
Company, Related Entities leases its properties and neither the
Company, nor any of its subsidiaries or Related Entities knows of
any event which, but for the passage of time or the giving of
notice, or both, would constitute a default under any of such
leases; (v) no tenant under any of the leases pursuant to which any
of the Company, or its subsidiaries or, to the knowledge of the
Company, Related Entities leases its properties has an option or
right of first refusal to purchase the premises demised under such
lease; (vi) each of the properties of any of the Company or its
subsidiaries or to the knowledge of the Company, Related Entities
complies with all applicable codes and zoning laws and regulations;
and (vii) neither the Company nor any of its subsidiaries has
knowledge of any pending or threatened condemnation, zoning change
or other proceeding or action that will in any manner affect the
size of, use of, improvements on, construction on, or access to the
properties of any of the Company, or its subsidiaries or Related
Entities.
(z)
Title Insurance . Title insurance in favor of the
mortgagee or the Company, its subsidiaries and/or their Related
Entities is maintained with respect to each property owned by any
such entity in an amount at least equal to (a) the cost of
acquisition of such property or (b) the cost of construction of
such property (measured at the time of such construction), except,
in each case, where the failure to maintain such title insurance
would not have a material adverse effect on the condition,
financial or otherwise, or on the earnings, business affairs or
business prospects of the Company and its subsidiaries considered
as one enterprise.
(aa)
No Convertible Mortgages . Except as described in the
Prospectus, the mortgages and deeds of trust encumbering the
properties and assets described in the Prospectus are not
convertible nor does any of the Company, or its subsidiaries hold a
participating interest therein.
(bb)
Valid Partnerships . Each of the partnership and
joint venture agreements to which the Company or any of its
subsidiaries is a party, and which relates to real property
described in the Prospectus, has been duly authorized, executed and
delivered by such applicable party and constitutes the valid
agreement thereof, enforceable in accordance with its terms, except
as limited by (a) the effect of bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter
in effect relating to or affecting the rights or remedies of
creditors or (b) the effect of general principles of equity,
whether enforcement is considered in a proceeding in equity or at
law, and the discretion of the court before which any proceeding
therefor may be brought, and the execution, delivery and
performance of any of such agreements did not, at the time of
execution and delivery, and does not constitute a breach of, or
default under, the charter or bylaws of such party or any material
contract, lease or other instrument to which such party is a party
or by which its properties may be bound or any law, administrative
regulation or administrative or court order or decree, except for
such breaches or defaults that would not result in a Material
Adverse Change.
(cc)
Hazardous Materials . Except as otherwise described in the
Prospectus, none of the Company, or any of its subsidiaries has any
knowledge of (a) the unlawful presence of any hazardous substances,
hazardous materials, toxic substances or waste materials
(collectively, “ Hazardous Materials ”)
on any of the properties owned by it or the Related Entities, or
(b) any unlawful spills, releases, discharges or disposal, of
Hazardous Materials that have occurred or are presently occurring
off such properties as a result of any construction on or operation
and use of such properties which presence or occurrence would have
a material adverse effect on the condition, financial or otherwise,
or on the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise; and in
connection with the construction on or operation and use of the
properties owned by the Company, its subsidiaries and
Related-Entities, each of the Company, and its subsidiaries
represents that, if any, it has no knowledge of any material
failure to comply with all applicable foreign local, state and
federal environmental laws, regulations, ordinances and
administrative and judicial orders relating to the generation,
recycling, reuse, sale, storage, handling, transport and disposal
of any Hazardous Materials, except for such failures that would not
result in a Material Adverse Change.
(dd)
Compliance with Environmental Laws . Except as otherwise
described in the Prospectus, and except as would not, individually
or in the aggregate, result in a Material Adverse Change (i)
neither the Company nor any of its subsidiaries is in violation of
any federal, state, local or foreign law or regulation relating to
pollution or protection of human health or the environment
(including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata) or wildlife,
including without limitation, laws and regulations relating to
emissions, discharges, releases or threatened releases of
chemicals, pollutants, contaminants, wastes, toxic substances,
hazardous substances, petroleum and petroleum products
(collectively, “ Materials of Environmental
Concern ”), or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal,
transport or handling of Materials of Environment Concern
(collectively, “ Environmental Laws ”),
which violation includes, but is not limited to, noncompliance with
any permits or other governmental authorizations required for the
operation of the business of the Company or its subsidiaries under
applicable Environmental Laws, or noncompliance with the terms and
conditions thereof, nor has the Company or any of its subsidiaries
received any written communication, whether from a governmental
authority, citizens group, employee or otherwise, that alleges that
the Company or any of its subsidiaries is in violation of any
Environmental Law; (ii) there is no claim, action or cause of
action filed with a court or governmental authority, no
investigation with respect to which the Company has received
written notice, and no written notice by any person or entity
alleging potential liability for investigatory costs, cleanup
costs, governmental responses costs, natural resources damages,
property damages, personal injuries, attorneys’ fees or
penalties arising out of, based on or resulting from the presence,
or release into the environment, of any Materials of Environmental
Concern at any location owned, leased or operated by the Company or
any of its subsidiaries, now or in the past (collectively, “
Environmental Claims ”), pending or, to the
best of the Company’s knowledge, threatened against the
Company or any of its subsidiaries or any person or entity whose
liability for any Environmental Claim the Company or any of its
subsidiaries has retained or assumed either contractually or by
operation of law; and (iii) to the best of the Company’s
knowledge, there are no past or present actions, activities,
circumstances, conditions, events or incidents, including, without
limitation, the release, emission, discharge, presence or disposal
of any Material of Environmental Concern, that reasonably could
result in a violation of any Environmental Law or form the basis of
a potential Environmental Claim against the Company or any of its
subsidiaries or against any person or entity whose liability for
any Environmental Claim the Company or any of its subsidiaries has
retained or assumed either contractually or by operation of
law.
(ee)
Periodic Review of Costs of Environmental Compliance
. The description set forth under the caption “The
Company’s Portfolio may have unknown environmental
liabilities” in Part IA of the Company’s Annual Report
on Form 10-K for the year ended December 31, 2008 accurately
describes the Company’s investigation of the compliance of
its properties with Environmental Laws. On the basis of such review
and the amount of its established reserves, the Company has
reasonably concluded that such associated costs and liabilities
would not, individually or in the aggregate, result in a Material
Adverse Change.
(ff)
Brokers . There is no broker, finder
or other party that is entitled to receive from the Company any
brokerage or finder’s fee or other fee or commission as a
result of any transactions contemplated by this
Agreement.
(gg)
No Outstanding Loans or Other Indebtedness
. Except as described in the Prospectus, there are no
outstanding loans, advances (except normal advances for business
expenses in the ordinary course of business) or guarantees or
indebtedness by the Company to or for the benefit of any of the
officers or directors of the Company or any of the members of any
of them.
(hh)
No Reliance . The Company has not relied upon
CF&Co or legal counsel for CF&Co for any legal, tax or
accounting advice in connection with the offering and sale of the
Placement Shares.
(ii)
CF&Co Purchases . The Company acknowledges
and agrees that CF&Co has informed the Company that CF&Co
may, to the extent permitted under the Securities Act and the
Exchange Act, purchase and sell shares of Common Stock for its own
account while this Agreement is in effect, provided,
that (i) no such purchase or sales shall take place while a
Placement Notice is in effect (except to the extent CF&Co may
engage in sales of Placement Shares purchased or deemed purchased
from the Company as a “riskless principal” or in a
similar capacity) and (ii) the Company shall not be deemed to have
authorized or consented to any such purchases or sales by
CF&Co.
(jj)
Compliance with Laws . The Company has not been
advised, and has no reason to believe, that it and each of its
subsidiaries are not conducting business in compliance with all
applicable laws, rules and regulations of the jurisdictions in
which it is conducting business, except where failure to be so in
compliance would not result in a Material Adverse
Change.
Any certificate
signed by an officer of the Company and delivered to CF&Co or
to counsel for CF&
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