Common Stock
($0.01 par value)
ATM EQUITY OFFERING
SM
SALES AGREEMENT
Merrill Lynch,
Pierce, Fenner & Smith Incorporated
One Bryant Park
New York, New York 10036
Morgan Stanley
& Co. Incorporated
1585 Broadway
New York, New York 10036
UDR, Inc., a
Maryland corporation (the “ Company ”),
proposes, subject to the terms and conditions stated herein, to
issue and sell from time to time to or through Merrill Lynch,
Pierce, Fenner & Smith Incorporated (“BA/ML”) or
Morgan Stanley & Co. Incorporated (“Morgan
Stanley”), as sales agent and/or principal (each an
“Agent”, and together the “Agents”),
severally and not jointly, of up to 15,000,000 shares (the “
Shares ” ) of the Company’s common stock,
$0.01 par value (the “ Common Stock ”), on the
terms set forth in Section 2 of this ATM Equity
Offering SM
Sales Agreement (the “
Agreement ”). The Company agrees that whenever it
determines to sell Shares directly to an Agent as principal, it
will enter into a separate agreement (each, a “ Terms
Agreement ”) in substantially the form of Annex I hereto,
relating to such sale in accordance with Section 3 of this
Agreement.
As used herein,
the term “subsidiary” means a corporation, real estate
investment trust, partnership or limited liability company a
majority of the outstanding voting stock or beneficial, partnership
or membership interests, as the case may be, of which is owned or
controlled, directly or indirectly, by the Company or by one or
more other subsidiaries of the Company, including, without
limitation, United Dominion Realty L.P., a Delaware limited
partnership (“ UDR Operating Partnership ”), and
Heritage Communities L.P., a Delaware limited partnership (“
Heritage Operating Partnership ” and, together with
UDR Operating Partnership, the “ Operating
Partnerships ”).
Section 1.
Representations and Warranties . The Company represents and
warrants to the Agents that as of the date of this Agreement, each
Registration Statement Amendment Date (as defined in Section 3
below), each Company Periodic Report Date (as defined in
Section 3 below), each Company Earning Report Date (as defined
in Section 3 below), each Request Date (as defined in
Section 3 below), each Applicable Time (as defined in Section
1(a) below) and each Settlement Date (as defined in Section 2
below):
(a)
Compliance with Registration Requirements . The Company has
filed with the Securities and Exchange Commission (the “
Commission ”) an “automatic shelf registration
statement” as defined under Rule 405 under the
Securities Act of 1933, as amended (the “ 1933 Act
”), on Form S-3 (File No. 333-156002), in respect of
certain of the Company’s securities, including the Common
Stock, not earlier than three years prior to the date hereof; such
registration statement, and any post-effective amendment thereto,
became effective on filing; and no stop order suspending the
effectiveness of such registration statement or any part thereof
has been issued and no proceeding for that purpose has been
initiated or, to the knowledge of the Company, threatened by the
Commission, and no notice of objection of the Commission to the use
of such form of registration statement or any post-effective
amendment thereto pursuant to Rule 401(g)(2) under the 1933 Act has
been received by the Company (the base prospectus filed as part of
such registration statement, in the form in which it has most
recently been filed with the Commission on or prior to the date of
this Agreement, is hereinafter called the “ Basic
Prospectus ”; the various parts
1
of such
registration statement, excluding any Form T-1 but including all
other exhibits thereto and any prospectus supplement or prospectus
relating to the Shares that is filed with the Commission and deemed
by virtue of Rule 430B under the 1933 Act to be part of such
registration statement, each as amended at the time such part of
the registration statement became effective, are hereinafter
collectively called the “ Registration Statement
”; the prospectus supplement specifically relating to the
Shares prepared and filed with the Commission pursuant to Rule
424(b) under the 1933 Act is hereinafter called the “
Prospectus Supplement ”; the Basic Prospectus, as
amended and supplemented by the Prospectus Supplement, is
hereinafter called the “ Prospectus ”; any
reference herein to the Basic Prospectus, the Prospectus Supplement
or the Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein pursuant to
Item 12 of Form S-3 under the 1933 Act; any reference to any
amendment or supplement to the Basic Prospectus, the Prospectus
Supplement or the Prospectus shall be deemed to refer to and
include any post-effective amendment to the Registration Statement,
any prospectus supplement or base prospectus relating to the Shares
filed with the Commission pursuant to Rule 424(b) under the 1933
Act and any documents filed under the Securities Exchange Act of
1934, as amended (the “ 1934 Act ”), and the
rules and regulations of the Commission thereunder (the “
1934 Act Regulations ”) and incorporated therein, in
each case after the date of the Basic Prospectus, the Prospectus
Supplement or the Prospectus, as the case may be; any reference to
any amendment to the Registration Statement shall be deemed to
refer to and include any annual report of the Company filed
pursuant to Section 13(a) or 15(d) of the 1934 Act after the
effective date of the Registration Statement that is incorporated
by reference in the Registration Statement; and any “issuer
free writing prospectus” as defined in Rule 433 under
the 1933 Act relating to the Shares is hereinafter called an
“ Issuer Free Writing Prospectus ”).
No order
preventing or suspending the use of the Basic Prospectus, the
Prospectus Supplement, the Prospectus or any Issuer Free Writing
Prospectus has been issued by the Commission, and the Basic
Prospectus and the Prospectus Supplement, at the time of filing
thereof, conformed in all material respects to the requirements of
the 1933 Act and the rules and regulations of the Commission
thereunder (the “ 1933 Act Regulations ”) and
did not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances
under which they were made, not misleading.
For the purposes
of this Agreement, the “ Applicable Time ”
means, with respect to any Shares, the time of sale of such Shares
pursuant to this Agreement; the Prospectus and the applicable
Issuer Free Writing Prospectus(es) issued at or prior to such
Applicable Time, taken together (collectively, and, with respect to
any Shares, together with the public offering price of such Shares,
the “ General Disclosure Package ”) as of each
Applicable Time and each Settlement Date, will not include any
untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading; and each applicable Issuer Free Writing Prospectus will
not conflict with the information contained in the Registration
Statement, the Prospectus Supplement or the Prospectus and each
such Issuer Free Writing Prospectus, as supplemented by and taken
together with the General Disclosure Package as of such Applicable
Time, will not include any untrue statement of a material fact or
omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which
they were made, not misleading.
(b)
Incorporation of Documents by Reference . The documents
incorporated or deemed to be incorporated by reference in the
Registration Statement and the Prospectus, when they became
effective or were filed with the Commission, as the case may be,
complied in all material respects with the requirements of the 1934
Act and the 1934 Act Regulations, and, when read together with the
other information in the Prospectus, (a) at the time the
Registration Statement became effective, (b) at the time the
Prospectus was issued and (c) on the date of this Agreement,
did 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.
(c)
Well-Known Seasoned Issuer . (A)(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 1933 Act (whether such amendment was
by post-effective amendment, incorporated report filed pursuant to
Section 13 or 15(d) of the 1934 Act or form of prospectus),
and (iii) 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 1933 Act Regulations) made any offer relating to the Shares in
reliance on the exemption of Rule 163 under the 1933 Act
Regulations, the Company was a “well-known seasoned
issuer” as defined in Rule 405 of the 1933 Act
Regulations; and (B) at the earliest time after the filing
of
2
the
Registration Statement that the Company or any other offering
participant made a bona fide offer (within the meaning of
Rule 164(h)(2) of the 1933 Act Regulations) of the Shares, the
Company was not an “ineligible issuer” as defined in
Rule 405 of the 1933 Act Regulations.
(d) Due
Incorporation or Formation . Each of the Company and its
subsidiaries has been duly incorporated or formed, as applicable,
and is validly existing as a corporation, limited liability
company, real estate investment trust or partnership, as the case
may be, in good standing under the laws of the jurisdiction in
which it is chartered or organized with full power and authority to
own or lease, as the case may be, and to operate its properties and
conduct its business as described in the Registration Statement,
the Prospectus or the General Disclosure Package, and is duly
qualified to do business as a foreign corporation, limited
liability company, real estate investment trust or partnership, as
the case may be, and is in good standing under the laws of each
jurisdiction which requires such qualification (except in any case
in which the failure to so qualify or to be in good standing would
not have a material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of the
Company and its subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of business
(“ Material Adverse Effect ”), except as set
forth in or contemplated in the Registration Statement, the
Prospectus or the General Disclosure Package (exclusive of any
supplement thereto)).
(e) Duly
Authorized and Issued Partnership Interests . All the
outstanding partnership interests of each Operating Partnership
have been duly authorized and validly issued, are fully paid and
(except in the case of general partnership interests)
non-assessable, and, except as otherwise disclosed in the
Registration Statement, the Prospectus and the General Disclosure
Package and except for minority interests in the Operating
Partnerships described in the Registration Statement, the
Prospectus and the General Disclosure Package, are owned by the
Company either directly or through wholly owned subsidiaries free
and clear of any perfected security interest or any other security
interests, claims, liens or encumbrances; and the Company and/or
one or more subsidiaries of the Company are the only members or
general partners of the Company’s limited liability company
or limited partnership subsidiaries, as applicable, and own the
entire membership or general partnership interest in each such
subsidiary free and clear of any perfected security interest or any
other security interests, claims, liens or encumbrances.
(f)
Capitalization . The Company’s authorized equity
capitalization is as set forth in the Registration Statement, the
Prospectus and the General Disclosure Package; the capital stock of
the Company conforms in all material respects to the description
thereof contained in the Registration Statement, the Prospectus and
the General Disclosure Package; the outstanding Shares of the
Company’s Common Stock and the outstanding shares of the
Company’s preferred stock, no par value per share, have been
duly and validly authorized and issued and are fully paid and
nonassessable; the Shares have been duly and validly authorized for
issuance and sale to the Agents pursuant to this Agreement and,
when issued and delivered to and paid for by the Agents pursuant to
this Agreement, will be validly issued, fully paid and
nonassessable; no holder or beneficial owner of shares of capital
stock of the Company will be subject to personal liability by
reason of being such a holder or beneficial owner; the Shares are
duly listed, and admitted and authorized for trading, subject to
official notice of issuance on the New York Stock Exchange (“
NYSE ”); the certificates for the Shares are in valid
and sufficient form.
(g) No
Preemptive Rights . Neither the holders of outstanding shares
of capital stock of the Company nor the holders of any of the
Company’s other outstanding securities are entitled to
preemptive or other rights to subscribe for the Shares. Except as
set forth in the Registration Statement, the Prospectus and the
General Disclosure Package, no options, warrants or other rights to
purchase, agreements or other obligations to issue, or rights to
convert any obligations into or exchange any securities for, shares
of capital stock of or ownership interests in the Company are
outstanding.
(h)
Accuracy of Descriptions and Exhibits . There is no
franchise, contract or other document of a character required to be
described in the Registration Statement or the Prospectus or to be
filed as an exhibit to the Registration Statement or to any report
filed with the Commission under the 1934 Act which has not been so
described or filed; and the statements in the Registration
Statement, the Prospectus and the General Disclosure Package under
the headings “Description of Capital Stock — Common
Stock,” “Federal Income Tax Considerations” and
“Additional Federal Income Tax Considerations” insofar
as such statements constitute matters of law or legal conclusions,
are correct in all material respects.
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(i)
Authorization of Agreement . This Agreement has been duly
authorized, executed and delivered by the Company and constitutes a
valid and binding obligation of the Company enforceable in
accordance with its terms, except as enforceability may be limited
by bankruptcy, fraudulent conveyance, insolvency, reorganization,
moratorium or other laws relating to or affecting enforcement of
creditors’ rights generally or by general equity principles
(regardless of whether enforcement is considered in a proceeding in
equity or at law).
(j)
Investment Company Act . The Company is not, and upon the
issuance and sale of the Shares as herein contemplated, the
application of any net proceeds therefrom as described in the
Registration Statement, the Prospectus and the General Disclosure
Package will not be, an “investment company” within the
meaning of the Investment Company Act of 1940, as
amended.
(k)
Absence of Further Requirements . No consent, approval,
authorization, filing with or order of any court or governmental
agency or regulatory body is required in connection with the
transactions contemplated herein, except such as have been obtained
under the 1933 Act or the 1933 Act Regulations and such as may be
required under the blue sky laws of any jurisdiction in connection
with the purchase and distribution of the Shares by the Agents in
the manner contemplated herein and in the Registration Statement
and the Prospectus.
(l)
Absence of Defaults and Conflicts . Neither the issue and
sale of the Shares nor the consummation of any other of the
transactions herein contemplated nor the fulfillment of the terms
hereof will conflict with, result in a breach or violation or
imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any of its subsidiaries pursuant to,
(i) the charter or by-laws or other organizational documents
of the Company or any of its subsidiaries, (ii) the terms of
any indenture, contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other agreement, obligation,
condition, covenant or instrument to which the Company or any of
its subsidiaries is a party or bound or to which its or their
property is subject (except in any case in which such would not
have a Material Adverse Effect, except as set forth in or
contemplated in the Registration Statement, the Prospectus or the
General Disclosure Package (exclusive of any supplement thereto)),
or (iii) any statute, law, rule, regulation, judgment, order
or decree applicable to the Company or any of its subsidiaries of
any court, regulatory body, administrative agency, governmental
body, arbitrator or other authority having jurisdiction over the
Company or any of its subsidiaries or any of its or their
properties (except in any case in which such would not have a
Material Adverse Effect, except as set forth in or contemplated in
the Registration Statement, the Prospectus and the General
Disclosure Package (exclusive of any supplement
thereto)).
(m)
Registration Rights . Except for certain registration rights
of holders of units of limited partnership interests in United
Dominion Realty, L.P. pursuant to the terms of the Contribution
Agreement dated June 19, 2003, among Calvert Associates, a
Virginia general partnership, Union Dominion Realty L.P., a
Virginia limited partnership and United Dominion Realty Trust, Inc,
a Maryland corporation, no holders of securities of the Company
have rights to the registration of such securities under the
Registration Statement.
(n)
Financial Statements . The financial statements, together
with related notes and schedules of the Company and its
subsidiaries and of any companies, other entities or properties
acquired or to be acquired by the Company, as set forth or
incorporated by reference in the Registration Statement, the
Prospectus or the General Disclosure Package, present fairly the
financial position, results of operations and cash flows of the
Company and its subsidiaries and of such companies, entities and
properties, as the case may be, at the indicated dates and for the
indicated periods. Such financial statements comply as to form with
the applicable accounting requirements of the 1933 Act and the 1933
Act Regulations and have been prepared in accordance with United
States generally accepted accounting principles (“
GAAP ”), consistently applied throughout the periods
involved, and all adjustments necessary for a fair presentation of
results for such periods have been made (except to the extent that,
in accordance with the 1934 Act and the 1934 Act Regulations,
certain footnotes have been omitted from the financial statements
included in the Company’s Quarterly Reports on Form 10-Q
incorporated by reference in the Registration Statement, the
Prospectus and the General Disclosure Package). The summary
financial and statistical data, if any, included in the
Registration Statement, the Prospectus or the General Disclosure
Package present fairly the information shown therein and have been
compiled on a basis consistent with the financial statements
presented in the Registration Statement, the Prospectus or the
General Disclosure Package; the Company is not required to include
any financial statements of any other entity or business or any pro
forma financial statements in the Registration Statement, the
Prospectus or the General Disclosure Package under the 1933 Act or
the 1933 Act
4
Regulations or
in any document required to be filed with the Commission under the
1934 Act or the 1934 Act Regulations.
(o) No
Material Loss of Business . Neither the Company nor any of its
subsidiaries has sustained since the date of the latest audited
financial statements included or incorporated by reference in the
Registration Statement, the Prospectus and the General Disclosure
Package, any material loss or interference with its business from
fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth or
contemplated in the Registration Statement, the Prospectus and the
General Disclosure Package.
(p) No
Material Change . Since the respective dates as of which
information is given in the Registration Statement, the Prospectus
and the General Disclosure Package, there has not been any material
change in the capital stock, total assets or material increase in
the long-term debt of the Company or any of its subsidiaries, or
material change in any dividend or distribution of any kind
declared, set aside for payment, paid or made by the Company on any
class of capital stock, or any material adverse change, or any
development involving a prospective material adverse change, in or
affecting the general affairs, management, financial position,
shareholders’ equity or results of operations of the Company
and its subsidiaries, otherwise than as set forth or contemplated
in the Registration Statement, the Prospectus and the General
Disclosure Package. Neither the Company nor any of its subsidiaries
has entered into any transaction or agreement not in the ordinary
course of business which is material to the Company and its
subsidiaries considered as a whole or incurred any liability or
obligation, direct or contingent, which is material to the Company
and its subsidiaries considered as a whole.
(q)
Absence of Proceedings . No action, suit or proceeding by or
before any court or governmental agency, authority or regulatory
body or any arbitrator involving the Company or any of its
subsidiaries or its or their property is pending or, to the best
knowledge of the Company, threatened that (i) could reasonably
be expected to have a Material Adverse Effect on the performance of
this Agreement or the consummation of any of the transactions
contemplated hereby or (ii) could reasonably be expected to
have a Material Adverse Effect, except as set forth in or
contemplated in the Registration Statement, the Prospectus and the
General Disclosure Package (exclusive of any supplement
thereto).
(r)
Properties . Each of the Company and each of its
subsidiaries owns or leases all such properties as are necessary to
the conduct of its operations as presently conducted (except in any
case in which the failure to own or lease any such properties would
not have a Material Adverse Effect.
(s)
Absence of Defaults and Conflicts . Neither the Company nor
any subsidiary is in violation or default of (i) any provision
of its charter or bylaws or other organizational documents,
(ii) the terms of any indenture, contract, lease, mortgage,
deed of trust, note agreement, loan agreement or other agreement,
obligation, condition, covenant or instrument to which it is a
party or bound or to which its property is subject (except in any
case in which it would not have a Material Adverse Effect, except
as set forth in or contemplated in the Registration Statement, the
Prospectus and the General Disclosure Package (exclusive of any
supplement thereto)), or (iii) any statute, law, rule,
regulation, judgment, order or decree of any court, governmental
agency, regulatory body, administrative agency, arbitrator or other
authority having jurisdiction over the Company or such subsidiary
or any of its properties (except in any case in which it would not
have a Material Adverse Effect, except as set forth in or
contemplated in the Registration Statement, the Prospectus and the
General Disclosure Package (exclusive of any supplement thereto)),
as applicable.
(t)
Independent Accountants . Ernst & Young LLP, who have
certified certain financial statements of the Company and its
consolidated subsidiaries and delivered their report with respect
to the audited consolidated financial statements and schedules
included in the Registration Statement, the Prospectus or the
General Disclosure Package, are independent public accountants with
respect to the Company within the meaning of Rule 101 of the
Code of Professional Conduct of the American Institute of Certified
Public Accountants and its interpretations and rulings thereunder,
as required by the 1933 Act and the 1933 Act Regulations and the
Public Company Accounting Oversight Board (United States), and to
the Company’s knowledge, Ernst & Young LLP has not
engaged in any activity with respect to the Company that is
prohibited by any of the subsections (g) through (l) of
Section 10A of the 1934 Act.
5
(u)
Payment of Transfer Taxes . There are no transfer taxes or
other similar fees or charges under Federal law or the laws of any
state, or any political subdivision thereof, required to be paid in
connection with the execution and delivery of this Agreement or the
issuance by the Company or sale by the Company of the Shares
hereunder.
(v)
Payment of Taxes . Each of the Company and its subsidiaries
has filed all foreign, federal, state and local tax returns that
are required to be filed or has requested extensions thereof
(except in any case in which the failure so to file would not have
a Material Adverse Effect, except as set forth in or contemplated
in the Registration Statement, the Prospectus and the General
Disclosure Package (exclusive of any supplement thereto)) and has
paid all taxes required to be paid and any other assessment, fine
or penalty levied against it, to the extent that any of the
foregoing is due and payable, except for any such assessment, fine
or penalty that is currently being contested in good faith or as
would not have a Material Adverse Effect, except as set forth in or
contemplated in the Registration Statement, the Prospectus and the
General Disclosure Package (exclusive of any supplement
thereto).
(w)
Absence of Labor Dispute . No labor problem or dispute with
the employees of the Company or any of its subsidiaries exists or,
to the Company’s knowledge, is threatened or imminent, that
could have a Material Adverse Effect, and the Company is not aware
of any existing or imminent labor disturbance by the employees of
any of its or its subsidiaries’ principal suppliers,
contractors or customers, that could have a Material Adverse
Effect, except as set forth in or contemplated in the Registration
Statement, the Prospectus and the General Disclosure Package
(exclusive of any supplement thereto).
(x)
Insurance . The Company and each of its subsidiaries are
adequately insured by insurers of recognized financial
responsibility against all losses and risks (except in any case in
which such would not have a Material Adverse Effect; all policies
of insurance and fidelity or surety bonds insuring the Company or
any of its subsidiaries or their respective businesses, assets,
employees, officers and directors are in full force and effect; the
Company and its subsidiaries are in compliance with the terms of
such policies and instruments in all material respects; and there
are no claims by the Company or any of its subsidiaries under any
such policy or instrument as to which any insurance company is
denying liability or defending under a reservation of rights clause
(except in any case in which such would not have a Material Adverse
Effect, except as set forth in or contemplated in the Registration
Statement, the Prospectus and the General Disclosure Package
(exclusive of any supplement thereto)); and neither the Company nor
any such subsidiary has any reason to believe that it will not be
able to renew its existing insurance coverage as and when such
coverage expires or to obtain similar coverage from similar
insurers as may be necessary to continue its business at a cost
that would not have a Material Adverse Effect, except as set forth
in or contemplated in the Registration Statement, the Prospectus
and the General Disclosure Package (exclusive of any supplement
thereto).
(y) Title
to Property . Except as described in the Registration
Statement, the Prospectus and the General Disclosure Package, the
Company and its subsidiaries have good and marketable title to all
real properties owned by them (each, a “ Property
” and collectively, the “ Properties ”),
in each case free from liens, encumbrances and defects that would
materially affect the value thereof or materially interfere with
the use made or to be made thereof by them; the Company or its
subsidiaries have obtained an owner’s title insurance policy
in an amount at least equal to the cost of acquisition from a title
insurance company with respect to each of its real estate
properties; except as disclosed in the Registration Statement, the
Prospectus and the General Disclosure Package, the Company and its
subsidiaries hold any leased real or personal property under valid
and enforceable leases, with no exceptions that would materially
interfere with the value thereof or materially interfere with the
use made or to be made thereof by them; neither the Company nor its
subsidiaries has knowledge of any pending or threatened
condemnation proceeding, 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 any of the Properties
(except in any case in which such would not have a Material Adverse
Effect.
(z) No
Restrictions on Dividends . No subsidiary of the Company is
currently prohibited, directly or indirectly, from paying any
dividends to the Company, from making any other distribution on
such subsidiary’s capital stock, from repaying to the Company
any loans or advances to such subsidiary from the Company or from
transferring any of such subsidiary’s property or assets to
the Company or any other subsidiary of the Company, except as
required by the terms of the Company’s indebtedness described
in the Registration Statement, the Prospectus and the General
Disclosure Package.
6
(aa)
Possession of Licenses and Permits . The Company and its
subsidiaries possess all licenses, certificates, permits and other
authorizations issued by the appropriate federal, state or foreign
regulatory authorities necessary to conduct their respective
businesses (except in any case in which failure to possess such
would not have a Material Adverse Effect, except as set forth in or
contemplated in the Registration Statement, the Prospectus and the
General Disclosure Package (exclusive of any supplement thereto)),
and neither the Company nor any such subsidiary has received any
notice of proceedings relating to the revocation or modification of
any such certificate, authorization or permit which, singly or in
the aggregate, if the subject of an unfavorable decision, ruling or
finding, would have a Material Adverse Effect, except as set forth
in or contemplated in the Registration Statement, the Prospectus
and the General Disclosure Package (exclusive of any supplement
thereto).
(bb)
Accounting Controls and Compliance with the Sarbanes-Oxley
Act . The Company maintains a system of internal accounting and
other controls sufficient to provide reasonable assurances that
(i) transactions are executed in accordance with
management’s general or specific authorizations,
(ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to
maintain accountability for assets, (iii) access to assets is
permitted only in accordance with management’s general or
specific authorization, (iv) the recorded accounting for
assets is compared with existing assets at reasonable intervals and
appropriate action is taken with respect to any differences and
(v) the principal executive officers (or their equivalents)
and principal financial officers (or their equivalents) of the
Company have made all certifications required by Sections 302
and 906 of the Sarbanes-Oxley Act of 2002 (the “
Sarbanes-Oxley Act ”) and any related rules and
regulations promulgated by the Commission, and the statements
contained in any such certification are complete and correct.
Except as described in the Registration Statement, the Prospectus
and the General Disclosure Package, with respect to stock options
or other equity incentive grants granted subsequent to the adoption
of the Sarbanes-Oxley Act on July 31, 2002 pursuant to the
equity-based compensation plans of the Company and its subsidiaries
(the “ Equity Plans ”), (i) no stock
options have been granted with an exercise price based upon a price
of the Common Stock on a date occurring prior to the date of
approval of such grant, (ii) each such grant was made in
accordance with the material terms of the Equity Plans, the 1934
Act, the 1934 Act Regulations and all other applicable laws and
regulatory rules or requirements, including the rules of the NYSE,
and (iii) each such grant has been properly accounted for in
accordance with GAAP in the financial statements (including the
related notes) of the Company and disclosed in the Company’s
filings with the Commission.
(cc) No
Change in Internal Control Over Financial Reporting . Except as
disclosed in the Registration Statement, the Prospectus and the
General Disclosure Package, since the end of the Company’s
most recent audited fiscal year, there has been no change in the
Company’s internal control over financial reporting that has
materially affected, or is reasonably likely to materially affect,
the Company’s internal control over financial reporting. The
Company has established and maintains disclosure controls and
procedures (as such term is defined in Rule 13a-15 and 15d-15 under
the 1934 Act Regulations) in accordance with the rules and
regulations under the Sarbanes-Oxley Act, the 1933 Act and the 1934
Act.
(dd) No
Personal Loans to Directors . Since July 30, 2002, the
Company has not, in violation of the Sarbanes-Oxley Act, directly
or indirectly, including through a subsidiary, extended or
maintained credit, arranged for the extension of credit, or renewed
an extension of credit, in the form of a personal loan to or for
any executive officer or director of the Company.
(ee) No
Fiduciary Relationship . The Company acknowledges and agrees
that (i) the purchase and sale of the Shares pursuant to this
Agreement and any Terms Agreement is an arm’s-length
commercial transaction between the Company, on the one hand, and
the several Agents, on the other, (ii) in connection therewith
and with the process leading to such transaction each Agent is
acting solely as principal and not the agent or fiduciary of the
Company, (iii) the Agents have not assumed an advisory or
fiduciary responsibility in favor of the Company with respect to
the offering contemplated hereby or the process leading thereto
(irrespective of whether the Agents have advised or are currently
advising the Company on other matters) or any other obligations of
the Company except the obligations expressly set forth in this
Agreement and (iv) the Company has consulted its own legal and
financial advisors to the extent it deemed appropriate. The Company
agrees that it will not claim that the Agents have rendered
advisory services of any nature or respect, or owe a fiduciary or
similar duty to the Company, in connection with the offering of the
Shares or the process leading thereto.
7
(ff)
Absence of Manipulation . Neither the Company nor any
affiliate of the Company has taken or will take, directly or
indirectly, any action designed to or that would constitute or that
might reasonably be expected to cause or result in, under the 1934
Act or otherwise, stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the
Shares.
(gg) No
Finder’s Fee . Except pursuant to this Agreement and as
described in the Registration Statement, the Prospectus and the
General Disclosure Package, there are no contracts, agreements or
understandings between the Company, the Operating Partnerships or
any subsidiaries and any person relating to a brokerage commission,
finder’s fee or other like payment in connection with the
offering, issuance and sale of the Shares.
(hh)
Environmental Laws . The Company and its subsidiaries
(i) are in compliance with any and all applicable
Environmental Laws, (ii) have received and are in compliance
with all permits, licenses or other approvals required of them
under applicable Environmental Laws to conduct their respective
businesses and all such permits, licenses and approvals remain in
full force and effect, and (iii) have not received and are not
aware of any pending or threatened notice of any actual or
potential liability for the investigation or remediation or any
disposal or release of Hazardous Substances or for any other
non-compliance with Environmental Laws, except where such
non-compliance with Environmental Laws, failure to receive required
permits, licenses or other approvals, or any such actual or
potential liability would not, individually or in the aggregate,
result in a Material Adverse Effect, except as set forth in or
contemplated in the Registration Statement, the Prospectus and the
General Disclosure Package (exclusive of any supplement thereto).
Except as set forth in the Registration Statement, the Prospectus
and the General Disclosure Package, (i) neither the Company
nor any of its subsidiaries has been named as a “potentially
responsible party” under the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended, and
(ii) to the Company’s knowledge, Hazardous Substances
have not been released or disposed in, on, under or near the
Properties.
“
Environmental Laws ” shall mean any and all federal,
state, local or municipal laws, rules, orders, regulations,
statutes, ordinances, codes, decrees or requirements of any
Governmental Authority regulating, relating to or imposing
liability or standards of conduct concerning any Hazardous
Substances, public health or environmental protection, together
with any amendment or a re-authorization thereof or
thereto.
“
Governmental Authority ” shall mean any federal,
state, local or municipal governmental body, department, agency or
subdivision responsible for the due administration and/or
enforcement of any Environmental Law.
“
Hazardous Substances ” shall mean any pollutant,
contaminant, hazardous material, hazardous waste, infectious
medical waste, hazardous or toxic substance defined or regulated as
such in or under any Environmental Law.
(ii)
Compliance with ERISA Requirements . Each of the Company and
its subsidiaries has fulfilled its obligations, if any, under the
minimum funding standards of Section 302 of the United States
Employee Retirement Income Security Act of 1974
(“ERISA”) and the regulations and published
interpretations thereunder with respect to each “plan”
(as defined in Section 3(3) of ERISA and such regulations and
published interpretations) in which employees of the Company and
its subsidiaries are eligible to participate and each such plan is
in compliance in all material respects with the presently
applicable provisions of ERISA and such regulations and published
interpretations (except in any case in which failure to do such
would not have a Material Adverse Effect, except as set forth in or
contemplated in the Registration Statement, the Prospectus and the
General Disclosure Package (exclusive of any supplement thereto)).
The Company and its subsidiaries have not incurred any unpaid
liability to the Pension Benefit Guaranty Corporation (other than
for the payment of premiums in the ordinary course) or to any such
plan under Title IV of ERISA (except in any case in which such
would not have a Material Adverse Effect, except as set forth in or
contemplated in the Registration Statement, the Prospectus and the
General Disclosure Package (exclusive of any supplement
thereto)).
(jj)
Significant Subsidiaries . The subsidiaries listed on
Schedule 1 attached hereto are the only significant
subsidiaries of the Company as defined by Rule 1-02 of
Regulation S-X.
(kk)
Possession of Intellectual Property . The Company and its
subsidiaries own, possess, license or have other rights to use, on
reasonable terms, all patents, patent applications, trade and
service marks, trade and
8
service mark
registrations, trade names, copyrights, licenses, inventions, trade
secrets, technology, know-how and other intellectual property
(collectively, the “ Intellectual Property ”)
used in the conduct of the Company’s business as now
conducted or as proposed in the Registration Statement, the
Prospectus and the General Disclosure Package to be conducted
(except in any case in which such would not have a Material Adverse
Effect. To the Company’s knowledge, (a) there is no material
infringement by third parties of any such Intellectual Property;
(b) there is no pending or threatened action, suit, proceeding
or claim by others challenging the Company’s rights in or to
any such Intellectual Property, and the Company is unaware of any
facts which would form a reasonable basis for any such claim;
(c) there is no pending or threatened action, suit, proceeding
or claim by others challenging the validity or scope of any such
Intellectual Property, and the Company is unaware of any facts
which would form a reasonable basis for any such claim; and
(d) there is no pending or threatened action, suit, proceeding
or claim by others that the Company infringes or otherwise violates
any patent, trademark, copyright, trade secret or other proprietary
rights of others, and the Company is unaware of any other fact
which would form a reasonable basis for any such claim.
(ll) REIT
Status . The Company has been and is organized and has operated
in conformity with the requirements for qualification and taxation
as a real estate investment trust (a “ REIT ”)
for each of its taxable years beginning with the taxable year ended
December 31, 2006 through its taxable year ended
December 31, 2008, or any prior year where the Company’s
failure to so qualify could cause the Company to have a liability
for taxes (whether in that year or any subsequent year) for which
the Internal Revenue Service is or will be entitled to assert a
claim, and its current organization and current and proposed method
of operation will enable it to continue to meet the requirements
for qualification and taxation as a REIT for the taxable year
ending December 31, 2009 and thereafter. No transaction event
has occurred which could cause the Company not to be able to
qualify as a REIT for its current taxable year or any future
taxable year. The Company currently intends to continue to qualify
as a REIT under the Internal Revenue Code of 1986, as
amended.
(mm)
Proper Classifications of Operating Partnerships . Each of
the Operating Partnerships is properly classified as a partnership,
and not as a corporation or as a publicly traded partnership
taxable as a corporation, for Federal income tax purposes
throughout the period from its formation through the date
hereof.
(nn)
Proper Classification of Subsidiaries . Each of the
subsidiaries that is a partnership or a limited liability company
(other than an entity for which a taxable REIT subsidiary election
has been made) (“ Subsidiary Partnerships ”) is
properly classified either as a disregarded entity or as a
partnership, and not as a corporation or as a publicly traded
partnership taxable as a corporation, for Federal income tax
purposes throughout the period from its formation through the date
hereof, or, in the case of any Subsidiary Partnerships that have
terminated, through the date of termination of such Subsidiary
Partnerships.
(oo)
Adequate Provision for Taxes . The Company has made adequate
charges, accruals and reserves in the applicable financial
statements referred to in Section 1(n) hereof in respect of all
federal, state, local and foreign income and franchise taxes for
all periods as to which the tax liability of the Company or any of
the subsidiaries has not been finally determined.
(pp) No
Violation of Federal Reserve System Regulations . Neither the
issuance, sale and delivery of the Shares nor the application of
the proceeds thereof by the Company as described in the
Registration Statement, the Prospectus or the General Disclosure
Package will violate Regulation T, U or X of the Board of
Governors of the Federal Reserve System or any other regulation of
such Board of Governors.
(qq)
Reasonable Basis for Forward-Looking Statements . No
forward-looking statement (within the meaning of Section 27A
of the 1933 Act and Section 21E of the 1934 Act) contained in
the Registration Statement, the Prospectus or the General
Disclosure Package has been made or reaffirmed without a reasonable
basis or has been disclosed other than in good faith.
(rr)
Absence of Commission Proceedings . The Registration
Statement is not the subject of a pending proceeding or examination
under Section 8(d) or 8(e) of the 1933 Act, and the Company is not
the subject of a pending proceeding under Section 8A of the
1933 Act in connection with the offering of the Shares.
(ss)
Statistical and Market-Related Data . Nothing has come to
the attention of the Company that has caused the Company to believe
that the statistical or other market-related data included in the
Registration
9
Statement, the
Prospectus or the General Disclosure Package is not based on or
derived from sources that are reliable and accurate in all material
respects.
(tt)
Money Laundering Laws . The operations of the Company are
and have been conducted at all times in compliance with applicable
financial recordkeeping and reporting requirements of the Currency
and Foreign Transactions Reporting Act of 1970, as amended, the
money laundering statutes of all jurisdictions, the rules and
regulations thereunder and any related or similar rules,
regulations or guidelines, issued, administered or enforced by any
governmental agency (collectively, the “ Money Laundering
Laws ”) and no action, suit or proceeding by or before
any court or governmental agency, authority or regulatory body or
any arbitrator involving the Company with respect to the Money
Laundering Laws is pending or, to the best knowledge of the
Company, threatened.
(uu)
OFAC . Neither the Company nor, to the knowledge of the
Company, any director, officer, agent, employee, affiliate or
person acting on behalf of the Company is currently subject to any
U.S. sanctions administered by the Office of Foreign Assets Control
of the U.S. Treasury Department (“ OFAC ”); and
the Company will not directly or indirectly use the proceeds of the
offering, or lend, contribute or otherwise make available such
proceeds to any subsidiary, joint venture partner or other person
or entity, for the purpose of financing the activities of any
person currently subject to any U.S. sanctions administered by
OFAC.
(vv)
Actively Traded Security . The Common Stock is an
“actively traded security” exempted from the
requirements of Rule 101 of Regulation M under the 1934
Act by subsection (c)(1) of such rule.
Any certificate
signed by any officer or other authorized signatory of the Company
and delivered to the Agents or to counsel for the Agents shall be
deemed a representation and warranty by the Company to the Agents
as to the matters covered thereby as of the date or dates indicated
in such certificate.
Section 2.
Sale and Delivery of Shares .
(a) Subject
to the terms and conditions set forth herein, the Company agrees to
issue and sell through the Agent acting as sales agent or directly
to the Agent acting as principal from time to time, and each Agent
agrees to use its commercially reasonable efforts to sell as sales
agent for the Company, the Shares. Sales of the Shares, if any,
through the Agent acting as sales agent or directly to the Agent
acting as principal, will be made by means of ordinary
brokers’ transactions on the NYSE or otherwise at market
prices prevailing at the time of sale, at prices related to
prevailing market prices or at negotiated prices.
(b) The
Shares are to be sold on a daily basis or otherwise as shall be
agreed to by the Company and the Agent, through whom the sale of
Shares is effected on that day, on any trading day (other than a
day on which the NYSE is scheduled to close prior to its regular
weekday closing time, each, a “ Trading Day ”)
that the Company has satisfied its obligations under Section 6
of this Agreement and that the Company has instructed such Agent to
make such sales. On any Trading Day, the Company shall sell Shares
through only one of the Agents, but in no event through both, and
the Company shall give at least one business day prior written
notice by facsimile or email to the Agents to notify them of any
change of the Agent through whom the sale of Shares will be
effected. For the avoidance of doubt, the foregoing limitation
shall not apply to sales solely to employees or security holders of
the Company or its subsidiaries, or to a trustee or other person
acquiring such securities for the accounts of such persons in which
either BA/ML or Morgan Stanley is acting for the Company in a
capacity other than as Agent under this Agreement. On any Trading
Day, the Company may instruct the Agent through whom the sale of
Shares are effected on that day by telephone (confirmed promptly by
facsimile or email, which confirmation will be promptly
acknowledged by such Agent) as to the maximum number of Shares to
be sold by the Agent on such day (in any event not in excess of the
number available for issuance under
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