Exhibit 1.1
EXTRA SPACE STORAGE
INC.
13,000,000
Shares
Common Stock
($.01 Par
Value)
UNDERWRITING
AGREEMENT
May 13
, 2008
UNDERWRITING
AGREEMENT
May 13 , 2008
MERRILL
LYNCH & CO.
Merrill Lynch, Pierce, Fenner &
Smith
Incorporated
Citigroup Global
Markets Inc.
as Representatives of
the several Underwriters
c/o Merrill
Lynch & Co.
Merrill Lynch, Pierce, Fenner &
Smith
Incorporated
4
World Financial Center
New
York, New York 10080
Ladies and
Gentlemen:
Extra Space
Storage Inc., a Maryland corporation (the “Company”),
and Extra Space Storage LP, a Delaware limited partnership, of
which the Company is the indirect general partner and majority
limited partner (the “Operating Partnership” and,
together with the Company, the “Transaction Entities”),
propose to issue and sell to the underwriters named in
Schedule A annexed hereto (the
“Underwriters”), for whom you are acting as
representatives, an aggregate of 13,000,000 shares (the “Firm
Shares”) of Common Stock, $.01 par value per share (the
“Common Stock”), of the Company. In addition, solely
for the purpose of covering over-allotments, the Transaction
Entities propose to grant to the Underwriters the option to
purchase from the Company up to an additional 1,950,000 shares of
Common Stock (the “Additional Shares”). The Firm
Shares and the Additional Shares are hereinafter collectively
sometimes referred to as the “Shares.” The Shares
are described in the Prospectus which is referred to
below.
The Company has
prepared and filed, in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and
regulations thereunder (collectively, the “Act”), with
the Securities and Exchange Commission (the
“Commission”) a registration statement on
Form “S-3” (File No. 333-128970) under the
Act (the “registration statement”). Amendments to
such registration statement, if necessary or appropriate, have been
similarly prepared and filed with the Commission in accordance with
the Act. Such registration statement, as so amended, has
become effective under the Act.
Except where the
context otherwise requires, “Registration Statement,”
as used herein, means the registration statement, as amended at the
time of such registration statement’s effectiveness for
purposes of Section 11 of the Act, as such section applies to
the respective Underwriters (the “Effective Time”),
including (i) all documents filed as a part thereof or
incorporated or deemed to be incorporated by reference therein,
(ii) any information contained or incorporated by reference in
a prospectus filed with the Commission pursuant to
Rule 424(b) under the Act, to the extent such information
is deemed, pursuant to Rule 430B or Rule 430C under the
Act, to be part of the registration statement at the Effective
Time, and (iii) any registration statement filed to register
the offer and sale of Shares pursuant to
Rule 462(b) under the Act.
The Company has
furnished to you, for use by the Underwriters and by dealers in
connection with the offering of the Shares, copies of one or more
“preliminary prospectus supplements,” and otherwise
made available the documents incorporated by reference therein,
relating to the Shares. Except where the context otherwise
requires, “Pre-Pricing Prospectus,” as used herein,
means each such preliminary prospectus “supplement”
relating to the Shares, in the form so furnished, including any
basic prospectus (whether or not in preliminary form) furnished to
you by the Company and attached to or used with such preliminary
prospectus “supplement.” Except where the context
otherwise requires, “Basic Prospectus,” as used herein,
means any such basic prospectus and any basic prospectus furnished
to you by the Company and attached to or used with the Prospectus
Supplement (as defined below).
Except where the
context otherwise requires, “Prospectus Supplement,” as
used herein, means the final prospectus supplement, relating to the
Shares, filed by the Company with the Commission pursuant to
Rule 424(b) under the Act on or before the second
business day after the date hereof (or such earlier time as may be
required under the Act), in the form furnished by the Company to
you for use by the Underwriters and by dealers in connection with
the offering of the Shares.
Except where the
context otherwise requires, “Prospectus,” as used
herein, means the Prospectus Supplement together with the Basic
Prospectus attached to or used with the Prospectus
Supplement.
“Permitted
Free Writing Prospectuses,” as used herein, means the
documents listed on Schedule B attached hereto and each
“road show” (as defined in Rule 433 under the Act)
that is a “written communication” (as defined in
Rule 405 under the Act), including any “bona fide
electronic road show” (as defined in Rule 433(h)(5)), if
any, related to the offering of the Shares contemplated hereby
(each such road show, a “road show”).
“Disclosure
Package,” as used herein, means any Pre-Pricing Prospectus
and Basic Prospectus, in either case together with all Permitted
Free Writing Prospectuses, if any, and the information included as
Schedule C hereto (the “Pricing
Information”).
Any reference
herein to the registration statement, the Registration Statement,
any Basic Prospectus, any Pre-Pricing Prospectus, the Prospectus
Supplement, the Prospectus or any Permitted Free Writing Prospectus
shall be deemed to refer to and include the documents, if any,
incorporated by reference, or deemed to be incorporated by
reference, therein (the “Incorporated Documents”),
including, unless the context otherwise requires, the documents, if
any, filed as exhibits to such Incorporated Documents. Any
reference herein to the terms “amend,”
“amendment” or “supplement” with respect to
the Registration Statement, any Basic Prospectus, any Pre-Pricing
Prospectus, the Prospectus Supplement, the Prospectus or any
Permitted Free Writing Prospectus shall be deemed to refer to and
include the filing of any document under the Securities Exchange
Act of 1934, as amended, and the rules and regulations
thereunder (collectively, the “Exchange Act”) on or
after the initial effective date of the Registration Statement, or
the date of such Basic Prospectus, such Pre-Pricing Prospectus, the
Prospectus Supplement, the Prospectus or such Permitted Free
Writing Prospectus, as the case may be, and deemed to be
incorporated therein by reference.
As used in this
Agreement, “business day” shall mean a day on which the
New York Stock Exchange (the “NYSE”) is open for
trading. The terms “herein,”
“hereof,” “hereto,”
“hereinafter” and similar terms, as used in this
Agreement, shall in each case refer to this Agreement as a whole
and not
2
to any particular
section, paragraph, sentence or other subdivision of this
Agreement. The term “or,” as used herein, is not
exclusive.
1.
Sale and Purchase . Upon the basis of the
representations and warranties and subject to the terms and
conditions herein set forth, the Company agrees to issue and sell
to the respective Underwriters and each of the Underwriters,
severally and not jointly, agrees to purchase from the Company the
respective number of Firm Shares (subject to such adjustment as
Merrill Lynch, Pierce, Fenner & Smith Incorporated
(“Merrill Lynch”) may determine to avoid fractional
shares) which bears the same proportion to the total number of Firm
Shares to be sold by the Company as the number of Firm Shares set
forth opposite the name of such Underwriter in
Schedule A annexed hereto, subject to adjustment in
accordance with Section 8 hereof, in each case at a purchase
price of $15.61425 per Share (the public offering price of $16.35
per Share shall apply to the 60,000 Shares (120,000 Shares in the
aggregate) that the Underwriters have reserved for sale to each of
Kenneth M. Woolley, the Company’s Chairman and Chief
Executive Officer, and Spencer F. Kirk, the Company’s
President). The Transaction Entities are advised by you that
the Underwriters intend (i) to make a public offering of their
respective portions of the Firm Shares as soon after the effective
date of this Agreement as in your judgment is advisable and
(ii) initially to offer the Firm Shares upon the terms set
forth in the Prospectus. You may from time to time increase
or decrease the public offering price after the initial public
offering to such extent as you may determine.
In addition, the
Company hereby grants to the several Underwriters the option (the
“Over-Allotment Option”) to purchase, and upon the
basis of the representations and warranties and subject to the
terms and conditions herein set forth, the Underwriters shall have
the right to purchase, severally and not jointly, from the Company
ratably in accordance with the number of Firm Shares to be
purchased by each of them, all or a portion of the Additional
Shares as may be necessary to cover over-allotments made in
connection with the offering of the Firm Shares, at the same
purchase price per share to be paid by the Underwriters to the
Company for the Firm Shares. The Over-Allotment Option may be
exercised by Merrill Lynch on behalf of the several Underwriters at
any time and from time to time on or before the thirtieth day
following the date of the Prospectus Supplement, by written notice
to the Company. Such notice shall set forth the aggregate
number of Additional Shares as to which the Over-Allotment Option
is being exercised and the date and time when the Additional Shares
are to be delivered (any such date and time being herein referred
to as an “additional time of purchase”);
provided , however , that no additional time of
purchase shall be earlier than the “time of purchase”
(as defined below) nor earlier than the second business day after
the date on which the Over-Allotment Option shall have been
exercised nor later than the tenth business day after the date on
which the Over-Allotment Option shall have been exercised.
The number of Additional Shares to be sold to each Underwriter
shall be the number which bears the same proportion to the
aggregate number of Additional Shares being purchased as the number
of Firm Shares set forth opposite the name of such Underwriter on
Schedule A hereto bears to the total number of Firm Shares
(subject, in each case, to such adjustment as Merrill Lynch may
determine to eliminate fractional shares), subject to adjustment in
accordance with Section 8 hereof.
2.
Payment and Delivery . Payment of the purchase price
for the Firm Shares shall be made to the Company by Federal Funds
wire transfer, against delivery of the certificates for the Firm
Shares to you through the facilities of The Depository Trust
Company (DTC) for the respective accounts of the
Underwriters. Such payment and delivery shall be made at
10:00 A.M., New York City time, on May 19,
2008 (unless another time shall be agreed to by you and the
Company or unless postponed in accordance with the provisions of
Section 8 hereof). The time at which such payment and
delivery are to
3
be made is hereinafter
sometimes called “the time of purchase.”
Electronic transfer of the Firm Shares shall be made to you at the
time of purchase in such names and in such denominations as you
shall specify.
Payment of the
purchase price for the Additional Shares shall be made at the
additional time of purchase in the same manner and at the same
office as the payment for the Firm Shares. Electronic
transfer of the Additional Shares shall be made to you at the
additional time of purchase in such names and in such denominations
as you shall specify.
Deliveries of the
documents described in Section 6 hereof with respect to the
purchase of the Shares shall be made at the offices of
Hogan & Hartson LLP, 555 Thirteenth Street, NW,
Washington, D.C., at 9:00 A.M., New York City time, on the
date of the closing of the purchase of the Firm Shares or the
Additional Shares, as the case may be.
3.
Representations and Warranties of the Transaction Entities
. Each of the Transaction Entities jointly and severally
represents and warrants to and agrees with each of the Underwriters
that:
(a)
the Registration Statement has heretofore become effective under
the Act; no stop order of the Commission preventing or suspending
the use of any Basic Prospectus, any Pre-Pricing Prospectus, the
Prospectus Supplement, the Prospectus or any Permitted Free Writing
Prospectus, or the effectiveness of the Registration Statement, has
been issued, and no proceedings for such purpose have been
instituted or are pending or, to the Company’s knowledge, are
contemplated by the Commission and any request on the part of the
Commission for additional information has been complied with;
(b)
the Registration Statement complied when it became effective,
complies as of the date hereof and, as amended or supplemented, at
the time of purchase, each additional time of purchase, if any, and
at all times during which a prospectus is required by the Act to be
delivered (whether physically or through compliance with
Rule 172 under the Act or any similar rule) in connection with
any sale of Shares, will comply, in all material respects, with the
requirements of the Act; the conditions to the use of
Form “S-3” in connection with the offering and
sale of the Shares as contemplated hereby have been satisfied; the
Registration Statement meets, and the offering and sale of the
Shares as contemplated hereby complies with, the requirements of
Rule 415 under the Act (including, without limitation,
Rule 415(a)(5)); the Registration Statement did not, as of the
latest Effective Time, 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; each
Pre-Pricing Prospectus complied, at the time it was filed with the
Commission, and complies as of the date hereof, in all material
respects with the requirements of the Act; at no time during the
period that begins on the earlier of the date of such Pre-Pricing
Prospectus and the date such Pre-Pricing Prospectus was filed with
the Commission and ends at the time of purchase did or will any
Pre-Pricing Prospectus, as then amended or supplemented, together
with the Pricing Information, include an untrue statement of a
material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances
under which they were
4
made, not misleading, and at no time during
such period did or will any Pre-Pricing Prospectus, as then amended
or supplemented, together with any combination of one or more of
the then issued Permitted Free Writing Prospectuses, if any, and
the Pricing Information, include an untrue statement of a material
fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under
which they were made, not misleading; each Basic Prospectus
complied or will comply, at the time it was or will be filed with
the Commission, complies as of the date hereof (if filed with the
Commission on or prior to the date hereof) and, at the time of
purchase, each additional time of purchase, if any, and at all
times during which a prospectus is required by the Act to be
delivered (whether physically or through compliance with
Rule 172 under the Act or any similar rule) in connection with
any sale of Shares, will comply, in all material respects, with the
requirements of the Act; at no time during the period that begins
on the earlier of the date of such Basic Prospectus and the date
such Basic Prospectus was filed with the Commission and ends at the
time of purchase did or will any Basic Prospectus, as then amended
or supplemented, together with the Pricing Information, include an
untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading, and at no time during such period did or will any Basic
Prospectus, as then amended or supplemented, together with any
combination of one or more of the then issued Permitted Free
Writing Prospectuses, if any, and the Pricing Information, include
an untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading; each of the Prospectus Supplement and the Prospectus
will comply, as of the date that it is filed with the Commission,
the date of the Prospectus Supplement, the time of purchase, each
additional time of purchase, if any, and at all times during which
a prospectus is required by the Act to be delivered (whether
physically or through compliance with Rule 172 under the Act
or any similar rule) in connection with any sale of Shares, in all
material respects, with the requirements of the Act (in the case of
the Prospectus, including, without limitation,
Section 10(a) of the Act); at no time during the period
that begins on the earlier of the date of the Prospectus Supplement
and the date the Prospectus Supplement is filed with the Commission
and ends at the later of the time of purchase, the latest
additional time of purchase, if any, and the end of the period
during which a prospectus is required by the Act to be delivered
(whether physically or through compliance with Rule 172 under
the Act or any similar rule) in connection with any sale of Shares
did or will any Prospectus Supplement or the Prospectus, as then
amended or supplemented, include an untrue statement of a material
fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under
which they were made, not misleading; at no time during the period
that begins on the date of such Permitted Free Writing Prospectus
and ends at the time of purchase did or will any Permitted Free
Writing Prospectus include an untrue statement of a material fact
or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which
they were made, not misleading; provided , however ,
that the Company and the Operating Partnership make no
representation or warranty in this Section 3(b) with
respect to any statement contained in the Registration Statement,
any Pre-Pricing Prospectus, the Prospectus or any Permitted Free
Writing Prospectus in reliance upon and in conformity with
information concerning an
5
Underwriter and furnished in writing by or on
behalf of such Underwriter through you to the Company expressly for
use in the Registration Statement, such Pre-Pricing Prospectus, the
Prospectus or such Permitted Free Writing Prospectus; each
Incorporated Document, at the time such document was filed with the
Commission complied, in all material respects, with the
requirements of the Exchange Act and did not include an untrue
statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not
misleading;
(c)
prior to the execution of this Agreement, the Company has not,
directly or indirectly, offered or sold any Shares by means of any
“prospectus” (within the meaning of the Act) or used
any “prospectus” (within the meaning of the Act) in
connection with the offer or sale of the Shares, in each case other
than the Pre-Pricing Prospectus and the Permitted Free Writing
Prospectus, if any; the Company has not, directly or indirectly,
prepared, used or referred to any Permitted Free Writing Prospectus
except in compliance with Rules 164 and 433 under the Act;
assuming that such Permitted Free Writing Prospectus is so sent or
given after the Registration Statement was filed with the
Commission (and after such Permitted Free Writing Prospectus was,
if required pursuant to Rule 433(d) under the Act, filed
with the Commission), the sending or giving, by any Underwriter, of
any Permitted Free Writing Prospectus will satisfy the provisions
of Rule 164 or Rule 433 (without reliance on subsections
(b), (c) and (d) of Rule 164); the conditions set
forth in one or more of subclauses (i) through (iv),
inclusive, of Rule 433(b)(1) under the Act are satisfied,
and the registration statement relating to the offering of the
Shares contemplated hereby, as initially filed with the Commission,
includes a prospectus that, other than by reason of Rule 433
or Rule 431 under the Act, satisfies the requirements of
Section 10 of the Act; neither the Company nor the
Underwriters are disqualified, by reason of subsection (f) or
(g) of Rule 164 under the Act, from using, in connection
with the offer and sale of the Shares, “free writing
prospectuses” (as defined in Rule 405 under the Act)
pursuant to Rules 164 and 433 under the Act; the Company
was not and is not an “ineligible issuer” (as
defined in Rule 405 under the Act) as of the eligibility
determination date for purposes of Rules 164 and 433 under the
Act with respect to the offering of the Shares contemplated by the
Registration Statement; the parties hereto agree and understand
that the content of any and all “road shows” (as
defined in Rule 433 under the Act) related to the offering of
the Shares contemplated hereby is solely the property of the
Company;
(d)
as of March 31, 2008, the Company had an authorized and
outstanding capitalization as set forth under the heading
“Actual” in the section of the Registration Statement,
the Pre-Pricing Prospectus and the Prospectus entitled
“Capitalization” (and any similar sections or
information, if any, contained in any Permitted Free Writing
Prospectus), and, as of the time of purchase and any additional
time of purchase, as the case may be, the Company shall have an
authorized capitalization as set forth under the heading “As
Adjusted” in the section of the Registration Statement, the
Pre-Pricing Prospectus and the Prospectus entitled
“Capitalization” (and any similar sections or
information, if any, contained in any Permitted Free Writing
Prospectus); all of the issued and outstanding shares of capital
stock, including the Common Stock of the Company have been duly
authorized and validly issued and are fully paid and
non-assessable, have
6
been issued in compliance with all federal and
state securities laws and were not issued in violation of any
preemptive right, resale right, right of first refusal or similar
right and no further approval or authority of the stockholders or
the Board of Directors of the Company are required for the issuance
and sale of the Shares;
(e)
(i) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State of Maryland, with full corporate power and authority to own,
lease and operate its properties and conduct its business as
described in the Registration Statement, the Pre-Pricing
Prospectus, the Prospectus and the Permitted Free Writing
Prospectus, if any, to execute and deliver this Agreement and to
issue, sell and deliver the Shares as contemplated herein;
(ii) the Operating Partnership has been duly formed and is
validly existing as a limited partnership in good standing under
the laws of the State of Delaware, with full limited partnership
power and authority to own, lease and operate its properties and
conduct its business and described in the Registration Statement,
the Pre-Pricing Prospectus, the Prospectus and the Permitted Free
Writing Prospectus, if any, and to execute and deliver this
Agreement and to perform its obligations as contemplated
herein;
(f)
(i) the Company is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction where the
ownership or leasing of its properties or the conduct of its
business requires such qualification, except where the failure to
be so qualified and in good standing would not, individually or in
the aggregate, have a material adverse effect on the business,
properties, condition (financial or otherwise), results of
operations or prospects of the Company, the Operating Partnership
and the Subsidiaries (as hereinafter defined) taken as a whole (a
“Material Adverse Effect”); (ii) the Operating
Partnership is duly qualified to do business and is in good
standing in each jurisdiction where the ownership or leasing of its
properties or the conduct of its business requires such
qualification, except where the failure to be so qualified and in
good standing would not have a Material Adverse Effect;
(g)
the Company and the Operating Partnership have provided you
complete and correct copies of the articles of incorporation and
the by-laws (or comparable organizational documents) of the
Company, the Operating Partnership and their subsidiaries (as
defined under the Exchange Act) (each, a “Subsidiary”
and collectively, the “Subsidiaries”) and all
amendments thereto have been delivered to you and, except as set
forth in the exhibits to the Registration Statement or any
Incorporated Document, no changes therein will be made on or after
the date hereof through and including the time of purchase or, if
later, any additional time of purchase; the Company, through two
wholly-owned Subsidiaries, owned approximately 92.92% of the
outstanding units of partnership interest in the Operating
Partnership as of March 31, 2008; each of the
“significant subsidiaries” of the Company as defined in
Rule 405 of the Securities Act and ESS Holdings Business Trust
I (each, a “Significant Subsidiary” and collectively,
the “Significant Subsidiaries”) has been duly organized
and is validly existing as a corporation, limited liability
company, limited partnership or trust, as applicable, in good
standing under the laws of the jurisdiction of its organization,
with full power and authority to own, lease and operate its
properties and to conduct its business as described in the
Registration Statement, the Pre-Pricing Prospectus, the Prospectus
and the
7
Permitted Free Writing Prospectus, if any; each
Subsidiary is duly qualified to do business as a foreign
corporation, limited liability company, limited partnership or
trust, as applicable, and is in good standing in each jurisdiction
where the ownership or leasing of its properties or the conduct of
its business requires such qualification, except where the failure
to be so qualified and in good standing would not, individually or
in the aggregate, have a Material Adverse Effect; each of the
Company and the Operating Partnership has no “significant
subsidiary,” other than as set forth in Annex A
hereto; all of the outstanding shares of capital stock or other
equity interests of each of the Subsidiaries have been duly
authorized and validly issued, are fully paid and non-assessable,
as applicable, and, with respect to such securities, are owned
directly or indirectly by the Company or the Operating Partnership
subject to no security interest, other encumbrance or adverse
claims; and no options, warrants or other rights to purchase,
agreements or other obligations to issue or other rights to convert
any obligation into shares of capital stock or ownership interests
in the Subsidiaries are outstanding;
(h)
the Shares have been duly and validly authorized and, when issued
and delivered against payment therefor as provided herein, will be
duly and validly issued, fully paid and non-assessable and free of
statutory and contractual preemptive rights, resale rights, rights
of first refusal and similar rights;
(i)
the capital stock of the Company, including the Shares, conforms in
all material respects to the description thereof contained or
incorporated by reference in the Registration Statement, the
Pre-Pricing Prospectus, the Prospectus or any Permitted Free
Writing Prospectus, and the certificates for the Shares are in due
and proper form and the holders of the Shares will not be subject
to personal liability by reason of being such holders;
(j)
this Agreement has been duly authorized, executed and delivered by
each of the Transaction Entities;
(k)
neither the Company, the Operating Partnership nor any of the
Subsidiaries is in breach or violation of or in default under (nor
has any event occurred which with notice, lapse of time or both
would result in any breach of, constitute a default under or give
the holder of any indebtedness (or a person acting on such
holder’s behalf) the right to require the repurchase,
redemption or repayment of all or a part of such indebtedness
under) (i) its respective charter, by-laws, limited liability
company agreement, partnership agreement or other organizational
document, or (ii) any indenture, mortgage, deed of trust, bank
loan or credit agreement or other evidence of indebtedness, or any
license, lease, contract or other agreement or instrument to which
the Company, the Operating Partnership or any of the Subsidiaries
is a party or by which any of them or any of their properties may
be bound or affected, (iii) any federal, state, local or
foreign law, regulation or rule, or (iv) any judgment or order
applicable to the Operating Partnership, the Company or any of the
Subsidiaries or any of their respective properties except, in case
of (ii), (iii) and (iv), as would not have a Material Adverse
Effect, and the execution, delivery and performance of this
Agreement, the issuance and sale of the Shares and the consummation
of the transactions contemplated hereby will not conflict
8
with, result in any breach or violation of or
constitute a default under (nor constitute any event which, with or
without notice, lapse of time or both, would result in any breach
of or constitute a default under) (A) the charter, by-laws,
limited liability company agreement, partnership agreement or other
organizational documents, as applicable, of the Company, the
Operating Partnership or any of the Subsidiaries, (B) any
indenture, mortgage, deed of trust, bank loan or credit agreement
or other evidence of indebtedness, or any license, lease, contract
or other agreement or instrument to which the Company, the
Operating Partnership or any of the Subsidiaries is a party or by
which any of them or any of their respective properties may be
bound or affected, (C) any federal, state, local or foreign
law, regulation or rule, (D) any decree, judgment or order
applicable to the Company, the Operating Partnership or any of the
Subsidiaries or any of their respective properties, or
(E) result in the creation or imposition of any lien, charge
or encumbrance upon any property or assets of the Company or any of
the Subsidiaries, except, in case of (B), (C), (D) or (E), as
would not, individually or in the aggregate, have a Material
Adverse Effect;
(l)
no approval, authorization, consent or order of or filing with any
federal, state, local or foreign governmental or regulatory
commission, board, body, authority or agency is required in
connection with the issuance and sale of the Shares or the
consummation by the Company of the transactions contemplated
hereby, other than registration of the Shares under the Act, which
has been or will be effected, and any necessary qualification under
the securities or blue sky laws of the various jurisdictions in
which the Shares are being offered by the Underwriters or under the
rules of the Financial Industry Regulatory Authority
(“FINRA”);
(m)
except as set forth in the Disclosure Package and the Prospectus,
(i) no person has the right, contractual or otherwise, to
cause the Operating Partnership or the Company to issue or sell to
it any shares of Common Stock or shares of any other capital stock
or other equity interests of the Operating Partnership or the
Company, (ii) no person has any preemptive rights, resale
rights, rights of first refusal or other rights to purchase any
shares of Common Stock or shares of any other capital stock or
other equity interests in the Operating Partnership or the Company,
and (iii) no person has the right to act as an underwriter or
as a financial advisor to the Operating Partnership or the Company
in connection with the offer and sale of the Shares, in the case of
each of the foregoing clauses (i), (ii) and (iii), whether as
a result of the filing or effectiveness of the Registration
Statement or the sale of the Shares as contemplated thereby or
otherwise; no person has the right, contractual or otherwise, to
cause the Company or the Operating Partnership to register under
the Act any shares of Common Stock or shares of any other capital
stock of or other equity interests in the Company or the Operating
Partnership, other than (A) registration rights pursuant to
the Registration Rights Agreement, dated August 2004, by and
among the Company and certain persons listed on schedule 1 thereto,
for which the Company has already filed a registration statement
that has been declared effective by the Commission, and which
remains in effect as of the date of this Agreement,
(B) registration rights granted in connection with the OP
Units issued to Jesse Morgan and family, which registration rights
are not and will not be exercisable as of the date of this
Agreement, the time of purchase or the additional time of purchase,
(C) registration rights granted in connection with the OP
Units issued to Richard Crocker and
9
family, which registration rights are not and
will not be exercisable as of the date of this Agreement, the time
of purchase or the additional time of purchase,
(D) registration rights granted in connection with the OP
Units issued to H. James Knuppe and family, which registration
rights are not and will not be exercisable as of the date of this
Agreement, the time of purchase or the additional time of purchase,
and (E) registration rights granted to the holders of the
Operating Partnership’s 3.625% Exchangeable Senior Notes
pursuant to the Registration Rights Agreement dated March 27,
2007, for which the Company has already filed a registration
statement that has been declared effective by the Commission, and
which remains in effect as of the date of this Agreement, or to
include any such shares or interests in the Registration Statement
or the offering contemplated thereby, whether as a result of the
filing or effectiveness of the Registration Statement or the sale
of the Shares as contemplated thereby or
otherwise;
(n)
each of the Company, the Operating Partnership and the Subsidiaries
has all necessary licenses, authorizations, consents and approvals
and has made all necessary filings required under any federal,
state, local or foreign law, regulation or rule, and has obtained
all necessary licenses, authorizations, consents and approvals from
other persons, in order to conduct their respective businesses,
except as would not have a Material Adverse Effect; neither the
Company, the Operating Partnership nor any of the Subsidiaries is
in violation of, or in default under, or has received notice of any
proceedings relating to revocation or modification of, any such
license, authorization, consent or approval or any federal, state,
local or foreign law, regulation or rule or any decree, order
or judgment applicable to the Company, the Operating Partnership or
any of the Subsidiaries, except where such violation, default,
revocation or modification would not, individually or in the
aggregate, have a Material Adverse Effect;
(o)
all legal or governmental proceedings, affiliate transactions,
off-balance sheet transactions, contracts, licenses, agreements,
leases or documents of a character required to be described in the
Registration Statement, the Pre-Pricing Prospectus or the
Prospectus or to be filed as an exhibit to the Registration
Statement have been so described or filed as required;
(p)
there are no actions, suits, claims, investigations or proceedings
pending or threatened or, to the knowledge of either of the
Transaction Entities, contemplated to which the Company, the
Operating Partnership or any of the Subsidiaries or any of their
respective directors or officers is a party or of which any of
their respective properties is subject at law or in equity, before
or by any federal, state, local or foreign governmental or
regulatory commission, board, body, authority or agency, except any
such action, suit, claim, investigation or proceeding which would
not result in a judgment, decree or order having, individually or
in the aggregate, a Material Adverse Effect or preventing
consummation of the transactions contemplated hereby;
(q)
Ernst & Young LLP, the Company’s registered public
accounting firm, whose report on the consolidated financial
statements of the Company and the Subsidiaries is included and
incorporated by reference in the Registration Statement, the
Pre-Pricing Prospectus and the Prospectus, is an independent public
accountant as
10
required by the Act and the rules of the
Public Company Accounting Oversight Board (United
States);
(r)
the audited financial statements included and incorporated by
reference in the Registration Statement, the Pre-Pricing
Prospectus, the Prospectus or any Permitted Free Writing
Prospectus, together with the related notes and schedules,
(i) present fairly (A) the consolidated financial
position of the Company and the Subsidiaries as of the dates
indicated, and the consolidated results of operations and cash
flows of the Company and the Subsidiaries for the periods specified
and (B) the statement of revenues and certain expenses of each
of Extra Space of Jamaica Plain, LLC, Extra Space of Culver City,
LLC and Extra Space of Middletown, LLC, in each case for the
periods specified (such financial statements having been included
in the Company’s Current Report on Form 8-K filed with
the Commission on March 14, 2008), and (ii) have been
prepared in compliance with the requirements of the Act and in
conformity with generally accepted accounting principles applied on
a consistent basis during the periods involved;
(s)
all pro forma financial statements or data included or incorporated
by reference in the Registration Statement, the Pre-Pricing
Prospectus, the Prospectus and any Permitted Free Writing
Prospectus comply with the requirements of Regulation S-X of the
Act and the Exchange Act, and the assumptions used in the
preparation of such pro forma financial statements and data are
reasonable, the pro forma adjustments used therein are appropriate
to give effect to the transactions or circumstances described
therein and the pro forma adjustments have been properly applied to
the historical amounts in the compilation of those statements and
data; the other financial and statistical data contained or
incorporated by reference in the Registration Statement, the
Pre-Pricing Prospectus, the Prospectus and any Permitted Free
Writing Prospectus are fairly presented and prepared on a basis
consistent with the financial statements and books and records of
the Company, the Operating Partnership and the Subsidiaries; there
are no financial statements (historical or pro forma) that are
required to be included or incorporated by reference in the
Registration Statement, the Pre-Pricing Prospectus, the Prospectus
and any Permitted Free Writing Prospectus that are not included or
incorporated by reference as required; the Company, the Operating
Partnership and the Subsidiaries do not have any material
liabilities or obligations, direct or contingent (including any
off-balance sheet obligations), not disclosed in the Registration
Statement, the Pre-Pricing Prospectus, the Prospectus and any
Permitted Free Writing Prospectus; and all disclosures contained or
incorporated by reference in the Registration Statement, the
Pre-Pricing Prospectus, the Prospectus or any Permitted Free
Writing Prospectus regarding “non-GAAP financial
measures” (as such term is defined by the rules and
regulations of the Commission) comply with Regulation G of the
Exchange Act and Item 10 of Regulation S-K under the Act, to the
extent applicable;
(t)
subsequent to the respective dates as of which information is given
in the Disclosure Package and the Prospectus, in each case
excluding any amendments or supplements to the foregoing made after
the execution of this Agreement, there has not been (i) any
material adverse change, or any development involving a prospective
material adverse change, in the business, properties, management,
financial condition or
11
results of operations of the Company, the
Operating Partnership and the Subsidiaries taken as a whole,
(ii) any transaction which is material to the Company, the
Operating Partnership and the Subsidiaries taken as a whole,
(iii) and except as otherwise disclosed in the
Disclosure Package and the Prospectus, any obligation or
liability, direct or contingent (including any off-balance sheet
obligations), incurred by the Company, the Operating Partnership or
any Subsidiary, which is material to the Company and the
Subsidiaries taken as a whole, (iv) other than the issuance of
shares of Common Stock pursuant to the exercise or vesting of any
Awards outstanding on the date hereof and issued pursuant to the
Equity Plans, any change in the authorized or outstanding capital
stock or outstanding indebtedness of the Company, the Operating
Partnership or the Subsidiaries or (v) any dividend or
distribution of any kind declared, paid or made on the capital
stock of the Company;
(u)
the Company and the Operating Partnership have obtained for the
benefit of the Underwriters the agreement (a “Lock-Up
Agreement”), in the form set forth as Exhibit A
hereto, of each of the persons identified in
Exhibit A-1 hereto;
(v)
neither the Company, the Operating Partnership nor any Subsidiary
is and, after giving effect to the offering and sale of the Shares
and the application of the proceeds thereof, none of them will be
an “investment company” or an entity
“controlled” by an “investment company,” as
such terms are defined in the Investment Company Act of 1940, as
amended (the “Investment Company Act”);
(w)
except as described in the Disclosure Package and the Prospectus,
the Company and each of the Subsidiaries has good and marketable
title to all property (real and personal) described in the
Disclosure Package and the Prospectus as being owned by each of
them, free and clear of all liens, claims, security interests or
other encumbrances; except as described in the Disclosure Package
and the Prospectus, all the property described in the Disclosure
Package and the Prospectus as being held under lease by the
Company, the Operating Partnership or a Subsidiary is held thereby
under valid, subsisting and enforceable leases, except where the
failure to do so would not, individually or in the aggregate, have
a Material Adverse Effect;
(x)
except as described in the Disclosure Package and the Prospectus,
the Company, the Operating Partnership and the Subsidiaries own, or
have obtained valid and enforceable licenses for, or other rights
to use, the inventions, patent applications, patents, trademarks
(both registered and unregistered), tradenames, copyrights, trade
secrets and other proprietary information described in the
Disclosure Package and the Prospectus as being owned or licensed by
them or which are necessary for the conduct of their respective
businesses as currently conducted, except where the failure to own,
license or have such rights would not, individually or in the
aggregate, have a Material Adverse Effect
(collectively, “Intellectual Property”);
(i) there are no third parties who have or, to the knowledge
of either of the Transaction Entities, will be able to establish
rights to any Intellectual Property, except for the ownership
rights of the owners of the Intellectual Property which the
Disclosure Package and the Prospectus disclose is licensed to the
Company or the Operating Partnership and for licenses for or other
rights to use Intellectual Property which is licensed to the
Company on a non-exclusive basis;
12
(ii) none of the Company, the Operating
Partnership or any of the Subsidiaries has received written notice
of any infringement by third parties of any Intellectual Property;
(iii) there is no pending or, to the knowledge of the
Transaction Entities, threatened action, suit, proceeding or claim
by others challenging the Transaction Entities’ rights in or
to any Intellectual Property, and the Company and the Operating
Partnership are unaware of any facts which could form a reasonable
basis for any such action, suit, proceeding or claim;
(iv) there is no pending or, to the knowledge of the
Transaction Entities, threatened action, suit, proceeding or claim
by others challenging the validity or scope of any Intellectual
Property, and the Company and the Operating Partnership are unaware
of any facts which could form a reasonable basis for any such
claim; (v) there is no pending or, to the knowledge of the
Transaction Entities, threatened action, suit, proceeding or claim
by others that the Transaction Entities or any Subsidiary infringes
or otherwise violates any patent, trademark, copyright, trade
secret or other proprietary rights of others, and the Transaction
Entities are unaware of any facts which could form a reasonable
basis for any such claim; (vi) there is no patent or patent
application that contains claims that interfere with the issued or
pending claims of any of the Intellectual Property owned by or
licensed to the Company or the Operating Partnership; and
(vii) none of the Company, the Operating Partnership or any of
the Subsidiaries is aware of any prior art that may render any
patent application owned by the Company, the Operating Partnership
or any Subsidiary of the Intellectual Property unpatentable that
has not been disclosed to the U.S. Patent and Trademark
Office;
(y)
none of the Company, the Operating Partnership or any of the
Subsidiaries is engaged in any unfair labor practice; except for
matters which would not, individually or in the aggregate, have a
Material Adverse Effect, (i) there is (A) no unfair labor
practice complaint pending or, to the knowledge of either of the
Transaction Entities, threatened against the Company, the Operating
Partnership or any of the Subsidiaries before the National Labor
Relations Board, and no grievance or arbitration proceeding arising
out of or under collective bargaining agreements is pending or
threatened, (B) no strike, labor dispute, slowdown or
stoppage pending or, to the knowledge of either of the
Transaction Entities, threatened against the Company or any of the
Subsidiaries and (C) no union representation dispute currently
existing concerning the employees of the Company, the Operating
Partnership or any of the Subsidiaries, and (ii) to the
knowledge of either of the Transaction Entities, (A) no union
organizing activities are currently taking place concerning the
employees of the Company, the Operating Partnership or any of the
Subsidiaries and (B) there has been no violation of any
federal, state, local or foreign law relating to discrimination in
the hiring, promotion or pay of employees, any applicable wage or
hour laws or any provision of the Employee Retirement Income
Security Act of 1974 (“ERISA”) or the rules and
regulations promulgated thereunder concerning the employees of the
Company, the Operating Partnership or any of the Subsidiaries;
(z)
(i) the Company, the Operating Partnership and the
Subsidiaries and their respective properties, assets and operations
are in compliance with, and the Company, the Operating Partnership
and the Subsidiaries hold all permits, authorizations and approvals
required under, Environmental Laws (as defined below), except to
the extent that failure to so comply or to hold such permits,
authorizations or approvals would not, individually
13
or
in the aggregate, have a Material Adverse Effect; (ii) there
are no past, present or, to the knowledge of either of the
Transaction Entities, reasonably anticipated future events,
conditions, circumstances, activities, practices, actions,
omissions or plans that could reasonably be expected to give rise
to any material costs or liabilities to the Company, the Operating
Partnership or any Subsidiary under, or to interfere with or
prevent compliance by the Company or the Subsidiaries with,
Environmental Laws; (iii) except as would not, individually or
in the aggregate, have a Material Adverse Effect, none of the
Company, the Operating Partnership or any of the Subsidiaries
(A) is the subject of any investigation, (B) has received
any notice or claim, (C) is a party to or affected by any
pending or threatened action, suit or proceeding, (D) is bound
by any judgment, decree or order or (E) has entered into any
agreement, in each case relating to any alleged violation of any
Environmental Law or any actual or alleged liability or release or
threatened release or cleanup at any location of any Hazardous
Materials (as defined below) (as used herein, “Environmental
Law” means any federal, state, local or foreign law, statute,
ordinance, rule, regulation, order, decree, judgment, injunction,
permit, license, authorization or other binding requirement, or
common law, relating to health, safety or the protection, cleanup
or restoration of the environment or natural resources, including
those relating to the distribution, processing, generation,
treatment, storage, disposal, transportation, other handling or
release or threatened release of Hazardous Materials, and
“Hazardous Materials” means any material (including,
without limitation, pollutants, contaminants, hazardous or toxic
substances or wastes) that is regulated by or may give rise to
liability under any Environmental Law);
(aa)
in the ordinary course of their business, the Company and the
Operating Partnership conduct periodic reviews of the effect of the
Environmental Laws on their business, operations and properties of
the Company and the Operating Partnership, in the course of which
they identify and evaluate associated costs and liabilities
(including, without limitation, any capital or operating
expenditures required for cleanup, closure of properties or
compliance with the Environmental Laws or any permit, license or
approval, any related constraints on operating activities and any
potential liabilities to third parties);
(bb)
all material tax returns required to be filed by the Company, the
Operating Partnership and each of the Subsidiaries have been filed,
and all material taxes and other assessments of a similar nature
(whether imposed directly or through withholding) including any
interest, additions to tax or penalties applicable thereto due or
claimed to be due from such entities have been paid, other than
those being contested in good faith and for which ade
|
