Exhibit 1.1
Execution Version
EXTRA SPACE STORAGE INC.
12,000,000 Shares
Common Stock
($.01 Par Value)
UNDERWRITING AGREEMENT
December 5, 2005
UNDERWRITING AGREEMENT
December 5, 2005
UBS Securities LLC
Wachovia Capital Markets,
LLC
as Managing Underwriters
c/o UBS Securities LLC
299 Park Avenue
New York, New York 10171
Ladies and Gentlemen:
Extra Space Storage Inc., a Maryland
corporation (the “Company”), and Extra Space Storage
LP, a Delaware limited partnership, the indirect general partner
and majority limited partner of the Company (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 12,000,000 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 1,800,000 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,” 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), if any, related
to the offering of the Shares contemplated hereby that is a
“written communication” (as defined in Rule 405 under
the Act) (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.
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 to any particular section, paragraph,
sentence or other subdivision of this Agreement. The term
“or,” as used herein, is not exclusive.
- 2 -
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 UBS Securities LLC (“UBS”) 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 $13.8779 per Share. 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 UBS 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
UBS 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 December 9,
2005 (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 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.
- 3 -
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
L.L.P., 875 Third Avenue, New York, New York 10022, 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, to the
Company’s knowledge, are contemplated by the
Commission;
(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 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, 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
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, 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
- 4 -
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, 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, 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 makes no representation or warranty 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
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
- 5 -
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 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 the date of this
Agreement, the Company has 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 and outstanding 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 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;
- 6 -
(e) 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;
(f) 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, financial condition, results of
operation or prospects of the Company and the Subsidiaries (as
hereinafter defined) taken as a whole (a “Material Adverse
Effect”);
(g) the Company has provided you
complete and correct copies of the articles of incorporation and
the by-laws (or comparable organizational documents) of the Company
and its 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 90.91% of the outstanding units of partnership
interest in the Operating Partnership as of September 30,
2005; each “significant subsidiary” of the Company as
defined in Rule 405 of the Securities Act, Extra Space Management,
Inc. 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 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; the Company has no “significant
subsidiary,” other than as set forth in Annex A
hereto; the Operating Partnership has full power and authority to
execute and deliver this Agreement and to perform its obligations
as contemplated herein; 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
- 7 -
respect to such securities, are
owned directly or indirectly by the Company 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 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) (A) its respective charter, by-laws, limited liability
company agreement or partnership agreement, or (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 or any of the
Subsidiaries is a party or by which any of them or any of their
properties may be bound or affected, except, in case of (B), 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 with, result in any breach or violation of
or constitute a default under (nor constitute any event which with
notice, lapse of time or both would result in any breach of or
constitute a default under) (x) the charter or by-laws of the
Company or any of the Subsidiaries, or (y) 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 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, or any federal,
state, local or foreign law, regulation or rule or any decree,
judgment or order applicable to the Company or any of the
Subsidiaries, except, in case of (y), as would not, individually or
in the aggregate, have a Material Adverse Effect;
- 8 -
(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 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 Conduct Rules of the National
Association of Securities Dealers (the
“NASD”);
(m) except as set forth in the
Registration Statement, the Pre-Pricing Prospectus and the
Prospectus, (i) no person has the right, contractual or
otherwise, to cause 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 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 of the Company, and
(iii) no person has the right to act as an underwriter or as a
financial advisor to 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 to register
under the Act any shares of Common Stock or shares of any other
capital stock or other equity interests of the Company, 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 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 authorizations, consents and approvals from
other persons, in order to conduct its respective business, except
as would not have a Material Adverse Effect; neither the Company
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 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 any of the Transaction Entities, contemplated
to
- 9 -
which the Company 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) Each of Ernst & Young
LLP, the Company’s current public accountants,
PricewaterhouseCoopers LLP, 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, and KPMG
LLP, whose report on the combined financial statements of the
Storage USA Carve-Out Company is included and incorporated by
reference in the Registration Statement, the Pre-Pricing Prospectus
and the Prospectus, is an independent public accountants as
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, present fairly the consolidated financial position
of the Company and the Subsidiaries as of the dates indicated and
of Storage USA Carve-Out Company 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 of Storage USA
Carve-Out Company for the periods specified, and 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 accurately presented and
prepared on a basis consistent with the financial statements and
books and records of the Company; 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 and the Subsidiaries do not have
any material liabilities or obligations, direct or
- 10 -
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 Registration
Statement, the Pre-Pricing Prospectus, the Prospectus and the
Permitted Free Writing Prospectus, if any, 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 results of operations of the Company and the
Subsidiaries taken as a whole, (ii) any transaction which is
material to the Company and the Subsidiaries taken as a whole,
(iii) any obligation, direct or contingent (including any
off-balance sheet obligations), incurred by the Company or the
Subsidiaries, which is material to the Company and the Subsidiaries
taken as a whole (iv) any change in the capital stock or
outstanding indebtedness of the Company 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 has 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 its directors and officers identified in
Exhibit A-1 hereto;
(v) the Company is not and, after
giving effect to the offering and sale of the Shares, will not 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
Registration Statement, the Pre-Pricing Prospectus, the Prospectus
or any Permitted Free Writing Prospectus, the Company and each of
the Subsidiaries has good and marketable title to all property
(real and personal) described the Registration Statement and in 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 Registration Statement, the Pre-Pricing
Prospectus, the Prospectus or any Permitted Free Writing
Prospectus, all the property described in the Registration
Statement, the Pre-Pricing Prospectus, the Prospectus or any
Permitted Free Writing Prospectus as being held under lease by the
Company or a Subsidiary is held thereby under valid, subsisting and
enforceable leases, except where failure to do so would not,
individually or in the aggregate, have a Material Adverse
Effect;
(x) except as described in the
Registration Statement, the Pre-Pricing Prospectus, the Prospectus
and any Permitted Free Writing Prospectus, the Company and the
Subsidiaries own, or have obtained valid and enforceable licenses
for, or other rights
- 11 -
to use, the inventions, patent
applications, patents, trademarks (both registered and
unregistered), tradenames, copyrights, trade secrets and other
proprietary information described in the Registration Statement,
the Pre-Pricing Prospectus, the Prospectus and any Permitted Free
Writing Prospectus as being owned or licensed by them or which are
necessary for the conduct of their respective businesses, 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 any 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 is licensed to the
Company; (ii) neither the Company nor 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 Company’s
rights in or to any Intellectual Property, and the Company is
unaware of any facts which could form a reasonable basis for any
such 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 is 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 Company infringes or otherwise violates any
patent, trademark, copyright, trade secret or other proprietary
rights of others, and the Company is 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; and (vii) neither the Company nor any
of the Subsidiaries is aware of any prior art that may render any
patent application owned by the Company of the Intellectual
Property unpatentable that has not been disclosed to the U.S.
Patent and Trademark Office;
(y) neither the Company nor 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 any of the
Transaction Entities, threatened against the Company 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 any 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 or any of the Subsidiaries, and
(ii) to the knowledge of any of the Transaction Entities,
(A) no union organizing activities are currently taking place
concerning the employees of the Company 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 or any of the
Subsidiaries;
- 12 -
(z) (i) the Company and the
Subsidiaries and their properties, assets and operations are in
compliance with, and 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 or in the
aggregate, have a Material Adverse Effect; (ii) there are no
past, present or, to the knowledge of any 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 or the Subsidiaries 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, neither the Company nor 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 its
business, the Company conducts a periodic review of the effect of
the Environmental Laws on the business, operations and properties
of the Company and each of its Subsidiaries, in the course of which
it identifies and evaluates 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 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
adequate reserves have been provided; the Company has no knowledge
of any tax deficiency that has been asse
