ESSEX PROPERTY TRUST, INC. 2,000,000 SHARES CONTROLLED EQUITY OFFERINGSM SALES AGREEMENT
2,000,000
SHARES
CONTROLLED
EQUITY OFFERINGSM
May
12,
2006
CANTOR
XXXXXXXXXX & CO.
000
Xxxx
00xx Xxxxxx
Xxx
Xxxx,
XX 00000
Ladies
and Gentlemen:
ESSEX
PROPERTY TRUST, INC., a Maryland corporation (the “Company”),
confirms its agreement (this “Agreement”)
with
Cantor Xxxxxxxxxx & Co. (“CF&Co”),
as
follows:
1. Issuance
and Sale of Shares.
The
Company agrees that, from time to time during the term of this Agreement, on
the
terms and subject to the conditions set forth herein, it may issue and sell
through CF&Co, acting as
agent
and/or principal, (a) up to 2,000,000 shares of the Company’s common stock, par
value $0.0001 per share (the “Common
Stock”);
and
(b) such preferred stock as the Company may subsequently designate (the
“Preferred
Stock”;
and
together with the Common Stock, the “Shares”).
Notwithstanding anything to the contrary contained herein, the parties hereto
agree that compliance with the limitation set forth in this Section
1
on the
number of Shares issued and sold under this Agreement shall be the sole
responsibility of the Company, and CF&Co shall have no obligation in
connection with such compliance. The issuance and sale of Shares through
CF&Co will be effected pursuant to the Registration Statement (as defined
below) filed by the Company and declared effective by the Securities and
Exchange Commission (the “Commission”),
although nothing in this Agreement shall be construed as requiring the Company
to use the Registration Statement to issue Common Stock or Preferred Stock.
The
Company has filed, in accordance with the provisions of the Securities Act
of
1933, as amended, and the rules and regulations thereunder (collectively, the
“Securities
Act”),
with
the Commission a registration statement on Form S-3 (File No. 333-108336),
including a base prospectus, with respect to equity and other offerings,
including the Shares, and which incorporates by reference documents that the
Company has filed or will file in accordance with the provisions of the
Securities Exchange Act of 1934, as amended, and the rules and regulations
thereunder (collectively, the “Exchange
Act”).
The
Company has prepared a prospectus supplement (the “Prospectus
Supplement”)
to the
base prospectus included as part of such registration statement. The Company
has
furnished to CF&Co, for use by CF&Co, copies of the prospectus included
as part of such registration statement, as supplemented by the Prospectus
Supplement, relating to the Shares. Except where the context otherwise requires,
such registration statement, as amended when it became effective, including
all
documents filed as part thereof or incorporated by reference therein, and
including any information contained in a
Prospectus
(as defined below) subsequently filed with the Commission pursuant to Rule
424(b) under the Securities Act and also including any other registration
statement filed pursuant to Rule 462(b) under the Securities Act, collectively,
are herein called the “Registration
Statement,”
and
the base prospectus, including all documents incorporated therein by reference,
included in the Registration Statement, as it may be supplemented by the
Prospectus Supplement, in the form in
which
such prospectus and/or Prospectus Supplement have most recently been
filed
by
the Company with the Commission pursuant to Rule 424(b) under the Securities
Act
is herein called the “Prospectus.”
Any
reference herein to the Registration Statement, the Prospectus or any amendment
or supplement thereto shall be deemed to refer to and include the documents
incorporated by reference therein, and any reference herein to the terms
“amend,” “amendment” or “supplement” with respect to the Registration Statement
or the Prospectus shall be deemed to refer to and include the filing after
the
execution hereof of any document with the Commission deemed to be incorporated
by reference therein. For purposes of this Agreement, all references to the
Registration Statement, the Prospectus or to any amendment or supplement thereto
shall be deemed to include any copy filed with the Commission pursuant to its
Electronic Data Gathering Analysis and Retrieval System (“XXXXX”).
2. Placements.
Each
time that the Company wishes to issue and sell Shares hereunder (each, a
“Placement”),
it
will notify CF&Co by email notice (or other method mutually agreed to in
writing by the Parties) of the number of Shares (the “Placement
Shares”)
to be
issued, the type of Shares, the time period during which sales are requested
to
be made, any limitation on the number of Shares that may be sold in any one
day
and any minimum price below which sales may not be made (a “Placement
Notice”),
the
form of which is attached hereto as Schedule
1.
The
Placement Notice shall originate from any of the individuals from the Company
set forth on Schedule
3 (with
a
copy to each of the other individuals from the Company listed on such schedule),
and shall be addressed to each of the individuals from CF&Co set forth on
Schedule
3,
as such
Schedule
3
may be
amended from time to time. The Placement Notice shall be effective unless and
until (i) CF&Co declines to accept the terms contained therein for any
reason, in its sole discretion, (ii) the entire amount of the Placement Shares
have been sold, (iii) the Company suspends or terminates the Placement Notice
or
(iv) the Agreement has been terminated under the provisions of Section
11.
The
amount of any discount, commission or other compensation to be paid by the
Company to CF&Co in connection with the sale of the Placement Shares shall
be calculated in accordance with the terms set forth in Schedule
2.
It is
expressly acknowledged and agreed that neither the Company nor CF&Co will
have any obligation whatsoever with respect to a Placement or any Placement
Shares unless and until the Company delivers a Placement Notice to CF&Co and
CF&Co does not decline such Placement Notice pursuant to the terms set forth
above, and then only upon the terms specified therein and herein. In the event
of a conflict between the terms of this Agreement and the terms of a Placement
Notice, the terms of the Placement Notice will control.
3. Sale
of Placement Shares by CF&Co.
Subject
to the terms and conditions herein set forth, upon the Company’s issuance of a
Placement Notice, and unless the sale of the Placement Shares described therein
has been declined, suspended, or otherwise terminated in accordance with the
terms of this Agreement, CF&Co will use its commercially reasonable efforts
consistent with its normal trading and sales practices to sell such Placement
Shares up to the amount specified, and otherwise in accordance with the terms
of
such Placement Notice. CF&Co will provide written confirmation to the
Company no later than the opening of the
-2-
Trading
Day (as defined below) immediately following the Trading Day on which it has
made sales of Placement Shares hereunder setting forth the number of Placement
Shares sold on such day, the compensation payable by the Company to CF&Co
pursuant to Section 2 with respect to such sales, and the Net Proceeds (as
defined below) payable to the Company, with an itemization of deductions made
by
CF&Co (as set forth in Section 5(a)) from the gross proceeds that it
receives from such sales. CF&Co may sell Placement Shares by any method
permitted by law deemed to be an “at the market” offering as defined in Rule 415
of the Securities Act, including without limitation sales made directly on
the
New York Stock Exchange (the
“Exchange”),
on
any other existing trading market for the Common Stock or to or through a market
maker. CF&Co may also sell Placement Shares in privately negotiated
transactions. The Company acknowledges and agrees that (i) there can be no
assurance that CF&Co will be successful in selling Placement Shares, and
(ii) CF&Co will incur no liability or obligation to the Company or any other
person or entity if it does not sell Placement Shares for any reason other
than
a failure by CF&Co to use its commercially reasonable efforts consistent
with its normal trading and sales practices to sell such Placement Shares as
required under this Section
3.
For the
purposes hereof, “Trading
Day”
means
any day on which Common Stock is purchased and sold on the principal market
on
which the Common Stock is listed or quoted.
4. Suspension
of Sales.
The
Company or CF&Co may, upon notice to the other party in writing (including
by email correspondence to each of the individuals of the other Party set forth
on Schedule
3,
if
receipt of such correspondence is actually acknowledged by any of the
individuals to whom the notice is sent, other than via auto-reply) or by
telephone (confirmed immediately by verifiable facsimile transmission or email
correspondence to each of the individuals of the other Party set forth on
Schedule
3),
suspend any sale of Placement Shares; provided,
however,
that
such suspension shall not affect or impair either party’s obligations with
respect to any Placement Shares sold hereunder prior to the receipt of such
notice. Each of the Parties agrees that no such notice under this Section
4
shall be
effective against the other unless it is made to one of the individuals named
on
Schedule
3
hereto,
as such Schedule may be amended from time to time.
5. Settlement.
(a) Settlement
of Placement Shares.
Unless
otherwise specified in the applicable Placement Notice, settlement for sales
of
Placement Shares will occur on the third (3rd)
Trading
Day (or such earlier day as is industry practice for regular-way trading)
following the date on which such sales are made (each, a “Settlement
Date”).
The
amount of proceeds to be delivered to the Company on a Settlement Date against
receipt of the Placement Shares sold (the “Net
Proceeds”)
will
be equal to the aggregate sales price received by CF&Co at which such
Placement Shares were sold, after deduction for (i) CF&Co’s commission,
discount or other compensation for such sales payable by the Company pursuant
to
Section
2
hereof,
(ii) any other amounts due and payable by the Company to CF&Co hereunder
pursuant to Section
7(g)
(Expenses) hereof, and (iii) any transaction fees imposed by any governmental
or
self-regulatory organization in respect of such sales.
(b) Delivery
of Placement Shares.
On or
before each Settlement Date, the Company will, or will cause its transfer agent
to, electronically transfer the Placement Shares being sold by crediting
CF&Co’s or its designee’s account (provided CF&Co
shall
have given the Company written notice of such designee prior to the Settlement
Date) at The Depository Trust Company
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through
its Deposit and Withdrawal at Custodian
System or by such other means of delivery as may be mutually agreed upon by
the
parties hereto which in all cases shall be freely tradeable, transferable,
registered shares in good deliverable form. On each Settlement Date, CF&Co
will deliver the related Net Proceeds in same day funds to an account designated
by the Company on, or prior to, the Settlement Date. The Company agrees that
if
the Company, or its transfer agent (if applicable), defaults in its obligation
to deliver Placement Shares on a Settlement Date, the Company agrees that in
addition to and in no way limiting the rights and obligations set forth in
Section
9(a)
(Indemnification and Contribution) hereto, it will (i) hold CF&Co
harmless against any loss, claim, damage, or expense (including reasonable
legal
fees and expenses), as incurred, arising out of or in connection with such
default by the Company and (ii) pay to CF&Co any commission, discount, or
other compensation to which it would otherwise have been entitled absent such
default.
6. Representations
and Warranties of the Company.
The
Company represents and warrants to, and agrees with, CF&Co that as of the
date of this Agreement and as of each Representation Date (as defined in
Section
7(m)
below)
on which a certificate is required to be delivered pursuant to Section
7(m)
of this
Agreement, as the case may be:
(a) Compliance
with Registration Requirements.
The
Registration Statement and any Rule 462(b) Registration Statement have been
declared effective by the Commission under the Securities Act. The Company
has
complied to the Commission’s satisfaction with all requests of the Commission
for additional or supplemental information. No stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b) Registration
Statement is in effect and no proceedings for such purpose have been instituted
or are pending or, to the best knowledge of the Company, are contemplated or
threatened by the Commission.
(b) No
Misstatement or Omission.
The
Prospectus when filed complied and, as amended or supplemented, if applicable,
will comply in all material respects with the Securities Act. Each of the
Registration Statement, any Rule 462(b) Registration Statement and any
post-effective amendment thereto, at the time it became effective, complied
and,
as of each of the Settlement Dates, if any, will comply in all material respects
with the Securities Act and did not and, as of each of the Settlement Dates,
if
any, will not contain any untrue statement of a material fact or omit to state
a
material fact required to be stated therein or necessary to make the statements
therein not misleading. The Prospectus, as amended or supplemented, as of its
date, did not and, as of each of the Settlement Dates, if any, will not contain
any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The representations
and warranties set forth in the two immediately preceding sentences do not
apply
to statements in or omissions from the Registration Statement, any
Rule 462(b) Registration Statement, or any post-effective amendment
thereto, or the Prospectus, or any amendments or supplements thereto, made
in
reliance upon and in conformity with information relating to CF&Co furnished
to the Company in writing by CF&Co expressly for use therein. There are no
contracts or other documents required to be described in the Prospectus or
to be
filed as exhibits to the Registration Statement which have not been described
or
filed as required.
(c) Offering
Materials Furnished to CF&Co.
The
Company has delivered to CF&Co one complete copy of the Registration
Statement and a copy of each consent and certificate of experts filed as a
part
thereof, and conformed copies of the Registration Statement
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(without
exhibits) and the Prospectus, as amended or supplemented, in such quantities
and
at such places as CF&Co has reasonably requested.
(d) Distribution
of Offering Material By the Company.
The
Company has not distributed and will not distribute, prior to the later of
the
Closing Date and the completion of CF&Co’s distribution of the Shares, any
offering material in connection with the offering and sale of the Shares other
than the Prospectus or the Registration Statement.
(e) The
Sales Agreement.
This
Agreement has been duly authorized, executed and delivered by, and is a valid
and binding agreement of, the Company, enforceable in accordance with its terms,
except as rights to indemnification hereunder may be limited by applicable
law
and except as the enforcement hereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting the
rights and remedies of creditors or by general equitable principles.
(f) Authorization
of the Shares.
The
Shares to be sold by CF&Co, acting as agent and/or principal for the
Company, have been duly authorized for issuance and sale pursuant to this
Agreement and, when issued and delivered by the Company to CF&Co pursuant to
this Agreement, will be validly issued, fully paid and
nonassessable.
(g) No
Applicable Registration or Other Similar Rights.
There
are no persons with registration or other similar rights to have any equity
or
debt securities registered for sale under the Registration Statement or included
in the offering contemplated by this Agreement, except for such rights as have
been duly waived.
(h) No
Material Adverse Change.
Except
as otherwise disclosed in the Prospectus, subsequent to the respective dates
as
of which information is given in the Prospectus: (i) there has been no
material adverse change, or any development that could reasonably be expected
to
result in a material adverse change, in the condition, financial or otherwise,
or in the earnings, business, operations or prospects, whether or not arising
from transactions in the ordinary course of business, of the Company and its
subsidiaries, considered as one entity (any such change is called a
“Material
Adverse Change”);
(ii) the Company and its subsidiaries, considered as one entity, have not
incurred any material liability or obligation, indirect, direct or contingent,
not in the ordinary course of business nor entered into any material transaction
or agreement not in the ordinary course of business: and (iii) there has
been no dividend or distribution of any kind declared, paid or made by the
Company or, except for dividends paid to the Company or other subsidiaries,
any
of its subsidiaries on any class of capital stock or repurchase or redemption
by
the Company or any of its subsidiaries of any class of capital
stock.
(i) Independent
Accountants.
KPMG
LLP, who have expressed their opinion with respect to the financial statements
(which term as used in this Agreement includes the related notes thereto) and
supporting schedules filed with the Commission or incorporated by reference
as a
part of the Registration Statement and included in the Prospectus, are
independent public or certified public accountants as required by the Securities
Act and the Exchange Act.
(j) Preparation
of the Financial Statements.
The
financial statements filed with the Commission as a part of or incorporated
within the Registration Statement and included in the Prospectus present fairly
the consolidated financial position of the Company and its
-5-
subsidiaries
as of and at the dates indicated and the results of their operations and cash
flows for the periods specified. The supporting schedules included in or
incorporated in the Registration Statement present fairly the information
required to be stated therein. Such financial statements and supporting
schedules have been prepared in conformity with generally accepted accounting
principles as applied in the United States applied on a consistent basis
throughout the periods involved, except as may be expressly stated in the
related notes thereto. No other financial statements or supporting schedules
are
required to be included in or incorporated in the Registration Statement. The
financial data set forth or incorporated in the Prospectus under the captions
“Ratio of Earnings to Fixed Charges” and “Selected Financial Data” fairly
present the information set forth therein on a basis consistent with that of
the
audited financial statements contained, incorporated or deemed to be
incorporated in the Registration Statement.
(k) Incorporation
and Good Standing of the Company and its Subsidiaries.
The
Company has been duly incorporated and is validly existing as a corporation
in
good standing under the laws of the State of Maryland and is in good standing
with the State Department of Assessments and Taxation of Maryland and has
corporate power and authority to own, lease and operate its properties and
to
conduct its business as described in the Prospectus and to enter into and
perform its obligations under this Agreement. Essex Portfolio, L.P. is the
Company’s only significant subsidiary (as defined in Rule 1-02 (w) of
Regulation S-X of the Exchange Act) (the “Significant
Subsidiary”).
The
Significant Subsidiary has been duly organized and is validly existing as a
partnership in good standing under the laws of the jurisdiction of its
organization and has the requisite power and authority to own, lease and operate
its properties and to conduct its business as described in the Prospectus.
Each
of the Company and the Significant Subsidiary is duly qualified as a foreign
corporation or foreign partnership to transact business and is in good standing
in the State of California and each other jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except for such jurisdictions (other than
the State of California) where the failure to so qualify or to be in good
standing would not, individually or in the aggregate, result in a Material
Adverse Change. All of the issued and outstanding capital stock or partnership
interests of the Significant Subsidiary has been duly authorized and validly
issued, is fully paid and nonassessable and is owned by the Company free and
clear of any security interest, mortgage, pledge, lien, encumbrance or claim.
The Company does not own or control, directly or indirectly, any corporation,
association or other entity other than the subsidiaries listed in
Exhibit 21.1 to the Company’s Annual Report on Form 10-K for the most
recently ended fiscal year and other than (i) those subsidiaries not
required to be listed on Exhibit 21.1 by Item 601 of Regulation S-K
under the Exchange Act and (ii) those subsidiaries formed since the last
day of the most recently ended fiscal year.
(l) Capital
Stock Matters.
The
Shares conforms in all material respects to the description thereof contained
in
the Prospectus. All of the issued and outstanding shares of Common Stock and
Preferred Stock have been duly authorized and validly issued, are fully paid
and
nonassessable and have been issued in compliance with federal and state
securities laws. None of the outstanding shares of Common Stock and Preferred
Stock were issued in violation of any preemptive rights, rights of first refusal
or other similar rights to subscribe for or purchase securities of the Company.
There are no authorized or outstanding options, warrants, preemptive rights,
rights of first refusal or other rights to purchase, or equity or debt
securities convertible into or exchangeable or exercisable for, any capital
stock of the Company or any of its
-6-
subsidiaries
other than those accurately described in all material respects in the
Prospectus. The description of the Company’s stock option, stock bonus and other
stock plans or arrangements, and the options or other rights granted thereunder,
set forth in the Prospectus accurately and fairly presents in all material
respects the information required to be shown with respect to such plans,
arrangements, options and rights.
(m) Non-Contravention
of Existing Instruments; No Further Authorizations or Approvals
Required.
Neither
the Company nor any of its subsidiaries is in violation of its charter or
by-laws or is in default (or, with the giving of notice or lapse of time, would
be in default) (“Default”)
under
any indenture, mortgage, loan or credit agreement, note, contract, franchise,
lease or other instrument to which the Company or any of its subsidiaries is
a
party or by which it or any of them may be bound, or to which any of the
property or assets of the Company or any of its subsidiaries is subject (each,
an “Existing
Instrument”),
except for such Defaults as would not, individually or in the aggregate, result
in a Material Adverse Change. The Company’s execution, delivery and performance
of this Agreement and consummation of the transactions contemplated hereby
and
by the Prospectus (i) have been duly authorized by all necessary corporate
action and will not result in any violation of the provisions of the charter
or
by-laws of the Company or any subsidiary, (ii) will not conflict with or
constitute a breach of, or Default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of
the
Company or any of its subsidiaries pursuant to, or require the consent of any
other party to, any Existing Instrument, except for such conflicts, breaches,
Defaults, liens, charges or encumbrances as would not, individually or in the
aggregate, result in a Material Adverse Change and (iii) will not result in
any violation of any law, administrative regulation or administrative or court
decree applicable to the Company or any subsidiary. No consent, approval,
authorization or other order of, or registration or filing with, any court
or
other governmental or regulatory authority or agency, is required for the
Company’s execution, delivery and performance of this Agreement and consummation
of the transactions contemplated hereby and by the Prospectus, except such
as
have been obtained or made by the Company and are in full force and effect
under
the Securities Act, applicable state securities or blue sky laws and from the
NASD.
(n) No
Material Actions or Proceedings.
Except
as disclosed in the Prospectus, there are no legal or governmental actions,
suits or proceedings pending or, to the best of the Company’s knowledge,
threatened (i) against or affecting the Company or any of its subsidiaries,
(ii) which has as the subject thereof any officer or director of, or
property owned or leased by, the Company or any of its subsidiaries or
(iii) relating to environmental or discrimination matters, where in any
such case (A) there is a reasonable possibility that such action, suit or
proceeding might be determined adversely to the Company or such subsidiary
and
(B) any such action, suit or proceeding, if so determined adversely, would
reasonably be expected to result in a Material Adverse Change or adversely
affect the consummation of the transactions contemplated by this Agreement.
No
material labor dispute with the employees of the Company or any of its
subsidiaries exists or, to the best of the Company’s knowledge, is threatened or
imminent.
(o) All
Necessary Permits, etc.
The
Company and each subsidiary possess such valid and current certificates,
authorizations or permits issued by the appropriate state, federal or foreign
regulatory agencies or bodies necessary to conduct their respective businesses,
-7-
other
than those the failure to possess or own would not result in a Material Adverse
Change, and neither the Company nor any subsidiary has received any notice
of
proceedings relating to the revocation or modification of, or non-compliance
with, any such certificate, authorization or permit which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding, could
result in a Material Adverse Change.
(p) Tax
Law Compliance.
The
Company and its consolidated subsidiaries have filed all necessary federal,
state and foreign income, property and franchise tax returns and have paid
all
taxes required to be paid by any of them and, if due and payable, any related
or
similar assessment, fine or penalty levied against any of them except as may
be
being contested in good faith and by appropriate proceedings. The Company has
made adequate charges, accruals and reserves in the applicable financial
statements referred to in Section 1 (i) above in respect of all federal,
state and foreign income, property and franchise taxes for all periods as to
which the tax liability of the Company or any of its consolidated subsidiaries
has not been finally determined.
(q) Company
is a REIT.
Commencing with the Company’s taxable year beginning January 1, 1994, the
Company has been organized and has operated in conformity with the requirements
for qualification as a “real estate investment trust,” and its organization and
proposed method of operation will enable it to meet the requirements for the
qualification and taxation as a “real estate investment trust” under the
Internal Revenue Code of 1986, as amended (the “Code”).
(r) Company
Not an “Investment Company”.
The
Company has been advised of the rules and requirements under the Investment
Company Act of 1940, as amended (the “Investment
Company Act”).
The
Company is not, and after receipt of payment for the Shares will not be, an
“investment company” within the meaning of Investment Company Act and will
conduct its business in a manner so that it will not become subject to the
Investment Company Act.
(s) Insurance.
Except
as otherwise described in the Prospectus, each of the Company and its
subsidiaries are insured by recognized, financially sound and reputable
institutions with policies in such amounts and with such deductibles and
covering such risks as are generally deemed adequate and customary for their
businesses including, but not limited to, policies covering real and personal
property owned or leased by the Company and its subsidiaries against theft,
damage, destruction, acts of vandalism and earthquakes. The Company has no
reason to believe that it or any subsidiary will not be able (i) to renew
its existing insurance coverage as and when such policies expire or (ii) to
obtain comparable coverage from similar institutions as may be necessary or
appropriate to conduct its business as now conducted and at a cost that would
not result in a Material Adverse Change. Neither of the Company nor any
subsidiary has been denied any insurance coverage which it has sought or for
which it has applied.
(t) No
Price Stabilization or Manipulation.
The
Company has not taken and will not take, directly or indirectly, any action
designed to or that might be reasonably expected to cause or result in
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares.
-8-
(u) Related
Party Transactions.
There
are no business relationships or related-party transactions involving the
Company or any subsidiary or any other person required to be described in the
Prospectus which have not been described as required.
(v) Exchange
Act Compliance.
The
documents incorporated or deemed to be incorporated by reference in the
Prospectus, at the time they were or hereafter are filed with the Commission,
complied and will comply in all material respects with the requirements of
the
Exchange Act, and, when read together with the other information in the
Prospectus, at the Closing Dates, will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein
or
necessary to make the fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which they
were
made, not misleading.
(w) No
Unlawful Contributions or Other Payments.
Neither
the Company nor any of its subsidiaries nor, to the best of the Company’s
knowledge, any employee or agent of the Company or any subsidiary, has made
any
contribution or other payment to any official of, or candidate for, any federal,
state or foreign office in violation of any law or of the character required
to
be disclosed in the Prospectus.
(x) Company’s
Accounting System.
The
Company maintains a system of accounting controls sufficient to provide
reasonable assurances that (i) transactions are executed in accordance with
management’s general or specific authorization; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles as applied in the
United States and to maintain accountability for assets; (iii) access to
assets is permitted only in accordance with management’s general or specific
authorization; and (iv) the recorded accountability for assets is compared
with existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(y) Title
to Properties.
Except
as otherwise disclosed in the Prospectus and except as would not have a material
adverse effect on the condition, financial or otherwise, or on the earnings,
business affairs or business prospects of the Company and its subsidiaries
considered as one enterprise: (i) all properties and assets described in
the Prospectus are owned with good and marketable title by the Company, its
subsidiaries and/or a joint venture or partnership in which any such party
is a
participant (a “Related
Entity”);
(ii) all of the leases under which any of the Company, its subsidiaries or,
to the knowledge of the Company, Related Entities holds or uses real properties
or assets as a lessee are in full force and effect, and neither the Company,
nor
any of its subsidiaries or, to the knowledge of the Company, Related Entities
is
in material default in respect of any of the terms or provisions of any of
such
leases and no claim has been asserted by anyone adverse to any such party’s
rights as lessee under any of such leases, or affecting or questioning any
such
party’s right to the continued possession or use of the leased property or
assets under any such leases; (iii) all liens, charges, encumbrances,
claims or restrictions on or affecting the properties and assets of any of
the
Company, its subsidiaries or Related Entities which are required to be disclosed
in the Prospectus are disclosed therein; (iv) neither the Company, nor any
of its subsidiaries or, to the knowledge of the Company, Related Entities nor
any lessee of any portion of any such party’s properties is in default under any
of the leases pursuant to which any of the Company, its subsidiaries or, to
the
knowledge of the Company, Related Entities leases its properties and neither
the
Company, nor any of its subsidiaries or Related Entities knows of any event
which, but for the passage of time or the
-9-
giving
of
notice, or both, would constitute a default under any of such leases;
(v) no tenant under any of the leases pursuant to which any of the Company,
or its subsidiaries or, to the knowledge of the Company, Related Entities leases
its properties has an option or right of first refusal to purchase the premises
demised under such lease; (vi) each of the properties of any of the Company
or its subsidiaries or to the knowledge of the Company, Related Entities
complies with all applicable codes and zoning laws and regulations; and
(vii) neither the Company nor any of its subsidiaries has knowledge of any
pending or threatened condemnation, zoning change or other proceeding or action
that will in any manner affect the size of, use of, improvements on,
construction on, or access to the properties of any of the Company, or its
subsidiaries or Related Entities.
(z) Title
Insurance.
Title
insurance in favor of the mortgagee or the Company, its subsidiaries and/or
their Related Entities is maintained with respect to each property owned by
any
such entity in an amount at least equal to (a) the cost of acquisition of
such property or (b) the cost of construction of such property (measured at
the time of such construction), except, in each case, where the failure to
maintain such title insurance would not have a material adverse effect on the
condition, financial or otherwise, or on the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise.
(aa) No
Convertible Mortgages.
Except
as described in the Prospectus, the mortgages and deeds of trust encumbering
the
properties and assets described in the Prospectus are not convertible nor does
any of the Company, or its subsidiaries hold a participating interest
therein.
(bb) Valid
Partnerships.
Each of
the partnership and joint venture agreements to which the Company or any of
its
subsidiaries is a party, and which relates to real property described in the
Prospectus, has been duly authorized, executed and delivered by such applicable
party and constitutes the valid agreement thereof, enforceable in accordance
with its terms, except as limited by (a) the effect of bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter
in
effect relating to or affecting the rights or remedies of creditors or
(b) the effect of general principles of equity, whether enforcement is
considered in a proceeding in equity or at law, and the discretion of the court
before which any proceeding therefor may be brought, and the execution, delivery
and performance of any of such agreements did not, at the time of execution
and
delivery, and does not constitute a breach of, or default under, the charter
or
bylaws of such party or any material contract, lease or other instrument to
which such party is a party or by which its properties may be bound or any
law,
administrative regulation or administrative or court order or
decree.
(cc) Hazardous
Materials.
Except
as otherwise described in the Prospectus, none of the Company, or any of its
subsidiaries has any knowledge of (a) the unlawful presence of any
hazardous substances, hazardous materials, toxic substances or waste materials
(collectively, “Hazardous
Materials”)
on any
of the properties owned by it or the Related Entities, or (b) any unlawful
spills, releases, discharges or disposal, of Hazardous Materials that have
occurred or are presently occurring off such properties as a result of any
construction on or operation and use of such properties which presence or
occurrence would have a material adverse effect on the condition, financial
or
otherwise, or on the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise; and in connection
with the construction on or operation and use of the properties owned by the
Company, its subsidiaries and Related-Entities, each of the Company, and its
subsidiaries represents that, if any, it has no
-10-
knowledge
of any material failure to comply with all applicable foreign local, state
and
federal environmental laws, regulations, ordinances and administrative and
judicial orders relating to the generation, recycling, reuse, sale, storage,
handling, transport and disposal of any Hazardous Materials.
(dd) Compliance
with Environmental Laws.
Except
as otherwise described in the Prospectus, and except as would not, individually
or in the aggregate, result in a Material Adverse Change (i) neither the
Company nor any of its subsidiaries is in violation of any federal, state,
local
or foreign law or regulation relating to pollution or protection of human health
or the environment (including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata) or wildlife, including without
limitation, laws and regulations relating to emissions, discharges, releases
or
threatened releases of chemicals, pollutants, contaminants, wastes, toxic
substances, hazardous substances, petroleum and petroleum products
(collectively, “Materials
of Environmental Concern”),
or
otherwise relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Materials of Environment Concern
(collectively, “Environmental
Laws”),
which
violation includes, but is not limited to, noncompliance with any permits or
other governmental authorizations required for the operation of the business
of
the Company or its subsidiaries under applicable Environmental Laws, or
noncompliance with the terms and conditions thereof, nor has the Company or
any
of its subsidiaries received any written communication, whether from a
governmental authority, citizens group, employee or otherwise, that alleges
that
the Company or any of its subsidiaries is in violation of any Environmental
Law;
(ii) there is no claim, action or cause of action filed with a court or
governmental authority, no investigation with respect to which the Company
has
received written notice, and no written notice by any person or entity alleging
potential liability for investigatory costs, cleanup costs, governmental
responses costs, natural resources damages, property damages, personal injuries,
attorneys’ fees or penalties arising out of, based on or resulting from the
presence, or release into the environment, of any Material of Environmental
Concern at any location owned, leased or operated by the Company or any of
its
subsidiaries, now or in the past (collectively, “Environmental
Claims”),
pending or, to the best of the Company’s knowledge, threatened against the
Company or any of its subsidiaries or any person or entity whose liability
for
any Environmental Claim the Company or any of its subsidiaries has retained
or
assumed either contractually or by operation of law; and (iii) to the best
of the Company’s knowledge, there are no past or present actions, activities,
circumstances, conditions, events or incidents, including, without limitation,
the release, emission, discharge, presence or disposal of any Material of
Environmental Concern, that reasonably could result in a violation of any
Environmental Law or form the basis of a potential Environmental Claim against
the Company or any of its subsidiaries or against any person or entity whose
liability for any Environmental Claim the Company or any of its subsidiaries
has
retained or assumed either contractually or by operation of law.
(ee) Periodic
Review of Costs of Environmental Compliance.
The
description set forth under the caption “Possible Environmental Liabilities” in
Part IA of the Company’s Annual Report on Form 10-K for the year ended
December 31, 2005 accurately describes the Company’s investigation of the
compliance of its properties with Environmental Laws. On the basis of such
review and the amount of its established reserves, the Company has reasonably
concluded that such associated costs and liabilities would not, individually
or
in the aggregate, result in a Material Adverse Change.
-11-
(ff) Brokers.
There
is no broker, finder or other party that is entitled to receive from the Company
any brokerage or finder’s fee or other fee or commission as a result of any
transactions contemplated by this Agreement.
(gg) No
Outstanding Loans or Other Indebtedness.
Except
as described in the Prospectus, there are no outstanding loans, advances (except
normal advances for business expenses in the ordinary course of business) or
guarantees or indebtedness by the Company to or for the benefit of any of the
officers or directors of the Company or any of the members of any of
them.
(hh) No
Reliance.
The
Company has not relied upon CF&Co or legal counsel for CF&Co for any
legal, tax or accounting advice in connection with the offering and sale of
the
Placement Shares.
(ii) CF&Co
Purchases.
The
Company acknowledges and agrees that CF&Co has informed the Company that
CF&Co may, to the extent permitted under the
Securities Act
and the
Exchange Act, purchase and sell shares of Common
Stock
for its own account while this Agreement is in effect, provided, that
(i) no
such purchase or sales shall take place while a Placement Notice is in effect
(except to the extent CF&Co may engage in sales of Placement Shares
purchased or deemed purchased from the Company as a “riskless principal” or in a
similar capacity) and (ii) the Company shall not be deemed to have authorized
or
consented to any such purchases or sales by CF&Co.
(jj) Compliance
with Laws.
The
Company has not been advised, and has no reason to believe, that it and each
of
its subsidiaries are not conducting business in compliance with all applicable
laws, rules and regulations of the jurisdictions in which it is conducting
business, except where failure to be so in compliance would not result in a
Material Adverse Change.
Any
certificate signed by an officer of the Company and delivered to CF&Co or to
counsel for CF&Co shall be deemed to be a representation and warranty by the
Company to CF&Co as to the matters set forth therein.
The
Company acknowledges that CF&Co and, for purposes of the opinions to be
delivered pursuant to Section
7
hereof,
counsel to the Company and counsel to CF&Co, will rely upon the accuracy and
truthfulness of the foregoing representations and hereby consents to such
reliance.
7. Covenants
of the Company.
The
Company covenants and agrees with CF&Co that:
(a) Registration
Statement Amendments.
After
the date of this Agreement and during any period in which a Prospectus relating
to any Placement Shares is required to be delivered by CF&Co under the
Securities Act (including in circumstances where such requirement may be
satisfied pursuant to Rule 172 under the Securities Act), (i) the
Company will notify CF&Co promptly of the time when any subsequent amendment
to the Registration Statement, other than documents incorporated by reference,
has been filed with the Commission and/or has become effective or any subsequent
supplement to the Prospectus has been filed and of any request by the Commission
for any amendment or supplement to the Registration Statement or Prospectus
or
for additional information, (ii) the Company will prepare and file with
-12-
the
Commission, promptly upon CF&Co’s request, any amendments or supplements to
the Registration Statement or Prospectus that, in CF&Co’s reasonable
opinion, may be necessary or advisable in connection with the distribution
of
the Placement Shares by CF&Co (provided,
however,
that
the failure of CF&Co to make such request shall not relieve the Company of
any obligation or liability hereunder, or affect CF&Co’s right to rely on
the representations and warranties made by the Company in this Agreement);
(iii)
the Company will not file any amendment or supplement to the Registration
Statement or Prospectus, other than documents incorporated by reference,
relating to the Placement Shares or a security convertible into the Placement
Shares unless a copy thereof has been submitted to CF&Co within a reasonable
period of time before the filing and CF&Co has not reasonably objected
thereto (provided,
however,
that
the failure of CF&Co to make such objection shall not relieve the Company of
any obligation or liability hereunder, or affect CF&Co’s right to rely on
the representations and warranties made by the Company in this Agreement) and
the Company will furnish to CF&Co at the time of filing thereof a copy of
any document that upon filing is deemed to be incorporated by reference into
the
Registration Statement or Prospectus, except for those documents available
via
XXXXX; and (iv) the Company will cause each amendment or supplement to the
Prospectus, other than documents incorporated by reference, to be filed with
the
Commission as required pursuant to the applicable paragraph of Rule 424(b)
of
the Securities Act.
(b) Notice
of Commission Stop Orders.
The
Company will advise CF&Co, promptly after it receives notice or obtains
knowledge thereof, of the issuance or threatened issuance by the Commission
of
any stop order suspending the effectiveness of the Registration Statement,
of
the suspension of the qualification of the Placement Shares for offering or
sale
in any jurisdiction, or of the initiation or threatening of any proceeding
for
any such purpose; and it will promptly use its commercially reasonable efforts
to prevent the issuance of any stop order or to obtain its withdrawal if such
a
stop order should be issued.
(c) Delivery
of Prospectus; Subsequent Changes.
During
any period in which a Prospectus relating to the Placement Shares is required
to
be delivered by CF&Co under the Securities Act with respect to a pending
sale of the Placement Shares, (including in circumstances where such requirement
may be satisfied pursuant to Rule 172 under the Securities Act), the Company
will comply with all requirements imposed upon it by the Securities Act, as
from
time to time in force, and to file on or before their respective due dates
all
reports and any definitive proxy or information statements required to be filed
by the Company with the Commission pursuant to Sections 13(a), 13(c), 14, 15(d)
or any other provision of or under the Exchange Act. If during such period
any
event occurs as a result of which the Prospectus as then amended or supplemented
would include an untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in the light of the circumstances
then existing, not misleading, or if during such period it is necessary to
amend
or supplement the Registration Statement or Prospectus to comply with the
Securities Act, the Company will promptly notify CF&Co to suspend the
offering of Placement Shares during such period and the Company will promptly
amend or supplement the Registration Statement or Prospectus (at the expense
of
the Company) so as to correct such statement or omission or effect such
compliance.
(d) Listing
of Placement Shares.
During
any period in which the Prospectus relating to the Placement Shares is required
to be delivered by CF&Co under the Securities Act
-13-
with
respect to a pending sale of the Placement Shares (including in circumstances
where such requirement may be satisfied pursuant to Rule 172 under the
Securities Act), the Company will use its commercially reasonable efforts to
cause the Placement Shares to be listed on the Exchange and to qualify the
Placement Shares for sale under the securities laws of such jurisdictions as
CF&Co reasonably designates and to continue such qualifications in effect so
long as required for the distribution of the Placement Shares; provided,
however,
that the
Company shall not be required in connection therewith to qualify as a foreign
corporation or dealer in securities or file a general consent to service of
process in any jurisdiction.
(e) Delivery
of Registration Statement and Prospectus.
The
Company will furnish to CF&Co and its counsel (at the expense of the
Company) copies of the Registration Statement, the Prospectus (including all
documents incorporated by reference therein) and all amendments and supplements
to the Registration Statement or Prospectus that are filed with the Commission
during any period in which a Prospectus relating to the Placement Shares is
required to be delivered under the Securities Act (including all documents
filed
with the Commission during such period that are deemed to be incorporated by
reference therein), in each case as soon as reasonably practicable and in such
quantities as CF&Co may from time to time reasonably request and, at
CF&Co’s request, will also furnish copies of the Prospectus to each exchange
or market on which sales of the Placement Shares may be made; provided,
however,
that the
Company shall not be required to furnish any document (other than the
Prospectus) to CF&Co to the extent such document is available on XXXXX.
(f) Earnings
Statement.
The
Company will make generally available to its security holders as soon as
practicable, but in any event not later than 15 months after the end of the
Company’s current fiscal quarter, an earnings statement covering a 12-month
period that satisfies the provisions of Section 11(a) and Rule 158 of the
Securities Act.
(g) Expenses.
The
Company, whether or not the transactions contemplated hereunder are consummated
or this Agreement is terminated, in accordance with the provisions of Section
11
hereunder, will pay the following expenses all incident to the performance
of
its obligations hereunder, including, but not limited to, expenses relating
to
(i) the preparation, printing and filing of the Registration Statement and
each
amendment and supplement thereto, of each Prospectus and of each amendment
and
supplement thereto, (ii) the preparation, issuance and delivery of the Placement
Shares, (iii) the qualification of the Placement Shares under securities laws
in
accordance with the provisions of Section
7(d)
of this
Agreement, including filing fees (provided, however, that any fees or
disbursements of counsel for CF&Co in connection therewith shall be paid by
CF&Co), (iv) the printing and delivery to CF&Co of copies of the
Prospectus and any amendments or supplements thereto, and of this Agreement,
(v)
the fees and expenses incurred in connection with the listing or qualification
of the Placement Shares for trading on the Exchange, (vi) filing fees and
expenses, if any, of the Commission and the NASD Corporate Financing Department.
(h) Use
of
Proceeds.
The
Company will use the Net Proceeds as described in the Prospectus in the section
entitled “Use of Proceeds.”
(i) Notice
of Other Sales.
During
the pendency of any Placement Notice given hereunder, the Company shall provide
CF&Co notice as promptly as reasonably possible before it offers to sell,
contracts to sell, sells, grants any option to sell or otherwise disposes of
any
-14-
shares
of Common Stock (other than Placement Shares offered pursuant to the provisions
of this Agreement) or securities convertible into or exchangeable for Common
Stock, warrants or any rights to purchase or acquire Common Stock; provided,
that
such notice shall not be required in connection with the (i) issuance, grant
or
sale of Common Stock, options to purchase shares of Common Stock or Common
Stock
issuable upon the exercise of options or other equity awards pursuant to the
any
stock option, stock bonus or other stock plan or arrangement described in the
Prospectus, (ii) the issuance of securities in connection with an acquisition,
merger or sale or purchase of assets or (iii) the issuance or sale of Common
Stock pursuant to any dividend reinvestment plan that the Company may adopt
from
time to time provided the implementation of such is disclosed to CF & Co. in
advance or (iv) any shares of common stock issuable upon the exchange,
conversion or redemption of securities, including but not limited to, operating
partnership units in Essex Portfolio, L.P., as to which the Company is the
general partner, or the exercise of warrants, options or other rights in effect
or outstanding.
(j) Change
of Circumstances.
The
Company will, at any time during a fiscal quarter in which the Company intends
to tender a Placement Notice or sell Placement Shares, advise CF&Co promptly
after it shall have received notice or obtained knowledge thereof, of any
information or fact that would alter or affect in any material respect any
opinion, certificate, letter or other document provided to CF&Co pursuant to
this Agreement.
(k) Due
Diligence Cooperation.
The
Company will cooperate with any reasonable due diligence review conducted by
CF&Co or its agents in connection with the transactions contemplated hereby,
including, without limitation, providing information and making available
documents and senior corporate officers, during regular business hours and
at
the Company’s principal offices, as CF&Co may reasonably
request.
(l) Required
Filings Relating to Placement of Placement Shares.
The
Company agrees that on such dates as the Securities Act shall require, the
Company will (i) file a prospectus supplement with the Commission under the
applicable paragraph of Rule 424(b) under the Securities Act (each and every
filing under Rule 424(b), a “Filing
Date”),
which
prospectus supplement will set forth, within the relevant period, the amount
of
Placement Shares sold through CF&Co, the Net Proceeds to the Company and the
compensation payable by the Company to CF&Co with respect to such Placement
Shares, and (ii) deliver such number of copies of each such prospectus
supplement to each exchange or market on which such sales were effected as
may
be required by the rules or regulations of such exchange or market.
(m) Representation
Dates; Certificate.
On or
prior to the date that the first Shares are sold pursuant to the terms of this
Agreement and each time the Company (i) files the Prospectus relating to the
Placement Shares or amends or supplements the Registration Statement or the
Prospectus relating to the Placement Shares (other than a prospectus supplement
filed in accordance with Section 7(l) of this Agreement) by means of a
post-effective amendment, sticker, or supplement but not by means of
incorporation of document(s) by reference to the Registration Statement or
the
Prospectus relating to the Placement Shares; (ii) files an annual report on
Form
10-K under the Exchange Act; (iii) files its quarterly reports on Form 10-Q
under the Exchange Act; or (iv) files a report on Form 8-K containing amended
financial information (other than an earnings release, to “furnish” information
pursuant to Items 2.02 or 7.01 of Form 8-K or to provide disclosure pursuant
to
Item 8.01 of Form 8-K relating to the reclassifications of certain properties
as
discontinued operations in accordance with
-15-
Statement
of Financial Accounting Standards No. 144) under the Exchange Act (each date
of
filing of one or more of the documents referred to in clauses (i) through (iv)
shall be a "Representation
Date");
the
Company shall furnish CF&Co with a certificate, in the form attached hereto
as Exhibit
7(m)
within
three (3) Trading Days of any Representation Date if requested by CF&Co.
The
requirement to provide a certificate under this Section 7(m) shall be waived
for
any Representation Date occurring at a time at which no Placement Notice is
pending, which waiver shall continue until the earlier to occur of the date
the
Company delivers a Placement Notice hereunder (which for such calendar quarter
shall be considered a Representation Date) and the next occurring Representation
Date; provided,
however,
that
such waiver shall not apply for any Representation Date on which the Company
files its annual report on Form 10-K. Notwithstanding the foregoing, if the
Company subsequently decides to sell Placement Shares following a Representation
Date when the Company relied on such waiver and did not provide CF&Co with a
certificate under this Section
7(m),
then
before the Company delivers the Placement Notice or CF&Co sells any
Placement Shares, the Company shall provide CF&Co with a certificate, in the
form attached hereto as Exhibit
7(m),
dated
the date of the Placement Notice.
(n) Legal
Opinion.
On
or
prior to the date that the first Shares are sold pursuant to the terms of this
Agreement
and
within three (3) Trading Days of each Representation Date with respect to which
the Company is obligated to deliver a certificate in the form attached hereto
as
Exhibit
7(m)
for
which no waiver is applicable, the Company shall cause to be furnished to
CF&Co a written opinion of Xxxxx & XxXxxxxx LLP (“Company
Counsel”),
or
other counsel satisfactory to CF&Co, in form and substance satisfactory to
CF&Co and its counsel, dated the date that the opinion is required to be
delivered, substantially similar to the form attached hereto as Exhibit
7(n)(1)(a)
and
Exhibit 7(n)(1)(b),
respectively, modified, as necessary, to relate to the Registration Statement
and the Prospectus as then amended or supplemented; provided,
however,
that in
lieu of such opinions for subsequent Representation Dates, counsel may furnish
CF&Co with a letter (a “Reliance
Letter”)
to the
effect that CF&Co may rely on a prior opinion delivered under this
Section
7(n)
to the
same extent as if it were dated the date of such letter (except that statements
in such prior opinion shall be deemed to relate to the Registration Statement
and the Prospectus as amended or supplemented at such Representation Date).
(o) Comfort
Letter.
On or
prior to the date that the first Shares are sold pursuant to the terms of this
Agreement and within three (3) Trading Days of each Representation Date with
respect to which the Company is obligated to deliver a certificate in the form
attached hereto as Exhibit
7(m)
for
which no waiver is applicable, the Company shall cause its independent
accountants to furnish CF&Co letters (the "Comfort
Letters"),
dated
the date of the Comfort Letter is delivered, in form and substance satisfactory
to CF&Co, (i) confirming that they are an independent registered public
accounting firm within the meaning of the Securities Act and the PCAOB, (ii)
stating, as of such date, the conclusions and findings of such firm with respect
to the financial information and other matters ordinarily covered by
accountants’ “comfort letters” to CF&Cos in connection with registered
public offerings (the first such letter, the “Initial
Comfort Letter”)
and
(iii) updating the Initial Comfort Letter with any information that would have
been included in the Initial Comfort Letter had it been given on such date
and
modified as necessary to relate to the Registration Statement and the
Prospectus, as amended and supplemented to the date of such letter.
-16-
(p) Market
Activities.
The
Company will not, directly or indirectly, (i) take any action designed to cause
or result in, or that constitutes or might reasonably be expected to constitute,
the stabilization or manipulation of the price of any security of the Company
to
facilitate the sale or resale of the Shares or (ii) sell, bid for, or purchase
the Shares to be issued and sold pursuant to this Agreement, or pay anyone
any
compensation for soliciting purchases of the Shares other than CF&Co;
provided, however, that the Company may bid for and purchase shares of its
common stock in accordance with Rule 10b-18 under the Exchange Act.
(q) Insurance.
The
Company and its Subsidiaries shall maintain, or caused to be maintained,
insurance in such amounts and covering such risks as is reasonable and customary
for companies engaged in similar businesses in similar industries.
(r) Compliance
with Laws.
The
Company and each of its Subsidiaries shall maintain, or cause to be maintained,
all material environmental permits, licenses and other authorizations required
by federal, state and local law in order to conduct their businesses as
described in the Prospectus, and the Company and each of its Subsidiaries shall
conduct their businesses, or cause their businesses to be conducted, in
substantial compliance with such permits, licenses and authorizations and with
applicable environmental laws, except where the failure to maintain or be in
compliance with such permits, licenses and authorizations could not reasonably
be expected to have a Material Adverse Effect.
(s) REIT
Treatment.
The
Company will take all reasonable efforts to enable the Company to continue
to
meet the requirements for qualification and taxation as a REIT under the Code
for subsequent tax years that include any portion of the term of this
Agreement.
(t) Investment
Company Act.
The
Company will conduct its affairs in such a manner so as to reasonably ensure
that neither it nor the Subsidiaries will be or become, at any time prior to
the
termination of this Agreement, an “investment company,” as such term is defined
in the Investment Company Act, assuming no change in the Commission’s current
interpretation as to entities that are not considered an investment
company.
(u) Securities
Act and Exchange Act.
The
Company will use its best efforts to comply with all requirements imposed upon
it by the Securities Act and the Exchange Act as from time to time in force,
so
far as necessary to permit the continuance of sales of, or dealings in, the
Placement Shares as contemplated by the provisions hereof and the
Prospectus.
(v) No
Offer to Sell.
Other
than a free writing prospectus (as defined in Rule 405 under the Act) approved
in advance by the Company and CF&Co in its capacity as principal or agent
hereunder, neither CF&Co nor the Company (including its agents and
representatives, other than CF&Co in its capacity as such) will make, use,
prepare, authorize, approve or refer to any written communication (as defined
in
Rule 405 under the Act), required to be filed with the Commission, that
constitutes an offer to sell or solicitation of an offer to buy Shares
hereunder
(w) Xxxxxxxx-Xxxxx
Act.
The
Company and the Subsidiaries will use their best efforts to comply with all
effective applicable provisions of the Xxxxxxxx-Xxxxx Act.
8. Conditions
to CF&Co’s Obligations.
The
obligations of CF&Co hereunder with respect to a Placement will be subject
to the
-17-
continuing
accuracy and completeness of the representations and warranties made by the
Company herein, to the due performance by the Company of its obligations
hereunder, to the completion by CF&Co of a due diligence review satisfactory
to CF&Co in its reasonable judgment, and to the continuing satisfaction (or
waiver by CF&Co in its sole discretion) of the following additional
conditions:
(a) Registration
Statement Effective.
The
Registration Statement shall have become effective and shall be available for
(i) all sales of Placement Shares issued pursuant to all prior Placement Notices
and (ii) the sale of all Placement Shares contemplated to be issued by any
Placement Notice.
(b) No
Material Notices.
None of
the following events shall have occurred and be continuing: (i) receipt by
the
Company of any request for additional information from the Commission or any
other federal or state governmental authority during the period of effectiveness
of the Registration Statement, the response to which would require any
post-effective amendments or supplements to the Registration Statement or the
Prospectus; (ii) the issuance by the Commission or any other federal or
state governmental authority of any stop order suspending the effectiveness
of
the Registration Statement or the initiation of any proceedings for that
purpose; (iii) receipt by the Company of any notification with respect to the
suspension of the qualification or exemption from qualification of any of the
Placement Shares for sale in any jurisdiction or the initiation or threatening
of any proceeding for such purpose; (iv) the occurrence of any event that makes
any material statement made in the Registration Statement or the Prospectus
or
any material document incorporated or deemed to be incorporated therein by
reference untrue in any material respect or that requires the making of any
changes in the Registration Statement, related Prospectus or documents so that,
in the case of the Registration Statement, it will not contain any materially
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not misleading
and, that in the case of the Prospectus, it will not contain any materially
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
(c) No
Misstatement or Material Omission.
CF&Co shall not have advised the Company that the Registration Statement or
Prospectus, or any amendment or supplement thereto, contains an untrue statement
of fact that in CF&Co’s reasonable opinion is material, or omits to state a
fact that in CF&Co’s opinion is material and is required to be stated
therein or is necessary to make the statements therein not
misleading.
(d) Material
Changes.
Except
as contemplated in the Prospectus, or disclosed in the Company’s reports filed
with the Commission, there shall not have been any material adverse change,
on a
consolidated basis, in the authorized capital stock of the Company or any
Material Adverse Change, or any development that could reasonably be expected
to
cause a Material Adverse Change, or a downgrading in or withdrawal of the rating
assigned to any of the Company’s securities (other than asset backed securities)
by any rating organization or a public announcement by any rating organization
that it has under surveillance or review its rating of any of the Company’s
securities (other than asset backed securities), the effect of which, in the
case of any such action by a rating organization described above, in the
reasonable judgment of CF&Co (without relieving the Company of any
obligation or liability it may otherwise have), is so material as
to
-18-
make
it impracticable or inadvisable to proceed with the offering of the Placement
Shares on the terms and in the manner contemplated in the
Prospectus.
(e) Legal
Opinion.
CF&Co shall have received the opinions of Company Counsel required to be
delivered pursuant Section
7(n)
on or
before the date on which such delivery of such opinion is required pursuant
to
Section
7(n).
(f) Comfort
Letter.
CF&Co shall have received the Comfort Letter required to be delivered
pursuant Section
7(o)
on or
before the date on which such delivery of such opinion is required pursuant
to
Section
7(o).
(g) Representation
Certificate.
CF&Co shall have received the certificate required to be delivered pursuant
to Section 7(m)
on or
before the date on which delivery of such certificate is required pursuant
to
Section
7(m).
(h) No
Suspension.
Trading
in the Shares shall not have been suspended on the Exchange.
(i) Other
Materials.
On each
date on which the Company is required to deliver a certificate pursuant to
Section
7(m),
the
Company shall have furnished to CF&Co such appropriate further information,
certificates and documents as CF&Co may reasonably request. All such
opinions, certificates, letters and other documents will be in compliance with
the provisions hereof. The Company will furnish CF&Co with such conformed
copies of such opinions, certificates, letters and other documents as CF&Co
shall reasonably request.
(j) Securities
Act Filings Made.
All
filings with the Commission required by Rule 424 under the Securities Act to
have been filed prior to the issuance of any Placement Notice hereunder shall
have been made within the applicable time period prescribed for such filing
by
Rule 424.
(k) Approval
for Listing.
The
Placement Shares shall either have been (i) approved for listing on the
Exchange, subject only to notice of issuance, or (ii) the Company shall have
filed an application for listing of the Placement Shares on the Exchange at,
or
prior to, the issuance of any Placement Notice.
(l) No
Termination Event.
There
shall not have occurred any event that would permit CF&Co to terminate this
Agreement pursuant to Section
11(a).
9. Indemnification
and Contribution.
(a) Company
Indemnification.
The
Company agrees to indemnify and hold harmless CF&Co, the directors,
officers, partners, employees and agents of CF&Co and each person, if any,
who (i) controls CF&Co within the meaning of Section 15 of the
Securities Act
or
Section 20 of the Exchange Act, or (ii) is controlled by or is under common
control with CF&Co (a “CF&Co
Affiliate”)
from
and against any and all losses, claims, liabilities, expenses and damages
(including, but not limited to, any and all reasonable investigative, legal
and
other expenses incurred in connection with, and any and all amounts paid in
settlement (in accordance with Section
9(c))
of, any
action, suit or
-19-
proceeding
between any of the indemnified parties and any indemnifying parties or between
any indemnified party and any third party, or otherwise, or any claim asserted),
as and when incurred, to which CF&Co, or any such person, may become subject
under the
Securities
Act, the Exchange Act or other federal or state statutory law or regulation,
at
common law or otherwise, insofar as such losses, claims, liabilities, expenses
or damages arise out of or are based, directly or indirectly, on (i) any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement or the Prospectus or any amendment or supplement to
the
Registration Statement or the Prospectus or in any free writing prospectus
or in
any application or other document executed by or on behalf of the Company or
based on written information furnished by or on behalf of the Company filed
in
any jurisdiction in order to qualify the Shares under the securities laws
thereof or filed with the Commission, (ii) the omission or alleged omission
to
state in any such document a material fact required to be stated in it or
necessary to make the statements in it not misleading or (iii) any breach by
any
of the indemnifying parties
of any
of their respective representations, warranties and agreements contained in
this
Agreement;
provided,
however,
that
this indemnity agreement shall not apply to the extent that such loss, claim,
liability, expense or damage arises from the sale of the Placement Shares
pursuant to this Agreement and is caused directly or indirectly by an untrue
statement or omission made in reliance upon and in conformity with written
information relating to CF&Co and furnished to the Company by CF&Co
expressly for inclusion in any document as described in clause (a)(i).
This
indemnity agreement will be in addition to any liability that the Company might
otherwise have.
(b) CF&Co
Indemnification.
CF&Co agrees to indemnify and hold harmless the Company and its directors
and each officer of the Company who signed the Registration Statement, and
each
person, if any, who (i) controls the Company within the meaning of Section
15 of the
Securities Act
or
Section 20 of the Exchange Act or (ii) is controlled by or is under common
control with the Company (a “Company
Affiliate”)
against any and all loss, liability, claim, damage and expense described in
the
indemnity contained in Section
9(a),
as
incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement (or any
amendments thereto) or the Prospectus (or any amendment or supplement thereto)
in reliance upon and in conformity with written information relating to
CF&Co and furnished to the Company by CF&Co expressly for inclusion in
any document as described in Section
9(a)(i).
(c) Procedure.
Any
party that proposes to assert the right to be indemnified under this
Section
9 will,
promptly after receipt of notice of commencement of any action against such
party in respect of which a claim is to be made against an indemnifying party
or
parties under this Section
9,
notify
each such indemnifying party of the commencement of such action, enclosing
a
copy of all papers served, but the omission so to notify such indemnifying
party
will not relieve the indemnifying party from (i) any liability that it might
have to any indemnified party otherwise than under this Section
9
and (ii)
any liability that it may have to any indemnified party under the foregoing
provision of this Section
9
unless,
and only to the extent that, such omission results in the forfeiture of
substantive rights or defenses by the indemnifying party. If any such action
is
brought against any indemnified party and it notifies the indemnifying party
of
its commencement, the indemnifying party will be entitled to participate in
and,
to the extent that it elects by delivering written notice to the indemnified
party promptly after receiving notice of the commencement of the action from
the
indemnified party, jointly with any other indemnifying party
-20-
similarly
notified, to assume the defense of the action, with counsel reasonably
satisfactory to the indemnified party, and after notice from the indemnifying
party to the indemnified party of its election to assume the defense, the
indemnifying party will not be liable to the indemnified party for any legal
or
other expenses except as provided below and except for the reasonable costs
of
investigation subsequently incurred by the indemnified party in connection
with
the defense. The indemnified party will have the right to employ its own counsel
in any such action, but the fees, expenses and other charges of such counsel
will be at the expense of such indemnified party unless (1) the employment
of
counsel by the indemnified party has been authorized in writing by the
indemnifying party, (2) the indemnified party has reasonably concluded (based
on
advice of counsel) that there may be legal defenses available to it or other
indemnified parties that are different from or in addition to those available
to
the indemnifying party, (3) a conflict or potential conflict exists (based
on
advice of counsel to the indemnified party) between the indemnified party and
the indemnifying party (in which case the indemnifying party will not have
the
right to direct the defense of such action on behalf of the indemnified party)
or (4) the indemnifying party has not in fact employed counsel to assume the
defense of such action within a reasonable time after receiving notice of the
commencement of the action, in each of which cases the reasonable fees,
disbursements and other charges of counsel will be at the expense of the
indemnifying party or parties. It is understood that the indemnifying party
or
parties shall not, in connection with any proceeding or related proceedings
in
the same jurisdiction, be liable for the reasonable fees, disbursements and
other charges of more than one separate firm admitted to practice in such
jurisdiction at any one time for all such indemnified party or parties. All
such
fees, disbursements and other charges will be reimbursed by the indemnifying
party promptly as they are incurred. An indemnifying party will not, in any
event, be liable for any settlement of any action or claim effected without
its
written consent. No indemnifying party shall, without the prior written consent
of each indemnified party, settle or compromise or consent to the entry of
any
judgment in any pending or threatened claim, action or proceeding relating
to
the matters contemplated by this Section
9
(whether
or not any indemnified party is a party thereto), unless such settlement,
compromise or consent includes an unconditional release of each indemnified
party from all liability arising or that may arise out of such claim, action
or
proceeding.
(d) Contribution.
In
order to provide for just and equitable contribution in circumstances in which
the indemnification provided for in the foregoing paragraphs of this
Section
9
is
applicable in accordance with its terms but for any reason is held to be
unavailable from the Company or CF&Co, the Company and CF&Co will
contribute to the total losses, claims, liabilities, expenses and damages
(including any investigative, legal and other expenses reasonably incurred
in
connection with, and any amount paid in settlement of, any action, suit or
proceeding or any claim asserted, but after deducting any contribution received
by the Company from persons other than CF&Co, such as persons who control
the Company within the meaning of the
Securities Act,
officers of the Company who signed the Registration Statement and directors
of
the Company, who also may be liable for contribution) to which the Company
and
CF&Co may be subject in such proportion as shall be appropriate to reflect
the relative benefits received by the Company on the one hand and CF&Co on
the other. The relative benefits received by the Company on the one hand and
CF&Co on the other hand shall be deemed to be in the same proportion as the
total net proceeds from the sale of the Placement Shares (before deducting
expenses) received by the Company bear to the total compensation
received by
CF&Co from the sale of Placement Shares on behalf of the Company. If, but
only if, the allocation provided by the foregoing
-21-
sentence
is not permitted by applicable law, the allocation of contribution shall be
made
in such proportion as is appropriate to reflect not only the relative benefits
referred to in the foregoing sentence but also the relative fault of the
Company, on the one hand, and CF&Co, on the other, with respect to the
statements or omission that resulted in such loss, claim, liability, expense
or
damage, or action in respect thereof, as well as any other relevant equitable
considerations with respect to such offering. Such relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or omission or alleged omission to state
a
material fact relates to information supplied by the Company or CF&Co, the
intent of the parties and their relative knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company and
CF&Co agree that it would not be just and equitable if contributions
pursuant to this Section
9(d)
were to
be determined by pro rata allocation or by any other method of allocation that
does not take into account the equitable considerations referred to herein.
The
amount paid or payable by an indemnified party as a result of the loss, claim,
liability, expense, or damage, or action in respect thereof, referred to above
in this Section
9(d)
shall be
deemed to include, for the purpose of this Section
9(d),
any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim to the
extent consistent with Section
9(c)
hereof.
Notwithstanding the foregoing provisions of this Section
9(d),
CF&Co shall not be required to contribute any amount in excess of the
commissions received by it under this Agreement and no person found guilty
of
fraudulent misrepresentation (within the meaning of Section 11(f) of
the
Securities Act)
will be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section
9(d),
any
person who controls a party to this Agreement within the meaning of the
Securities Act,
and any
officers, directors, partners, employees or agents of CF&Co, will have the
same rights to contribution as that party, and each officer of the Company
who
signed the Registration Statement will have the same rights to contribution
as
the Company, subject in each case to the provisions hereof. Any party entitled
to contribution, promptly after receipt of notice of commencement of any action
against such party in respect of which a claim for contribution may be made
under this Section
9(d),
will
notify any such party or parties from whom contribution may be sought, but
the
omission to so notify will not relieve that party or parties from whom
contribution may be sought from any other obligation it or they may have under
this Section
9(d)
except
to the extent that the failure to so notify such other party materially
prejudiced the substantive rights or defenses of the party from whom
contribution is sought. Except for a settlement entered into pursuant to the
last sentence of Section
9(c)
hereof,
no party will be liable for contribution with respect to any action or claim
settled without its written consent if such consent is required pursuant to
Section
9(c)
hereof.
10. Representations
and Agreements to Survive Delivery.
The
indemnity and contribution agreements contained in Section
9
of this
Agreement and all representations and warranties of the Company herein or in
certificates delivered pursuant hereto shall survive, as of their respective
dates, regardless of (i) any investigation made by or on behalf of CF&Co,
any controlling persons, or the Company (or any of their respective officers,
directors or controlling persons), (ii) delivery and acceptance of the Placement
Shares and payment therefor or (iii) any termination of this
Agreement.
11. Termination.
-22-
(a) CF&Co
shall have the right by giving notice as hereinafter specified at any time
to
terminate this Agreement if (i) any Material Adverse Change, or any development
that has actually occurred and that is reasonably expected to cause a Material
Adverse Change has occurred that, in the reasonable judgment of CF&Co, may
materially impair the ability of CF&Co to sell the Placement Shares
hereunder, (ii) the Company shall have failed, refused or been unable to perform
any agreement on its part to be performed hereunder; provided,
however,
in the
case of any failure of the Company to deliver (or cause another person to
deliver) any certification, opinion, or letter required under Sections 7(m),
7(n),
or
7(o),
CF&Co’s right to terminate shall not arise unless such failure to deliver
(or cause to be delivered) continues for more than thirty (30) days from the
date such delivery was required; or (iii) any other condition of
CF&Co’s obligations hereunder is not fulfilled, or (iv), any suspension or
limitation of trading in the Placement Shares or in securities generally on
the
Exchange shall have occurred. Any such termination shall be without liability
of
any party to any other party except that the provisions of Section
7(g)
(Expenses), Section
9
(Indemnification), Section
10
(Survival of Representations), Section
16
(Applicable Law; Consent to Jurisdiction) and Section
17
(Waiver
of Jury Trial) hereof shall remain in full force and effect notwithstanding
such
termination. If CF&Co elects to terminate this Agreement as provided in this
Section
11(a),
CF&Co shall provide the required notice as specified in Section
12
(Notices).
(b) The
Company shall have the right, by giving ten (10) days notice as hereinafter
specified to terminate this Agreement in its sole discretion at
any
time after the date of this Agreement.
Any
such termination shall be without liability of any party to any other party
except that the provisions of Section
7(g),
Section
9,
Section
10,
Section
16
and
Section
17
hereof
shall remain in full force and effect notwithstanding such
termination.
(c) CF&Co
shall have the right, by giving ten (10) days notice as hereinafter specified
to
terminate this Agreement in its sole discretion
at any
time after the date of this Agreement.
Any
such termination shall be without liability of any party to any other party
except that the provisions of Section
7(g),
Section
9,
Section
10,
Section
16
and
Section
17
hereof
shall remain in full force and effect notwithstanding such
termination.
(d) Unless
earlier terminated pursuant to this Section
11,
this
Agreement shall automatically terminate upon the issuance and sale of all of
the
Placement Shares through CF&Co on the terms and subject to the conditions
set forth herein; provided
that the
provisions of Section
7(g),
Section
9,
Section
10,
Section
16
and
Section
17
hereof
shall remain in full force and effect notwithstanding such
termination.
(e) This
Agreement shall remain in full force and effect unless terminated pursuant
to
Sections
11(a),
(b),
(c),
or (d)
above or
otherwise by mutual agreement of the parties; provided,
however, that
any
such termination by mutual agreement shall in all cases be deemed to provide
that Section
7(g),
Section
9,
Section
10,
Section
16
and
Section
17
shall
remain in full force and effect.
(f) Any
termination of this Agreement shall be effective on the date specified in such
notice of termination; provided,
however,
that
such termination shall not be effective until the close of business on the
date
of receipt of such notice by CF&Co or the Company, as the case may be. If
such termination shall occur prior to the Settlement Date for any sale of
Placement Shares, such Placement Shares shall settle in accordance with the
provisions of this Agreement.
-23-
12. Notices.
All
notices or other communications required
or permitted to be given by any party to any other party pursuant to the terms
of this Agreement shall
be
in writing, unless otherwise specified, and if sent to CF&Co, shall be
delivered to CF&Co at Cantor Xxxxxxxxxx & Co., 000 Xxxx 00xx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, fax no. (000) 000-0000, Attention: ITD-Investment Banking,
with copies to Xxxxxxx Xxxxxx, General Counsel, at the same address, and DLA
Xxxxx Xxxxxxx Xxxx Xxxx US LLP, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, XX 00000,
fax no. (000) 000-0000, Attention: Xxxx X. Xxxxxxx; or if sent to the Company,
shall be delivered to Essex Property Trust, Inc., 000 Xxxx Xxxxxx Xxxxx, Xxxx
Xxxx, Xxxxxxxxxx 00000, fax no. (000) 000-0000, attention: Xxxxxxx Dance, Chief
Financial Officer, with a copy to Xxxxx & XxXxxxxx LLP, Xxx Xxxxxxxxxxx
Xxxxxx, 00xx
Xxxxx,
Xxx Xxxxxxxxx, XX 00000-0000, fax no. (000) 000-0000, attention: Xxxxxxx
Xxxxxxxx, Esq. Each party to this Agreement may change such address for notices
by sending to the parties to this Agreement written notice of a new address
for
such purpose.
Each
such notice or other communication shall be deemed given (i) when delivered
personally or by verifiable facsimile transmission (with an original to follow)
on or before 4:30 p.m., New York City time, on a Business Day or, if such day
is
not a Business Day, on the next succeeding Business Day, (ii) on the next
Business Day after timely delivery to a nationally-recognized overnight courier
and (iii) on the Business Day
actually received if deposited in the U.S. mail (certified or registered mail,
return receipt requested, postage prepaid). For purposes of this Agreement,
“Business
Day”
shall
mean any day on which the Exchange and commercial banks in the City of New
York
are open for business.
13. Successors
and Assigns.
This
Agreement shall inure to the benefit of and be binding upon the Company and
CF&Co and their respective successors and the affiliates, controlling
persons, officers and directors referred to in Section
9
hereof.
References to any of the parties contained in this Agreement shall be deemed
to
include the successors and permitted assigns of such party. Nothing
in this Agreement, express or implied, is intended to confer upon any party
other than the parties hereto or their respective successors and permitted
assigns any rights, remedies, obligations or liabilities under or by reason
of
this Agreement, except as expressly provided in this Agreement. Neither party
may assign its rights or obligations under this Agreement without the prior
written consent of the other party; provided,
however,
that
CF&Co may assign its rights and obligations hereunder to an affiliate of
CF&Co without obtaining the Company’s consent.
14. Adjustments
for Stock Splits.
The
parties acknowledge and agree that all share-related numbers contained in this
Agreement shall be adjusted to take into account any stock split, stock dividend
or similar event effected with respect to the Shares.
15. Entire
Agreement; Amendment; Severability.
This
Agreement (including all schedules and exhibits attached hereto and Placement
Notices issued pursuant hereto) constitutes the entire agreement and supersedes
all other prior and contemporaneous agreements and undertakings, both written
and oral, among the parties hereto with regard to the subject matter
hereof.
Neither
this Agreement nor any term hereof may be amended except pursuant to a written
instrument executed by the Company and CF&Co. In the event that any one or
more of the provisions contained herein, or the application thereof in any
circumstance, is held invalid, illegal or unenforceable as written by
a
court of competent jurisdiction,
then
such
provision shall be given full force and effect to the fullest possible extent
that it is
valid,
legal and enforceable,
and the
remainder of the terms and provisions herein shall be construed as if such
invalid,
illegal or unenforceable term
or
-24-
provision
was not contained herein, but only to the extent that giving effect to such
provision and the remainder of the terms and provisions hereof shall be in
accordance with the intent of the parties as reflected in this
Agreement.
16. Applicable
Law; Consent to Jurisdiction.
This
Agreement shall be governed by, and construed in accordance with, the internal
laws of the State of New York without regard to the principles of conflicts
of
laws. Each
party hereby irrevocably submits to the non-exclusive jurisdiction of the state
and federal courts sitting in the City of New York, borough of Manhattan, for
the adjudication of any dispute hereunder or in connection with any transaction
contemplated hereby, and hereby irrevocably waives, and agrees not to assert
in
any suit, action or proceeding, any claim that it is not personally subject
to
the jurisdiction of any such court, that such suit, action or proceeding is
brought in an inconvenient forum or that the venue of such suit, action or
proceeding is improper. Each party hereby irrevocably waives personal service
of
process and consents to process being served in any such suit, action or
proceeding by mailing a copy thereof (certified or registered mail, return
receipt requested) to such party at the address in effect for notices to it
under this Agreement and agrees that such service shall constitute good and
sufficient service of process and notice thereof. Nothing contained herein
shall
be deemed to limit in any way any right to serve process in any manner permitted
by law.
17. Waiver
of Jury Trial.
The
Company and CF&Co each hereby irrevocably waives any right it may have to a
trial by jury in respect of any claim based upon or arising out of this
agreement or any transaction contemplated hereby.
18. Counterparts.
This
Agreement may be executed in two or more counterparts, each of which shall
be
deemed an original, but all of which together shall constitute one and the
same
instrument. Delivery of an executed Agreement by one party to the other may
be
made by facsimile transmission.
[Remainder
of Page Intentionally Blank]
-25-
If
the
foregoing correctly sets forth the understanding between the Company and
CF&Co, please so indicate in the space provided below for that purpose,
whereupon this letter shall constitute a binding agreement between the Company
and CF&Co.
Very
truly yours,
ESSEX
PROPERTY TRUST, INC.
By:
/s/
Xxxxxxx X. Dance
Name: Xxxxxxx
X. Dance
Title: Chief
Financial Officer,
Executive
Vice President
ACCEPTED
as of the date
first-above
written:
CANTOR
XXXXXXXXXX & CO.
By:
/s/
Xxxxxxx Xxxxx
Name: Xxxxxxx
Xxxxx
Title: Managing
Director
-26-
SCHEDULE
1
FORM
OF PLACEMENT NOTICE
|
From:
|
[
|
]
|
|
Cc:
|
[
|
]
|
| To: | [ | ] |
Subject:
Controlled
Equity Offering—Placement Notice
Gentlemen:
Pursuant
to the terms and subject to the conditions contained in the Controlled Equity
OfferingSM Sales
Agreement between Essex Property Trust, Inc. (the “Company”),
and
Cantor Xxxxxxxxxx & Co. (“CF&Co”)
dated
May 12, 2006 (the “Agreement”),
I
hereby request on behalf of the Company that CF&Co sell up to [ ] shares of
the Company’s common stock, par value $0.0001 per share, at a minimum market
price of $_______ per share.
SCHEDULE
2
Compensation
CF&Co
shall be paid compensation equal to two percent (2%) of the gross proceeds
from
the sales of Shares pursuant to the terms of this Agreement.
SCHEDULE
3
CANTOR
XXXXXXXXXX & CO.
Xxxx
Xxxxx
Xxxx
Xxxxxx
Xxxxxxx
XxXxxxxx
Xxxxx
Xxxxxxxxx
ESSEX
PROPERTY TRUST, INC.
Xxxxx
Xxxxxxxx
Michall
Xxxxxx
Xxxxxxx
Dance
(Unless
notified in writing from Essex that the following policy is no longer in effect,
Placement Notices shall not provide for sales in the aggregate to exceed 250,000
shares of common stock in any three month period.)
Exhibit
7(n)
MATTERS
TO BE COVERED BY INITIAL OPINION
OF
XXXXX
& XXXXXXXX
LLP
| (i) |
As
of December 31, 2005, the Company had an authorized capitalization
as set
forth in its statements of financial condition included in the Company’s
Annual Report on Form 10-K for the year ended December 31, 2005.
All of
the outstanding shares of Common Stock and Preferred Stock conform,
in all
material respects, to the description thereof contained in the
Prospectus.
|
| (ii) |
The
Company is a corporation duly incorporated and existing under and
by
virtue of the laws of the State of Maryland and is in good standing
with
the State Department of Assessments and Taxation of Maryland. The
Company
has the corporate power to own, lease and operate its properties
and
conduct its business in all material respects as described under
the
headings “Item 1 Business” and “Item 2 Properties” in the Company’s Annual
Report on Form 10-K for the year ended December 31, 2005. The Operating
Partnership is validly existing as a limited partnership in good
standing
under the laws of the jurisdiction of its incorporation or organization
with the power to own, lease and operate its properties and conduct
its
business in all material respects as described under the headings
“Item 1
Business” and “Item 2 Properties” in the Company’s Annual Report on Form
10-K for the year ended December 31,
2005.
|
| (iii) |
To
the knowledge of such counsel, the Company and the Operating Partnership
is duly qualified or registered to transact business in each jurisdiction
set forth on Schedule 1 hereto in which the failure, individually
or in
the aggregate, to be so qualified could reasonably be expected to
have a
Material Adverse Effect. To the knowledge of such counsel, other
than the
Company’s interests in the Subsidiaries or as disclosed in the Prospectus,
the Company does not own, directly or indirectly, any capital stock
or
other equity securities of any other corporation or any ownership
interest
in any limited liability company, partnership, joint venture or other
association.
|
| (iv) |
The
execution, delivery and performance of the Sales Agreement by the
Company
and the transactions contemplated thereby do not conflict with, or
result
in any breach of, or constitute a default under (nor constitute an
event
that with notice, lapse of time or both would constitute a breach
of or
default under), (i) the charter or bylaws of the Company, (ii) any
agreement listed on Schedule 2 hereto or (iii) to our knowledge,
any
Applicable Law or any decree, judgment or order applicable to the
Company
(other than state and foreign securities or blue sky laws, as to
which we
express no opinion), except in the case of clauses (ii) and (iii)
for such
conflicts, breaches or defaults, which individually or in the aggregate
could not be reasonably expected to have a Material Adverse Effect.
|
1
| (v) |
To
our knowledge, except as otherwise described in the Registration
Statement, the Prospectus, the documents incorporated therein by
reference
or the exhibits filed in connection therewith, there are no persons
with
registration or other similar rights to have any securities registered
pursuant to the Registration
Statement.
|
| (vi) |
At
the time the Registration Statement became effective, the Registration
Statement and, as of the date of the Sales Agreement and the date
hereof,
the Prospectus (in each case, other than the financial statements,
financial schedules and other financial and statistical data included
or
incorporated by reference in, or excluded from, the Registration
Statement
and the Prospectus, as to which we express no opinion) complied as
to form
in all material respects with the requirements of the Securities
Act and
the rules and regulations promulgated
thereunder.
|
| (vii) |
The
statements under the caption “Description of Capital Stock” in the
Prospectus, insofar as such statements constitute a summary of the
legal
matters referred to therein, constitute accurate summaries thereof
in all
material respects as of the date of such
statements.
|
| (viii) |
To
our knowledge, there are no actions, suits or proceedings or inquiries
or
investigations, pending or threatened, against the Company or any
of its
officers and directors or to which the Company’s assets (excluding the
Company’s direct or indirect interests in the Subsidiaries) are subject,
at law or in equity, before or by any federal, state, local or foreign
governmental or regulatory commission, board, body, authority, arbitration
panel or agency that are required to be described in the Prospectus
or the
documents incorporated therein by reference but are not so described.
|
| (ix) |
The
Company is not an “investment company” required to register under the
Investment Company Act of 1940, as amended, (the “1940 Act”) or a company
“controlled” by an “investment company” within the meaning of the 1940
Act.
|
| (x) |
The
Shares to be issued and sold by the Company pursuant to the Sales
Agreement, are duly listed, and admitted and authorized for trading,
subject to official notice of issuance, on the
Exchange.
|
2
| (xi) |
Commencing
with its taxable year ended December 31, 1994 through its taxable
year
ended December 31, 2005, the Company has been organized and has operated
in conformity with the requirements for qualification and taxation
as a
REIT under the Code and its organization and proposed method of operation
will enable it to continue to meet the requirements for qualification
and
taxation as a REIT; and
|
| (xii) |
The
statements contained in the Prospectus Supplement under the caption
“Certain Material U.S. Federal Income Tax Considerations” insofar as such
statements constitute matters of law, summaries of legal matters,
or legal
conclusions, have been reviewed by us and fairly present and summarize,
in
all material respects, the matters referred to
therein.
|
| (xiii) |
The
Company is not an "investment company" required to register under
the
Investment Company Act of 1940, as amended, (the "1940 Act") or a
company
"controlled" by an "investment company" within the meaning of the
1940
Act.
|
| (xiv) |
The
Shares to be issued and sold by the Company pursuant to the Sales
Agreement, are duly listed, and admitted and authorized for trading,
subject to official notice of issuance, on the
Exchange.
|
| (xv) |
Commencing
with its taxable year ended December 31, 1994 through its taxable
year
ended December 31, 2005, the Company has been organized and has operated
in conformity with the requirements for qualification and taxation
as a
REIT under the Code and its organization and proposed method of operation
will enable it to continue to meet the requirements for qualification
and
taxation as a REIT; and
|
| (xvi) |
The
statements contained in the Prospectus Supplement under the caption
“Certain Material U.S. Federal Income Tax Considerations” insofar as such
statements constitute matters of law, summaries of legal matters,
or legal
conclusions, have been reviewed by us and fairly present and summarize,
in
all material respects, the matters referred to
therein.
|
The
Registration Statement became effective under the Securities Act in 2003 and,
to
our knowledge, no stop order suspending the effectiveness of the Registration
Statement has been issued under the Securities Act or proceedings therefor
initiated or threatened by the Commission.
In
addition, we have reviewed the Registration Statement and the Prospectus
and
participated in conferences with officers and other representatives of the
Company, representatives of independent public accountants for the Company
at
which the contents of the Registration Statement and the Prospectus and related
matters were discussed, although we are not passing upon, and do not assume
any
responsibility for, the accuracy, completeness or fairness of the statements
contained or incorporated by reference in the Registration Statement
3
The
limitations inherent in the independent verification of factual matters and
the
character of determinations involved in the preparation of a disclosure document
are such, however, that we do not assume any responsibility, except as otherwise
stated in opinion (xiii) above, for the accuracy, completeness or fairness
of
the statements contained in the Registration Statement or Prospectus or any
amendments or supplements thereto (including any of the documents incorporated
by reference therein).
In
rendering such opinion, such counsel may rely (A) as to matters involving the
application of laws of any jurisdiction other than the California Corporations
Code or the federal law of the United States, to the extent they deem proper
and
specified in such opinion, upon the opinion (which shall be satisfactory in
form
and substance to the Underwriter, shall expressly state that the Underwriter
and
Underwriter’s counsel may rely on such opinion as if the opinion were addressed
to them and shall be furnished to the Underwriter) of other counsel of good
standing whom they believe to be reliable and who are satisfactory to counsel
for the Underwriter; provided,
however,
that
such counsel shall further state that they believe that they, the Underwriter
and the Underwriter’s counsel are justified in relying upon such opinion of
other counsel, and (B) as to matters of fact, to the extent they deem proper,
on
certificates of responsible officers of the Company and public
officials.
4
Exhibit
7(n)(2)
Matters
to be covered by subsequent Company Counsel Opinions
The
Registration Statement, when it became effective, and the Prospectus and any
amendment or supplement thereto, on the date of filing thereof with the
Commission, complied as to form in all material respects with the requirements
for registration statements on Form S-3 under the Securities Act and the rules
and regulations of the Commission thereunder, and each of the documents
incorporated by reference in the Registration Statement or the Prospectus,
or
any amendment or supplement thereto, on the date of filing thereof with the
Commission, complied as to form in all material respects with the requirements
of the Exchange Act and the rules and regulations of the Commission thereunder;
it being understood, however, that we express no opinion with respect to the
financial statements, schedules or other financial or statistical data included
or incorporated by reference in, or omitted from, the Registration Statement
or
the Prospectus or any other document. In passing upon the compliance as to
form
of the Registration Statement and the Prospectus and any other document, we
have
assumed that the statements made and incorporated by reference therein are
correct and complete.
(a) The
Registration Statement has become effective under the
Securities Act
and, to
the best of our knowledge, no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceeding for that purpose has
been instituted by the Commission.
(b) To
our
knowledge and other than as set forth in the Prospectus, there are no legal
or
governmental proceedings, pending or threatened, to which the Company is a
party
required to be described in the Prospectus that are not described as
required.
In
addition, we have participated in conferences with officers and other
representatives of the Company, representatives of the independent public
accountants for the Company, and your representatives, at which the contents
of
the Registration Statement and the Prospectus and related matters were discussed
and, although we are not passing upon, and do not assume any responsibility
for,
the accuracy, completeness or fairness of the statements contained or
incorporated by reference in the Registration Statement and the Prospectus,
during the course of such participation, no facts came to our attention that
caused us to believe that the Registration Statement, at the time it became
effective, contained an untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading, or that the Prospectus (including the
Incorporated Documents), as of its date, contained an untrue statement of a
material fact or omitted to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; it being understood that we express no belief with respect
to the financial statements, schedules and other financial and statistical
data
included or incorporated by reference in the Registration Statement or the
Prospectus.
*
Note:
“Registration Statement” and “Prospectus” will be defined to include documents
incorporated by reference therein (“Incorporated
Documents”).
2
Exhibit
7(m)
OFFICER
CERTIFICATE
The
undersigned, the duly qualified and elected Xxxxxxx X. Dance, Chief Financial
Officer, of ESSEX
PROPERTY TRUST, INC. (“Company”),
a
Maryland corporation, does hereby certify in such capacity and on behalf of
the
Company, pursuant to Section
7(m)
of the
Sales Agreement dated May 11,
2006 (the “Sales
Agreement”)
between the Company and Cantor Xxxxxxxxxx & Co., that to the best of the
knowledge of the undersigned.
(i) The
representations and warranties of the Company in Section
6
of the
Sales Agreement (A) to the extent such representations and warranties are
subject to qualifications and exceptions contained therein relating to
materiality or Material Adverse Effect, are true and correct on and as of the
date hereof with the same force and effect as if expressly made on and as of
the
date hereof, except for those representations and warranties that speak solely
as of a specific date and which were true and correct as of such date, and
(B)
to the extent such representations and warranties are not subject to any
qualifications or exceptions, are true and correct in all material respects
as
of the date hereof as if made on and as of the date hereof with the same force
and effect as if expressly made on and as of the date hereof except for those
representations and warranties that speak solely as of a specific date and
which
were true and correct as of such date; and
(ii) The
Company has complied with all agreements and satisfied all conditions on its
part to be performed or satisfied pursuant to the Sales Agreement at or prior
to
the date hereof.
By: /s/ Xxxxxxx
X. Dance
Name:
Xxxxxxx X. Dance
Title: Chief
Financial Officer,
Executive Vice President
Date: May
12, 2006
