ESSEX PROPERTY TRUST, INC. 2,000,000 SHARES CONTROLLED EQUITY OFFERINGSM SALES AGREEMENT
EXHIBIT
1.1
ESSEX
PROPERTY TRUST, INC.
2,000,000
SHARES
CONTROLLED
EQUITY OFFERINGSM
March
30,
2007
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. 333-141726), including a base prospectus,
relating to certain securities, including the Shares, to be issued from time
to
time by the Company, and which incorporates by reference documents that the
Company has filed or will file in accordance with the provisions of the
Securities Exchange Act of 1934, as amended, and the rules and regulations
thereunder (collectively, the “Exchange Act”). The
Company has prepared a prospectus supplement specifically relating to the
Shares
(the “Prospectus Supplement”) to the base prospectus
included as part of such registration statement. The Company has
furnished to CF&Co, for use by CF&Co, copies of the prospectus included
as part of such registration statement, as supplemented by the Prospectus
Supplement, relating to the Shares. Except where the context
otherwise requires, such registration statement, as amended when it became
effective, including all documents filed as part thereof or incorporated
by
reference therein, and including any information contained in a Prospectus
(as
defined below) subsequently filed with the Commission pursuant to Rule 424(b)
under the Securities Act and or deemed to be a part of such registration
statement pursuant to Rule 430B of the Securities Act, is herein called the
“Registration Statement.” The base
prospectus, including all documents incorporated therein by reference, included
in the Registration Statement, as it may be supplemented by the Prospectus
Supplement, in the form in which such prospectus and/or Prospectus Supplement
have most recently been
filed by the Company
with the Commission pursuant to Rule 424(b) under
the Securities Act, together with any “issuer free writing prospectus,” as
defined in Rule 433 of the Securities Act Regulations (“Rule 433”), relating to
the Shares that (i) is required to be filed with the Commission by the Company
or (ii) is exempt from filing pursuant to Rule 433(d)(5)(i), in each case
in the
form filed or required to be filed with the Commission or, if not required
to be
filed, in the form retained in the Company’s records pursuant to Rule 433(g), is
herein called the “Prospectus.” Any reference herein to
the Registration Statement, the Prospectus or any amendment or supplement
thereto shall be deemed to refer to and include the documents incorporated
by
reference therein, and any reference herein to the terms “amend,” “amendment” or
“supplement” with respect to the Registration Statement or the Prospectus shall
be deemed to refer to and include the filing after the execution hereof of
any
document with the Commission deemed to be incorporated by reference therein.
For
purposes of this Agreement, all references to the Registration Statement,
the
Prospectus or to any amendment or supplement thereto shall be deemed to include
any copy filed with the Commission pursuant to 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) containing
the
parameters in accordance with which it desires the Shares to be sold, which
shall at a minimum include the number of Shares to be issued (the
“Placement Shares”), the time period during which sales
are requested to be made, any limitation on the number of Shares that may
be
sold in any one day and any minimum price below which sales may not be made
(a
“Placement Notice”), a form of which containing such
minimum sales parameters necessary is attached hereto as Schedule
1. The Placement Notice shall originate from any of the
individuals from the Company set forth on Schedule
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 upon receipt by CF&Co unless and
until (i) in accordance with the notice requirement set forth in Section
4,
CF&Co declines to accept the terms contained therein for any reason, in its
sole discretion, (ii) the entire amount of the Placement Shares have been
sold,
(iii) in accordance with the notice requirements set forth in Section 4,
the
Company suspends or terminates the Placement Notice, (iv) the Company issues
a
subsequent Placement Notice with parameters superseding those on the earlier
dated Placement Notice, or (v) the Agreement has been terminated under the
provisions of Section 11. The amount of any discount,
commission or other compensation to be paid by the Company to CF&Co in
connection with the sale of the Placement Shares shall be calculated in
accordance with the terms set forth in Schedule
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.
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3. Sale
of Placement Shares by CF&Co. Subject to the terms and
conditions herein set forth, upon the Company’s issuance of a Placement Notice,
and unless the sale of the Placement Shares described therein has been declined,
suspended, or otherwise terminated in accordance with the terms of this
Agreement, CF&Co., for the period specified in the Placement Notice, will
use its commercially reasonable efforts consistent with its normal trading
and
sales practices 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 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.
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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 through its
Deposit and Withdrawal at Custodian System or by such other means of delivery
as
may be mutually agreed upon by the parties hereto which in all cases shall
be
freely tradeable, transferable, registered shares in good deliverable
form. On each Settlement Date, CF&Co will deliver the related Net
Proceeds in same day funds to an account designated by the Company on, or
prior
to, the Settlement Date. The Company agrees that if the Company, or
its transfer agent (if applicable), defaults in its obligation to deliver
Placement Shares on a Settlement Date, that in addition to and in no way
limiting the rights and obligations set forth in Section 9(a)
(Indemnification and Contribution) hereto, it will (i) hold CF&Co
harmless against any loss, claim, damage, or expense (including reasonable
legal
fees and expenses), as incurred, arising out of or in connection with such
default by the Company and (ii) pay to CF&Co any commission, discount, or
other compensation to which it would otherwise have been entitled absent
such
default.
6. Representations
and Warranties of the Company. The Company represents and
warrants to, and agrees with, CF&Co that as of the date of this Agreement
and as of each Representation Date (as defined in Section 7(m) below) on
which a certificate is required to be delivered pursuant to Section 7(m)
of this Agreement, as the case may be:
(a) Compliance
with Registration Requirements. The Registration Statement and any
Rule 462(b) Registration Statement have been declared effective by the
Commission under the Securities Act. The Company has complied to the
Commission’s satisfaction with all requests of the Commission for additional or
supplemental information. No stop order suspending the effectiveness
of the Registration Statement or any Rule 462(b) Registration Statement is
in effect and no proceedings for such purpose have been instituted or are
pending or, to the best knowledge of the Company, are contemplated or threatened
by the Commission.
(b) No
Misstatement or Omission. The Prospectus when filed complied and,
as amended or supplemented, if applicable, will comply in all material respects
with the Securities Act. Each of the Registration Statement, any
Rule 462(b) Registration Statement and any post-effective amendment
thereto, at the time it became effective, complied and, as of each of the
Settlement Dates, if any, will comply in all material respects with the
Securities Act and did not and, as of each of the Settlement Dates, if any,
will
not contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading. The Prospectus, as amended or supplemented, as of its date,
did
not and, as of each of the Settlement Dates, if any, will not contain any
untrue
statement of a material fact or omit to state a material fact necessary in
order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading. The representations and warranties set forth
in
the two immediately preceding sentences do not apply to statements in or
omissions from the Registration Statement, any Rule 462(b) Registration
Statement, or any post-effective amendment thereto, or the Prospectus, or
any
amendments or supplements thereto, made in reliance upon and in conformity
with
information relating to CF&Co furnished to the Company in writing by
CF&Co expressly for use therein. There are no contracts or other
documents required to be described in the Prospectus or to be filed as exhibits
to the Registration Statement which have not been described or filed as
required.
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(c) Offering
Materials Furnished to CF&Co. The Company has delivered to CF&Co one
complete copy of the Registration Statement and a copy of each consent and
certificate of experts filed as a part thereof, and conformed copies of the
Registration Statement (without exhibits) and the Prospectus, as amended
or
supplemented, in such quantities and at such places as CF&Co has reasonably
requested.
(d) Distribution
of Offering Material By the Company. The Company has not distributed and
will not distribute, prior to the later of the Closing Date and the completion
of CF&Co’s distribution of the Shares, any offering material in connection
with the offering and sale of the Shares other than the Prospectus or the
Registration Statement.
(e) The
Sales Agreement. This Agreement has been duly authorized, executed and
delivered by, and is a valid and binding agreement of, the Company, enforceable
in accordance with its terms, except as rights to indemnification hereunder
may
be limited by applicable law and except as the enforcement hereof may be
limited
by bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights and remedies of creditors or by general
equitable principles.
(f) Authorization
of the Shares. The Shares to be sold by CF&Co, acting as agent and/or
principal for the Company, have been duly authorized for issuance and sale
pursuant to this Agreement and, when issued and delivered by the Company
to
CF&Co pursuant to this Agreement, will be validly issued, fully paid and
nonassessable.
(g) No
Applicable Registration or Other Similar Rights. There are no persons with
registration or other similar rights to have any equity or debt securities
registered for sale under the Registration Statement or included in the offering
contemplated by this Agreement, except for such rights as have been duly
waived.
(h) No
Material Adverse Change. Except as otherwise disclosed in the
Prospectus, subsequent to the respective dates as of which information is
given
in the Prospectus: (i) there has been no material adverse change, or any
development that could reasonably be expected to result in a material adverse
change, in the condition, financial or otherwise, or in the earnings, business,
operations or prospects, whether or not arising from transactions in the
ordinary course of business, of the Company and its subsidiaries, considered
as
one entity (any such change is called a “Material Adverse
Change”); (ii) the Company and its subsidiaries, considered as
one entity, have not incurred any material liability or obligation, indirect,
direct or contingent, not in the ordinary course of business nor entered
into
any material transaction or agreement not in the ordinary course of business:
and (iii) there has been no dividend or distribution of any kind declared,
paid or made by the Company or, except for regular quarterly dividends publicly
announced by the Company or dividends paid to the Company or other subsidiaries,
any of its subsidiaries on any class of capital stock or repurchase or
redemption by the Company or any of its subsidiaries of any class of capital
stock.
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(i) Independent
Accountants. KPMG LLP, who have expressed their opinion with
respect to the financial statements (which term as used in this Agreement
includes the related notes thereto) and supporting schedules filed with the
Commission or incorporated by reference as a part of the Registration Statement
and included in the Prospectus, is an independent registered public accounting
firm as required by the Securities Act and the Exchange Act.
(j) Preparation
of the Financial Statements. The financial statements filed with the
Commission as a part of or incorporated within the Registration Statement
and
included in the Prospectus present fairly the consolidated financial position
of
the Company and its subsidiaries as of and at the dates indicated and the
results of their operations and cash flows for the periods
specified. The supporting schedules included in or incorporated in
the Registration Statement present fairly the information required to be
stated
therein. Such financial statements and supporting schedules have been
prepared in conformity with generally accepted accounting principles as applied
in the United States applied on a consistent basis throughout the periods
involved, except as may be expressly stated in the related notes
thereto. No other financial statements or supporting schedules are
required to be included in or incorporated in the Registration
Statement. The financial data set forth or incorporated in the
Prospectus under the captions “Ratio of Earnings to Fixed Charges” and “Selected
Financial Data” fairly present the information set forth therein on a basis
consistent with that of the audited financial statements contained, incorporated
or deemed to be incorporated in the Registration Statement.
(k) Incorporation
and Good Standing of the Company and its Subsidiaries. The Company has been
duly incorporated and is validly existing as a corporation in good standing
under the laws of the State of Maryland and is in good standing with the
State
Department of Assessments and Taxation of Maryland and has corporate power
and
authority to own, lease and operate its properties and to conduct its business
as described in the Prospectus and to enter into and perform its obligations
under this Agreement. Essex Portfolio, L.P. is the Company’s only significant
subsidiary (as defined in Rule 1-02 (w) of Regulation S-X of the
Exchange Act) (the “Significant
Subsidiary”). The Significant Subsidiary has been duly
organized and is validly existing as a partnership in good standing under
the
laws of the jurisdiction of its organization and has the requisite power
and
authority to own, lease and operate its properties and to conduct its business
as described in the Prospectus. Each of the Company and the
Significant Subsidiary is duly qualified as a foreign corporation or foreign
partnership to transact business and is in good standing in the State of
California and each other jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the conduct
of
business, except for such jurisdictions (other than the State of California)
where the failure to so qualify or to be in good standing would not,
individually or in the aggregate, result in a Material Adverse
Change. Except as described in the Prospectus, all of the issued and
outstanding partnership interests of the Significant Subsidiary have been
duly
authorized and validly issued, are fully paid and nonassessable and are 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.
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(l) Capital
Stock Matters. The Shares conforms in all material respects to the
description thereof contained in the Prospectus. All of the issued
and outstanding shares of Common Stock and Preferred Stock have been duly
authorized and validly issued, are fully paid and nonassessable and have
been
issued in compliance with federal and state securities laws. None of
the outstanding shares of Common Stock and Preferred Stock were issued in
violation of any preemptive rights, rights of first refusal or other similar
rights to subscribe for or purchase securities of the Company. There
are no authorized or outstanding options, warrants, preemptive rights, rights
of
first refusal or other rights to purchase, or equity or debt securities
convertible into or exchangeable or exercisable for, any capital stock of
the
Company or any of its subsidiaries other than those accurately described
in all
material respects in the Prospectus. The description of the Company’s
stock option, stock bonus and other stock plans or arrangements, and the
options
or other rights granted thereunder, set forth in the Prospectus accurately
and
fairly presents in all material respects the information required to be shown
with respect to such plans, arrangements, options and rights.
(m) Non-Contravention
of Existing Instruments; No Further Authorizations or Approvals
Required. Neither the Company nor any of its subsidiaries
is in violation of its charter or by-laws or is in default (or, with the
giving
of notice or lapse of time, would be in default)
(“Default”) under any indenture, mortgage, loan or
credit agreement, note, contract, franchise, lease or other instrument to
which
the Company or any of its subsidiaries is a party or by which it or any of
them
may be bound, or to which any of the property or assets of the Company or
any of
its subsidiaries is subject (each, an “Existing
Instrument”), except for such Defaults as would not, individually
or in the aggregate, result in a Material Adverse Change. The
Company’s execution, delivery and performance of this Agreement and consummation
of the transactions contemplated hereby and by the Prospectus (i) have been
duly authorized by all necessary corporate action and will not result in
any
violation of the provisions of the charter or by-laws of the Company or any
subsidiary, (ii) will not conflict with or constitute a breach of, or
Default under, or result in the creation or imposition of any lien, charge
or
encumbrance upon any property or assets of the Company or any of its
subsidiaries pursuant to, or require the consent of any other party to, any
Existing Instrument, except for such conflicts, breaches, Defaults, liens,
charges or encumbrances as would not, individually or in the aggregate, result
in a Material Adverse Change and (iii) will not result in any violation of
any law, administrative regulation or administrative or court decree applicable
to the Company or any subsidiary. No consent, approval, authorization
or other order of, or registration or filing with, any court or other
governmental or regulatory authority or agency, is required for the Company’s
execution, delivery and performance of this Agreement and consummation of
the
transactions contemplated hereby and by the Prospectus, except such as have
been
obtained or made by the Company and are in full force and effect under the
Securities Act, applicable state securities or blue sky laws and from the
NASD.
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(n) No
Material Actions or Proceedings. Except as disclosed in the
Prospectus, there are no legal or governmental actions, suits or proceedings
pending or, to the best of the Company’s knowledge, threatened (i) against
or affecting the Company or any of its subsidiaries, (ii) which has as the
subject thereof any officer or director of, or property owned or leased by,
the
Company or any of its subsidiaries or (iii) relating to environmental or
discrimination matters, where in any such case (A) there is a reasonable
possibility that such action, suit or proceeding might be determined adversely
to the Company or such subsidiary and (B) any such action, suit or
proceeding, if so determined adversely, would reasonably be expected to result
in a Material Adverse Change or adversely affect the consummation of the
transactions contemplated by this Agreement. No material labor
dispute with the employees of the Company or any of its subsidiaries exists
or,
to the best of the Company’s knowledge, is threatened or imminent.
(o) All
Necessary Permits, etc. The Company and each subsidiary possess
such valid and current certificates, authorizations or permits issued by
the
appropriate state, federal or foreign regulatory agencies or bodies necessary
to
conduct their respective businesses, other than those the failure to possess
or
own would not result in a Material Adverse Change, and neither the Company
nor
any subsidiary has received any notice of proceedings relating to the revocation
or modification of, or non-compliance with, any such certificate, authorization
or permit which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, could result in a Material Adverse
Change.
(p) Tax
Law Compliance. The Company and its consolidated subsidiaries
have filed all necessary federal, state and foreign income, property and
franchise tax returns and have paid all taxes required to be paid by any
of them
and, if due and payable, any related or similar assessment, fine or penalty
levied against any of them except as may be being contested in good faith
and by
appropriate proceedings. The Company has made adequate charges,
accruals and reserves in the applicable financial statements referred to
in
Section 1 (i) above in respect of all federal, state and foreign income,
property and franchise taxes for all periods as to which the tax liability
of
the Company or any of its consolidated subsidiaries has not been finally
determined.
(q) Company
is a REIT. Commencing with the Company’s taxable year beginning
January 1, 1994, the Company has been organized and has operated in
conformity with the requirements for qualification as a “real estate investment
trust,” and its organization and proposed method of operation will enable it to
meet the requirements for the qualification and taxation as a “real estate
investment trust” under the Internal Revenue Code of 1986, as amended (the
“Code”).
(r) Company
Not an “Investment Company”. The Company has been advised of the rules and
requirements under the Investment Company Act of 1940, as amended (the
“Investment Company Act”). The Company is
not, and after receipt of payment for the Shares will not be, an “investment
company” within the meaning of Investment Company Act and will conduct its
business in a manner so that it will not become subject to the Investment
Company Act.
(s) Insurance. Except
as otherwise described in the Prospectus, each of the Company and its
subsidiaries are insured by insurers of recognized financial responsibility
with
policies in such amounts and with such deductibles and covering such risks
as
are generally deemed prudent and customary for the business for which it
is
engaged including, but not limited to, policies covering real and personal
property owned or leased by the Company and its subsidiaries against theft,
damage, destruction, 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.
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(t) No
Price Stabilization or Manipulation. The Company has not taken
and will not take, directly or indirectly, any action designed to or that
might
be reasonably expected to cause or result in stabilization or manipulation
of
the price of any security of the Company to facilitate the sale or resale
of the
Shares.
(u) Related
Party Transactions. There are no business relationships or
related-party transactions involving the Company or any subsidiary or any
other
person required to be described in the Prospectus which have not been described
as required.
(v) Exchange
Act Compliance. The documents incorporated or deemed to be
incorporated by reference in the Prospectus, at the time they were or hereafter
are filed with the Commission, complied and will comply in all material respects
with the requirements of the Exchange Act, and, when read together with the
other information in the Prospectus, at the Closing Dates, will not contain
an
untrue statement of a material fact or omit to state a material fact required
to
be stated therein or necessary to make the fact required to be stated therein
or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
(w) No
Unlawful Contributions or Other Payments. Neither the Company nor
any of its subsidiaries nor, to the best of the Company’s knowledge, any
employee or agent of the Company or any subsidiary, has made any contribution
or
other payment to any official of, or candidate for, any federal, state or
foreign office in violation of any law or of the character required to be
disclosed in the Prospectus.
(x) Company’s
Accounting System. The Company maintains a system of accounting
controls sufficient to provide reasonable assurances that (i) transactions
are executed in accordance with management’s general or specific authorization;
(ii) transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting principles
as applied in the United States and to maintain accountability for assets;
(iii) access to assets is permitted only in accordance with management’s
general or specific authorization; and (iv) the recorded accountability for
assets is compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
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(y) Title
to Properties. Except as otherwise disclosed in the Prospectus
and except as would not have a material adverse effect on the condition,
financial or otherwise, or on the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one enterprise:
(i) all properties and assets described in the Prospectus are owned with
good and marketable title by the Company, its subsidiaries and/or a joint
venture or partnership in which any such party is a participant (a
“Related Entity”); (ii) all of the leases under
which any of the Company, its subsidiaries or, to the knowledge of the Company,
Related Entities holds or uses real properties or assets as a lessee are
in full
force and effect, and neither the Company, nor any of its subsidiaries or,
to
the knowledge of the Company, Related Entities is in material default in
respect
of any of the terms or provisions of any of such leases and no claim has
been
asserted by anyone adverse to any such party’s rights as lessee under any of
such leases, or affecting or questioning any such party’s right to the continued
possession or use of the leased property or assets under any such leases;
(iii) all liens, charges, encumbrances, claims or restrictions on or
affecting the properties and assets of any of the Company, its subsidiaries
or
Related Entities which are required to be disclosed in the Prospectus are
disclosed therein; (iv) neither the Company, nor any of its subsidiaries
or, to the knowledge of the Company, Related Entities nor any lessee of any
portion of any such party’s properties is in default under any of the leases
pursuant to which any of the Company, its subsidiaries or, to the knowledge
of
the Company, Related Entities leases its properties and neither the Company,
nor
any of its subsidiaries or Related Entities knows of any event which, but
for
the passage of time or the giving of notice, or both, would constitute a
default
under any of such leases; (v) no tenant under any of the leases pursuant to
which any of the Company, or its subsidiaries or, to the knowledge of the
Company, Related Entities leases its properties has an option or right of
first
refusal to purchase the premises demised under such lease; (vi) each of the
properties of any of the Company or its subsidiaries or to the knowledge
of the
Company, Related Entities complies with all applicable codes and zoning laws
and
regulations; and (vii) neither the Company nor any of its subsidiaries has
knowledge of any pending or threatened condemnation, zoning change or other
proceeding or action that will in any manner affect the size of, use of,
improvements on, construction on, or access to the properties of any of the
Company, or its subsidiaries or Related Entities.
(z) Title
Insurance. Title insurance in favor of the mortgagee or the
Company, its subsidiaries and/or their Related Entities is maintained with
respect to each property owned by any such entity in an amount at least equal
to
(a) the cost of acquisition of such property or (b) the cost of
construction of such property (measured at the time of such construction),
except, in each case, where the failure to maintain such title insurance
would
not have a material adverse effect on the condition, financial or otherwise,
or
on the earnings, business affairs or business prospects of the Company and
its
subsidiaries considered as one enterprise.
(aa) No
Convertible Mortgages. Except as described in the Prospectus, the mortgages
and deeds of trust encumbering the properties and assets described in the
Prospectus are not convertible nor does any of the Company, or its subsidiaries
hold a participating interest therein.
(bb) Valid
Partnerships. Each of the partnership and joint venture
agreements to which the Company or any of its subsidiaries is a party, and
which
relates to real property described in the Prospectus, has been duly authorized,
executed and delivered by such applicable party and constitutes the valid
agreement thereof, enforceable in accordance with its terms, except as limited
by (a) the effect of bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect relating to or affecting the
rights or remedies of creditors or (b) the effect of general principles of
equity, whether enforcement is considered in a proceeding in equity or at
law,
and the discretion of the court before which any proceeding therefor may
be
brought, and the execution, delivery and performance of any of such agreements
did not, at the time of execution and delivery, and does not constitute a
breach
of, or default under, the charter or bylaws of such party or any material
contract, lease or other instrument to which such party is a party or by
which
its properties may be bound or any law, administrative regulation or
administrative or court order or decree, except for such breaches or defaults
that would not result in a Material Adverse Change.
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(cc) Hazardous
Materials. Except as otherwise described in the Prospectus, none of the
Company, or any of its subsidiaries has any knowledge of (a) the unlawful
presence of any hazardous substances, hazardous materials, toxic substances
or
waste materials (collectively, “Hazardous Materials”) on
any of the properties owned by it or the Related Entities, or (b) any
unlawful spills, releases, discharges or disposal, of Hazardous Materials
that
have occurred or are presently occurring off such properties as a result
of any
construction on or operation and use of such properties which presence or
occurrence would have a material adverse effect on the condition, financial
or
otherwise, or on the earnings, business affairs or business prospects of
the
Company and its subsidiaries considered as one enterprise; and in connection
with the construction on or operation and use of the properties owned by
the
Company, its subsidiaries and Related-Entities, each of the Company, and
its
subsidiaries represents that, if any, it has no knowledge of any material
failure to comply with all applicable foreign local, state and federal
environmental laws, regulations, ordinances and administrative and judicial
orders relating to the generation, recycling, reuse, sale, storage, handling,
transport and disposal of any Hazardous Materials.
(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.
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(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,
2006 accurately describes the Company’s investigation of the compliance of its
properties with Environmental Laws. On the basis of such review and the amount
of its established reserves, the Company has reasonably concluded that such
associated costs and liabilities would not, individually or in the aggregate,
result in a Material Adverse Change.
(ff) Brokers. There
is no broker, finder or other party that is entitled to receive from the
Company
any brokerage or finder’s fee or other fee or commission as a result of any
transactions contemplated by this Agreement.
(gg) No
Outstanding Loans or Other Indebtedness. Except as described in
the Prospectus, there are no outstanding loans, advances (except normal advances
for business expenses in the ordinary course of business) or guarantees or
indebtedness by the Company to or for the benefit of any of the officers
or
directors of the Company or any of the members of any of them.
(hh) No
Reliance. The Company has not relied upon CF&Co or legal
counsel for CF&Co for any legal, tax or accounting advice in connection with
the offering and sale of the Placement Shares.
(ii) CF&Co
Purchases. The Company acknowledges and agrees that CF&Co has
informed the Company that CF&Co may, to the extent permitted under the
Securities Act and the Exchange Act, purchase and sell shares of Common Stock
for its own account while this Agreement is in effect,
provided,that (i) no such purchase or sales shall take place
while a Placement Notice is in effect (except to the extent CF&Co may engage
in sales of Placement Shares purchased or deemed purchased from the Company
as a
“riskless principal” or in a similar capacity) and (ii) the Company shall not be
deemed to have authorized or consented to any such purchases or sales by
CF&Co.
(jj) Compliance
with Laws. The Company has not been advised, and has no reason to
believe, that it and each of its subsidiaries are not conducting business
in
compliance with all applicable laws, rules and regulations of the jurisdictions
in which it is conducting business, except where failure to be so in compliance
would not result in a Material Adverse Change.
Any
certificate signed by an officer of the Company and delivered to CF&Co or to
counsel for CF&Co shall be deemed to be a representation and warranty by the
Company to CF&Co as to the matters set forth therein.
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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 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.
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(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 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.
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(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 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.
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(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 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)(i) and Exhibit 7(n)(ii), 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).
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(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.
(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 the business for which it is engaged.
(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.
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17 -
(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 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.
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18 -
(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 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.
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19 -
(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
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).
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20 -
(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 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.
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21 -
(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 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.
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22 -
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.
(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
Sections7(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.
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23 -
(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.
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 Piper
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.
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24 -
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 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. Absence
of Fiduciary Relationship. The Company acknowledges and
agrees that:
(a) CF&Co
has been retained solely to act as sales agent in connection with the sale
of
the Shares and that no fiduciary, advisory or agency relationship between
the
Company and CF&Co has been created in respect of any of the transactions
contemplated by this Agreement, irrespective of whether CF&Co has advised or
is advising the Company on other matters;
(b) the
Company is capable of evaluating and understanding and understands and accepts
the terms, risks and conditions of the transactions contemplated by this
Agreement;
(c) the
Company has been advised that CF&Co and its affiliates are engaged in a
broad range of transactions which may involve interests that differ from
those
of the Company and that CF&Co has no obligation to disclose such interests
and transactions to the Company by virtue of any fiduciary, advisory or agency
relationship; and
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25 -
(d) the
Company waives, to the fullest extent permitted by law, any claims it may
have
against CF&Co, for breach of fiduciary duty or alleged breach of fiduciary
duty and agrees that CF&Co shall have no liability (whether direct or
indirect) to the Company in respect of such a fiduciary claim or to any person
asserting a fiduciary duty claim on behalf of or in right of the Company,
including stockholders, partners, employees or creditors of the
Company.
19. 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]
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26 -
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:
|
Executive Vice President & Chief Financial Officer | ||
|
ACCEPTED
as of the date first-above
written:
|
|||
|
CANTOR
XXXXXXXXXX & CO.
|
|||
|
By:
|
/s/ Xxxxxxxx Xxxxx | ||
|
Name: Xxxxxxx
Xxxxx
|
|||
|
Title: Managing
Director
|
|||
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 ____________, 2007 (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 up 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
Xxxxxxx
Xxxxx
Xxxxxxxxx
ESSEX
PROPERTY TRUST, INC.
Xxxxx
Xxxxxxxx
Michall
Xxxxxx
Xxxxxxx
Dance
(Unless
notified in writing from the Company that the following policy is no longer
in
place, Placement Notices shall not provide for sales in the aggregate to
exceed
250,000 Shares in any 90 day period)
Exhibit
7(n)(i)
MATTERS
TO BE COVERED BY INITIAL OPINION
OF
XXXXX
& XXXXXXXX
LLP
|
|
(i)
|
As
of December 31, 2006, 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, 2006.
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, 2006. 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,
2006.
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(iii)
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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.
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(iv)
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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.
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(v)
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The
Company has the corporate power to execute and deliver the Agreement
and
to issue, sell and deliver the Shares as contemplated in the
Agreement. The Agreement has been duly authorized, executed
and, so far as is known to us, delivered by the
Company.
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(vi)
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No
approval, authorization, consent or order of, or filing with, any
federal
or state governmental or regulatory commission, board, body, authority
or
agency is required under Applicable Law in connection with the
execution,
delivery and performance of the Sales Agreement, or the consummation
of
the transactions contemplated thereby, by the Company, other than
such as
have been obtained or made under the Securities Act or the Securities
Exchange Act of 1934, as amended, and such approvals as have been
obtained
in connection with the listing of the Placement Shares on the New
York
Stock Exchange; provided, however, that we do not express any
opinion as to any necessary qualification under the securities
or blue sky
laws of the various jurisdictions in which the Placement Shares
are being
offered by CF&Co or any approval of the underwriting terms and
arrangements relating to the offering of the Placement Shares by
the
NASD.
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(vii)
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The
Shares, when issued and delivered by the Company pursuant to the
Resolutions and the Agreement against payment of the consideration
set
forth therein, will be duly authorized, validly issued, fully paid
and
nonassessable.
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(viii)
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The
issuance and sale of the Placement Shares by the Company is not
subject to
preemptive or other similar rights arising by operation of the
Maryland
General Corporation Law under the charter or bylaws of the Company
or
under any agreement known to us to which the Company is a
party.
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(ix)
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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.
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(x)
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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.
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2
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(xi)
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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.
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(xii)
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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.
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(xiii)
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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.
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(xiv)
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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.
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(xv)
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Commencing
with its taxable year ended December 31, 1994 through its taxable
year
ended December 31, 2006, 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
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(xvi)
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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.
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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.
3
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 and
the
Prospectus and have not made any independent check or verification thereof,
during the course of such participation, nothing has come to our attention
that
leads us to believe that the Registration Statement, at the time such
Registration Statement 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, as of the date of the Sales Agreement or the date hereof, included
or includes an untrue statement of a material fact or omitted or omits 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 (it being
understood that we express no belief with respect to the financial statements,
financial schedules and other financial or statistical data included or
incorporated by reference in, or excluded from, the Registration Statement
or
the Prospectus).
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)(ii)
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”).
Exhibit 7(m)
OFFICER
CERTIFICATE
The
undersigned, the duly qualified and elected _______________________, 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. ,
2007 (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.
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By:
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Name:
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Title:
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Date:
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