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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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FORM 8-K
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CURRENT REPORT
PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES AND EXCHANGE ACT of 1934
November 21, 1997 (November 18, 1997)
Date of Report (Date of Earliest Event Reported)
PRENTISS PROPERTIES TRUST
(Exact name of registrant as specified in its charter)
Maryland 1-14516 75-2661588
- ---------------------------- --------------------- ------------------
(State or other jurisdiction (Commission File No.) I.R.S. Employer
of incorporation) (Identification No.)
3890 West Northwest Highway, Suite 400
Dallas, Texas 75220
(Address of principal executive offices)
(214) 654-0886
(Registrant's telephone number, including area code)
N/A
(former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS
On November 18, 1997, Prentiss Properties Trust, a national office and
industrial real estate investment trust, sold 6,000,000 shares of its common
stock in a public offering underwritten by Lehman Brothers Inc. on a firm
commitment basis. The total net proceeds to the Company were approximately $150
million. The offering also includes an 30 day option for Lehman Brothers to
purchase up to an additional 900,000 shares to cover over-allotments, if any.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits:
<TABLE>
<CAPTION>
Exhibit
Number Exhibit
------- -------
<S> <C>
1 Underwriting Agreement between Prentiss Properties Trust,
Prentiss Properties Acquisition Partners, L.P., Prentiss
Properties I, Inc. and Lehman Brothers Inc., dated November 18, 1997.
8 Form Tax Opinion of Hunton & Williams, Richmond, Virginia
</TABLE>
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PRENTISS PROPERTIES TRUST
Date: November 21, 1997 By: /s/ Thomas F. August
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Name: Thomas F. August
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Title: President
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Exhibit Index
<TABLE>
<CAPTION>
Exhibit
Number Exhibit
------- -------
<S> <C>
1 Underwriting Agreement between Prentiss Properties Trust,
Prentiss Properties Acquisition Partners, L.P., Prentiss
Properties I, Inc. and Lehman Brothers Inc., dated November 18, 1997.
8 Form Tax Opinion of Hunton & Williams, Richmond, Virginia
</TABLE>
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Exhibit 1
6,000,000
PRENTISS PROPERTIES TRUST
Common Shares of Beneficial Interest
UNDERWRITING AGREEMENT
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November 18, 1997
Lehman Brothers Inc.
Three World Financial Center
New York, New York 10285
Dear Sirs:
Prentiss Properties Trust, a Maryland real estate investment
trust (the "Company"), Prentiss Properties Acquisition Partners, L.P., a
Delaware limited partnership (the "Operating Partnership") and Prentiss
Properties I, Inc., a Delaware corporation (the "General Partner," and together
with the Company and the Operating Partnership, the "Transaction Entities") each
wish to confirm as follows its agreement with Lehman Brothers Inc. (the
"Underwriter"), with respect to the sale by the Company and the purchase by the
Underwriter of an aggregate of 6,000,000 shares (the "Firm Shares") of the
Company's common shares of beneficial interest, par value $.01 per share (the
"Common Shares"). In addition, the Company proposes to grant to the Underwriter
an option to purchase up to an additional 900,000 Common Shares on the terms and
for the purposes set forth in Section 2 (the "Option Shares"). The Firm Shares
and the Option Shares, if purchased, are hereinafter collectively called the
"Shares."
Capitalized terms used but not otherwise defined herein shall
have the meanings given to those terms in the Prospectus (as herein defined).
1. Representations, Warranties and Agreements of the
Transaction Entities. Each of the Transaction Entities, jointly and
severally, represents, warrants and agrees that, as of the date hereof:
(a) A registration statement on Form S-3 (No.
333-38079), and any amendments thereto, with respect to the
Shares has (i) been prepared by the Company in conformity with
the requirements of the United States Securities Act of 1933,
as amended (the "Securities Act") and the rules and
regulations (the "Rules and Regulations") of the United States
Securities and Exchange Commission (the "Commission")
thereunder, (ii) been filed with the Commission under the
Securities Act and (iii) become effective under the Securities
Act. Copies of such registration statement and any amendments
thereto have been delivered by the Company to the Underwriter.
As used in this Agreement, "Effective Time" means the date and
the time as of which such registration
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statement, or the most recent post-effective amendment
thereto, if any, was declared effective by the Commission;
"Effective Date" means the date of the Effective Time;
"Preliminary Prospectus" means each prospectus included in
such registration statement, or amendments thereto, before it
became effective under the Securities Act and any prospectus
filed with the Commission by the Company with the consent of
the Underwriter pursuant to Rule 424(a) of the Rules and
Regulations; "Registration Statement" means such registration
statement, as amended at the Effective Time, including all
information contained in the final prospectus filed with the
Commission pursuant to Rule 424(b) of the Rules and
Regulations and deemed to be a part of the registration
statement as of the Effective Time pursuant to paragraph (b)
of Rule 430A of the Rules and Regulations; and "Prospectus"
means such final prospectus, as first filed with the
Commission pursuant to paragraph (1) or (4) of Rule 424(b) of
the Rules and Regulations. Any registration statement
(including any amendment or supplement thereto or information
which is deemed to be a part thereof) filed by the Company to
register additional Common Shares under rule 462(b) of the
Rules and Regulations (a "Rule 462(b) Registration Statement")
shall be deemed a part of the Registration Statement. Any
prospectus (including any amendment or supplement thereto or
information which is deemed to be a part thereof) included in
a Rule 462(b) Registration Statement shall be deemed to be
part of the Prospectus. Any reference herein to the
Registration Statement, the Prospectus or a Preliminary
Prospectus shall be deemed to include the documents
incorporated or deemed to be incorporated by reference therein
which were filed under the Securities and Exchange Act of
1934, as amended (the "Exchange Act"). For purposes of this
Agreement, all references to the Registration Statement, any
Preliminary Prospectus or the Prospectus or any amendment or
supplement to any of the foregoing shall be deemed to include
the copy filed with the Commission pursuant to its Electronic
Data Gathering, Analysis and Retrieval system ("EDGAR").
(b) Each Preliminary Prospectus included as part of
the Registration Statement as originally filed or as part of
any amendment or supplement thereto, or filed pursuant to Rule
424 under the Rules and Regulations, complied when so filed in
all material respects with the provisions of the Securities
Act, and each Preliminary Prospectus delivered to the
Underwriter for use in connection with this offering was
identical to the electronically transmitted copies thereof
filed with the Commission pursuant to EDGAR, except to the
extent permitted by Regulation S-T.
(c) The Registration Statement conforms in all
material respects, and the Prospectus and any further
amendments or supplements to the Registration Statement or the
Prospectus will, when they become effective or are filed with
the Commission, as the case may be, conform in all material
respects to the requirements of the Securities Act and the
Rules and Regulations, and do not and will not, as of the
applicable Effective Date (as to the Registration Statement
and any amendment thereto) and as of the applicable filing
date and at the First Delivery Date (as defined below) (as to
the Prospectus and any amendment or supplement thereto)
contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or
necessary to make the statements
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therein not misleading (with respect to the Prospectus, in
light of the circumstances under which they were made);
provided that no representation or warranty is made as to
information contained in or omitted from the Registration
Statement or the Prospectus in reliance upon and in conformity
with written information furnished to the Company by or on
behalf of the Underwriter specifically for inclusion therein.
The Prospectus delivered to the Underwriter for use in
connection with this offering was identical to the
electronically transmitted copies thereof filed with the
Commission pursuant to EDGAR, except to the extent permitted
by Regulation S-T.
(d) The documents incorporated or deemed to be
incorporated by reference in the Registration Statement as of
the applicable Effective Date, the Prospectus as of its date
or any Preliminary Prospectus as of its date, complied in all
material respects with the Exchange Act and the rules and
regulations thereunder, and none of such documents, at such
dates, 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, in the light of
the circumstances under which they were made, not misleading.
(e) No stop order suspending the effectiveness of the
Registration Statement or any part thereof has been issued and
no proceeding for that purpose has been instituted or, to the
knowledge of any of the Transaction Entities, threatened by
the Commission or by the state securities authority of any
jurisdiction. No order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus has been issued and
no proceeding for that purpose has been instituted or, to the
knowledge of any of the Transaction Entities, after due
inquiry of the Commission, threatened by the Commission or by
the state securities authority of any jurisdiction.
(f) The Company has been duly formed and is validly
existing as a real estate investment trust in good standing
under the laws of the State of Maryland, is duly qualified to
do business and is in good standing in each jurisdiction in
which its ownership or lease of property or the conduct of its
business requires such qualification, and has all power and
authority necessary to own or hold its properties, to conduct
the business in which it is engaged and to enter into and
perform its obligations under this Agreement. None of the
subsidiaries of the Company (other than the Operating
Partnership, the General Partner, and Prentiss Properties Real
Estate Fund I, L.P., a Delaware limited partnership ("PPREF")
(collectively, the "Significant Subsidiaries")) is a
"significant subsidiary," as such term is defined in Rule 405
of the Rules and Regulations. Except as described in the
Prospectus and other than the Transaction Entities (other than
the Company), the Company owns no direct or indirect equity
interest in any entity, except for such interests as, in the
aggregate, are not material to the condition, financial or
otherwise, or the earnings, assets or business affairs of the
Company and its subsidiaries considered as a single
enterprise.
(g) The Company has an authorized capitalization as
set forth in the Prospectus, and all of the issued shares of
beneficial interest of the Company have been duly and validly
authorized and issued, are fully paid and non-assessable and
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conform to the description thereof contained in the
Prospectus. Except as disclosed in the Prospectus, no shares
of beneficial interest of the Company are reserved for any
purpose and except for the equity interests in the Operating
Partnership ("Units"), there are no outstanding securities
convertible into or exchangeable for any shares of beneficial
interest of the Company, and no outstanding options, rights
(preemptive or otherwise) or warrants to purchase or subscribe
for shares of beneficial interest or any other securities of
the Company.
(h) The Operating Partnership has been duly formed
and is validly existing as a limited partnership under the
laws of the State of Delaware, is duly qualified to do
business as a foreign limited partnership in each jurisdiction
in which its ownership or lease of property or the conduct of
its business requires such qualification (except where the
failure to be so qualified would not have a material adverse
effect on the earnings, assets or business affairs of the
Company and its subsidiaries considered as a single
enterprise), and has all partnership power and authority
necessary to own or hold its properties, to conduct the
business in which it is engaged and to enter into and perform
its obligations under this Agreement. The General Partner is
the sole general partner of the Operating Partnership. The
Agreement of Limited Partnership of the Operating Partnership
(the "Operating Partnership Agreement") is in full force and
effect, and the aggregate percentage interests of the Company,
the General Partner and the limited partners in the Operating
Partnership are as set forth in the Prospectus; provided that
to the extent any portion of the over-allotment option
described in Section 2 hereof is exercised at the First
Delivery Date, the percentage interest of such partners in the
Operating Partnership will be adjusted accordingly.
Additionally, to the extent any portion of such over-allotment
option is exercised subsequent to the First Delivery Date, the
Company will contribute the proceeds from the sale of the
Option Shares to the Operating Partnership in exchange for a
number of Units equal to the number of Option Shares issued.
(i) The General Partner has been duly formed and is
validly existing as a corporation in good standing under the
laws of the State of Delaware, is duly qualified to do
business and is in good standing in each jurisdiction in which
its ownership or lease of property or the conduct of its
business requires such qualification (except where the failure
to be so qualified would not have a material adverse effect on
the earnings, assets or business affairs of the Company and
its subsidiaries considered as a single enterprise), and has
all corporate power and authority necessary to own or hold its
properties, to conduct the business in which it is engaged and
to enter into and perform its obligations under this
Agreement. All of the issued and outstanding capital stock of
the General Partner has been duly authorized and validly
issued and is fully paid and non-assessable, is owned by the
Company free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim, restriction or equities and
has been offered and sold in compliance with all applicable
laws (including, without limitation, federal or state
securities laws). No shares of capital stock of the General
Partner are reserved for any purpose, and there are no
outstanding securities convertible into or exchangeable for
any capital stock of the General Partner, and no outstanding
options, rights (preemptive or otherwise) or warrants to
purchase or to subscribe for shares of such capital stock or
any other securities of the General Partner.
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(j) PPREF has been duly organized and is validly existing as a
limited partnership under the laws of the State of Delaware, is duly
qualified to do business as a foreign limited partnership in each
jurisdiction in which its ownership or lease of property or the conduct of
its business requires such qualification (except where the failure to be so
qualified would not have a material adverse effect on the earnings, assets
or business affairs of the Company and its subsidiaries considered as a
single enterprise), and has all partnership power and authority necessary
to own or hold its properties and to conduct the business in which it is
engaged. Except as set forth in the Prospectus, all of the partnership
interests of PPREF are owned directly or indirectly by the Company and the
Operating Partnership, free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim, restriction or equities.
(k) The Shares have been duly and validly authorized and, when
issued and delivered against payment therefor as provided herein, will be
duly and validly issued, fully paid and non-assessable. Upon payment of the
purchase price and delivery of the Shares in accordance herewith, the
Underwriter will receive good, valid and marketable title to the Shares,
free and clear of all security interests, mortgages, pledges, liens,
encumbrances, claims, restrictions and equities. The terms of the Shares
conform in substance to all statements and descriptions related thereto
contained in the Prospectus. The form of the certificates to be used to
evidence the Shares will at the First Delivery Date be in due and proper
form and will comply with all applicable legal requirements. The issuance
of the Shares is not subject to any preemptive or other similar rights.
(l) (A) This Agreement has been duly and validly authorized,
executed and delivered by each of the Transaction Entities; and (B) the
Operating Partnership Agreement and the partnership agreement of each
Significant Subsidiary (where applicable), has been duly and validly
authorized, executed and delivered by the parties thereto and is a valid
and binding agreement of the parties thereto, enforceable against such
parties in accordance with its terms.
(m) The execution, delivery and performance of this Agreement by
each of the Transaction Entities and the consummation of the transactions
contemplated hereby will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which any of the Transaction Entities is a party
or by which any of the Transaction Entities is bound or to which any of the
Properties or other assets of any of the Transaction Entities is subject,
nor will such actions result in any violation of the provisions of the
charter, by-laws, certificate of limited partnership or agreement of
limited partnership of any of the Transaction Entities, or any statute or
any order, rule or regulation of any court or governmental agency or body
having jurisdiction over any of the Transaction Entities or any of their
properties or assets; and except for the registration of the Shares under
the Securities Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under the Exchange Act
and applicable state securities laws in connection with the purchase and
distribution of the Shares by the Underwriter,
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no consent, approval, authorization or order of, or filing or registration
with, any such court or governmental agency or body is required for the
execution, delivery and performance of this Agreement by the Transaction
Entities and the consummation of the transactions contemplated hereby.
(n) Other than as described in the Prospectus, there are no
contracts, agreements or understandings between the Company and any person
granting such person the right to require the Company to file a
registration statement under the Securities Act with respect to any
securities of the Company owned or to be owned by such person or to require
the Company to include such securities in the securities registered
pursuant to the Registration Statement or in any securities being
registered pursuant to any other registration statement filed by the
Company under the Securities Act.
(o) Except as described in the Prospectus and except for the
issuance of securities under employee benefit plans, the issuance of Units
in connection with the acquisition of any properties and the issuance of
Common Shares upon the exchange of Units pursuant to the Operating
Partnership Agreement, no Transaction Entity has sold or issued any
securities during the six-month period preceding the date of the
Prospectus, including any sales pursuant to Rule 144A under, or Regulations
D or S of, the Securities Act.
(p) None of the Transaction Entities nor any of the Properties has
sustained, since the date of the latest audited financial statements
included in the Prospectus, any material loss or interference with its
business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental
action, order or decree, other than as set forth or contemplated in the
Prospectus; and, since such date, there has not been any change in the
capital stock or long-term debt of any of the Transaction Entities or any
material adverse change in or affecting any of the Properties or the
general affairs, management, financial position, stockholders' equity or
results of operations of any of the Transaction Entities, other than as set
forth or contemplated in the Prospectus.
(q) The financial statements (including the related notes and
supporting schedules) filed as part of, or incorporated by reference in,
the Registration Statement and the Prospectus present fairly the financial
condition and results of operations of the entities purported to be shown
thereby, at the dates and for the periods indicated, and have been prepared
in conformity with generally accepted accounting principles applied on a
consistent basis throughout the periods involved. The Company's ratio of
earnings to fixed charges (actual and, if any, pro forma) included in the
Prospectus under the captions "Ratio of Earnings to Fixed Charges" and in
Exhibit 12.1 to the Registration Statement have been calculated in
compliance with Item 503(d) of Regulation S-K of the Commission. Pro forma
financial information included in or incorporated by reference in the
Registration Statement and the Prospectus has been prepared in accordance
with the applicable requirements of the Securities Act, the Rules and
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Regulations and AICPA guidelines with respect to pro forma financial
information and includes all adjustments necessary to present fairly the
pro forma financial position of the Company at the respective dates
indicated and the results of operations for the respective periods
specified.
(r) Coopers & Lybrand L.L.P., who have certified certain financial
statements of the Company, whose reports appear in the Prospectus and who
have delivered the initial letter referred to in Section 7(f) hereof, are
independent public accountants as required by the Securities Act and the
Rules and Regulations.
(s) (A) The Operating Partnership, directly or indirectly, has
good and marketable title to each of the Properties and the other assets
not located in Texas, and has good and indefeasible title to each of the
Properties and the other assets located in Texas, in each case free and
clear of all liens, encumbrances, claims, security interests and defects,
other than those referred to in the Prospectus or those which are not
material in amount or those which would not have a material adverse effect
on the business, operations, use or value of any of the Properties; (B) all
liens, charges, encumbrances, claims or restrictions on or affecting any of
the Properties and the assets of any Transaction Entity which are required
to be disclosed in the Prospectus are disclosed therein; (C) except as
otherwise described in the Prospectus, neither any Significant Subsidiary
nor any 10% or greater (in terms of square footage or base rent) tenant of
any of the Properties is in default under (i) any space leases (as lessor
or lessee, as the case may be) relating to the Properties, or (ii) any of
the mortgages or other security documents or other agreements encumbering
or otherwise recorded against the Properties, in each case which default
would have a material adverse effect on the earnings, assets or business
affairs of the Company and its subsidiaries considered as a single
enterprise, and no Transaction Entity 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 documents or agreements; (D) no tenant under any
of the leases at the Properties has a right of first refusal to purchase
the premises demised under such lease; (E) each of the Properties complies
with all applicable codes, laws and regulations (including, without
limitation, building and zoning codes, laws and regulations and laws
relating to access to the Properties), except for such failures to comply
that would not have a material adverse effect on the earnings, assets or
business affairs of the Company and its subsidiaries considered as a single
enterprise; and (F) no Transaction Entity has knowledge of any pending or
threatened condemnation proceedings, zoning change or other proceeding or
action that will in any material manner affect the size of, use of,
improvements on, construction on or access to the Properties.
(t) The mortgages and deeds of trust which encumber the Properties
are not convertible into equity securities of the entity owning such
Property and said mortgages and deeds of trust are not cross-defaulted or
cross-collateralized with any property other than other Properties.
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(u) The Operating Partnership, directly or indirectly, has obtained
title insurance on the fee or leasehold interests in each of the
Properties, in an amount at least equal to the greater of (A) the mortgage
indebtedness of each such Property or (B) the purchase price of each such
Property.
(v) Except as disclosed in the Prospectus: (A) to the knowledge of
the Transaction Entities, the operations of the Company, the Operating
Partnership, the General Partner, each Manager, and the Properties are
materially in compliance with all Environmental Laws (as defined below) and
all requirements of applicable permits, licenses, approvals and other
authorizations issued pursuant to Environmental Laws; (B) to the knowledge
of the Transaction Entities, after due inquiry, none of the Transaction
Entities or any Property has caused or suffered to occur any Release (as
defined below) of any Hazardous Substance (as defined below) into the
Environment (as defined below) on, in, under or from any Property, and no
condition exists on, in, under or adjacent to any Property that could
result in the incurrence of liabilities under, or any violations of, any
Environmental Law or give rise to the imposition of any Lien (as defined
below), under any Environmental Law, except such as in each case would not
have a material adverse effect on any Property or Transaction Entity; (C)
none of the Transaction Entities has received any written notice of a claim
under or pursuant to any Environmental Law or under common law pertaining
to Hazardous Substances on, in, under or originating from any Property; (D)
none of the Transaction Entities has actual knowledge of, or received any
written notice from any Governmental Authority (as defined below) claiming,
any violation of any Environmental Law or a determination to undertake
and/or request the investigation, remediation, clean-up or removal of any
Hazardous Substance released into the Environment on, in, under or from any
Property; and (E) no Property is included or, to the knowledge of the
Transaction Entities, after due inquiry, proposed for inclusion on the
National Priorities List issued pursuant to CERCLA (as defined below) by
the United States Environmental Protection Agency (the "EPA") or on the
Comprehensive Environmental Response, Compensation, and Liability
Information System database maintained by the EPA, and none of the
Transaction Entities has actual knowledge that any Property has otherwise
been identified in a published writing by the EPA as a potential CERCLA
removal, remedial or response site or, to the knowledge of the Transaction
Entities, is included on any similar list of potentially contaminated sites
pursuant to any other Environmental Law.
As used herein, "Hazardous Substance" shall include any hazardous
substance, hazardous waste, toxic substance, pollutant or hazardous
material, including, without limitation, oil, petroleum or any petroleum-
derived substance or waste, asbestos or asbestos-containing materials,
PCBs, pesticides, explosives, radioactive materials, dioxins, urea
formaldehyde insulation or any constituent of any such substance, pollutant
or waste which is subject to regulation under any Environmental Law
(including, without limitation, materials listed in the United States
Department of Transportation Optional Hazardous Material Table, 49
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C.F.R. (S) 172.101, or in the EPA's List of Hazardous Substances and
Reportable Quantities, 40 C.F.R. Part 302); "Environment" shall mean any
surface water, drinking water, ground water, land surface, subsurface
strata, river sediment, buildings, structures, and ambient, workplace and
indoor and outdoor air; "Environmental Law" shall mean the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended
(42 U.S.C. (S) 9601 et seq.) ("CERCLA"), the Resource Conservation and
Recovery Act of 1976, as amended (42 U.S.C. (S) 6901, et seq.), the Clean
Air Act, as amended (42 U.S.C. (S) 7401, et seq.), the Clean Water Act, as
amended (33 U.S.C. (S) 1251, et seq.), the Toxic Substances Control Act, as
amended (15 U.S.C. (S) 2601, et seq.), the Occupational Safety and Health
Act of 1970, as amended (29 U.S.C. (S) 651, et seq.), the Hazardous
Materials Transportation Act, as amended (49 U.S.C. (S) 1801, et seq.), and
all other federal, state and local laws, ordinances, regulations, rules and
orders relating to the protection of the Environment or of human health
from environmental effects; "Governmental Authority" shall mean any
federal, state or local governmental office, agency or authority having the
duty or authority to promulgate, implement or enforce any Environmental
Law; "Lien" shall mean, with respect to any Property, any mortgage, deed of
trust, pledge, security interest, lien, encumbrance, penalty, fine, charge,
assessment, judgment or other liability in, on or affecting such Property;
and "Release" shall mean any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, emanating or
disposing of any Hazardous Substance into the Environment, including,
without limitation, the abandonment or discard of barrels, containers,
tanks (including, without limitation, underground storage tanks) or other
receptacles containing or previously containing any Hazardous Substance.
(w) Each Transaction Entity and their subsidiaries, and each
Property carries, or is covered by, insurance in such amounts and covering
such risks as is adequate for the conduct of its business and the value of
such Property and as is customary for companies engaged in similar
businesses in similar industries.
(x) Each Transaction Entity owns or possesses adequate rights to
use all material patents, patent applications, trademarks, service marks,
trade names, trademark registrations, service mark registrations,
copyrights and licenses necessary for the conduct of its business and has
no reason to believe that the conduct of its business will conflict with,
and has not received any notice of any claim of conflict with, any such
rights of others.
(y) Except as described in the Prospectus, there are no legal or
governmental proceedings pending to which any Transaction Entity is a party
or of which any property or assets of any Transaction Entity is the subject
which, if determined adversely to such Transaction Entity, could reasonably
be expected to have a material adverse effect on the consolidated financial
position, shareholders' equity, results of operations or business of the
Company; and to the best
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knowledge of the Transaction Entities, no such proceedings are threatened
or contemplated by governmental authorities or threatened by others.
(z) There are no contracts or other documents which are required to
be described in the Prospectus or filed as exhibits to the Registration
Statement by the Securities Act or by the Rules and Regulations which have
not been described in the Prospectus or filed as exhibits to the
Registration Statement or incorporated therein by reference as permitted by
the Rules and Regulations.
(aa) No relationship, direct or indirect, exists between or among
any of the Transaction Entities on the one hand, and the directors,
trustees, officers, stockholders, customers or suppliers of the Transaction
Entities on the other hand, which is required to be described in the
Prospectus which is not so described.
(bb) No labor disturbance by the employees of any Transaction Entity
exists or, to the knowledge of the Transaction Entities, is imminent which
might be expected to have a material adverse effect on the consolidated
financial position, stockholders' equity, results of operations or business
of the Company and its subsidiaries considered as a single enterprise.
(cc) Each Transaction Entity is in compliance in all material
respects with all presently applicable provisions of the Employee
Retirement Income Security Act of 1974, as amended, including the
regulations and published interpretations thereunder ("ERISA"); no
"reportable event" (as defined in ERISA) has occurred with respect to any
"pension plan" (as defined in ERISA) for which any Transaction Entity would
have any liability; no Transaction Entity has incurred or expects to incur
liability under (i) Title IV of ERISA with respect to termination of, or
withdrawal from, any "pension plan" or (ii) sections 412 or 4971 of the
Internal Revenue Code of 1986, as amended (the "Code"); and each "pension
plan" for which any Transaction Entity would have any liability that is
intended to be qualified under section 401(a) of the Code is so qualified
in all material respects and nothing has occurred, whether by action or by
failure to act, which would cause the loss of such qualification.
(dd) Each Transaction Entity has filed all federal, state and local
income and franchise tax returns required to be filed through the date
hereof and has paid all taxes due thereon, and no tax deficiency has been
determined adversely to any Transaction Entity which has had (nor does any
Transaction Entity have any knowledge of any tax deficiency which, if
determined adversely to it might have) a material adverse effect on the
financial position, stockholders' equity, results of operations or business
of such Transaction Entity.
(ee) At all times since October 22, 1996, the Company, the Operating
Partnership, the General Partner, and the Managers have been and upon the
sale of
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the Shares will continue to be, organized and operated in conformity with
the requirements for qualification of the Company as a real estate
investment trust under the Code and the proposed method of operation of the
Company, the Operating Partnership, the General Partner and the Managers
will enable the Company to continue to meet the requirements for
qualification and taxation as a real estate investment trust under the
Code.
(ff) Since the date as of which information is given in the
Prospectus through the date hereof, and except as may otherwise be
disclosed in the Prospectus, no Transaction Entity has (i) issued or
granted any securities, except for the issuance of securities under
employee benefit plans and the issuance of Common Shares upon the exchange
of Units pursuant to the Operating Partnership Agreement, (ii) incurred any
liability or obligation, direct or contingent, other than liabilities and
obligations which were incurred in the ordinary course of business, (iii)
entered into any transaction not in the ordinary course of business or (iv)
declared or paid any dividend on its capital stock (other than regular
quarterly dividends).
(gg) Each Transaction Entity and their subsidiaries (i) makes and
keeps accurate books and records and (ii) maintains internal accounting
controls which provide reasonable assurance that (A) transactions are
executed in accordance with management's authorization, (B) transactions
are recorded as necessary to permit preparation of its financial statements
and to maintain accountability for its assets, (C) access to its assets is
permitted only in accordance with management's authorization and (D) the
reported accountability for its assets is compared with existing assets at
reasonable intervals.
(hh) Neither the Company nor any Significant Subsidiary (i) is in
violation of its charter, by-laws, certificate of limited partnership,
agreement of limited partnership or other similar organizational document,
(ii) is in default in any material respect, and no event has occurred
which, with notice or lapse of time or both, would constitute such a
default, in the due performance or observance of any term, covenant or
condition contained in any material indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which it is a party or
by which it is bound or to which any of the Properties or any of its other
properties or assets is subject or (iii) is in violation in any material
respect of any law, ordinance, governmental rule, regulation or court
decree to which it or the Properties or any of its other properties or
assets may be subject or has failed to obtain any material license, permit,
certificate, franchise or other governmental authorization or permit
necessary to the ownership of the Properties or any of its other properties
or assets or to the conduct of its business.
(ii) No Transaction Entity, nor any director, trustee, officer,
agent, employee or other person associated with or acting on behalf of any
Transaction Entity, has used any corporate funds for any unlawful
contribution, gift,
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entertainment or other unlawful expense relating to political activity;
made any direct or indirect unlawful payment to any foreign or domestic
government official or employee from corporate funds; violated or is in
violation of any provision of the Foreign Corrupt Practices Act of 1977; or
made any bribe, rebate, payoff, influence payment, kickback or other
unlawful payment.
(jj) No Transaction Entity is an "investment company" within the
meaning of such term under the Investment Company Act of 1940 and the rules
and regulations of the Commission thereunder.
(kk) The Shares have been approved for listing upon official notice
of issuance on the New York Stock Exchange.
(ll) Other than this Agreement and as set forth in the Prospectus
under the heading "Underwriting," there are no contracts, agreements or
understandings between any Transaction Entity and any person that would
give rise to a valid claim against any Transaction Entity or the
Underwriter for a brokerage commission, finder's fee or other like payment
with respect to the consummation of the transactions contemplated by this
Agreement.
(mm) Each Transaction Entity has complied with all provisions of
Florida Statutes (S) 517.075, relating to issuers doing business with Cuba.
2. Purchase of the Shares by the Underwriter. On the basis of the
representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, the Company agrees to sell the 6,000,000 Firm
Shares, to the Underwriter and the Underwriter agrees to purchase 6,000,000 Firm
Shares.
In addition, the Company grants to the Underwriter an option to purchase up
to 900,000 Option Shares. Such option is granted solely for the purpose of
covering over-allotments in the sale of Firm Shares and is exercisable as
provided in Section 4 hereof. The price of both the Firm Shares and any Option
Shares shall be $25.00 per share.
The Company shall not be obligated to deliver any of the Shares to be
delivered on the First Delivery Date or the Second Delivery Date (as hereinafter
defined), as the case may be, except upon payment for all the Shares to be
purchased on such Delivery Date as provided herein.
3. Offering of Shares by the Underwriter. The Underwriter proposes to
offer the Firm Shares for sale upon the terms and conditions set forth in the
Prospectus.
4. Delivery of and Payment for the Shares. Delivery of and payment for
the Firm Shares shall be made at the office of Rogers & Wells, 200 Park Avenue,
New York, New York 10166, at 10:00 A.M., New York City time, on the third full
business day following the
12
<PAGE>
date of this Agreement or on the fourth full business day if this Agreement is
executed after the daily closing time of the New York Stock Exchange, or at such
other date or place as shall be determined by agreement between the Underwriter
and the Company. This date and time are sometimes referred to as the "First
Delivery Date." On the First Delivery Date, the Company shall deliver or cause
to be delivered certificates representing the Firm Shares to the Underwriter for
the account of the Underwriter against payment to or upon the order of the
Company of the purchase price by wire transfer or, at the Company's election, by
certified or official bank check or checks payable in same day funds. Time shall
be of the essence, and delivery at the time and place specified pursuant to this
Agreement is a further condition of the obligation of the Underwriter hereunder.
Upon delivery, the Firm Shares shall be registered in such names and in such
denominations as the Underwriter shall request in writing not less than two full
business days prior to the First Delivery Date. For the purpose of expediting
the checking and packaging of the certificates for the Firm Shares, the Company
shall make the certificates representing the Firm Shares available for
inspection by the Underwriter in New York, New York, not later than 2:00 P.M.,
New York City time, on the business day prior to the First Delivery Date.
At any time on or before the thirtieth day after the date of this
Agreement, the option granted in Section 2 may be exercised by written notice
being given to the Company by the Underwriter. Such notice shall set forth the
aggregate number of Option Shares as to which the option is being exercised, the
names in which the Option Shares are to be registered, the denominations in
which the Option Shares are to be issued and the date and time, as determined by
the Underwriter, when the Option Shares are to be delivered; provided, however,
that this date and time shall not be earlier than the First Delivery Date nor
earlier than the second business day after the date on which the option shall
have been exercised nor later than the fifth business day after the date on
which the option shall have been exercised. The date and time the Option Shares
are delivered are sometimes referred to as the "Second Delivery Date" and the
First Delivery Date and the Second Delivery Date are sometimes each referred to
as a "Delivery Date."
Delivery of and payment for the Option Shares shall be made at the place
specified in the first sentence of the first paragraph of this Section 4 (or at
such other place as shall be determined by agreement between the Underwriter and
the Company) at 10:00 A.M., New York City time, on the Second Delivery Date. On
the Second Delivery Date, the Company shall deliver or cause to be delivered the
certificates representing the Option Shares to the Underwriter for the account
of the Underwriter against payment to or upon the order of the Company of the
purchase price by wire transfer or, at the Company's election, by certified or
official bank check or checks payable in same day funds. Time shall be of the
essence, and delivery at the time and place specified pursuant to this Agreement
is a further condition of the obligation of the Underwriter hereunder. Upon
delivery, the Option Shares shall be registered in such names and in such
denominations as the Underwriter shall request in the aforesaid written notice.
For the purpose of expediting the checking and packaging of the certificates for
the Option Shares, the Company shall make the certificates representing the
Option Shares available for inspection by the Underwriter in New York, New York,
not later than 2:00 P.M., New York City time, on the business day prior to the
Second Delivery Date.
5. Further Agreements of the Transaction Entities. Each of the
Transaction Entities jointly and severally agrees:
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(a) To prepare the Prospectus in a form approved by the Underwriter
and to file such Prospectus pursuant to Rule 424(b) under the Securities
Act not later than the Commission's close of business on the second
business day following the execution and delivery of this Agreement or, if
applicable, such earlier time as may be required by Rule 430A(a)(3) under
the Securities Act; to make no further amendment or any supplement to the
Registration Statement or to the Prospectus except as permitted herein; to
advise the Underwriter, promptly after it receives notice thereof, of the
time when any amendment to the Registration Statement has been filed or
becomes effective or any supplement to the Prospectus or any amended
Prospectus has been filed and to furnish the Underwriter with copies
thereof; to advise the Underwriter, promptly after it receives notice
thereof, of the issuance by the Commission of any stop order or of any
order preventing or suspending the use of any Preliminary Prospectus or the
Prospectus, of the suspension of the qualification of the Shares for
offering or sale in any jurisdiction, of the initiation or threatening of
any proceeding for any such purpose, or of any request by the Commission
for the amending or supplementing of the Registration Statement or the
Prospectus or for additional information; and, in the event of the issuance
of any stop order or of any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus or suspending any such
qualification, to use promptly its best efforts to obtain its withdrawal;
(b) To furnish promptly to the Underwriter and to counsel for the
Underwriter such number of conformed copies as the Underwriter shall
reasonably request of the Registration Statement as originally filed with
the Commission, and each amendment thereto filed with the Commission,
including all consents and exhibits filed therewith or incorporated by
reference therein and all documents incorporated by reference therein; such
copies will be identical to the electronically transmitted copies thereof
filed with the Commission pursuant to EDGAR, except to the extent permitted
by Regulation S-T;
(c) To deliver promptly to the Underwriter such number of the
following documents as the Underwriter shall reasonably request: each
Preliminary Prospectus, the Prospectus and any amended or supplemented
Prospectus; and, if the delivery of a prospectus is required at any time
after the Effective Time in connection with the offering or sale of the
Shares or any other securities relating thereto and if at such time any
events shall have occurred 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 any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made when such Prospectus is delivered, not misleading, or, if for any
other reason it shall be necessary to amend or supplement the Prospectus in
order to comply with the Securities Act or the Exchange Act, to notify the
Underwriter and, upon its request, to file such document and to prepare and
furnish without charge to the Underwriter and to any dealer in securities
as many copies as the Underwriter may from time to time reasonably request
of an amended or supplemented Prospectus which will correct such statement
or omission or effect such compliance. The aforementioned documents
furnished to the Underwriter
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<PAGE>
will be identical to the electronically transmitted copies
thereof filed with the Commission pursuant to EDGAR, except to
the extent permitted by Regulation S-T;
(d) To file promptly with the Commission any
amendment to the Registration Statement or the Prospectus or
any supplement to the Prospectus that may, in the judgment of
the Company or the Underwriter, be required by the Securities
Act or requested by the Commission;
(e) Prior to filing with the Commission any amendment
to the Registration Statement or supplement to the Prospectus
or any Prospectus pursuant to Rule 424 of the Rules and
Regulations, to furnish a copy thereof to the Underwriter and
counsel for the Underwriter and obtain the consent of the
Underwriter to the filing;
(f) The Company will make generally available to its
security holders and will deliver to the Underwriter as soon
as practicable (it being understood that the Company shall
have until at least 410 days after the end of the Company's
current fiscal quarter) an earnings statement (in form
complying with the provisions of Section 11(a) of the
Securities Act and Rule 158 of the Rules and Regulations),
which need not be certified by independent certified public
accountants unless required by the Securities Act or the Rules
and Regulations, covering a twelve-month period commencing
after the "effective date" (as defined in said Rule 158) of
the Registration Statement;
(g) For a period of five years following the
Effective Date, to furnish to the Underwriter copies of all
materials furnished by the Company to its shareholders and all
public reports and all reports and financial statements
furnished by the Company to the principal national securities
exchange upon which the Common Shares may be listed pursuant
to requirements of or agreements with such exchange or to the
Commission pursuant to the Exchange Act or any rule or
regulation of the Commission thereunder;
(h) Promptly from time to time to take such action as
the Underwriter may reasonably request to qualify the Shares
for offering and sale under the securities, real estate
syndication or Blue Sky laws of such jurisdictions as the
Underwriter may request and to comply with such laws so as to
permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the
distribution of the Shares;
(i) For a period of 90 days from the date of the
Prospectus, the Company will not, directly or indirectly, (1)
offer for sale, contract to sell, sell, pledge or otherwise
dispose of (or enter into any transaction or device which is
designed to, or could be expected to, result in the
disposition by any person at any
15
<PAGE>
time in the future of) any Common Shares or securities
convertible into or exercisable or exchangeable for Common
Shares (other than the Shares and any Units or Common Shares
that may be issued in connection with any acquisition of a
property or pursuant to customary compensation arrangements
and employee benefit plans), or sell or grant options, rights
or warrants with respect to any Common Shares or securities
convertible into or exercisable or exchangeable for Common
Shares (except pursuant to customary compensation arrangements
and employee benefit plans), or (2) enter into any swap or
other derivatives transaction that transfers to another, in
whole or in part, any of the economic benefits or risks of
ownership of such Common Shares, whether any such transaction
described in clause (1) or (2) above is to be settled by
delivery of Common Shares or other securities, in cash or
otherwise, in each case without the prior written consent of
Lehman Brothers Inc.;
(j) To maintain the listing of the Common Shares on
the New York Stock Exchange, Inc.;
(k) To apply the net proceeds from the sale of the
Shares being sold by the Company in accordance with the
description set forth in the Prospectus under the caption "Use
of Proceeds";
(l) To take such steps as shall be necessary to
ensure that none of the Transaction Entities shall become an
"investment company" within the meaning of such term under the
Investment Company Act of 1940 and the rules and regulations
of the Commission thereunder;
(m) Except as stated in this Agreement and in the
Preliminary Prospectus and Prospectus, no Transaction Entity
has taken, nor will take, directly or indirectly, any action
designed to or that might reasonably be expected to cause or
result in stabilization or manipulation of the price of the
Common Shares to facilitate the sale or resale of the Shares;
(n) The Company will use its best efforts to continue
to meet the requirements to qualify as a "real estate
investment trust" under the Code; and
(o) If this Agreement shall be terminated by the
Underwriter because of any failure or refusal on the part of
the Transaction Entities to comply with the terms or fulfill
any of the conditions of this Agreement, the Transaction
Entities jointly and severally agree to reimburse the
Underwriter for all reasonable out-of-pocket expenses
(including fees and expenses of counsel for the Underwriter)
incurred by the Underwriter in connection herewith.
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<PAGE>
6. Expenses. The Transaction Entities jointly and severally agree to
pay (a) the costs incident to the authorization, issuance, sale and delivery of
the Shares and any taxes payable in that connection; (b) the costs incident to
the preparation, printing and filing under the Securities Act of the
Registration Statement and any amendments and exhibits thereto; (c) the costs of
distributing the Registration Statement as originally filed and each amendment
thereto and any post-effective amendments thereof (including, in each case,
exhibits), any Preliminary Prospectus, the Prospectus and any amendment or
supplement to the Prospectus, all as provided in this Agreement; (d) the costs
of producing and distributing this Agreement and any other related documents in
connection with the offering, purchase, sale and delivery of the Shares; (e) the
filing fees incident to securing any required review by the National Association
of Securities Dealers, Inc. of the terms of sale of the Shares; (f) any
applicable listing or other fees; (g) the fees and expenses of qualifying the
Shares under the securities laws of the several jurisdictions as provided in
Section 5(i) and of preparing, printing and distributing a Blue Sky Memorandum
(including related reasonable fees and expenses of counsel to the Underwriter);
and (h) all other costs and expenses incident to the performance of the
obligations of the Transaction Entities under this Agreement; provided that,
except as provided in this Section 6 and in Section 12 the Underwriter shall pay
its own costs and expenses, including the costs and expenses of its counsel, any
transfer taxes on the Shares which they may sell and the expenses of advertising
any offering of the Shares made by the Underwriter.
7. Conditions of Underwriter's Obligations. The obligations of the
Underwriter hereunder are subject to the accuracy, when made and on each
Delivery Date, of the representations and warranties of the Transaction Entities
contained herein, to the performance by each Transaction Entity of its
obligations hereunder, and to each of the following additional terms and
conditions:
(a) If, at the time this Agreement is executed and delivered, it
is necessary for the Registration Statement or a post-effective
amendment thereto to be declared effective before the offering of the
Shares may commence, the Registration Statement or such post-effective
amendment shall have become effective not later than 5:30 P.M., New
York City time, on the date hereof, or at such later date and time as
shall be consented to in writing by you, and all filings, if any,
required by Rules 424 and 430A under the Rules and Regulations shall
have been timely made; no stop order suspending the effectiveness of
the Registration Statement shall have been issued and no proceeding for
that purpose shall have been instituted or, to the knowledge of the
Transaction Entities or the Underwriter, threatened by the Commission,
and any request of the Commission for additional information (to be
included in the Registration Statement or the Prospectus or otherwise)
shall have been complied with to the satisfaction of the Underwriter.
(b) Subsequent to the effective date of this Agreement, there
shall not have occurred (i) any change, or any development involving a
prospective change, in or affecting the condition, financial or
otherwise, business, properties, net worth, or results of operations of
any Transaction Entity, any of their subsidiaries or any Property not
contemplated by the Prospectus, which in the opinion of the
Underwriter, would materially adversely affect the market for the
Shares, or (ii) any event or development relating to or involving any
Transaction Entity, or any
17
<PAGE>
partner, officer, director or trustee of any Transaction
Entity, which makes any statement of a material fact made in
the Prospectus untrue or which, in the opinion of the Company
and its counsel or the Underwriter and its counsel, requires
the making of any addition to or change in the Prospectus in
order to state a material fact required by the Securities Act
or any other law to be stated therein or necessary in order to
make the statements therein not misleading, if amending or
supplementing the Prospectus to reflect such event or
development would, in your opinion, adversely affect the
market for the Shares.
(c) All corporate proceedings and other legal matters
incident to the authorization, form and validity of this
Agreement, the Shares, the Registration Statement and the
Prospectus, and all other legal matters relating to this
Agreement and the transactions contemplated hereby shall be
reasonably satisfactory in all material respects to counsel
for the Underwriter, and the Company shall have furnished to
such counsel all documents and information that they may
reasonably request to enable them to pass upon such matters.
(d) Hunton & Williams, or such other firm or firms
satisfactory to counsel for the Underwriter, shall have
furnished to the Underwriter its written opinion, as counsel
to the Company, addressed to the Underwriter and dated such
Delivery Date, in form and substance reasonably satisfactory
to the Underwriter, to the effect that:
(i) The Company has been duly formed and
is validly existing as a real estate investment
trust in good standing under and by virtue of the
laws of the State of Maryland, is in good
standing with the State Department of Assessments
and Taxation of Maryland and as a foreign trust
or corporation in those jurisdictions listed in
such opinion, and has all trust power and
authority necessary to own or hold its properties
and to conduct the business in which it is
engaged as described in the Registration
Statement and the Prospectus, and to enter into
and perform its obligations under this Agreement.
(ii) The Company has an authorized
capitalization as set forth in the Prospectus
under the caption "Capitalization," and all of
the issued shares of beneficial interest of the
Company (other than the Shares) have been duly
and validly authorized and issued, are fully paid
and non-assessable and conform in all material
respects to the description thereof contained in
the Prospectus.
(iii) The Operating Partnership has been
duly formed and is validly existing as a limited
partnership under the laws of the State of
Delaware, is duly qualified to do business as a
foreign limited partnership in Texas, Maryland,
Illinois, Pennsylvania and California, and has
all partnership power and authority necessary
18
<PAGE>
to own or hold its properties, to conduct
the business in which it is engaged as
described in the Registration Statement and
the Prospectus, and to enter into and
perform its obligations under this
Agreement. To such counsel's knowledge, the
General Partner is the sole general partner
of the Operating Partnership, the Operating
Partnership Agreement is in full force and
effect, and the aggregate percentage
interests of the Company, the General
Partner and the limited partners in the
Operating Partnership are as set forth in
the Prospectus.
(iv) The General Partner has been
duly formed and is validly existing as a
corporation in good standing under the laws
of the State of Delaware, is duly qualified
to do business and is in good standing as a
foreign corporation in Texas, Maryland,
Illinois, Pennsylvania and California, and
has all corporate power and authority
necessary to own or hold its properties, to
conduct the business in which it is engaged
as described in the Registration Statement
and the Prospectus, and to enter into and
perform its obligations under this
Agreement. All of the issued and outstanding
capital stock of the General Partner has
been duly authorized and validly issued and
is fully paid and non-assessable, is owned
by the Company free and clear of any
perfected security interest, mortgage,
pledge, lien, encumbrance, claim,
restriction or equities or, to such
counsel's knowledge, any unperfected
security interest, mortgage, pledge, lien,
encumbrance, claim, restriction or equities.
(v) PPREF has been duly organized
and is validly existing as a partnership
under the laws of State of Delaware, is duly
qualified to do business in California,
Illinois, Michigan, Missouri, Wisconsin,
Texas and Virginia, and has all partnership
power and authority necessary to own or hold
its properties and to conduct the business
in which it is engaged. Except as set forth
in the Prospectus, all of the issued
partnership interests of PPREF are owned
directly or indirectly by the Company and
the Operating Partnership, free and clear of
any perfected security interest, mortgage,
pledge, lien, encumbrance, claim,
restriction or equities or, to such
counsel's knowledge, any unperfected
security interest, mortgage, pledge, lien,
encumbrance, claim, restriction or equities.
(vi) The Shares have been duly and
validly authorized and, when issued and
delivered against payment therefor as
provided herein, will be duly and validly
issued, fully paid and non-assessable. Upon
payment of the purchase price and delivery
of the Shares in accordance herewith, the
Underwriter will receive good, valid and
marketable title to the Shares, free and
clear of all security interests, mortgages,
pledges, liens, encumbrances, claims,
restrictions and equities. The terms of the
Shares conform in all material respects to
all statements and descriptions related
thereto
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<PAGE>
contained in the Prospectus. The form of the
certificates to be used to evidence the
Shares are in due and proper form and comply
with all applicable legal requirements. The
issuance of the Shares is not subject to any
preemptive or other similar rights arising
under the Declaration of Trust or by-laws of
the Company, Title 8 of the Corporations and
Associations Article of the Annotated Code
of Maryland, as amended, or any agreement or
other instrument to which the Company is a
party known to such counsel.
(vii) This Agreement has been duly
and validly authorized, executed and
delivered by the each of the Transaction
Entities.
(viii) The execution, delivery and
performance of this Agreement by each of the
Transaction Entities and the consummation of
the transactions contemplated hereby will
not conflict with or result in a breach or
violation of any of the terms or provisions
of, or constitute a default under, any
indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument
known to such counsel to which any of the
Transaction Entities is a party or by which
any of the Transaction Entities is bound or
to which any of the Properties or other
assets of any of the Transaction Entities is
subject, nor will such actions result in any
violation of the provisions of the charter,
by-laws, certificate of limited partnership
or agreement of limited partnership of any
of the Transaction Entities, or any statute
or any order, rule or regulation known to
such counsel of any court or governmental
agency or body having jurisdiction over any
of the Transaction Entities or any of their
properties or assets; and except for the
registration of the Shares under the
Securities Act and such consents, approvals,
authorizations, registrations or
qualifications as may be required under the
Exchange Act and applicable state securities
laws in connection with the purchase and
distribution of the Shares by the
Underwriter, no consent, approval,
authorization or order of, or filing or
registration with, any such court or
governmental agency or body is required for
the execution, delivery and performance of
this Agreement by the Transaction Entities
and the consummation of the transactions
contemplated hereby.
(ix) To such counsel's knowledge,
other than as set forth in the Prospectus
and pursuant to the Operating Partnership
Agreement as to the Exchange Shares (as
defined therein), there are no contracts,
agreements or understandings between the
Company and any person granting such person
the right to require the Company to file a
registration statement under the Securities
Act with respect to any securities of the
Company owned or to be owned by such person
or to require the Company to include such
20
<PAGE>
securities in the securities registered
pursuant to the Registration Statement or in
any securities being registered pursuant to
any other registration statement filed by
the Company under the Securities Act.
(x) To such counsel's knowledge,
there are no legal or governmental
proceedings pending to which any Transaction
Entity is a party or of which any property
or assets of any Transaction Entity is the
subject which are not disclosed in the
Prospectus and which, if determined
adversely to such Transaction Entity, would
have a material adverse effect on the
consolidated financial position,
stockholders' equity, results of operations
or business of the Company; and to the
knowledge of such counsel, no such
proceedings are threatened or contemplated
by governmental authorities or threatened by
others.
(xi) There are no contracts or other
documents known to such counsel which are
required to be described in the Prospectus
or filed as exhibits to the Registration
Statement by the Securities Act or by the
Rules and Regulations which have not been
described in the Prospectus or filed as
exhibits to the Registration Statement or
incorporated therein by reference as
permitted by the Rules and Regulations.
(xii) To such counsel's knowledge,
no relationship, direct or indirect, exists
between or among any of the Transaction
Entities on the one hand, and the directors,
trustees, officers, stockholders, customers
or suppliers of the Transaction Entities on
the other hand, which is required to be
described in the Prospectus which is not so
described.
(xiii) To such counsel's knowledge,
neither the Company nor any Significant
Subsidiary (i) is in violation of its
charter, by-laws, certificate of limited
partnership, agreement of limited
partnership or other similar organizational
document or (ii) is in default in any
material respect, and no event has occurred
which, with notice or lapse of time or both,
would constitute such a default, in the due
performance or observance of any term,
covenant or condition contained in any
material indenture, mortgage, deed of trust,
loan agreement or other agreement or
instrument to which it is a party or by
which it is bound or to which any of the
Properties or any of its other properties or
assets is subject and which was filed as an
exhibit to the Registration Statement.
(xiv) No consent, approval,
authorization or other order of, or
registration or filing with, any court,
regulatory body, administrative agency or
other governmental body, agency, or
21
<PAGE>
official is required on the part of the
Company other than those which have been
obtained under the Securities Act and the
Exchange Act (except such as may be required
under state securities, real estate
syndication or Blue Sky laws governing the
purchase and distribution of the Shares, as
to which such counsel need express no
opinion) for the valid issuance and sale of
the Shares to the Underwriter as
contemplated by this Agreement.
(xv) No Transaction Entity is an
"investment company" within the meaning of
such term under the Investment Company Act
of 1940 and the rules and regulations of the
Commission thereunder. The Shares have been
approved for listing on the New York Stock
Exchange upon notice of issuance.
(xvi) The documents incorporated or
deemed to be incorporated by reference in
the Prospectus pursuant to Item 12 of Form
S-3 under the Securities Act (other than the
financial statements and related schedules
and financial information and data included
therein, as to which no opinion need be
rendered), at the time they were filed with
the Commission, complied and will comply as
to form in all material respects with the
requirements of the Exchange Act and the
rules and regulations thereunder.
(xvii) The Registration Statement
was declared effective under the Securities
Act as of the date and time specified in
such opinion, the Prospectus was filed with
the Commission pursuant to the subparagraph
of Rule 424(b) of the Rules and Regulations
specified in such opinion on the date
specified therein and, to the knowledge of
such counsel, no stop order suspending the
effectiveness of the Registration Statement
has been issued and, to the knowledge of
such counsel, no proceeding for that purpose
is pending or threatened by the Commission.
(xviii) The Registration Statement
and the Prospectus and any further
amendments or supplements thereto made by
the Company prior to such Delivery Date
(other than the financial statements and
related schedules and other financial data
included therein, as to which such counsel
need express no opinion) comply as to form
in all material respects with the
requirements of the Securities Act and the
Rules and Regulations.
(xix) The statements contained in
the Prospectus under the captions "Risk
Factors," "Description of Shares of
Beneficial Interest," "Federal Income Tax
Considerations," and "Certain Federal Income
Tax Considerations," insofar as those
statements are descriptions of contracts,
agreements or other legal documents, or they
describe federal statutes, rules and
regulations, and except to the extent such
statements are statistics or calculations,
constitute a fair summary thereof, and the
opinion of such counsel
22
<PAGE>
filed as Exhibit 8 to the Registration Statement is confirmed and
the Underwriter may rely upon such opinion as if it were addressed
to them.
In rendering such opinion, such counsel may (i) state that its opinion is
limited to matters governed by the Federal laws of the United States of America
and the corporate law of the State of Delaware; (ii) rely (to the extent such
counsel deems proper and specifies in their opinion), as to matters involving
the application of the laws of the State of Maryland upon the opinion of other
counsel of good standing, provided that such other counsel is satisfactory to
counsel for the Underwriter and furnishes a copy of its opinion to the
Underwriter; and (iii) in giving each of the opinions referred to in Section
7(d)(iii), (iv) and (v), state that such opinion is based upon an examination of
the statutes and regulations of certain States referenced in such opinion in the
latest unofficial compilations, and that such opinion is subject to the broad
discretionary powers of securities commissioners or other authorized officials
to, among other things, withdraw or deny the exempt status accorded by statute
to particular classes of securities or transactions, to impose additional
requirements, to require additional information, and to issue stop orders or to
deny, withdraw, revoke or suspend permits or registrations where such have been
granted; provided that such counsel shall state that it believes that both the
Underwriter and it are justified in relying upon such opinions of local counsel.
Such counsel shall also have furnished to the Underwriter a written statement,
addressed to the Underwriter and dated such Delivery Date, in form and substance
satisfactory to the Underwriter, to the effect that (x) such counsel has acted
as counsel to the Company in connection with the preparation of the Registration
Statement and the Prospectus, and (y) based on the foregoing, no facts have come
to the attention of such counsel which lead it to believe that the Registration
Statement, as of the Effective Date, contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein not misleading, or that the
Prospectus contains any untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The foregoing opinion and statement may be qualified by a
statement to the effect that such counsel does not assume any responsibility for
the accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus except for the statements made in the
Prospectus under the captions "Description of Shares of Beneficial Interest" and
"Federal Income Tax Considerations" insofar as such statements relate to the
Shares and concern legal matters, and may state that such counsel expresses no
belief with respect to the financial statements and notes thereto and other
financial and statistical data included or incorporated by reference in, or
omitted from, the Registration Statement or the Prospectus.
(e) The Underwriter shall have received from Rogers & Wells, counsel for
the Underwriter, such opinion or opinions, dated such Delivery Date, with
23
<PAGE>
respect to the issuance and sale of the Shares, the Registration Statement, the
Prospectus and other related matters as the Underwriter may reasonably require,
and the Company shall have furnished to such counsel such documents as they
reasonably request for the purpose of enabling them to pass upon such matters.
(f) At the time of execution of this Agreement, the Underwriter shall have
received from Coopers & Lybrand L.L.P. a letter, in form and substance
satisfactory to the Underwriter, addressed to the Underwriter and dated the date
hereof (i) confirming that they are independent public accountants within the
meaning of the Securities Act and are in compliance with the applicable
requirements relating to the qualification of accountants under Rule 2-01 of
Regulation S-X of the Commission, and (ii) stating, as of the date hereof (or,
with respect to matters involving changes or developments since the respective
dates as of which specified financial information is given in, or incorporated
by reference in, the Prospectus, as of a date not more than five days prior to
the date hereof), the conclusions and findings of such firm with respect to the
financial information and other matters ordinarily covered by accountants'
"comfort letters" to underwriters in connection with registered public
offerings.
(g) With respect to the letter of Coopers & Lybrand L.L.P. referred to in
the preceding paragraph and delivered to the Underwriter concurrently with the
execution of this Agreement (the "initial letter"), the Company shall have
furnished to the Underwriter a letter (the "bring-down letter") of such
accountants, addressed to the Underwriter and dated such Delivery Date (i)
confirming that they are independent public accountants within the meaning of
the Securities Act and are in compliance with the applicable requirements
relating to the qualification of accountants under Rule 2-01 of Regulation S-X
of the Commission, (ii) stating, as of the date of the bring-down letter (or,
with respect to matters involving changes or developments since the respective
dates as of which specified financial information is given in the Prospectus, as
of a date not more than five days prior to the date of the bring-down letter),
the conclusions and findings of such firm with respect to the financial
information and other matters covered by the initial letter and (iii) confirming
in all material respects the conclusions and findings set forth in the initial
letter.
(h) Each Transaction Entity shall have furnished to the Underwriter a
certificate, dated such Delivery Date, of its Chairman of the Board, its
President or a Vice President and its chief financial officer stating that:
(i) The representations, warranties and agreements of the Transaction
Entities in Section 1 are true and correct as of such Delivery Date; the
Transaction Entities complied with all of their agreements contained
herein; and the conditions set forth in Sections 7(a) and 7(i) have been
fulfilled; and
24
<PAGE>
(ii) They have carefully examined the Registration Statement and the
Prospectus and, in their opinion (A) as of the Effective Date, the
Registration Statement and Prospectus did not include any untrue statement
of a material fact and did not omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading (with respect to the Prospectus, in light of the circumstances
in which they were made), and (B) since the Effective Date no event has
occurred which should have been set forth in a supplement or amendment to
the Registration Statement or the Prospectus.
(i) (i) None of the Transaction Entities or any Property shall have
sustained since the date of the latest audited financial statements included in
the Prospectus any loss or interference with its business from fire, explosion,
flood or other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise than as set
forth or contemplated in the Prospectus or (ii) since such date there shall not
have been any change in the capital stock or long-term debt of any Transaction
Entity or any change, or any development involving a prospective change, in or
affecting any Property or the general affairs, management, financial position,
stockholders' equity or results of operations of any Transaction Entity,
otherwise than as set forth or contemplated in the Prospectus, the effect of
which, in any such case described in clause (i) or (ii), is, in the judgment of
the Underwriter, so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of the Shares
being delivered on such Delivery Date on the terms and in the manner
contemplated in the Prospectus.
(j) Subsequent to the execution and delivery of this Agreement there shall
not have occurred any of the following: (i) trading in securities generally on
the New York Stock Exchange or the American Stock Exchange or in the over-the-
counter market, or trading in any securities of the Company on any exchange or
in the over-the-counter market, shall have been suspended or minimum prices
shall have been established on any such exchange or such market by the
Commission, by such exchange or by any other regulatory body or governmental
authority having jurisdiction, (ii) a banking moratorium shall have been
declared by Federal or state authorities, (iii) the United States shall have
become engaged in hostilities, there shall have been an escalation in
hostilities involving the United States or there shall have been a declaration
of a national emergency or war by the United States or (iv) there shall have
occurred such a material adverse change in general economic, political or
financial conditions (or the effect of international conditions on the financial
markets in the United States shall be such) as to make it, in the judgment of
the Underwriter, impracticable or inadvisable to proceed with the public
offering or delivery of the Shares being delivered on such Delivery Date on the
terms and in the manner contemplated in the Prospectus.
(k) The Shares shall be approved for listing on the New York Stock
Exchange, Inc., subject only to official notice of issuance.
25
<PAGE>
(l) The Transaction Entities shall not have failed at or prior to such
Delivery Date to have performed or complied with any of their agreements herein
contained and required to be performed or complied with by them hereunder at or
prior to such Delivery Date.
(m) On the First Delivery Date, counsel for the Underwriter shall have
been furnished with such documents and opinions as it may require for the
purpose of enabling it to pass upon the issuance and sale of the Shares as
herein contemplated and related proceedings, or in order to evidence the
accuracy of any of the representations or warranties, or the fulfillment of any
of the conditions, herein contained; and all proceedings taken by the
Transaction Entities in connection with the issuance and sale of the Shares as
herein contemplated shall be satisfactory in form and substance to the
Underwriter and counsel for the Underwriter.
(n) The Company shall have furnished or caused to be furnished to the
Underwriter such further certificates and documents as the Underwriter shall
have reasonably requested.
(o) In the event that the Underwriter exercises its option provided in
Section 2(b) hereof to purchase all or any portion of the Option Shares, the
representations and warranties of the Transaction Entities contained herein and
the statements in any certificates furnished by the Transaction Entities
hereunder shall be true and correct as of each Date of Delivery and, at the
relevant Date of Delivery, the Underwriter shall have received:
(i) A certificate, dated such Date of Delivery, of the President or a
Vice President of each Transaction Entity and of the chief financial or
chief accounting officer of each Transaction Entity confirming that the
certificate delivered on the First Delivery Date pursuant to Section 7(h)
hereof remains true and correct as of such Date of Delivery.
(ii) The favorable opinion of Hunton & Williams, counsel for the
Transaction Entities, or such other firm or firms satisfactory to counsel
for the Underwriter, in form and substance satisfactory to counsel for the
Underwriter, dated such Date of Delivery, relating to the Option Shares to
be purchased on such Date of Delivery and otherwise to the same effect as
the opinions required by Section 7(d) hereof.
(iii) The favorable opinion of Rogers & Wells, counsel for the
Underwriter, dated such Date of Delivery, relating to the Option Shares to
be purchased on such Date of Delivery and otherwise to the same effect as
the opinion required by Section 7(e) hereof.
26
<PAGE>
(iv) A letter from Coopers & Lybrand L.L.P., in form and substance
satisfactory to the Underwriter and dated such Date of Delivery,
substantially the same in form and substance as the letters furnished to
the Underwriter pursuant to Section 7(f) hereof.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriter.
Any certificate or document signed by any officer of the Transaction
Entities and delivered to the Underwriter, or to counsel for the Underwriter,
shall be deemed a representation and warranty by the Transaction Entities to the
Underwriter as to the statements made therein.
The several obligations of the Underwriter to purchase Option Shares
hereunder are subject to the satisfaction on and as of any Date of Delivery of
the conditions set forth in this Section 7, except that, if any Date of Delivery
is other than the First Delivery Date, the certificates, opinions and letters
referred to in Sections 7(d) through 7(h) hereof shall be dated the Date of
Delivery in question and the opinions called for by Sections 7(d) and 7(e)
hereof shall be revised to reflect the sale of Option Shares.
8. Effective Date of Agreement. This Agreement shall become effective: (i)
upon the execution hereof by the parties hereto; or (ii) if, at the time this
Agreement is executed and delivered, it is necessary for the Registration
Statement or a post-effective amendment thereto to be declared effective before
the offering of the Shares may commence, when notification of the effectiveness
of the Registration Statement or such post-effective amendment has been released
by the Commission.
9. [INTENTIONALLY LEFT BLANK].
10. Indemnification and Contribution.
(a) The Transaction Entities jointly and severally, shall indemnify and
hold harmless the Underwriter, its officers and employees and each person, if
any, who controls the Underwriter within the meaning of the Securities Act, from
and against any loss, claim, damage or liability, joint or several, or any
action in respect thereof (including, but not limited to, any loss, claim,
damage, liability or action relating to purchases and sales of Shares), to which
that Underwriter, officer, employee or controlling person may become subject,
under the Securities Act or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon, (i) any untrue statement or
alleged untrue statement of a material fact contained (A) in any Preliminary
Prospectus, the Registration Statement or the Prospectus or in any amendment or
supplement thereto or (B) in any blue sky application or other document prepared
or executed by the Company (or based upon any written information furnished by
the Company) specifically for the purpose of qualifying any or all of the Shares
under the securities laws of any state or other jurisdiction (any such
application, document or information being hereinafter called a "Blue Sky
Application"), (ii) the omission or alleged omission to state in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or in any amendment or
supplement thereto, or in any Blue Sky Application any material fact required to
be stated therein or necessary to make the
27
<PAGE>
statements therein not misleading (with respect to the Prospectus, in light of
the circumstances under which they were made), or (iii) any act or failure to
act or any alleged act or failure to act by the Underwriter in connection with,
or relating in any manner to, the Shares or the offering contemplated hereby,
and which is included as part of or referred to in any loss, claim, damage,
liability or action arising out of or based upon matters covered by clause (i)
or (ii) above (provided that the Transaction Entities shall not be liable under
this clause (iii) to the extent that it is determined in a final judgment by a
court of competent jurisdiction that such loss, claim, damage, liability or
action resulted directly from any such acts or failures to act undertaken or
omitted to be taken by such Underwriter through its gross negligence or willful
misconduct), and shall reimburse the Underwriter and each such officer, employee
or controlling person promptly upon demand for any legal or other expenses
reasonably incurred by that Underwriter, officer, employee or controlling person
in connection with investigating or defending or preparing to defend against any
such loss, claim, damage, liability or action as such expenses are incurred;
provided, however, that the Transaction Entities shall not be liable in any such
case to the extent that any such loss, claim, damage, liability or action arises
out of, or is based upon, any untrue statement or alleged untrue statement or
omission or alleged omission made in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or in any such amendment or
supplement, or in any Blue Sky Application, in reliance upon and in conformity
with written information concerning the Underwriter furnished to the Company by
or on behalf of the Underwriter specifically for inclusion therein. The
foregoing indemnity agreement is in addition to any liability which the
Transaction Entities may otherwise have to the Underwriter or to any officer,
employee or controlling person of that Underwriter.
(b) The Underwriter shall indemnify and hold harmless each Transaction
Entity, its officers and employees, each of its directors or trustees, and each
person, if any, who controls each Transaction Entity within the meaning of the
Securities Act, from and against any loss, claim, damage or liability, joint or
several, or any action in respect thereof, to which each Transaction Entity or
any such director, trustee, officer or controlling person may become subject,
under the Securities Act or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon, (i) any untrue statement or
alleged untrue statement of a material fact contained (A) in any Preliminary
Prospectus, the Registration Statement or the Prospectus or in any amendment or
supplement thereto, or (B) in any Blue Sky Application or (ii) the omission or
alleged omission to state in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or in any amendment or supplement thereto, or in
any Blue Sky Application any material fact required to be stated therein or
necessary to make the statements therein not misleading, but in each case only
to the extent that the untrue statement or alleged untrue statement or omission
or alleged omission was made in reliance upon and in conformity with written
information concerning the Underwriter furnished to the Company by or on behalf
of that Underwriter specifically for inclusion therein, and shall reimburse each
Transaction Entity and any such director, trustee, officer or controlling person
for any legal or other expenses reasonably incurred by each Transaction Entity
or any such director, trustee, officer or controlling person in connection with
investigating or defending or preparing to defend against any such loss, claim,
damage, liability or action as such expenses are incurred. The foregoing
indemnity agreement is in addition to any liability which the Underwriter may
otherwise have to each Transaction Entity or any such director, trustee,
officer, employee or controlling person.
(c) Promptly after receipt by an indemnified party under this Section 10
of notice of any claim or the commencement of any action, the indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under this Section 10, notify the
28
<PAGE>
indemnifying party in writing of the claim or the commencement of that action;
provided, however, that the failure to notify the indemnifying party shall not
relieve it from any liability which it may have under this Section 10 except to
the extent it has been materially prejudiced by such failure and, provided
further, that the failure to notify the indemnifying party shall not relieve it
from any liability which it may have to an indemnified party otherwise than
under this Section 10. If any such claim or action shall be brought against an
indemnified party, and it shall notify the indemnifying party thereof, the
indemnifying party shall be entitled to participate therein and, to the extent
that it wishes, jointly with any other similarly notified indemnifying party, to
assume the defense thereof with counsel reasonably satisfactory to the
indemnified party. After notice from the indemnifying party to the indemnified
party of its election to assume the defense of such claim or action, the
indemnifying party shall not be liable to the indemnified party under this
Section 10 for any legal or other expenses subsequently incurred by the
indemnified party in connection with the defense thereof other than reasonable
costs of investigation; provided, however, that the Underwriter shall have the
right to employ counsel to represent jointly the Underwriter and their
respective officers, employees and controlling persons who may be subject to
liability arising out of any claim in respect of which indemnity may be sought
by the Underwriter against the Transaction Entities under this Section 10 if, in
the reasonable judgment of the Underwriter, it is advisable for the Underwriter,
officers, employees and controlling persons to be jointly represented by
separate counsel, and in that event the fees and expenses of such separate
counsel shall be paid by the indemnifying party. No indemnifying party shall (i)
without the prior written consent of the indemnified parties (which consent
shall not be unreasonably withheld), settle or compromise or consent to the
entry of any judgment with respect to any pending or threatened claim, action,
suit or proceeding in respect of which indemnification or contribution may be
sought hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding, or (ii) be liable for any
settlement of any such action effected without its written consent (which
consent shall not be unreasonably withheld), but if settled with the consent of
the indemnifying party or if there be a final judgment of the plaintiff in any
such action, the indemnifying party agrees to indemnify and hold harmless any
indemnified party from and against any loss or liability by reason of such
settlement or judgment.
(d) If the indemnification provided for in this Section 10 shall for any
reason be unavailable to or insufficient to hold harmless an indemnified party
under Section 10(a) or 10(c) in respect of any loss, claim, damage or liability,
or any action in respect thereof, referred to therein, then each indemnifying
party shall, in lieu of indemnifying such indemnified party, contribute to the
amount paid or payable by such indemnified party as a result of such loss,
claim, damage or liability, or action in respect thereof, (i) in such proportion
as shall be appropriate to reflect the relative benefits received by the
Transaction Entities on the one hand and the Underwriter on the other from the
offering of the Shares or (ii) if the allocation provided by clause (i) above is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Transaction Entities on the one hand and the Underwriter
on the other with respect to the statements or omissions which resulted in such
loss, claim, damage or liability, or action in respect thereof, as well as any
other relevant equitable considerations. The relative benefits received by the
Transaction Entities on the one hand and the Underwriter on the other with
respect to such offering shall be deemed to be in the same proportion as the
total net proceeds from the offering of the Shares purchased under this
Agreement (before deducting expenses)
29
<PAGE>
received by the Transaction Entities, on the one hand, and the total
underwriting discounts and commissions received by the Underwriter with respect
to the Shares purchased under this Agreement, on the other hand, bear to the
total gross proceeds from the offering of the Shares under this Agreement, in
each case as set forth in the table on the cover page of the Prospectus. The
relative fault shall be determined by reference to 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 Transaction Entities or the
Underwriter, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Transaction Entities and the Underwriter agree that it would not be just and
equitable if contributions pursuant to this Section were to be determined by pro
rata allocation or by any other method of allocation which 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, damage or
liability, or action in respect thereof, referred to above in this Section shall
be deemed to include, for purposes of this Section 10(d), any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 10(d), no Underwriter shall be required to contribute
any amount in excess of the amount by which the total price at which the Shares
underwritten by it and distributed to the public was offered to the public
exceeds the amount of any damages which the Underwriter has otherwise paid or
become liable to pay by reason of any untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
(e) The Underwriter confirms and each Transaction Entity acknowledges that
(i) the statements with respect to the public offering of the Shares by the
Underwriter set forth on the cover page of, (ii) the legend concerning over-
allotments on the inside front cover page of, and (iii) pursuant to Item 508 of
Regulation S-K of the Securities Act, the information contained in the seventh,
eighth and ninth paragraphs in the section captioned "Plan of Distribution" in,
the Prospectus are correct and constitute the only information concerning the
Underwriter furnished in writing to the Company by or on behalf of the
Underwriter specifically for inclusion in the Registration Statement and the
Prospectus.
11. Termination. The obligations of the Underwriter hereunder may be
terminated by the Underwriter by notice given to and received by the Company
prior to delivery of and payment for the Firm Shares if, prior to that time, any
of the events described in Sections 7(i), 7(j) or 7(l), shall have occurred or
if the Underwriter shall decline to purchase the Shares for any reason permitted
under this Agreement.
12. Reimbursement of Underwriter's Expenses. If the Company shall fail to
tender the Shares for delivery to the Underwriter by reason of any failure,
refusal or inability on the part of the Transaction Entities to perform any
agreement on their part to be performed, or because any other condition of the
Underwriter's obligations hereunder required to be fulfilled by the Transaction
Entities is not fulfilled (other than the condition set forth in Section 7(j)
herein), the Transaction Entities will reimburse the Underwriter for all
reasonable out-of-pocket expenses (including fees and disbursements of counsel)
incurred by the Underwriter in connection with this Agreement and the proposed
purchase of the Shares, and upon demand the Transaction Entities shall pay the
full amount thereof to the Underwriter.
30
<PAGE>
13. Notices, etc. All statements, requests, notices and
agreements hereunder shall be in writing, and:
(a) if to the Underwriter, shall be delivered or sent
by mail, telex or facsimile transmission to Lehman Brothers
Inc., Three World Financial Center, New York, New York 10285,
Attention: Syndicate Department (Fax: 212-526-6588), with a
copy, in the case of any notice pursuant to Section 10(c), to
the Director of Litigation, Office of the General Counsel,
Lehman Brothers Inc., 3 World Financial Center, 10th Floor,
New York, NY 10285; with a copy to Robert E. King, Jr., Esq.,
Rogers & Wells, 200 Park Avenue, New York, New York 10166
(Fax: 212-878-8375);
(b) if to the Transaction Entities shall be delivered
or sent by mail, telex or facsimile transmission to the
Company, 3890 W. Northwest Highway, Suite 400, Dallas, Texas
75220, Attention: Michael V. Prentiss (Fax: 214-350-2408);
with a copy to Randall S. Parks, Esq., Hunton & Williams, 951
East Byrd Street, Richmond, Virginia 23219 (Fax:
804-788-8218).
Any such statements, requests, notices or agreements shall take effect at the
time of receipt thereof.
14. Persons Entitled to Benefit of Agreement. This Agreement
shall inure to the benefit of and be binding upon the Underwriter, the
Transaction Entities and their respective personal representatives and
successors. This Agreement and the terms and provisions hereof are for the sole
benefit of only those persons, except that (A) the representations, warranties,
indemnities and agreements of the Transaction Entities contained in this
Agreement shall also be deemed to be for the benefit of the person or persons,
if any, who control the Underwriter within the meaning of Section 15 of the
Securities Act and (B) the indemnity agreement of the Underwriter contained in
Section 10(b) of this Agreement shall be deemed to be for the benefit of
directors and trustees of the Transaction Entities, officers of the Company who
have signed the Registration Statement and any person controlling the
Transaction Entities within the meaning of section 15 of the Securities Act.
Nothing in this Agreement is intended or shall be construed to give any person,
other than the persons referred to in this Section 14, any legal or equitable
right, remedy or claim under or in respect of this Agreement or any provision
contained herein.
15. Survival. The respective indemnities, representations,
warranties and agreements of the Transaction Entities and the Underwriter
contained in this Agreement or made by or on behalf on them, respectively,
pursuant to this Agreement, shall survive the delivery of and payment for the
Shares and shall remain in full force and effect, regardless of any
investigation made by or on behalf of any of them or any person controlling any
of them.
16. Definition of the Terms "Business Day" and "Subsidiary".
For purposes of this Agreement, (a) "business day" means any day on which the
New York Stock Exchange, Inc. is open for trading and (b) "subsidiary" has the
meaning set forth in Rule 405 of the Rules and Regulations.
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<PAGE>
17. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of New York.
18. Counterparts. This Agreement may be executed in one or
more counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
19. Headings. The headings herein are inserted for convenience
of reference only and are not intended to be part of, or to affect the meaning
or interpretation of, this Agreement.
If the foregoing correctly sets forth the agreement between
the Company and the Underwriter, please indicate your acceptance in the space
provided for that purpose below.
Very truly yours,
PRENTISS PROPERTIES TRUST
By /s/ THOMAS F. AUGUST
-------------------------------------
Name: Thomas F. August
Title: President
PRENTISS PROPERTIES ACQUISITION
PARTNERS, L.P.
By: Prentiss Properties I, Inc., its
general partner
By /s/ THOMAS F. AUGUST
-------------------------------
Name: Thomas F. August
Title: President
PRENTISS PROPERTIES I, INC.
By /s/ THOMAS F. AUGUST
-------------------------------------
Name: Thomas F. August
Title: President
Accepted:
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Lehman Brothers Inc.
By /s/ MICHAEL W. REID
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Authorized Representative
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Exhibit 8
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November 21, 1997
Prentiss Properties Trust
3890 W. Northwest Highway, Suite 400
Dallas, Texas 75220
Prentiss Properties Trust
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Qualification as
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Real Estate Investment Trust
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Ladies and Gentlemen:
We have acted as counsel to Prentiss Properties Trust, a
Maryland real estate investment trust (the "Trust"), in connection with (i) the
preparation of a Form S-3 registration statement filed with the Securities and
Exchange Commission ("SEC") on October 16, 1997 (No. 333-38079), as amended
through the date hereof (the "Registration Statement"), (ii) the offering and
sale (the "Offering") of 6,000,000 common shares of beneficial interest, par
value $0.01 per share (the "Common Shares"), of the Trust pursuant to a
prospectus dated October 24, 1997 (the "Prospectus") and a related prospectus
supplement dated November 18, 1997 (the "Prospectus Supplement") relating to the
Registration Statement, and (iii) the Trust's contribution of the net proceeds
of the Offering to Prentiss Properties Acquisition Partners, L.P., a Delaware
limited partnership (the "Operating Partnership"), in exchange for an additional
limited partnership interest in the Operating Partnership. You have requested
our opinion regarding certain U.S. federal income tax matters in connection with
the Offering.
The Operating Partnership owns, directly or indirectly, equity
interests in 154 office and industrial properties (the "Existing Properties")
and has contracted to acquire interests in three additional office properties
(together with the Existing Properties, the "Properties"). The Operating
Partnership owns and will own interests in certain Properties through subsidiary
partnerships, joint ventures, and limited liability companies (collectively, the
"Noncorporate Subsidiaries").
The Company owns 100% of the stock of Prentiss Properties I,
Inc., a Delaware corporation and the general partner of the Operating
Partnership ("PP I"). The Operating Partnership owns all of the nonvoting stock
of Prentiss Properties Limited, Inc., a Delaware corporation ("PPL"),
representing 95% of the economic interests therein. All of the voting stock of
PPL, representing 5% of the economic interests therein, is owned by Michael V.
Prentiss.
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PPL owns 100% of the outstanding stock of Prentiss Properties II, Inc., a
Delaware corporation ("PP II"). The Operating Partnership also owns all of the
nonvoting stock of Prentiss Properties Limited II, Inc., a Delaware corporation
("PPL II"), representing 95% of the economic interests therein. All of the
voting stock of PPL II, representing 5% of the economic interests therein, is
owned by Michael V. Prentiss.
In giving this opinion, we have examined the following:
1. the Trust's Amended and Restated Declaration of Trust, as
duly filed with the Department of Assessments and Taxation of the State
of Maryland on October 16, 1996;
2. the Trust's Bylaws;
3. the Prospectus and the Prospectus Supplement;
4. the Second Amended and Restated Agreement of Limited
Partnership of the Operating Partnership, dated October 22, 1996 (the
"Operating Partnership Agreement"), among PP I, as general partner, and
several limited partners;
5. the partnership agreements, joint venture agreements, and
operating agreements of the Noncorporate Subsidiaries (together with
the Operating Partnership Agreement, the "Partnership Agreements");
6. the Articles of Incorporation and Bylaws of PPL;
7. the Articles of Incorporation and Bylaws of PPL II;
8. the Amended and Restated Certificate of Incorporation and
the Bylaws of PP II; and
9. such other documents as we have deemed necessary or
appropriate for purposes of this opinion.
In connection with the opinions rendered below, we have assumed, with
your consent, that:
1. each of the documents referred to above has been duly
authorized, executed, and delivered; is authentic, if an original, or
is accurate, if a copy; and has not been amended;
2. during its taxable year ending December 31, 1997 and future
taxable years, the Trust has operated and will continue to operate in a
manner that makes and will continue to make the representations
contained in a certificate, dated the date hereof and
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executed by a duly appointed officer of the Trust (the "Officer's
Certificate"), true for such years;
3. the Trust will not make any amendments to its
organizational documents, PP I's organizational documents, the
Partnership Agreements, PPL's organizational documents, PPL II's
organizational documents, or PP II's organizational documents after the
date of this opinion that would affect its qualification as a real
estate investment trust (a "REIT") for any taxable year;
4. each partner or member of the Operating Partnership and the
Noncorporate Subsidiaries (each, a "Partner") that is a corporation or
other entity has a valid legal existence;
5. each Partner has full power, authority, and legal right to
enter into and to perform the terms of the applicable Partnership
Agreement and the transactions contemplated thereby; and
6. no action will be taken by the Trust, the Operating
Partnership, the Noncorporate Subsidiaries, the Partners, PPL, PPL II,
or PP II after the date hereof that would have the effect of altering
the facts upon which the opinions set forth below are based.
In connection with the opinions rendered below, we also have
relied upon the correctness of the representations contained in the Officer's
Certificate. After reasonable inquiry, no facts have come to our attention that
would cause us to question the accuracy and completeness of the facts contained
in the documents and assumptions set forth above, the representations set forth
in the Officer's Certificate, or the Prospectus in a material way. In addition,
to the extent that any of the representations provided to us in the Officer's
Certificate are with respect to matters set forth in the Internal Revenue Code
of 1986, as amended (the "Code"), or the Treasury regulations thereunder (the
"Regulations"), we have reviewed with the individuals making such
representations the relevant portion of the Code and the applicable Regulations.
Based on the documents and assumptions set forth above, the
representations set forth in the Officer's Certificate, and the discussions in
the Prospectus and in the Prospectus Supplement under the captions "Federal
Income Tax Considerations" and "Certain Federal Income Tax Considerations"
(which are incorporated herein by reference), we are of the opinion that:
(a) the Trust qualified to be taxed as a REIT pursuant to
sections 856 through 860 of the Code for its taxable year ended
December 31, 1996, and the Trust's organization and current and
proposed method of operation will enable it to continue to qualify as a
REIT for its taxable year ending December 31, 1997 and in the future;
and
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(b) the descriptions of the law and the legal conclusions
contained in the Prospectus and in the Prospectus Supplement under the
captions "Federal Income Tax Considerations" and "Certain Federal
Income Tax Considerations" are correct in all material respects, and
the discussions thereunder fairly summarize the federal income tax
considerations that are likely to be material to a holder of the Common
Shares.
We will not review on a continuing basis the Trust's compliance with the
documents or assumptions set forth above, or the representations set forth in
the Officer's Certificate. Accordingly, no assurance can be given that the
actual results of the Trust's operations for any given taxable year will satisfy
the requirements for qualification and taxation as a REIT.
The foregoing opinions are based on current provisions of the
Code and the Regulations, published administrative interpretations thereof, and
published court decisions. The Internal Revenue Service has not issued
Regulations or administrative interpretations with respect to various provisions
of the Code relating to REIT qualification. No assurance can be given that the
law will not change in a way that will prevent the Trust from qualifying as a
REIT, or the Operating Partnership or the Noncorporate Subsidiaries from being
classified as partnerships for federal income tax purposes.
We hereby consent to the filing of this opinion as an exhibit
to the Registration Statement. We also consent to the references to Hunton &
Williams under the captions "Federal Income Tax Considerations" and "Certain
Federal Income Tax Considerations" in the Prospectus and the Prospectus
Supplement, respectively. In giving this consent, we do not admit that we are in
the category of persons whose consent is required by Section 7 of the Securities
Act of 1933, as amended, or the rules and regulations promulgated thereunder by
the SEC.
The foregoing opinions are limited to the U.S. federal income
tax matters addressed herein, and no other opinions are rendered with respect to
other federal tax matters or to any issues arising under the tax laws of any
other country, or any state or locality. We undertake no obligation to update
the opinions expressed herein after the date of this letter. This opinion letter
is solely for the information and use of the addressee and the purchasers of
Common Shares pursuant to the Prospectus Supplement, and it may not be
distributed, relied upon for any purpose by any other person, quoted in whole or
in part or otherwise reproduced in any document, or filed with any governmental
agency without our express written consent.
Very truly yours,
Hunton & Williams
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