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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
February 17, 1998 (February 12, 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 February 12, 1998, Prentiss Properties Trust (the "Company"), a
national office and industrial real estate investment trust, agreed to sell
922,676 of its common shares of beneficial interest ("Common Shares")
in a public offering underwritten by Prudential Securities Incorporated.
Net proceeds to the Company from the sale will be $23,835,774.95, after
deducting costs payable by the Company of approximately $50,000.
Prudential Securities Incorporated has informed the Company that it intends
to deposit the Common Shares with the trustee of the National Equity Trust,
Equity Portfolio Series 2, a unit investment trust sponsored by Prudential
Securities Incorporated.
In an unrelated agreement also entered into on February 12, 1998, the
Company agreed to sell 893,330 Common Shares in a public offering
underwritten by Smith Barney Inc. Net proceeds to the Company from the
sale will be $23,076,080.38, after deducting expenses payable to the
Company of approximately $50,000. Smith Barney Inc. has informed the
Company that it intends to deposit the shares with the trustee of the
Equity Focus Trusts - REIT Portfolio Series 1998-A, a unit investment trust
sponsored by Smith Barney Inc.
Both transactions are expected to close on February 18, 1998.
Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS.
(c) EXHIBITS.
The following exhibits are filed herewith:
Exhibit Description
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1.1 Underwriting Agreement, dated February 12,
1998, between Prentiss Properties Trust,
Prentiss Properties Acquisition Partners,
L.P., Prentiss Properties I, Inc. and
Prudential Securities Incorporated
1.2 Underwriting Agreement, dated February 12,
1998, between Prentiss Properties Trust,
Prentiss Properties Acquisition Partners,
L.P., Prentiss Properties I, Inc. and Smith
Barney Inc.
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8.1 Form of Tax Opinion of Hunton & Williams, Richmond,
Virginia addressed to Prudential Securities Incorporated
8.2 Form of Tax Opinion of Hunton & Williams, Richmond,
Virginia addressed to Smith Barney Inc.
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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: February 17, 1998
By: /s/ Gregory S. Imhoff
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Gregory S. Imhoff
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Vice President and Secretary
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EXHIBIT INDEX
Exhibit Description
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1.1 Underwriting Agreement, dated February 12, 1998, between
Prentiss Properties Trust, Prentiss Properties Acquisition
Partners, L.P., Prentiss Properties I, Inc. and Prudential
Securities Incorporated.
1.2 Underwriting Agreement, dated February 12, 1998, between
Prentiss Properties Trust, Prentiss Properties Acquisition
Partners, L.P., Prentiss Properties I, Inc. and Smith Barney
Inc.
8.1 Form of Tax Opinion of Hunton & Williams, Richmond, Virginia
addressed to Salomon Smith Barney.
8.2 Form of Tax Opinion of Hunton & Williams, Richmond, Virginia
addressed to Prudential Securities Incorporated.
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Exhibit 1.1
922,676 SHARES
PRENTISS PROPERTIES TRUST
Common Shares of Beneficial Interest
UNDERWRITING AGREEMENT
----------------------
February 12, 1998
Prudential Securities Incorporated
One New York Plaza
New York, New York 10292
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 Prudential Securities Incorporated (the
"Underwriter"), with respect to the sale by the Company and the purchase by the
Underwriter of an aggregate of 922,676 shares (the "Shares") of the Company's
common shares of beneficial interest, par value $.01 per share (the "Common
Shares"). The Underwriter intends to deposit the Shares with the trustee of
National Equity Trust Equity Portfolio Series 2 (the "Trust") a registered unit
investment trust under the Investment Company Act of 1940, as amended, to which
Prudential Securities Incorporated acts as sponsor and depositor, in exchange
for units in the Trust.
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
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this Agreement, "Effective Time" means the date and the time as of
which such registration 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
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stated therein or necessary to make the statements 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-
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assessable and 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 as disclosed in the Prospectus 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.
(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.
(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
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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, 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.
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(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 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
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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 except those rights which if exercised 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; (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 have a material adverse effect on the
earnings, assets or business affairs of the Company and its
subsidiaries, considered as a single enterprise, if such proceeding,
change or action were not resolved in favor of the Company.
(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.
(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.
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(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,
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 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
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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 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.
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(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.
(ab) 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.
(ac) 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.
(ad) 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.
(ae) 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 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.
(af) 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,
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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).
(ag) 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.
(ah) 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.
(ai) 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, 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.
(aj) 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.
(ak) The Shares have been approved for listing upon official
notice of issuance on the New York Stock Exchange.
(al) 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
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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.
(am) 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 922,676 Shares to
the Underwriter and the Underwriter agrees to purchase 922,676 Shares at a
purchase price of $25.89 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 Company is advised by
you that the Underwriter proposes to deposit the Shares with the trustee of the
Trust, a registered unit investment trust under the Investment Company Act of
1940, as amended, to which Prudential Securities Incorporated acts as sponsor
and depositor, in exchange for units in the Trust (the "Offering") as soon after
the execution and delivery hereof as in your judgment is advisable (and, if
necessary, any post-effective amendment to the Registration Statement).
4. Delivery of and Payment for the Shares. Delivery to the
Underwriter of and payment for the Shares shall be made, subject to Section 7,
at the office of Rogers & Wells LLP, 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
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 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 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 Shares, the
Company shall make the certificates representing the 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.
5. Further Agreements of the Transaction Entities. Each of the
Transaction Entities jointly and severally agrees:
(a) To prepare the Prospectus in a form approved by the
Underwriter and to file such Prospectus pursuant to Rule 424(b) under
the
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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 will be
identical to the electronically transmitted copies thereof
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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 45 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) To maintain the listing of the Common Shares on the New York
Stock Exchange, Inc.;
(j) 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";
(k) 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;
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(l) 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;
(m) 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
(n) 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.
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(h) 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
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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 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.
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(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 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.
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(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 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
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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.
(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 official is required on the part of the Company other than
those which have
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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 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.
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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 LLP,
counsel for the Underwriter, such opinion or opinions, dated such
Delivery Date, with 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.
21
<PAGE>
(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
(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
22
<PAGE>
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 (x) commence or continue the offering of the units of
the Trust to the public, or (y) enforce contracts for the sale of the
units of the Trust.
(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 (x) commence or continue
the offering of the units of the Trust to the public, or (y) enforce
contracts for the sale of the units of the Trust.
(k) The Shares shall be approved for listing on the New York
Stock Exchange, Inc., subject only to official notice of issuance.
(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
23
<PAGE>
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.
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 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
24
<PAGE>
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 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
25
<PAGE>
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) 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
26
<PAGE>
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 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.
13. Notices, etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Underwriter, shall be delivered to Prudential
Securities Incorporated, One New York Plaza, New York, New York 10292,
Attention: Equity Transactions Group, with a copy to Robert E. King,
Jr., Esq., Rogers & Wells LLP, 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-
27
<PAGE>
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.
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.
28
<PAGE>
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/ Michael A. Ernst
------------------------------------
Name: Michael A. Ernst
Title: Vice President and Treasurer
PRENTISS PROPERTIES ACQUISITION
PARTNERS, L.P.
By: Prentiss Properties I, Inc., its general
partner
By /s/ Michael A. Ernst
--------------------------------
Name: Michael A. Ernst
Title: Vice President and Treasurer
PRENTISS PROPERTIES I, INC.
By /s/ Michael A. Ernst
---------------------------------------
Name: Michael A. Ernst
Title: Vice President and Treasurer
Accepted:
Prudential Securities Incorporated
By /s/ Jean-Claude Canfin
---------------------------------------
Name: Jean-Claude Canfin
Title: Managing Director
<PAGE>
Exhibit 1.2
893,330 SHARES
PRENTISS PROPERTIES TRUST
Common Shares of Beneficial Interest
UNDERWRITING AGREEMENT
----------------------
February 12, 1998
Salomon Smith Barney
Smith Barney Inc.
388 Greenwich Street
New York, New York 10013
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 Smith Barney Inc. (the "Underwriter"),
with respect to the sale by the Company and the purchase by the Underwriter of
an aggregate of 893,330 shares (the "Shares") of the Company's common shares of
beneficial interest, par value $.01 per share (the "Common Shares"). The
Underwriter intends to deposit the Shares with the trustee of Equity Focus
Trusts-REIT Portfolio Series, 1998-A (the "Trust") a registered unit investment
trust under the Investment Company Act of 1940, as amended, to which Smith
Barney Inc. acts as sponsor and depositor, in exchange for units in the Trust.
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
<PAGE>
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 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
2
<PAGE>
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading (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
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have been duly and validly authorized and issued, are fully paid and
non-assessable and 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 as disclosed in the Prospectus 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.
(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.
(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
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<PAGE>
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, 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
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<PAGE>
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 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.
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<PAGE>
(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 except those rights which if exercised 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; (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 have a material adverse effect on the
earnings, assets or business affairs of the Company and its
subsidiaries, considered as a single enterprise, if such proceeding,
change or action were not resolved in favor of the Company.
(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.
(u) The Operating Partnership, directly or indirectly, has
obtained title insurance on the fee or leasehold interests in each of
the Properties, in
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<PAGE>
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,
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 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
8
<PAGE>
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 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
9
<PAGE>
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.
(ab) 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.
(ac) 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.
(ad) 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.
(ae) 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 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.
(af) 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,
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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).
(ag) 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.
(ah) 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.
(ai) 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, 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.
(aj) 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.
(ak) The Shares have been approved for listing upon official
notice of issuance on the New York Stock Exchange.
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(al) 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.
(am) 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 893,330 Shares to
the Underwriter and the Underwriter agrees to purchase 893,330 Shares at a
purchase price of $25.8875 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 Company is advised by
you that the Underwriter proposes to deposit the Shares with the trustee of the
Trust, a registered unit investment trust under the Investment Company Act of
1940, as amended, to which Smith Barney Inc. acts as sponsor and depositor, in
exchange for units in the Trust (the "Offering") as soon after the execution and
delivery hereof as in your judgment is advisable (and, if necessary, any post-
effective amendment to the Registration Statement).
4. Delivery of and Payment for the Shares. Delivery of and payment
for the Shares shall be made at the office of Rogers & Wells LLP, 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 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 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
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 Shares, the Company shall make the
certificates representing the 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.
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
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Underwriter 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 45 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) To maintain the listing of the Common Shares on the New York
Stock Exchange, Inc.;
(j) 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";
(k) 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;
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(l) 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;
(m) 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
(n) 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.
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(h) 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
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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 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.
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(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 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.
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(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 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
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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.
(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 official is required on the part of the Company other than
those which have
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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 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.
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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 LLP,
counsel for the Underwriter, such opinion or opinions, dated such
Delivery Date, with 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.
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(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
(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
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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.
(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
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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.
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 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
24
<PAGE>
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 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
25
<PAGE>
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) 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
26
<PAGE>
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 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.
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 Smith Barney Inc., 388 Greenwich
Street, New York, New York 10013, Attention: Manager, Investment
Banking Division (Fax: 212-816-7360), with a copy, in the case of any
notice pursuant to Section 10(c), to the Director of Litigation,
Office of the General Counsel, Smith Barney Inc., 388 Greenwich
Street, New York, NY 10013; with a copy to Robert E. King, Jr., Esq.,
Rogers & Wells LLP, 200 Park Avenue, New York, New York 10166 (Fax:
212-878-8375);
27
<PAGE>
(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.
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.
28
<PAGE>
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/ Michael A. Ernst
-------------------------------------------
Name: Michael A. Ernst
Title: Vice President and Treasurer
PRENTISS PROPERTIES ACQUISITION
PARTNERS, L.P.
By: Prentiss Properties I, Inc., its general
partner
By /s/ Michael A. Ernst
-------------------------------------
Name: Michael A. Ernst
Title: Vice President and Treasurer
PRENTISS PROPERTIES I, INC.
By /s/ Michael A. Ernst
-------------------------------------------
Name: Michael A. Ernst
Title: Vice President and Treasurer
Accepted:
Smith Barney Inc.
By /s/ Jeffrey D. Horowitz
------------------------------------
Name: Jeffrey D. Horowitz
Title: Managing Director
29
<PAGE>
Exhibit 8.1
-----------
February 18, 1998
Prentiss Properties Trust
3890 W. Northwest Highway, Suite 400
Dallas, Texas 75220
Salomon Smith Barney
388 Greenwich Street
New York, New York 10012
Prentiss Properties Trust
-------------------------
Qualification as
----------------
Real Estate Investment Trust
----------------------------
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 893,330 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 February
12, 1998 (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.
As of February 5, 1998, the Operating Partnership owns, directly or
indirectly, equity interests in 217 office and industrial properties (the
"Properties"). The Operating Partnership owns and will own interests in certain
Properties through
<PAGE>
Prentiss Properties Trust
Salomon Smith Barney
February 18, 1998
Page 2
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. 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;
<PAGE>
Prentiss Properties Trust
Salomon Smith Barney
February 18, 1998
Page 3
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, 1998 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
February 18, 1998 and 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.
<PAGE>
Prentiss Properties Trust
Salomon Smith Barney
February 18, 1998
Page 4
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 years ended December 31, 1996 and
December 31, 1997, 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, 1998 and in the future;
(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; and
(c) the Operating Partnership and each Noncorporate Subsidiary will be
treated for federal income tax purposes as partnerships and not as
corporations or associations taxable as corporations or as publicly traded
partnerships.
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.
<PAGE>
Prentiss Properties Trust
Salomon Smith Barney
February 18, 1998
Page 5
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 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 addressees, and it may not be
distributed, relied upon for any purpose by any other
<PAGE>
Prentiss Properties Trust
Salomon Smith Barney
February 18, 1998
Page 6
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
03352/07796/08074
Richmond #127782 v1
<PAGE>
Exhibit 8.2
February 18, 1998
Prentiss Properties Trust
3890 W. Northwest Highway, Suite 400
Dallas, Texas 75220
Prudential Securities Incorporated
One New York Plaza
New York, New York 10292
Prentiss Properties Trust
-------------------------
Qualification as
----------------
Real Estate Investment Trust
----------------------------
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 922676 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 February
12, 1998 (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.
As of February 5, 1998, the Operating Partnership owns, directly or
indirectly, equity interests in 217 office and industrial properties (the
"Properties"). The Operating Partnership owns and will own interests in certain
Properties through
<PAGE>
Prentiss Properties Trust
Prudential Securities Incorporated
February 18, 1998
Page 2
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. 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;
<PAGE>
Prentiss Properties Trust
Prudential Securities Incorporated
February 18, 1998
Page 3
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, 1998 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
February 18, 1998 and 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.
<PAGE>
Prentiss Properties Trust
Prudential Securities Incorporated
February 18, 1998
Page 2
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 years ended December 31, 1996 and
December 31, 1997, 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, 1998 and in the future;
(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; and
(c) the Operating Partnership and each Noncorporate Subsidiary will be
treated for federal income tax purposes as partnerships and not as
corporations or associations taxable as corporations or as publicly traded
partnerships.
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.
<PAGE>
Prentiss Properties Trust
Prudential Securities Incorporated
February 18, 1998
Page 5
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 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 addressees, and it may not be
distributed, relied upon for any purpose by any other
<PAGE>
Prentiss Properties Trust
Prudential Securities Incorporated
February 18, 1998
Page 6
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
03352/07796/08074
Richmond #128446 v1
