SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) January 24, 1995
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Storage Equities, Inc.
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(Exact name of registrant as specified in its charter)
California 1-8389 95-3551121
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(State or other juris- (Commission (IRS Employer
diction of incorporation) File Number) Identification No.)
600 North Brand Boulevard, Glendale, California 91203-1241
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(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code (818) 244-8080
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N/A
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(Former name or former address, if changed since last report)
Item 5. Other Events
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On August 4, 1994, the Securities and Exchange Commission
declared effective the Registration Statement on Form S-3 (No. 33-54755)
of Storage Equities, Inc. (the "Company"), which together with the
securities previously registered pursuant to the Company's Registration
Statement on Form S-3 (No. 33-71336), permits the Company to issue an
aggregate of $300,000,000 of preferred stock, common stock and warrants.
Item 7. Financial Statements and Exhibits
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(c) Exhibits.
Exhibit 1.1 - Form of Underwriting Agreement relating to
the Company's ____% Cumulative Preferred Stock, Series E (the "Preferred
Stock").
Exhibit 3.1 - Form of Certificate of Determination for the
Preferred Stock.
Exhibit 10.1 - Sixth Amendment to Amended and Restated
Advisory Contract between the Company and Public Storage Advisers,
Inc. dated as of January 12, 1995.
SIGNATURES
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.
STORAGE EQUITIES, INC.
By: /s/ OBREN B. GERICH
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Obren B. Gerich
Vice President
Date: January 24, 1995
EXHIBIT 1.1
Storage Equities, Inc.
2,000,000 Shares
______% Cumulative Preferred Stock, Series E
(Stated Value $25.00 Per Share)
UNDERWRITING AGREEMENT
PAINEWEBBER INCORPORATED January ___, 1995
SMITH BARNEY INC. New York, New York
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
THE ROBINSON-HUMPHREY
COMPANY, INC.
As Representatives of the Several Underwriters
c/o PAINEWEBBER INCORPORATED
1285 Avenue of the Americas
New York, New York 10019
Ladies and Gentlemen:
Storage Equities, Inc., a real estate investment trust ("REIT") and a
California corporation (the "Company"), proposes to sell an aggregate of
2,000,000 shares (the "Firm Shares") of the Company's ____% Cumulative
Preferred Stock, Series E, $25.00 stated value per share (the "Preferred
Stock"), to you and the other underwriters named in Schedule I hereto
(collectively the "Underwriters") for whom you are acting as
Representatives (the "Representatives"). The Company has also agreed to
grant to the Underwriters an option (the "Option") to purchase up to an
additional 300,000 shares of Preferred Stock (the "Option Shares") on the
terms and for the purposes set forth in Section 1(b). The Firm Shares and
the Option Shares are hereinafter collectively referred to as the
"Shares."
The initial public offering price per share for the Shares and the
purchase price per share for the Shares to be paid by the Underwriters
shall be agreed upon by the Company and the Representatives, and such
agreement shall be set forth in a separate written instrument
substantially in the form of Exhibit A hereto (the "Price Determination
Agreement"). The Price Determination Agreement may take the form of an
exchange of any standard form of written telecommunication between the
Company and the Representatives, and shall specify such applicable
information as is indicated in Exhibit A hereto. The offering of the
Shares will be governed by this Agreement, as supplemented by the Price
Determination Agreement. From and after the date of the execution and
delivery of the Price Determination Agreement, this Agreement shall be
deemed to incorporate, and, unless the context otherwise indicates, all
references contained herein to "this Agreement" and to the phrase "herein"
shall be deemed to include the Price Determination Agreement.
The Company confirms as follows its agreements with the
Representatives and the several other Underwriters:
1. Agreement to Sell and Purchase.
(a) On the basis of the representations, warranties and
agreements of the Company herein contained and subject to all the terms
and conditions of this Agreement, the Company agrees to sell to the
Underwriters and each Underwriter agrees, severally and not jointly, to
purchase from the Company, at the purchase price per share for the Firm
Shares to be agreed upon by the Representatives and the Company as set
forth in the Price Determination Agreement, the number of Firm Shares set
forth opposite the name of such Underwriter in Schedule I to the Price
Determination Agreement.
(b) Subject to all the terms and conditions of this Agreement,
the Company grants the Option to the Underwriters to purchase, severally
and not jointly, up to 300,000 Option Shares from the Company at the same
price per share as the Underwriters shall pay for the Firm Shares. The
Option may be exercised only to cover over-allotments in the sale of the
Firm Shares by the Underwriters and may be exercised in whole or in part
at any time (but not more than once) on or before the 45th day after the
date of this Agreement, upon written or telegraphic notice (the "Option
Shares Notice") by the Representatives to the Company no later than 12:00
noon, New York City time, at least two and no more than five business days
before the date specified for closing in the Option Shares Notice (the
"Option Closing Date") setting forth the aggregate number of Option Shares
to be purchased and the time and date for such purchase. On the Option
Closing Date, the Company will issue and sell to the Underwriters the
number of Option Shares set forth in the Option Shares Notice and each
Underwriter will purchase such percentage of the Option Shares as is equal
to the percentage of Firm Shares that such Underwriter is purchasing, as
adjusted by the Representatives in such manner as they deem advisable to
avoid fractional shares.
2. Delivery and Payment. Delivery of the Firm Shares shall be made
to the Representatives against payment of the purchase price by certified
or official bank check or checks payable in New York Clearing House (next-
day) funds to the order of the Company at the office of PaineWebber
Incorporated, 1285 Avenue of the Americas, New York, New York 10019 or
such other place as may be agreed upon by the Company and the
Representatives. Such payment shall be made at 10:00 a.m., New York City
time, on the fifth business day following the date of this Agreement or at
such time on such other date, not later than seven business days after the
date of this Agreement, as may be agreed upon by the Company and the
Representatives (such date is hereinafter referred to as the "Closing
Date").
To the extent the Option is exercised, delivery of the Option
Shares against payment by the Underwriters (in the manner specified above)
will take place at the offices specified above for the Closing Date at the
time and date (which may be the Closing Date) specified in the Option
Shares Notice.
Certificates evidencing the Shares shall be in definitive form
and shall be registered in such names and in such denominations as the
Representatives shall request at least two business days prior to the
Closing Date or the Option Closing Date, as the case may be, by written
notice to the Company. For the purpose of expediting the checking and
packaging of certificates for the Shares, the Company agrees to make such
certificates available for inspection at least 24 hours prior to the
Closing Date or the Option Closing Date, as the case may be.
The cost of original issue tax stamps, if any, in connection
with the issuance and delivery of the Firm Shares and Option Shares by the
Company to the respective Underwriters shall be borne by the Company. The
Company will pay and save each Underwriter and any subsequent holder of
the Shares harmless from any and all liabilities with respect to or
resulting from any failure or delay in paying Federal and state stamp and
other transfer taxes, if any, which may be payable or determined to be
payable in connection with the original issuance or sale to such
Underwriter of the Firm Shares and Option Shares.
3. Representations and Warranties of the Company. The Company
represents, warrants and covenants to each Underwriter as set forth below.
Certain terms used in this Section 3 are defined in paragraph (w) hereof.
(a) The Company has filed with the Securities and Exchange
Commission (the "Commission") two registration statements (file numbers
33-71336 (the "First Registration Statement") and 33-54755 (the "Second
Registration Statement" and, collectively with the First Registration
Statement, the "Registration Statements")) on Form S-3, including the
related prospectus included in such Registration Statements, for the
registration under the Securities Act of 1933, as amended (the "Act"), of
the offering and sale of the Shares. The Company may have filed one or
more amendments thereto, including each related prospectus, each of which
has previously been furnished to the Representatives. Such Registration
Statements have been declared effective under the Act. The Company has
filed with the Commission a preliminary prospectus supplement specifically
relating to the Shares pursuant to Rule 424 under the Act and shall
promptly hereafter file with or transmit for filing to, the Commission a
prospectus supplement (the "Prospectus Supplement") specifically relating
to the Shares pursuant to Rule 424 under the Act. The Company has
included or will include in such Registration Statements, as amended at
the Effective Date, and in the Prospectus Supplement all information
required by the Act and the rules and regulations thereunder to be
included therein with respect to the Shares and the offering thereof. As
filed, such Registration Statements, as so amended, and form of final
prospectus contained in the Second Registration Statement and Prospectus
Supplement, or such final prospectus and Prospectus Supplement, contains
or will contain all required information with respect to the Shares and
the offering thereof and, except to the extent the Representatives shall
agree in writing to a modification, shall be in all substantive respects
in the form furnished to the Underwriters prior to the Execution Time or,
to the extent not completed at the Execution Time, shall contain only such
specific additional information and other changes (beyond that contained
in the latest Preliminary Prospectus and accompanying Prospectus) as the
Company has advised the Representatives, prior to the Execution Time, will
be included or made therein.
(b) On the Effective Date, the Registration Statements did or
will, and when the Prospectus and the Prospectus Supplement is first filed
in accordance with Rule 424(b) and on the Closing Date, the Prospectus
(and any supplements thereto) will, comply in all material respects with
the requirements of the Act and the rules and regulations thereunder; on
each of their respective Effective Dates, the Registration Statements did
not or will not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in
order to make the statements therein not misleading; and, on the date of
any filing pursuant to Rule 424(b) and on the Closing Date, the Prospectus
(together with any supplement thereto) will not include any untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided, however, that the
Company makes no representations or warranties as to the information
contained in or omitted from the Registration Statements or the Prospectus
(or any supplement thereto) in reliance upon and in conformity with
information furnished in writing to the Company by or on behalf of any
Underwriter through the Representatives specifically for inclusion in the
Registration Statements or the Prospectus (or any supplement thereto).
(c) No stop order suspending the effectiveness of the
Registration Statements is in effect and no proceedings for such purpose
are, to the knowledge of the Company, pending before or threatened by the
Commission.
(d) Each of the Incorporated Documents complied, as of the date
such Incorporated Document was filed (or, if any amendment with respect to
any such document was filed, when such amendment was filed), in all
material respects with the requirements of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and the rules and regulations
thereunder.
(e) Each of the Company, SEI Arlington Acquisition Corporation
("SEI Arlington"), SEI Hypoluxo Acquisition Corporation ("Hypoluxo") and
Arlington Acquisition Co. ("Arlington" and, together with SEI Arlington
and Hypoluxo, the "Subsidiaries") and PS Partners, Ltd. ("PSPI"), PS
Partners II, Ltd. ("PSPII"), PS Partners III, Ltd. ("PSPIII"), PS Partners
IV, Ltd. ("PSPIV"), PS Partners V, Ltd. ("PSPV"), PS Partners VI, Ltd.
("PSPVI"), PS Partners VII, Ltd. ("PSPVII") and PS Partners VIII, Ltd.
("PSPVIII" and, collectively, the "Partnerships") has been duly organized
and is validly existing (in the case of the Company and each of the
Subsidiaries, as a corporation) in good standing under the laws of the
jurisdiction in which it is organized, with full power and authority to
own or lease and occupy its properties and conduct its business as
described in the Prospectus, and is duly qualified to do business, and is
in good standing, in each jurisdiction which requires such qualification,
except where the failure to so qualify would not, individually or in the
aggregate, have a material adverse effect on the business, operations,
earnings, assets or financial condition of the Company (a "Material
Adverse Effect"). All of the outstanding shares of capital stock of each
of the Subsidiaries have been duly authorized and validly issued, are
fully paid and nonassessable, and are owned by the Company directly, or
indirectly through another Subsidiary, free and clear of any lien, adverse
claim, security interest, equity, or other encumbrance. The Company owns
as of December 31, 1994 approximately 37%, 66%, 49%, 33%, 43%, 34%, 51%
and 26% of the limited partnership units of PSPI, PSPII, PSPIII, PSPIV,
PSPV, PSPVI, PSPVII and PSPVIII, respectively.
(f) The Company, each of the Subsidiaries and each Partnership
have all requisite power and authority, and all necessary material
authorizations, approvals, orders, licenses, certificates and permits of
and from all regulatory or governmental officials, bodies and tribunals,
to own or lease their respective properties and to conduct their
respective businesses as now being conducted and as described in the
Prospectus; all such authorizations, approvals, licenses, certificates and
permits are in full force and effect, except where the failure to be in
full force and effect would not have a Material Adverse Effect on the
Company, such Subsidiary or such Partnership; and the Company, each of the
Subsidiaries and each Partnership are complying with all applicable laws,
the violation of which could have a Material Adverse Effect on the
Company, such Subsidiary or such Partnership, as the case may be.
(g) The Company, each Subsidiary and each Partnership have good
and marketable title to their properties, free and clear of all material
liens, charges and encumbrances and equities of record, except as set
forth or contemplated in the Prospectus.
(h) The Company, each Subsidiary and each Partnership maintain
adequate insurance for the conduct of their respective business as
described in the Prospectus.
(i) The Company, either directly or through the Subsidiaries or
Partnerships, owns or licenses or otherwise has the right to use all
patents, trademarks, trade names and trade secrets material to the
Company's business as described in the Prospectus; other than routine
proceedings which if adversely determined would not materially affect the
business (as described in the Prospectus) of the Company, the Subsidiaries
and the Partnerships taken as a whole, no claims have been asserted by any
person with respect to the use of any such patents, trademarks, trade
names and trade secrets or challenging or questioning the validity or
effectiveness of any such patents, trademarks, trade names or trade
secrets; to the best knowledge of the Company, the use, in connection with
the business and operations of the Company, the Subsidiaries and the
Partnerships, of such patents, trademarks and trade names does not
infringe on the rights of any person.
(j) The Company's authorized capitalization is as set forth in
the Prospectus; the capital stock of the Company conforms in all material
respects to the description thereof contained in the Prospectus; the
outstanding shares of common stock, par value $.10 per share, of the
Company (the "Common Stock"), Series A Preferred Stock, par value $.01 per
share, of the Company (the "Series A Preferred Stock"), Series B Preferred
Stock, par value $.01 per share, of the Company (the "Series B Preferred
Stock"), Adjustable Rate Cumulative Preferred Stock, Series C, stated
value $25.00 per share, of the Company (the "Series C Preferred Stock"),
9.50% Cumulative Preferred Stock, Series D, stated value $25.00 per share
(the "Series D Preferred Stock") and 8.25% Convertible Preferred Stock,
stated value $25.00 per share, of the Company (the "Convertible Preferred
Stock") have each been duly and validly authorized and issued and are
fully paid and nonassessable; the Shares have been duly and validly
authorized and, when issued and delivered pursuant to this Agreement, will
be fully paid and nonassessable; the Shares have been duly authorized for
listing, subject to official notice of issuance on the New York Stock
Exchange; prior to the Closing Date, the form of certificate for the
Shares will be in valid and sufficient form in compliance with New York
Stock Exchange requirements; and the holders of outstanding shares of
capital stock of the Company are not entitled to preemptive or other
rights to subscribe for the Shares.
(k) There is no pending or, to the best knowledge of the
Company, after due inquiry, threatened, action, suit, proceeding or
investigation before any court, governmental agency, authority or body or
arbitrator involving the Company, any of the Subsidiaries or any of the
Partnerships of a character required to be disclosed in the Registration
Statements or Prospectus which is not adequately disclosed in the
Prospectus, and there is no franchise, contract or other document of a
character required to be described in the Registration Statements or
Prospectus, or to be filed as an exhibit, which is not described or filed
as required.
(l) The Company has full corporate power and authority to enter
into and perform its obligations under this Agreement and to issue, sell
and deliver the Shares; and this Agreement has been duly authorized,
executed and delivered by the Company.
(m) No consent, approval, authorization or order of any court
or governmental agency, authority or body is required (and has not been
received) for the execution by the Company of this Agreement, the
performance by the Company of its obligations hereunder or the
consummation by the Company of the transactions contemplated herein,
except such as are required under the state securities or the Blue Sky
laws of any jurisdiction in connection with the purchase and distribution
of the Shares by the Underwriters. Neither the Company nor any of its
affiliates is presently doing any business with the government of Cuba or
with any person or affiliate located in Cuba.
(n) Neither the Company nor any of the Subsidiaries is in
violation of, in conflict with, in breach of or in default under (and none
of them know of an event which with the giving of notice or the lapse of
time or both would be reasonably likely to constitute a default under) its
charter or bylaws, and none of the Partnerships is in violation of its
respective partnership agreement (and none of them know of an event which
with the giving of notice or the lapse of time or both would be reasonably
likely to constitute a violation), and neither the Company, any Subsidiary
nor any Partnership is in default in the performance of any obligation,
agreement or condition contained in any loan, note or other evidence of
indebtedness or in any indenture, mortgage, deed of trust or any other
material agreement by which it or they or its or their properties are
bound, except for such defaults as could not, individually or in the
aggregate, have a Material Adverse Effect on the Company, such Subsidiary
or such Partnership, as the case may be.
(o) Neither the Company, any of the Subsidiaries nor any of
the Partnerships has violated any environmental, safety or similar law or
regulation applicable to its business relating to the protection of human
health and safety, the environment or hazardous or toxic substances or
wastes, pollutants or contaminants, nor has the Company, any of the
Subsidiaries nor any of the Partnerships violated any Federal, state or
local law relating to discrimination in the hiring, promotion or pay of
employees nor any applicable wage or hour laws, nor has the Company or any
of the Partnerships engaged in any unfair labor practice, which in each
case could reasonably be expected, individually or in the aggregate, to
have a Material Adverse Effect on the Company, such Subsidiary or such
Partnership, as the case may be.
(p) Neither the issue and sale of the Shares, nor the
consummation of any of the other transactions herein contemplated nor the
fulfillment of the terms hereof will conflict with, result in a breach or
violation of, or constitute a default under any law or the charter or
bylaws of the Company or any of the Subsidiaries or the terms of any
indenture or other agreement or instrument to which the Company, any of
the Subsidiaries or any of the Partnerships is a party or is bound or any
judgment, order or decree applicable to the Company, any of the
Subsidiaries or any of the Partnerships of any court, regulatory body,
administrative agency, governmental body or arbitrator having jurisdiction
over the Company, any of the Subsidiaries or any of the Partnerships.
(q) The Company has fulfilled its obligations, if any, under
the minimum funding standards of Section 302 of the United States Employee
Retirement Income Security Act of 1974 ("ERISA") and the regulations and
published interpretations thereunder with respect to each "pension plan"
(as defined in ERISA and such regulations and published interpretations)
in which employees of the Company are eligible to participate and each
such plan is in compliance in all material respects with the presently
applicable provisions of ERISA and such regulations and published
interpretations (except for such failure to so comply that would not have,
singularly or in the aggregate with all other such failures to comply, a
Material Adverse Effect), and has not incurred any unpaid liability to the
Pension Benefit Guaranty Corporation (other than for the payment of
premiums in the ordinary course) or to any such plan under Title IV of
ERISA.
(r) Other than as described in the Prospectus, there are no
outstanding warrants or options to purchase any shares of capital stock of
the Company and there are no restrictions upon the voting or transfer of,
or the declaration or payment of any dividend or distribution on, any
shares of capital stock of the Company pursuant to the articles of
incorporation or bylaws of the Company, any agreement or other instrument
to which the Company is a party or by which the Company is bound, or any
order, law, rule, regulation or determination of any court, governmental
agency or body (including, without limitation, any banking or insurance
regulatory agency or body), or arbitrator having jurisdiction over the
Company. No holders of securities of the Company have rights to the
registration of such securities under either of the Registration
Statements.
(s) The Company is qualified, has been qualified since January
1, 1981, has been operating, since the beginning of the current fiscal
year, in a manner that would continue to permit it to be qualified, and
intends to operate so as to continue to be qualified, (i) as a REIT under
Section 856 et seq. of the Internal Revenue Code of 1986, as amended (the
"Code"), and (ii) to be taxed on its "real estate investment trust income"
pursuant to Section 857 of the Code.
(t) No statement, representation, warranty or covenant made by
the Company in this Agreement or made in any certificate or document
required by this Agreement to be delivered to the Representatives is, or
will be, when made, inaccurate, untrue or incorrect in any material
respect.
(u) Neither the Company nor any of its officers, directors, or
controlling persons has taken, directly or indirectly, any action
intended, or which might reasonably be expected, to cause or result, under
the Act or otherwise, in, or which has constituted, stabilization or
manipulation of the price of any security of the Company to facilitate the
sale or resale of the Shares in violation of the Act.
(v) To the best of the Company's knowledge, the firm of
accountants that have certified or shall certify the applicable
consolidated financial statements and supporting schedules of the Company
filed or to be filed with the Commission as part of (or incorporated by
reference in) the Registration Statements and the Prospectus are
independent public accountants with respect to the Company, as required by
the Act. The consolidated financial statements, together with related
schedules and notes, incorporated by reference in the Prospectus and the
Registration Statements comply as to form in all material respects with
the requirements of the Act. Such financial statements fairly present the
consolidated financial position of the Company, the Subsidiaries and the
Partnerships at the respective dates indicated and the results of their
operations and their cash flows for the respective periods indicated, in
accordance with generally accepted accounting principles, except as
otherwise expressly stated therein, as consistently applied throughout
such periods. The other financial and statistical information and data
included in the Prospectus and in the Registration Statements are, in all
material respects, accurately presented and prepared on a basis consistent
with applicable financial statements and the books and records of the
Company, the Subsidiaries and the Partnerships or, with respect to
information and data relating to persons other than the Company, the
Subsidiaries and the Partnerships, other information available to the
Company.
(w) The terms which follow, when used in this Agreement, shall
have the meanings indicated. The term "the Effective Date" shall mean
each date that either of the Registration Statements and any post-
effective amendment or amendments thereto became or become effective.
"Execution Time" shall mean the date and time that this Agreement is
executed and delivered by the parties hereto. "Preliminary Prospectus"
shall mean any preliminary prospectus supplement referred to in paragraph
(a) above. "Prospectus" shall mean the prospectus and Prospectus
Supplement relating to the Shares that is first filed pursuant to Rule
424(b) after the Execution Time. "Registration Statements" shall mean the
registration statements referred to in paragraph (a) above, including
exhibits and financial statements, as amended at the Execution Time and,
in the event any post-effective amendment thereto becomes effective prior
to the Closing Date, shall also mean such registration statements as so
amended. "Rule 424" refers to such rule under the Act. Any reference
herein to the Registration Statements, a Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 which
were filed under the Exchange Act on or before the Effective Date of the
applicable Registration Statement or the issue date of such Preliminary
Prospectus or the Prospectus, as the case may be (collectively, the
"Incorporated Documents"); and any reference herein to the terms "amend,"
"amendment" or "supplement" with respect to the Registration Statements,
any Preliminary Prospectus or the Prospectus shall be deemed to refer to
and include the filing of any document under the Exchange Act after the
Effective Date of the applicable Registration Statement, or the issue date
of any Preliminary Prospectus or the Prospectus, as the case may be,
deemed to be incorporated therein by reference.
4. Agreements of the Company. The Company agrees with the
Underwriters as follows:
(a) The Company will not, either prior to the Effective Date or
thereafter during such period as the Prospectus is required by law to be
delivered in connection with sales of the Shares by any Underwriter or any
dealer, file any amendment to the Registration Statements or make any
amendment or supplement to the Prospectus, of which the Representatives
shall not previously have been provided a copy or to which, after the
Representatives shall have received a copy of such amendment or
supplement, as the case may be, proposed to be filed, the Representatives
shall reasonably object.
(b) The Company will use its best efforts to cause any post-
effective amendment to either of the Registration Statements to become
effective, and will notify the Representatives promptly, and will confirm
such advice in writing, (1) when any post-effective amendment to either of
the Registration Statements becomes effective, (2) of any request by the
Commission for amendments or supplements to either of the Registration
Statements or the Prospectus or for additional information, (3) of the
issuance by the Commission of any stop order suspending the effectiveness
of either of the Registration Statements or the initiation of any
proceedings for that purpose or the threat thereof, (4) of the happening
of any event during the period mentioned in the second sentence of Section
4(e) that in the judgment of the Company makes any statement made in
either of the Registration Statements or the Prospectus untrue or that
requires the making of any changes in either of the Registration
Statements or the Prospectus in order to make the statements therein, in
light of the circumstances in which they are made, not misleading, and (5)
of receipt by the Company or any representative or attorney of the Company
of any other communication from the Commission relating to the Company,
either of the Registration Statements, any preliminary prospectus or the
Prospectus. If at any time the Commission shall issue any order
suspending the effectiveness of either of the Registration Statements, the
Company will make every reasonable effort to obtain the withdrawal of such
order at the earliest possible moment.
(c) The Company will furnish to the Representatives, without
charge, four signed copies of each of the Registration Statements and of
any post-effective amendment thereto, including financial statements and
schedules, and all exhibits thereto (including any document filed under
the Exchange Act and deemed to be incorporated by reference into the
Prospectus) and, upon request, will furnish to the Representatives,
without charge, for transmittal to each of the other Underwriters, copies
of each of the Registration Statements and any post-effective amendment
thereof, including financial statements and schedules but without
exhibits.
(d) The Company will comply with all the provisions of any
undertakings contained in the Registration Statements.
(e) The Company will deliver to each of the Underwriters,
without charge, as many copies of the Prospectus or any amendment or
supplement thereto as the Representatives may reasonably request. The
Company consents to the use of the Prospectus or any amendment or
supplement thereto by the several Underwriters and by all dealers to whom
the Shares may be sold, both in connection with the offering or sale of
the Shares and for any period of time thereafter during which the
Prospectus is required by law to be delivered in connection therewith. If
during such period of time any event shall occur which in the judgment of
the Company or counsel to the Underwriters should be set forth in the
Prospectus in order to make any statement therein, in the light of the
circumstances under which it was made, not misleading, or if it is
necessary to supplement or amend the Prospectus to comply with law,
subject to the provisions of Section 4(a) hereof, the Company will
forthwith prepare and duly file with the Commission an appropriate
supplement or amendment thereto, and will deliver to the Underwriters,
without charge, such number of copies thereof as the Representatives may
reasonably request. The Company shall not file any document under the
Exchange Act before the termination of the offering of the Shares by the
Underwriters if such document would be deemed to be incorporated by
reference into the Prospectus which is not approved by the Representatives
after reasonable notice thereof.
(f) Prior to any public offering of the Shares by the
Underwriters, the Company will cooperate with the Representatives and
counsel to the Underwriters in connection with the registration or
qualification of the Shares for offer and sale under the securities or
Blue Sky laws of such jurisdictions as the Representatives may reasonably
request; provided, that in no event shall the Company be obligated to
qualify to do business in any jurisdiction where it is not now so
qualified or to take any action which would subject it to general service
of process in any jurisdiction where it is not now so subject. The
Company will inform the Florida Department of Banking and Finance if, at
any time prior to the completion of the distribution of the Shares by the
Underwriters, it commences engaging in business with the government of
Cuba or with any person or affiliate located in Cuba. Such information
will be provided within 90 days after the commencement thereof or after a
change occurs with respect to previously reported information.
(g) During the period of five years commencing on the Effective
Date, the Company will furnish to each of the Representatives and each
other Underwriter who may so request copies of such financial statements
and other periodic and special reports as the Company may from time to
time distribute generally to the holders of any class of its capital
stock, and will furnish to each of the Representatives and each other
Underwriter who may so request a copy of each annual or other report it
shall be required to file with the Commission.
(h) The Company will make generally available to holders of its
securities as soon as may be practicable but in no event later than the
last day of the fifteenth full calendar month following the calendar
quarter in which the Effective Date falls, an earnings statement (which
need not be audited but shall be in reasonable detail), with respect to
the Company, the Subsidiaries and the Partnerships, for a period of 12
months ended commencing after the Effective Date of the Second
Registration Statement, and satisfying the provisions of Section 11(a) of
the Act (including Rule 158 thereunder).
(i) Whether or not the transactions contemplated by this
Agreement are consummated or this Agreement is terminated, the Company
will pay, or reimburse if paid by the Representatives, all costs and
expenses incident to the performance of the obligations of the Company
under this Agreement, including but not limited to costs and expenses of
or relating to (1) the preparation, printing and filing of the
Registration Statements and exhibits to them, each Preliminary Prospectus,
the Prospectus and any amendment or supplement to the Registration
Statements or the Prospectus, (2) the preparation and delivery of
certificates representing the Shares, (3) the printing of this Agreement
and any Dealer Agreements, (4) furnishing (including costs of shipping and
mailing) such copies of the Registration Statements, the Prospectus and
any Preliminary Prospectus, and all amendments and supplements thereto, as
may be requested for use in connection with the offering and sale of the
Shares by the Underwriters or by dealers to whom Shares may be sold, (5)
the listing of the Shares on the New York Stock Exchange, (6) any filings
required to be made by the Representatives with the NASD, and the fees,
disbursements and other charges of counsel for the Underwriters in
connection therewith, (7) the registration or qualification of the Shares
for offer and sale under the securities or Blue Sky laws of such
jurisdictions designated pursuant to Section 4(f), including the fees,
disbursements and other charges of counsel to the Underwriters in
connection therewith, and the preparation and printing of preliminary,
supplemental and final Blue Sky memoranda, (8) counsel to the Company and
(9) the transfer agent for the Shares.
(j) If this Agreement shall be terminated by the Underwriters
pursuant to any of the provisions hereof (otherwise than pursuant to
Section 7) or if for any reason the Company shall be unable to perform its
obligations hereunder, the Company will reimburse the Underwriters for all
out-of-pocket expenses (including the fees, disbursements and other
charges of counsel to the Underwriters) reasonably incurred by them in
connection herewith.
(k) The Company will not at any time, directly or indirectly,
take any action intended, or which might reasonably be expected, to cause
or result in, or which will constitute, stabilization of the price of the
Shares to facilitate the sale or resale of any of the Shares in violation
of the Act.
(l) The Company will apply the net proceeds from the offering
and sale of the Shares to be sold by the Company in the manner set forth
in the Prospectus under "Use of Proceeds."
(m) The Company will use its best efforts to cause the Shares
to be listed and to remain listed on the New York Stock Exchange.
(n) During the period of nine months from the Closing Date, the
Company will file such amendments to the Registration Statements or
amendments or supplements to the Prospectus as the Representatives may
reasonably request in connection with the distribution and sale of the
Shares, and will furnish to the Underwriters, at the Company's expense, as
many copies of the Registration Statements or the Prospectus, as so
amended or supplemented, as the Representatives may reasonably request.
5. Conditions of the Obligations of the Underwriters. In addition
to the execution and delivery of the Price Determination Agreement, the
obligations of each Underwriter hereunder are subject to the following
conditions:
(a) If, at the time this Agreement is executed and delivered,
it is necessary for a post-effective amendment to either of the
Registration Statements to be declared effective before the offering of
the Shares may commence, 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 the Representatives, and all filings, if any, required by Rule 424 and
Rule 430A under the Act shall have been timely made.
(b) (i) No stop order suspending the effectiveness of either
of the Registration Statements shall have been issued and no proceeding
for that purpose shall have been instituted or, to the knowledge of the
Company or any Underwriter, threatened by the Commission, (ii) no order
suspending the effectiveness of either of the Registration Statements or
the qualification or registration of the Shares under the securities or
Blue Sky laws of any jurisdiction shall be in effect and no proceeding for
such purpose shall be pending before or threatened or contemplated by the
Commission or the authorities of any such jurisdiction, (iii) any request
of the Commission for additional information (to be included in the
Registration Statements or the Prospectus or otherwise) or any such
authorities shall have been complied with to the satisfaction of the
Representatives and (iv) after the date hereof no amendment or supplement
to either of the Registration Statements or the Prospectus shall have been
filed unless a copy thereof was first submitted to the Representatives and
the Representatives did not object thereto in good faith, and the
Representatives shall have received certificates, dated the Closing Date
and the Option Closing Date and signed by the President of the Company and
the Chief Financial Officer of the Company (who may, as to proceedings
threatened, rely upon the best of their information and belief), to the
effect of clauses (i), (ii) and (iii).
(c) Since the respective dates as of which information is given
in the Registration Statements and the Prospectus, (i) there shall not
have been a material adverse change in the general affairs, business,
business prospects, properties, management, condition (financial or
otherwise) or results of operations of the Company, the Subsidiaries or
the Partnerships, whether or not arising from transactions in the ordinary
course of business, in each case other than as set forth in or
contemplated by the Registration Statements and the Prospectus and (ii)
neither the Company, the Subsidiaries nor any of the Partnerships shall
have sustained any material loss or interference with its business or
properties from fire, explosion, flood or other casualty, whether or not
covered by insurance, or from any labor dispute or any court or
legislative or other governmental action, order or decree, which is not
set forth in the Registration Statements and the Prospectus, if in the
judgment of the Representatives any such development makes it
impracticable or inadvisable to consummate the sale and delivery of the
Shares by the Underwriters at the initial public offering price.
(d) Since the respective dates as of which information is given
in the Registration Statements and the Prospectus, there shall have been
no litigation or other proceeding instituted against the Company, any of
the Subsidiaries or any Partnership or any of their respective officers,
directors or general partners in their capacities as such, before or by
any Federal, state or local court, commission, regulatory body,
administrative agency or other governmental body, domestic or foreign, in
which litigation or proceeding an unfavorable ruling, decision or finding
would materially and adversely affect the business, properties, business
prospects, condition (financial or otherwise) or results of operations of
the Company, the Subsidiaries and the Partnerships taken as a whole.
(e) Each of the representations and warranties of the Company
contained herein shall be true and correct at the Closing Date and, with
respect to the Option Shares, at the Option Closing Date, as if made at
the Closing Date and, with respect to the Option Shares, at the Option
Closing Date, and all covenants and agreements herein contained to be
performed on the part of the Company and all conditions herein contained
to be fulfilled or complied with by the Company at or prior to the Closing
Date and, with respect to the Option Shares, at or prior to the Option
Closing Date, shall have been duly performed, fulfilled or complied with.
(f) The Underwriters shall have received an opinion, dated the
Closing Date and, with respect to the Option Shares, the Option Closing
Date, and satisfactory in form and substance to counsel for the
Underwriters, from David Goldberg, counsel for the Company, to the effect
set forth in Exhibit B, and from Hogan & Hartson, counsel for the Company,
to the effect set forth in Exhibit C.
(g) The Underwriters shall have received an opinion, dated the
Closing Date and, with respect to the Option Shares, the Option Closing
Date, from Skadden, Arps, Slate, Meagher & Flom, counsel to the
Underwriters, with respect to the Registration Statements, the Prospectus
and this Agreement, which opinion shall be satisfactory in all respects to
the Representatives, and such counsel shall have been provided by the
Company with such documents and information as they may reasonably request
to enable them to pass on such matters.
(h) Concurrently with the execution and delivery of this
Agreement, Ernst & Young shall have furnished to the Underwriters a
letter, dated the date of its delivery, addressed to the Representatives
and in form and substance satisfactory to the Representatives, confirming
that they are independent accountants with respect to the Company as
required by the Act and the rules and regulations thereunder and with
respect to the financial and other statistical and numerical information
contained in the Registration Statements or incorporated by reference
therein. At the Closing Date and, as to the Option Shares, the Option
Closing Date, Ernst & Young shall have furnished to the Representatives a
letter, dated the date of its delivery, which shall confirm, on the basis
of a review in accordance with the procedures set forth in the letter from
the Ernst & Young, that nothing has come to their attention during the
period from the date of the letter referred to in the prior sentence to a
date (specified in the letter) not more than five days prior to the
Closing Date and the Option Closing Date which would require any change in
their letter dated the date hereof if it were required to be dated and
delivered at the Closing Date and the Option Closing Date.
(i) Concurrently with the execution and delivery of this
Agreement and at the Closing Date and, as to the Option Shares, the Option
Closing Date, there shall be furnished to the Representatives an accurate
certificate, dated the date of its delivery, signed by each of the
President and the Chief Financial Officer of the Company, in form and
substance satisfactory to the Representatives, to the effect that:
(i) Each signer of such certificate has carefully examined
the Registration Statements and the Prospectus (including any
documents filed under the Exchange Act and deemed to be incorporated
by reference into the Prospectus) and (A) as of the date of such
certificate, such documents are true and correct in all material
respects and do not omit to state a material fact required to be
stated therein or necessary in order to make the statements therein
not untrue or misleading and (B) in the case of the certificate
delivered at the Closing Date and the Option Closing Date, since the
Effective Date of the Second Registration Statement, no event has
occurred as a result of which it is necessary to amend or supplement
the Prospectus in order to make the statements therein not untrue or
misleading in any material respect and there has been no document
required to be filed under the Exchange Act and the rules and
regulations thereunder that upon such filing would be deemed to be
incorporated by reference into the Prospectus that has not been so
filed.
(ii) Each of the representations and warranties of the
Company contained in this Agreement were, when originally made, and
are, at the time such certificate is delivered, true and correct.
(iii) Each of the covenants required herein to be
performed by the Company on or prior to the date of such certificate
has been duly, timely and fully performed and each condition herein
required to be complied with by the Company on or prior to the
delivery of such certificate has been duly, timely and fully complied
with.
(j) The Shares shall be qualified for sale in such states as
the Representatives may reasonably request, each such qualification shall
be in effect and not subject to any stop order or other proceeding on the
Closing Date and the Option Closing Date.
(k) Prior to the Closing Date, the Shares shall have been duly
authorized for listing by the New York Stock Exchange upon official notice
of issuance.
(l) The Company shall have furnished to the Representatives
such certificates, in addition to those specifically mentioned herein, as
the Representatives may have reasonably requested as to the accuracy and
completeness at the Closing Date and the Option Closing Date of any
statement in the Registration Statements or the Prospectus or any
documents filed under the Exchange Act and deemed to be incorporated by
reference into the Prospectus, as to the accuracy at the Closing Date and
the Option Closing Date of the representations and warranties of the
Company herein, as to the performance by the Company of its obligations
hereunder, or as to the fulfillment of the conditions concurrent and
precedent to the obligations hereunder of the Underwriters.
6. Indemnification.
(a) The Company will indemnify and hold harmless each of the
Underwriters, the directors, officers, employees and agents of each of the
Underwriters and each person, if any, who controls any of the Underwriters
within the meaning of Section 15 of the Act or Section 20 of the Exchange
Act from and against any and all losses, claims, liabilities, expenses and
damages (including any and all investigative, legal and other expenses
reasonably incurred in connection with, and any amount paid in settlement
of, any action, suit or proceeding or any claim asserted), to which they,
or any of them, may become subject under the Act, the Exchange Act or
other Federal or state statutory law or regulation, at common law or
otherwise, insofar as such losses, claims, liabilities, expenses or
damages arise out of or are based on any untrue statement or alleged
untrue statement of a material fact contained in any Preliminary
Prospectus, either of the Registration Statements or the Prospectus or any
amendment or supplement to either of the Registration Statements or the
Prospectus or in any documents filed under the Exchange Act and deemed to
be incorporated by reference into the Prospectus, or the omission or
alleged omission to state in such document a material fact required to be
stated in it or necessary to make the statements in it not misleading;
provided that the Company will not be liable to the extent that such loss,
claim, liability, expense or damage arises from the sale of the Shares in
the public offering to any person by any of the Underwriters and is based
on an untrue statement or omission or alleged untrue statement or omission
made in reliance on and in conformity with information relating to such
Underwriter furnished in writing to the Company by the Representatives on
behalf of such Underwriter expressly for inclusion in the Registration
Statements, any Preliminary Prospectus or the Prospectus; and provided,
further, that the Company will not be liable to any Underwriter, the
directors, officers, employees or agents of such Underwriter or any person
controlling such Underwriter with respect to any loss, claim, liability,
expense, charge or damage arising out of or based on any untrue statement
or alleged untrue statement or omission or alleged omission to state a
material fact in any Preliminary Prospectus which is completely corrected
in the Prospectus if the person asserting any such loss, claim, liability,
charge or damage purchased Shares from such Underwriter but was not sent
or given a copy of the Prospectus at or prior to the written confirmation
of the sale of such Shares to such person. This indemnity agreement will
be in addition to any liability that the Company might otherwise have.
(b) Each of the Underwriters will, severally and not jointly,
indemnify and hold harmless the Company, each person, if any, who controls
the Company within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act, each director of the Company and each officer of the
Company who signs either of the Registration Statements to the same extent
as the foregoing indemnity from the Company to the Underwriters, but only
insofar as losses, claims, liabilities, expenses or damages arise out of
or are based on any untrue statement or omission or alleged untrue
statement or omission made in reliance on and in conformity with
information relating to the Underwriters furnished in writing to the
Company by the Representatives on behalf of such Underwriter expressly for
use in either of the Registration Statements, any Preliminary Prospectus
or the Prospectus. The Company acknowledges that the statements set forth
under the heading "Underwriting" in any Preliminary Prospectus and the
Prospectus constitute the only information furnished in writing by or on
behalf of the Underwriters for inclusion in the registration statements
for the Shares as originally filed or in any amendment thereof, any
Preliminary Prospectus or the Prospectus. This indemnity will be in
addition to any liability that the Underwriters might otherwise have.
(c) Any party that proposes to assert the right to be
indemnified under this Section 6 will, promptly after receipt of notice of
commencement of any action against such party in respect of which a claim
is to be made against an indemnifying party or parties under this Section
6, notify each such indemnifying party of the commencement of such action,
enclosing a copy of all papers served, but the omission so to notify such
indemnifying party will not relieve it from any liability that it may have
to any indemnified party under the foregoing provisions of this Section 6
unless, and only to the extent that, such omission results in the
forfeiture of substantive rights or defenses by the indemnifying party.
If any such action is brought against any indemnified party and it
notifies the indemnifying party of its commencement, the indemnifying
party will be entitled to participate in and, to the extent that it elects
by delivering written notice to the indemnified party promptly after
receiving notice of the commencement of the action from the indemnified
party, jointly with any other indemnifying party similarly notified, to
assume the defense of the action, with counsel satisfactory to the
indemnified party, and after notice from the indemnifying party to the
indemnified party of its election to assume the defense, the indemnifying
party will not be liable to the indemnified party for any legal or other
expenses except as provided below and except for the reasonable costs of
investigation subsequently incurred by the indemnified party in connection
with the defense. The indemnified party will have the right to employ its
own counsel in any such action, but the fees, expenses and other charges
of such counsel will be at the expense of such indemnified party unless
(1) the employment of counsel by the indemnified party has been authorized
in writing by the indemnifying party, (2) the indemnified party has
reasonably concluded (based on advice of counsel) that there may be legal
defenses available to it or other indemnified parties that are different
from or in addition to those available to the indemnifying party, (3) a
conflict or potential conflict exists (based on advice of counsel to the
indemnified party) between the indemnified party and the indemnifying
party (in which case the indemnifying party will not have the right to
direct the defense of such action on behalf of the indemnified party) or
(4) the indemnifying party has not in fact employed counsel to assume the
defense of such action within a reasonable time after receiving notice of
the commencement of the action, in each of which cases the reasonable
fees, disbursements and other charges of counsel will be at the expense of
the indemnifying party or parties. It is understood that the indemnifying
party or parties shall not, in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the reasonable fees,
disbursements and other charges of more than one separate firm admitted to
practice in such jurisdiction at any one time for all such indemnified
party or parties. All such fees, disbursements and other charges will be
reimbursed by the indemnifying party promptly as they are incurred. An
indemnifying party will not be liable for any settlement of any action or
claim effected without its written consent (which consent will not be
unreasonably withheld).
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in the foregoing
paragraphs of this Section 6 is applicable in accordance with its terms
but for any reason is held to be unavailable from the Company or the
Underwriters, the Company and the Underwriters will contribute to the
total losses, claims, liabilities, expenses and damages (including any
investigative, legal and other expenses reasonably incurred in connection
with, and any amount paid in settlement of, any action, suit or proceeding
or any claim asserted, but after deducting any contribution received by
the Company from persons other than the Underwriters, such as persons who
control the Company within the meaning of the Act, officers of the Company
who signed either of the Registration Statements and directors of the
Company, who also may be liable for contribution) to which the Company and
the Underwriters may be subject in such proportion as shall be appropriate
to reflect the relative benefits received by the Company on the one hand
and the Underwriters on the other. The relative benefits received by the
Company on the one hand and the Underwriters on the other shall be deemed
to be in the same proportion as the total net proceeds from the offering
of the Shares (before deducting expenses) received by the Company bear to
the total underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the cover page of
the Prospectus. If, but only if, the allocation provided by the foregoing
sentence is not permitted by applicable law, the allocation of
contribution shall be made in such proportion as is appropriate to reflect
not only the relative benefits referred to in the foregoing sentence but
also the relative fault of the Company, on the one hand, and the
Underwriters, on the other, with respect to the statements or omissions
which resulted in such loss, claim, liability, expense or damage, or
action in respect thereof, as well as any other relevant equitable
considerations with respect to such offering. Such relative fault shall
be determined by reference to whether the untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a
material fact relates to information supplied by the Company or the
Representatives on behalf of the Underwriters, the intent of the parties
and their relative knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company and the
Underwriters agree that it would not be just and equitable if
contributions pursuant to this Section 6(d) were to be determined by pro
rata allocation (even if the Underwriters were treated as one entity for
this purpose) or by any other method of allocation which does not take
into account the equitable considerations referred to herein. The amount
paid or payable by an indemnified party as a result of the loss, claim,
liability, expense or damage, or action in respect thereof, referred to
above in this Section 6(d) shall be deemed to include, for purpose of this
Section 6(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 6(d), no
Underwriter shall be required to contribute any amount in excess of the
underwriting discounts received by it, and no person found guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Act) will be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation. The Underwriters' obligations to
contribute as provided in this Section 6(d) are several in proportion to
their respective underwriting obligations and not joint. For purposes of
this Section 6(d), any person who controls a party to this Agreement
within the meaning of the Act will have the same rights to contribution as
that party, and each officer of the Company who signed either of the
Registration Statements will have the same rights to contribution as the
Company, subject in each case to the provisions hereof. Any party
entitled to contribution, promptly after receipt of notice of commencement
of any action against such party in respect of which a claim for
contribution may be made under this Section 6(d), will notify any such
party or parties from whom contribution may be sought, but the omission so
to notify will not relieve the party or parties from whom contribution may
be sought from any other obligation it or they may have under this Section
6(d). No party will be liable for contribution with respect to any action
or claim settled without its written consent (which consent will not be
unreasonably withheld).
(e) The indemnity and contribution agreements contained in this
Section 6 and the representations and warranties of the Company contained
in this Agreement shall remain operative and in full force and effect
regardless of (i) any investigation made by or on behalf of any of the
Underwriters, (ii) acceptance of any of the Shares and payment therefor or
(iii) any termination of this Agreement.
7. Termination. The obligations of the Underwriters under this
Agreement may be terminated at any time prior to the Closing Date (or,
with respect to the Option Shares, on or prior to the Option Closing
Date), by notice to the Company from the Representatives without liability
on the part of the Underwriters to the Company, if, prior to delivery and
payment for the Shares (or the Option Shares, as the case may be), in the
sole judgment of the Representatives, (i) trading in any of the equity
securities of the Company shall have been suspended by the Commission, by
an exchange that lists the Shares or by the National Association of
Securities Dealers Automated Quotation Market System, (ii) trading in
securities generally on the New York Stock Exchange shall have been
suspended or limited or minimum or maximum prices shall have been
generally established on such exchange, or additional material
governmental restrictions, not in force on the date of this Agreement,
shall have been imposed upon trading in securities generally by such
exchange or by order of the Commission or any court or other governmental
authority, (iii) a general banking moratorium shall have been declared by
either Federal or New York State authorities or (iv) any material adverse
change in the financial or securities markets in the United States or in
political, financial or economic conditions in the United States or any
outbreak or material escalation of hostilities or declaration by the
United States of a national emergency or war or other calamity or crisis
shall have occurred, the effect of any of which is such as to make it, in
the sole judgment of the Representatives, impracticable or inadvisable to
market the Shares on the terms and in the manner contemplated by the
Prospectus.
8. Substitution of Underwriters. If any one or more of the
Underwriters shall fail or refuse to purchase any of the Firm Shares which
it or they have agreed to purchase hereunder, and the aggregate number of
Firm Shares which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase is not more than one-tenth of the aggregate
number of Firm Shares, the other Underwriters shall be obligated,
severally, to purchase the Firm Shares which such defaulting Underwriter
or Underwriters agreed but failed or refused to purchase, in the
proportions which the number of Firm Shares which they have respectively
agreed to purchase pursuant to Section 1 bears to the aggregate number of
Firm Shares which all such non-defaulting Underwriters have so agreed to
purchase, or in such other proportions as the Representatives may specify;
provided that in no event shall the maximum number of Firm Shares which
any Underwriter has become obligated to purchase pursuant to Section 1 be
increased pursuant to this Section 8 by more than one-ninth of the number
of Firm Shares agreed to be purchased by such Underwriter without the
prior written consent of such Underwriter. If any Underwriter or
Underwriters shall fail or refuse to purchase any Firm Shares and the
aggregate number of Firm Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase exceeds one-tenth of
the aggregate number of the Firm Shares and arrangements satisfactory to
the Representatives and the Company for the purchase of such Firm Shares
are not made within 48 hours after such default, this Agreement will
terminate without liability on the part of any non-defaulting Underwriter
or the Company for the purchase or sale of any Shares under this
Agreement. In any such case either the Representatives or the Company
shall have the right to postpone the Closing Date, but in no event for
longer than seven days, in order that the required changes, if any, in the
Registration Statements and in the Prospectus or in any other documents or
arrangements may be effected. Any action taken pursuant to this Section 8
shall not relieve any defaulting Underwriter from liability in respect of
any default of such Underwriter under this Agreement.
9. Miscellaneous. Notice given pursuant to any of the provisions
of this Agreement shall be in writing and, unless otherwise specified,
shall be mailed or delivered (a) if to the Company, at the office of the
Company, Storage Equities, Inc., 600 North Brand Boulevard, Glendale,
California 91203, Attention: Legal Department, or (b) if to the
Underwriters, at the offices of PaineWebber Incorporated, 1285 Avenue of
the Americas, New York, New York 10019, Attention: Corporate Finance
Department. Any such notice shall be effective only upon receipt. Any
notice under Section 7 may be made by telex or telephone, but if so made
shall be subsequently confirmed in writing.
This Agreement has been and is made solely for the benefit of the
Underwriters and the Company and of the controlling persons, directors and
officers referred to in Section 6, and their respective successors and
assigns, and no other person shall acquire or have any right under or by
virtue of this Agreement. The term "successors and assigns" as used in
this Agreement shall not include a purchaser, as such purchaser, of Shares
from the Underwriters.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
This Agreement may be signed in two or more counterparts with the
same effect as if the signatures thereto and hereto were upon the same
instrument.
In case any provision in this Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
The Company and the Underwriters each hereby irrevocably waive
any right they may have to a trial by jury in respect of any claim based
upon or arising out of this Agreement or the transactions contemplated
hereby.
Please confirm that the foregoing correctly sets forth the agreement
among the Company and the Underwriters.
Very truly yours,
STORAGE EQUITIES, INC.
By:
Name:
Title:
Confirmed as of the date first
above mentioned:
PAINEWEBBER INCORPORATED
SMITH BARNEY INC.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
THE ROBINSON-HUMPHREY
COMPANY, INC.
As Representatives of the Several Underwriters
By: PAINEWEBBER INCORPORATED
By: ______________________________
Name:
Title:
Exhibit A
STORAGE EQUITIES, INC.
PRICE DETERMINATION AGREEMENT
January __, 1995
PAINEWEBBER INCORPORATED
SMITH BARNEY INC.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
THE ROBINSON-HUMPHREY COMPANY, INC.
As Representatives of the Several Underwriters
c/o PAINEWEBBER INCORPORATED
1285 Avenue of the Americas
New York, New York 10019
Dear Ladies and Gentlemen:
Reference is made to the Underwriting Agreement, dated January __,
1995 (the "Underwriting Agreement"), between Storage Equities, Inc., a
real estate investment trust and a California corporation (the "Company"),
and the several underwriters named in Schedule I thereto (the
"Underwriters") for whom PaineWebber Incorporated, Smith Barney Inc.,
Donaldson, Lufkin & Jenrette Securities Corporation and The Robinson-
Humphrey Company, Inc. are acting as representatives (the
"Representatives"). The Underwriting Agreement provides for the purchase
by the Underwriters from the Company, subject to the terms and conditions
set forth therein, of an aggregate of 2,000,000 shares (the "Firm Shares")
of the Company's ___% Cumulative Preferred Stock, Series E, stated value
$25.00 per share, with the number of Firm Shares to be purchased by each
Underwriter set forth in Schedule I hereto. This Agreement is the Price
Determination Agreement referred to in the Underwriting Agreement.
Pursuant to Section 1 of the Underwriting Agreement, the undersigned
agrees with the Representatives as follows:
1. The initial public offering price per share for the Shares shall
be $25.00, and the annual dividend rate per share shall be ___% of the
stated value thereof.
2. The purchase price per share for the Firm Shares to be paid by
the several Underwriters shall be $______ representing an amount equal to
the initial public offering price set forth above, less $____ per share.
The Company represents and warrants to each of the Underwriters that
the representations and warranties of the Company set forth in Section 3
of the Underwriting Agreement are accurate as though expressly made at and
as of the date hereof.
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
If the foregoing is in accordance with your understanding of the
agreement among the Underwriters and the Company, please sign and return
to the Company a counterpart hereof, whereupon this instrument along with
all counterparts and together with the Underwriting Agreement shall be a
binding agreement among the Underwriters and the Company in accordance
with its terms and the terms of the Underwriting Agreement.
Very truly yours,
STORAGE EQUITIES, INC.
By: ______________________________
Name:
Title:
Confirmed as of the date
first above mentioned:
PAINEWEBBER INCORPORATED
SMITH BARNEY INC.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
THE ROBINSON-HUMPHREY COMPANY, INC.
As Representatives of the Several Underwriters
By: PAINEWEBBER INCORPORATED
By: ______________________________
Name:
Title:
SCHEDULE I
STORAGE EQUITIES, INC.
Number of Firm
Underwriter Shares
PaineWebber Incorporated . . . . . . . . . . . . . . . .
Smith Barney Inc. . . . . . . . . . . . . . . . . . .
Donaldson, Lufkin & Jenrette
Securities Corporation . . . . . . . . . . . . . . . .
The Robinson-Humphrey
Company, Inc. . . . . . . . . . . . . . . . . . .
Total 2,000,000
Exhibit B
Form of Opinion of
Counsel to the Company
1. Each of the Company, the Subsidiaries and the Partnerships has
been duly organized and is validly existing (in the case of the Company
and the Subsidiaries, as a corporation) in good standing under the laws of
the jurisdiction in which it is organized, with full power and authority
to own or lease and occupy its properties and conduct its business as
described in the Prospectus, and is duly qualified to do business, and is
in good standing, in each jurisdiction which requires such qualification,
except where the failure to so qualify would not, individually or in the
aggregate, have a Material Adverse Effect.
2. All of the Company's ownership interests in the Partnerships are
owned free and clear of any perfected security interest and, to the best
of my knowledge, after due inquiry, any other security interests, claims,
liens or encumbrances. All of the outstanding shares of capital stock of
each of the Subsidiaries are owned by the Company directly, or indirectly
through another Subsidiary, and to the best of my knowledge after due
inquiry, are free and clear of any lien, adverse claim, security interest,
equity or other encumbrance.
3. The Company's authorized equity capitalization is as set forth
in the Prospectus; the capital stock of the Company conforms to the
description thereof contained in the Prospectus; the outstanding shares of
Common Stock, Series A Preferred Stock, Series B Preferred Stock, Series C
Preferred Stock, Series D Preferred Stock, Series E Preferred Stock and
the Convertible Preferred Stock have been duly and validly authorized and
issued and are fully paid and nonassessable; the Shares have been duly and
validly authorized, and, when issued and delivered to and paid for by the
Underwriters pursuant to the Agreement, will be fully paid and
nonassessable; the Shares have been duly authorized for listing, subject
to official notice of issuance, on the New York Stock Exchange; the form
of certificate for the Shares is in valid and sufficient form in
compliance with New York Stock Exchange requirements; and the holders of
outstanding shares of capital stock of the Company are not entitled to
preemptive or other rights to subscribe for the Shares.
4. To the best of my knowledge, after due inquiry, there is no
pending or threatened action, suit or proceeding before any court or
governmental agency, authority or body or arbitrator involving the
Company, the Subsidiaries or any of the Partnerships of a character
required to be disclosed in the Registration Statements which is not
adequately disclosed in the Prospectus, and there is no franchise,
contract or other document of a character required to be described in the
Registration Statements or Prospectus, or to be filed as an exhibit, which
is not described or filed as required; and, to the best of my knowledge,
after due inquiry, the statements in the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1993, under Part II, Item 7 -
"Management's Discussion and Analysis of Financial Condition and Results
of Operations - REIT Distribution Requirement" and Part III, Item 13 -
"Certain Relationships and Related Party Transactions" (other than the
financial statements and other financial and statistical information
contained therein, as to which I express no opinion) fairly summarize the
matters therein described in all material respects.
5. The Registration Statements and the Prospectus and any amendment
or supplement thereto comply as to form in all material respects with the
requirements for the use of Form S-3 and the rules and regulations
thereunder, and the Registration Statements and the Prospectus and any
amendment or supplement thereto (other than the financial statements and
other financial information contained therein, as to which I express no
opinion) comply as to form in all material respects with the requirements
of the Act and the rules and regulations thereunder and each of the
Incorporated Documents (or, if any amendment with respect to any such
document was filed, when such document was filed), complied as to form in
all material respects with the requirements of the Exchange Act and the
rules and regulations thereunder (other than the financial statements and
other financial information contained therein, as to which I express no
opinion).
6. The Company has full corporate power and authority to enter into
and perform its obligations under the Agreement and to issue, sell and
deliver the Shares; and the Agreement has been duly authorized, executed
and delivered by the Company.
7. No consent, approval, authorization or order of any court or
governmental agency, authority or body is required for the execution by
the Company of the Agreement, the performance by the Company of its
obligations thereunder or the consummation of the transactions
contemplated therein, except such as have been obtained under the Act and
such as may be required under the Blue Sky laws of any jurisdiction in
connection with the purchase and distribution of the Shares by the
Underwriters.
8. The Company, each of the Subsidiaries and each Partnership have
all requisite power and authority, and, to the best of my knowledge, after
due inquiry, all necessary material authorizations, approvals, orders,
licenses, certificates and permits of and from all regulatory or
governmental officials, bodies and tribunals, to own or lease their
respective properties and to conduct their respective businesses as now
being conducted and as described in the Prospectus; and, to the best of my
knowledge, after due inquiry, all such authorizations, approvals,
licenses, certificates and permits are in full force and effect, except
where the failure to be in full force and effect would not have a Material
Adverse Effect on the Company, such Subsidiary or such Partnership, and
the Company, each Subsidiary and each Partnership are complying with all
applicable laws, the violation of which could have a Material Adverse
Effect on the Company, such Subsidiary or such Partnership, as the case
may be.
9. The Company and each of the Subsidiaries are not in violation of
their respective articles of incorporation or bylaws, and each of the
Partnerships is not in violation of its respective partnership agreement,
and to the best of my knowledge, after due inquiry, neither the Company,
the Subsidiaries nor any Partnership is in default in the performance of
any obligation, agreement or condition contained in any loan, note or
other evidence of indebtedness or in any indenture, mortgage, deed of
trust or any other material agreement by which it or they or its or their
properties are bound, except for such defaults as could not, individually
or the aggregate, have a Material Adverse Effect on the Company, such
Subsidiary or such Partnership, as the case may be.
10. Neither the issue and sale of the Shares, nor the consummation
of any other of the transactions contemplated by the Agreement nor the
fulfillment of the terms of the Agreement will conflict with, result in a
breach or violation of, or constitute a default under any law or the
articles of incorporation or bylaws of the Company or any of the
Subsidiaries or the terms of any indenture or other agreement or
instrument known to me and to which the Company, any of the Subsidiaries
or any of the Partnerships is a party or is bound or any judgment, order
or decree known to me to be applicable to the Company, any of the
Subsidiaries or any of the Partnerships of any court, regulatory body,
administrative agency, governmental body or arbitrator having jurisdiction
over the Company, any of the Subsidiaries or any of the Partnerships.
11. No holders of securities of the Company have rights to the
registration of such securities under the Registration Statements.
12. The Registration Statements have become effective under the Act;
any required filing of the Prospectus, and any supplements thereto,
pursuant to Rule 424(b) has been made in the manner and within the time
period required by Rule 424(b); and to the best of my knowledge, no stop
order suspending the effectiveness of the Registration Statements has been
issued and no proceedings for that purpose have been instituted or
threatened.
I have participated in conferences with representatives of the
Underwriters, and with officers and other representatives of the Company
and representatives of the independent certified public accountants of the
Company, at which conferences the contents of the Registration Statements
and the Prospectus and related matters were discussed and, although I do
not pass upon and do not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statements and the Prospectus, on the basis of the foregoing (relying as
to certain factual matters on the information provided to me by the
Company and not on an independent investigation, but in the absence of
information to the contrary), no facts have come to my attention which
lead me to believe that either of the Registration Statements, as of their
effective date, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, or that the
Prospectus, as of its date and as of the date hereof, contained an untrue
statement of a material fact or omitted to state a material fact necessary
to make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided that I do not express any
comment with respect to the financial statements and other financial data
included in the Registration Statements or Prospectus.
I have relied as to matters of fact, to the extent I deemed proper,
on certificates of responsible officers of the Company and public
officials.
Exhibit C
Form of Opinion of
Tax Counsel to the Company
1. The statements in the Prospectus under the heading "Certain
Federal Income Tax Considerations" fairly summarize the federal income tax
considerations likely to be material to a holder of the Shares.
2. Based upon current law, including relevant statutes, regulations
and judicial and administrative precedent (which law is subject to change
on a retroactive basis), and subject to the limitations and qualifications
set forth in our tax opinion filed as Exhibit 8.1 to the Second
Registration Statement, the Company has operated in a manner that
qualified it as a REIT under the Code, for its taxable years ended
December 31, 1988, December 31, 1989, December 31, 1990, December 31,
1991, December 31, 1992, December 31, 1993, and December 31, 1994, and if
it has continued and shall continue to operate subsequent to December 31,
1994 in the same manner as it has prior to that date, it will continue to
so qualify. You may rely upon our tax opinion filed as Exhibit 8.1 to the
Second Registration Statement to the same extent as if it were set forth
in full herein.
We have relied as to matters of fact, to the extent we deemed proper,
on certificates of responsible officers of the Company and public
officials, and, as to matters of California law, on the opinion of David
Goldberg.
EXHIBIT 3.1
CERTIFICATE OF DETERMINATION OF PREFERENCES
OF
____% CUMULATIVE PREFERRED STOCK, SERIES E
OF
STORAGE EQUITIES, INC.
The undersigned, Harvey Lenkin and Sarah Hass, President and
Secretary, respectively, of STORAGE EQUITIES, INC., a California
corporation, do hereby certify:
FIRST: The Restated Articles of Incorporation of the
Corporation authorize the issuance of 50,000,000 shares of stock
designated "preferred shares," issuable from time to time in one or more
series, and authorize the Board of Directors to fix the number of shares
constituting any such series, and to determine or alter the dividend
rights, dividend rate, conversion rights, voting rights, right and terms
of redemption (including sinking fund provisions), the redemption price or
prices and the liquidation preference of any wholly unissued series of
such preferred shares, and the number of shares constituting any such
series.
SECOND: The Board of Directors of the corporation did duly
adopt the resolutions attached hereto as Exhibit A and incorporated herein
by reference authorizing and providing for the creation of a series of
preferred shares to be known as "___% Cumulative Preferred Stock, Series
E" consisting of 2,300,000 shares, none of the shares of such series
having been issued.
We further declare under penalty of perjury under the laws of
the State of California that the matters set forth in this certificate are
true and correct of our own knowledge.
IN WITNESS WHEREOF, the undersigned have executed this
certificate this ____ day of _______________________, 1995.
__________________________________
Harvey Lenkin
President
__________________________________
Sarah Hass
Secretary
EXHIBIT A
RESOLUTION OF THE BOARD OF DIRECTORS
OF STORAGE EQUITIES, INC.
ESTABLISHING A SERIES OF ____% CUMULATIVE
PREFERRED STOCK, SERIES E
RESOLVED, that pursuant to the authority conferred upon the
Board of Directors by Article III of the Restated Articles of
Incorporation of this Corporation, there is hereby established a series
of the authorized preferred shares of this Corporation having a par value
of $.01 per share, which series shall be designated "____% Cumulative
Preferred Stock, Series E," shall consist of 2,300,000 shares and shall
have the following rights, preferences and privileges:
(a) Dividend Rights.
(1) Dividends shall be payable in cash on the shares of this
Series when, as and if declared by the Board of Directors, out of funds
legally available therefor: (i) for the period (the "Initial Dividend
Period") from the Deemed Original Issue Date (as defined below) to but
excluding April 1, 1995, and (ii) for each quarterly dividend period
thereafter (the Initial Dividend Period and each quarterly dividend period
being hereinafter individually referred to as a "Dividend Period" and
collectively referred to as "Dividend Periods"), which quarterly Dividend
Periods shall be in four equal amounts and shall commence on January 1,
April 1, July 1 and October 1 in each year (each, a "Dividend Period
Commencement Date"), commencing on April 1, 1995, and shall end on and
include the day next preceding the next Dividend Period Commencement Date,
at a rate per annum equal to ___% of the $25.00 per share stated value
thereof (the "Dividend Rate"). Dividends on each share of this Series
shall be cumulative from the Deemed Original Issue Date of such share and
shall be payable, without interest thereon, when, as and if declared by
the Board of Directors, on March 31, June 30, September 30 and December 31
of each year, commencing on March 31, 1995 or, in the case of shares of
this Series with a Deemed Original Issue Date after March 31, 1995, the
first such dividend payment date following such Deemed Original Issue
Date; provided, that if any such day shall be a Saturday, Sunday, or a day
on which banking institutions in the State of New York or the State of
California are authorized or obligated by law to close, or a day which is
or is declared a national or a New York or California state holiday (any
of the foregoing a "Non-Business Day"), then the payment date shall be the
next succeeding day which is not a Non-Business Day. Each such dividend
shall be paid to the holders of record of shares of this Series as they
appear on the stock register of the Corporation on such record date, not
more than 45 days nor less than 15 days preceding the payment date
thereof, as shall be fixed by the Board of Directors. Dividends on
account of arrears for any past Dividend Periods may be declared and paid
at any time, without reference to any regular dividend payment date, to
holders of record on such date, not more than 45 days nor less than 15
days preceding the payment date thereof, as may be fixed by the Board of
Directors. After full cumulative dividends on this Series have been paid
or declared and funds therefor set aside for payment, including for the
then current Dividend Period, the holders of shares of this Series will
not be entitled to any further dividends with respect to that Dividend
Period.
"Deemed Original Issue Date" means (a) in the case of any share
which is part of the first issuance of shares of this Series or part of a
subsequent issuance of shares of this Series prior to April 1, 1995, the
date of such first issuance or subsequent issuance, as the case may be,
and (b) in the case of any share which is part of a subsequent issuance of
shares of this Series on or after April 1, 1995, the later of (x) April 1,
1995 and (y) the latest Dividend Period Commencement Date which precedes
the date of issuance of such share and which succeeds the last Dividend
Period for which full cumulative dividends have been paid; provided that,
in the case of any share which is part of a subsequent issuance, the date
of issuance of which falls between (i) the record date for dividends
payable on the first succeeding dividend payment date and (ii) such
dividend payment date, the "Deemed Original Issue Date" means the date of
the Dividend Period Commencement Date that immediately follows the date of
issuance.
(2) Dividends payable on shares of this Series for any period
greater or less than a full Dividend Period, including the Initial
Dividend Period, shall be computed on the basis of a 360-day year
consisting of twelve 30-day months.
(3) The Corporation shall not declare or pay or set apart for
payment any dividends on any series of preferred shares ranking, as to
dividends, on a parity with or junior to the shares of this Series unless
full cumulative dividends have been or contemporaneously are declared and
paid, or declared and a sum sufficient for payment thereof is set apart
for payment, for all Dividend Periods terminating on or prior to the date
of payment of any such dividends on such other series of preferred shares.
When dividends are not paid in full upon the shares of this Series and any
other series of preferred shares ranking on a parity therewith as to
dividends (including the shares of the Corporation's 10% Cumulative
Preferred Stock, Series A (the "Series A Preferred Stock"), 9.20%
Cumulative Preferred Stock, Series B (the "Series B Preferred Stock"),
9.50% Cumulative Preferred Stock, Series D (the "Series D Preferred
Stock") and Adjustable Rate Cumulative Preferred Stock, Series C (the
"Adjustable Rate Preferred Stock")), all dividends declared upon shares of
this Series and any other series of preferred shares ranking on a parity
therewith as to dividends shall be declared pro rata so that the amount of
dividends declared per share on the shares of this Series and such other
series of preferred shares shall in all cases bear to each other that same
ratio that the accumulated dividends per share on the shares of this
Series and such other series of preferred shares bear to each other.
Except as provided in the preceding sentence, unless full cumulative
dividends on the shares of this Series have been paid for all past
Dividend Periods, no dividends (other than in shares of the Corporation's
common stock, par value $.10 per share (together with any other shares of
capital stock of the Corporation into which such shares shall be
reclassified or changed ("Common Shares"), or another stock ranking junior
to the shares of this Series as to dividends and upon liquidation) shall
be declared or paid or set aside for payment nor shall any other
distribution be made upon the Common Shares or on any other stock of the
Corporation ranking junior to or on a parity with the shares of this
Series as to dividends or upon liquidation. Unless full cumulative
dividends on the shares of this Series have been paid for all past
Dividend Periods, no Common Shares or any other stock of the Corporation
ranking junior to or on a parity with the shares of this Series as to
dividends or upon liquidation shall be redeemed, purchased, or otherwise
acquired for any consideration (or any moneys be paid to or made available
for a sinking fund for the redemption of any shares of any such stock) by
the Corporation or any subsidiary, except by conversion into or exchange
for stock of the Corporation ranking junior to the shares of this Series
as to dividends and upon liquidation.
(b) Liquidation.
In the event of any voluntary or involuntary liquidation,
dissolution, or winding up of the Corporation, the holders of shares of
this Series are entitled to receive out of the assets of the Corporation
available for distribution to shareholders, before any distribution of
assets is made to holders of Common Shares or any other class or series
of shares ranking junior to the shares of this Series upon liquidation,
liquidating distributions in the amount of the stated value of $25 per
share plus all accumulated and unpaid dividends (whether or not earned or
declared) for the then current and all past Dividend Periods. If, upon
any voluntary or involuntary liquidation, dissolution, or winding up of
the Corporation the amounts payable with respect to the shares of this
Series and any other shares of the Corporation ranking as to any such
distribution on a parity with the shares of this Series are not paid in
full, the holders of shares of this Series and of such other shares
(including the shares of Series A, Series B and Series D Preferred Stock
and Adjustable Rate Preferred Stock) will share ratably in any such
distribution of assets of the Corporation in proportion to the full
respective preferential amounts to which they are entitled. After payment
of the full amount of the liquidating distribution to which they are
entitled, the holders of shares of this Series will not be entitled to any
further participation in any distribution of assets by the Corporation.
(1) Written notice of any such liquidation, dissolution or
winding up of the Corporation, stating the payment date or dates when, and
the place or places where the amounts distributable in such circumstances
shall be payable, shall be given by first class mail, postage pre-paid,
not less than 30 nor more than 60 days prior to the payment date stated
therein, to each record holder of the shares of this Series at the
respective addresses of such holders as the same shall appear on the stock
transfer records of the Corporation.
(2) For purposes of liquidation rights, a reorganization (as
defined in Section 181 of the California Corporations Code) or
consolidation or merger of the Corporation with or into any other
corporation or corporations or a sale of all or substantially all of the
assets of the Corporation shall be deemed not to be a liquidation,
dissolution or winding up of the Corporation.
(c) Redemption.
(1) Except as provided in clause (9) below, the shares of this
Series are not redeemable prior to January 31, 2005. On and after such
date, the shares of this Series are redeemable at the option of the
Corporation, by resolution of the Board of Directors, in whole or in part,
from time to time upon not less than 30 nor more than 60 days' notice, at
a cash redemption price of the stated value of $25 per share plus all
accumulated and unpaid dividends (whether or not earned or declared) to
the date of redemption.
(2) If fewer than all the outstanding shares of this Series are
to be redeemed, the number of shares to be redeemed will be determined by
the Board of Directors, and such shares shall be redeemed pro rata from
the holders of record of such shares in proportion to the number of such
shares held by such holders (with adjustments to avoid redemption of
fractional shares) or by lot in a manner determined by the Board of
Directors.
(3) Notwithstanding the foregoing, if any dividends, including
any accumulation, on the shares of this Series are in arrears, no shares
of this Series shall be redeemed unless all outstanding shares of this
Series are simultaneously redeemed, and the Corporation shall not purchase
or otherwise acquire, directly or indirectly, any shares of this Series;
provided, however, that the foregoing shall not prevent the purchase or
acquisition of shares of this Series pursuant to a purchase or exchange
offer provided such offer is made on the same terms to all holders of
shares of this Series.
(4) Immediately prior to any redemption of shares of this
Series, the Corporation shall pay, in cash, any accumulated and unpaid
dividends through the redemption date, unless a redemption date falls
after a dividend payment record date and prior to the corresponding
dividend payment date, in which case each holder of shares of this Series
at the close of business on such dividend payment record date shall be
entitled to the dividend payable on such shares on the corresponding
dividend payment date notwithstanding the redemption of such shares before
such dividend payment date. Except as expressly provided hereinabove, the
Corporation shall make no payment or allowance for unpaid dividends,
whether or not in arrears, on shares of this Series called for redemption.
(5) Notice of redemption shall be given by publication in a
newspaper of general circulation in the County of Los Angeles and The City
of New York, such publication to be made once a week for two successive
weeks, commencing not less than 30 nor more than 60 days prior to the date
fixed for redemption thereof. A similar notice will be mailed by the
Company by first class mail, postage pre-paid, to each record holder of
the shares of this Series to be redeemed, not less than 30 nor more than
60 days prior to such redemption date, to the respective addresses of such
holders as the same shall appear on the stock transfer records of the
Corporation. Each notice shall state: (i) the redemption date; (ii) the
number of shares of this Series to be redeemed; (iii) the redemption
price; (iv) the place or places where certificates for such shares are to
be surrendered for payment of the redemption price; and (v) that dividends
on the shares to be redeemed will cease to accumulate on such redemption
date. If fewer than all the shares of this Series held by any holder are
to be redeemed, the notice mailed to such holder shall also specify the
number of shares of this Series to be redeemed from such holder.
(6) In order to facilitate the redemption of shares of this
Series, the Board of Directors may fix a record date for the determination
of the shares to be redeemed, such record date to be not less than 30 nor
more than 60 days prior to the date fixed for such redemption.
(7) Notice having been given as provided above, from and after
the date fixed for the redemption of shares of this Series by the
Corporation (unless the Corporation shall fail to make available the money
necessary to effect such redemption), the holders of shares selected for
redemption shall cease to be shareholders with respect to such shares and
shall have no interest in or claim against the Corporation by virtue
thereof and shall have no voting or other rights with respect to such
shares, except the right to receive the moneys payable upon such
redemption from the Corporation, less any required tax withholding amount,
without interest thereon, upon surrender (and endorsement or assignment of
transfer, if required by the Corporation and so stated in the notice) of
their certificates, and the shares represented thereby shall no longer be
deemed to be outstanding. If fewer than all the shares represented by a
certificate are redeemed, a new certificate shall be issued, without cost
to the holder thereof, representing the unredeemed shares. The
Corporation may, at its option, at any time after a notice of redemption
has been given, deposit the redemption price for the shares of this Series
designated for redemption and not yet redeemed, plus any accumulated and
unpaid dividends thereon to the date fixed for redemption, with the
transfer agent or agents for this Series, as a trust fund for the benefit
of the holders of the shares of this Series designated for redemption,
together with irrevocable instructions and authority to such transfer
agent or agents that such funds be delivered upon redemption of such
shares and to pay, on and after the date fixed for redemption or prior
thereto, the redemption price of the shares to their respective holders
upon the surrender of their share certificates. From and after the making
of such deposit, the holders of the shares designated for redemption shall
cease to be shareholders with respect to such shares and shall have no
interest in or claim against the Corporation by virtue thereof and shall
have no voting or other rights with respect to such shares, except the
right to receive from such trust fund the moneys payable upon such
redemption, without interest thereon, upon surrender (and endorsement,
if required by the Corporation) of their certificates, and the shares
represented thereby shall no longer be deemed to be outstanding. Any
balance of such moneys remaining unclaimed at the end of the five-year
period commencing on the date fixed for redemption shall be repaid to the
Corporation upon its request expressed in a resolution of its Board of
Directors.
(8) Any shares of this Series that shall at any time have been
redeemed shall, after such redemption, have the status of authorized but
unissued preferred shares, without designation as to series until such
shares are once more designated as part of a particular series by the
Board of Directors.
(9) If the Board of Directors of the Corporation shall, at any
time and in good faith, be of the opinion that ownership of securities of
the Corporation has or may become concentrated to an extent that may
prevent the Corporation from qualifying as a real estate investment trust
under the REIT Provisions of the Internal Revenue Code, then the Board of
Directors shall have the power, by lot or other means deemed equitable by
them to prevent the transfer of and/or to call for redemption a number of
shares of this Series sufficient, in the opinion of the Board of
Directors, to maintain or bring the direct or indirect ownership thereof
into conformity with the requirements of such a real estate investment
trust under the REIT Provisions of the Internal Revenue Code. The
redemption price to be paid for shares of this Series so called for
redemption, on the date fixed for redemption, shall be the average of the
highest bid and the lowest asked quotations on the last business day prior
to the redemption date as reported by the National Quotation Bureau,
Incorporated or a similar organization selected from time to time by the
Corporation or if there be no such bid and asked quotations, as determined
by the Board of Directors in good faith. From and after the date fixed
for redemption by the Board of Directors, the holder of any shares of
this Series so called for redemption shall cease to be entitled to any
distributions, voting rights and other benefits with respect to such
shares of this Series, other than the right to payment of the redemption
price determined as aforesaid. "REIT Provisions of the Internal Revenue
Code" shall mean Sections 856 through 860 of the Internal Revenue Code of
1986, as amended. In order to exercise the redemption option set forth
in this clause (9), with respect to the shares of this Series, the
Corporation shall give notice of redemption by publication in a newspaper
of general circulation in the County of Los Angeles and The City of New
York, such publication to be made once a week for two successive weeks,
commencing not less than 30 nor more than 60 days prior to the date fixed
for redemption. A similar notice will be mailed by the Corporation by
first class mail, postage pre-paid, to each record holder of the shares of
this Series to be redeemed, not less than 30 nor more than 60 days prior
to such redemption date, to the respective addresses of such holders as
the same shall appear on the stock transfer records of the Corporation.
Each notice shall state: (i) the redemption date; (ii) the number of
shares of this Series to be redeemed; (iii) the redemption price; (iv) the
place or places where certificates for such shares are to be surrendered
for payment of the redemption price; and (v) that dividends on the shares
to be redeemed will cease to accumulate on such redemption date. If fewer
than all the shares of this Series held by any holder are to be redeemed,
the notice mailed to such holder shall also specify the number of shares
of this Series to be redeemed from such holder.
(d) Maintenance of Debt Ratio. Without the affirmative vote
or the written consent of the holders of a majority of the shares of this
Series, the Corporation will not take any action that would result in a
ratio of Debt to Assets (the "Debt Ratio") in excess of 50%.
"Debt" means, as of any date of determination, all liabilities
that should, in accordance with GAAP, be reflected as a liability on the
consolidated balance sheet of the Corporation as of such date of
determination; provided, however, that "Debt" shall not include
liabilities included in the consolidated balance sheet under the headings
"accrued and other liabilities" or "minority interest" to the extent that
the inclusion of such liabilities under such headings is consistent with
the Corporation's past practice.
"Assets" means, as of any date of determination, all assets
that should, in accordance with GAAP, be reflected as an asset on the
consolidated balance sheet of the Corporation as of such date of
determination.
"GAAP" means generally accepted accounting principles as in
effect in the United States of America from time to time, consistently
applied.
(e) Voting Rights. The shares of this Series shall not have
any voting powers either general or special, except as required by law,
except as set forth in Section (d) hereof and except that:
(1) (A) If the Corporation shall fail to pay full cumulative
dividends on the shares of this Series or any other of its preferred
shares for six quarterly dividend payment periods, whether or not
consecutive (a "Dividend Default"), the holders of all outstanding
preferred shares, voting as a single class without regard to series, will
be entitled to elect two Directors until full cumulative dividends for all
past dividend payment periods on all preferred shares have been paid or
declared and funds therefor set apart for payment. Such right to vote
separately as a class to elect Directors shall, when vested, be subject,
always, to the same provisions for the vesting of such right to elect
Directors separately as a class in the case of future Dividend Defaults.
At any time when such right to elect Directors separately as a class shall
have so vested, the Corporation may, and upon the written request of the
holders of record of not less than 20% of the total number of preferred
shares of the Corporation then outstanding shall, call a special meeting
of stockholders for the election of Directors. In the case of such a
written request, such special meeting shall be held within 90 days after
the delivery of such request and, in either case, at the place and upon
the notice provided by law and in the Bylaws of the Corporation, provided
that the Corporation shall not be required to call such a special meeting
if such request is received less than 120 days before the date fixed for
the next ensuing Annual Meeting of Shareholders of the Corporation and the
holders of all classes of outstanding preferred shares are afforded the
opportunity to elect such Directors (or fill any vacancy) at such Annual
Meeting of Shareholders. Directors elected as aforesaid shall serve until
the next Annual Meeting of Shareholders of the Corporation or until their
respective successors shall be elected and qualified. If, prior to the
end of the term of any Director elected as aforesaid, a vacancy in the
office of such Director shall occur during the continuance of a Dividend
Default by reason of death, resignation, or disability, such vacancy shall
be filled for the unexpired term by the appointment of a new Director for
the unexpired term of such former Director, such appointment to be made by
the remaining Director elected as aforesaid.
(B) In addition to the right to elect Directors set forth
in clause (A) above, if, without the affirmative vote or the written
consent of the holders of a majority of the shares of this Series, on the
last day of two consecutive fiscal quarters of the Corporation, the Debt
Ratio exceeds 50% (a "Debt Ratio Default"), the holders of all outstanding
shares of this Series, voting as a single class, will be entitled to elect
two Directors until the Debt Ratio as of the last day of a fiscal quarter
of the Corporation is reduced to 50% or less. Such right to vote
separately as a class to elect Directors shall, when vested, be subject,
always, to the same provisions for the vesting of such right to elect
Directors separately as a class in the case of future Debt Ratio Defaults.
At any time when such right to elect Directors separately as a class shall
have so vested, the Corporation may, and upon the written request of the
holders of record of not less than 20% of the total number of shares of
this Series then outstanding shall, call a special meeting of stockholders
for the election of Directors. In the case of such a written request,
such special meeting shall be held within 90 days after the delivery of
such request and, in either case, at the place and upon the notice
provided by law and in the Bylaws of the Corporation, provided that the
corporation shall not be required to call such a special meeting if such
request is received less than 120 days before the date fixed for the next
ensuing Annual Meeting of Shareholders of the Corporation and the holders
of shares of this Series are afforded the opportunity to elect such
Directors (or fill any vacancy) at such Annual Meeting of Shareholders.
Directors elected as aforesaid shall serve until the next Annual Meeting
of Shareholders of the Corporation or until their respective successors
shall be elected and qualified. If, prior to the end of the term of any
Director elected as aforesaid, a vacancy in the office of such Director
shall occur during the continuance of a Debt Ratio Default by reason of
death, resignation, or disability, such vacancy shall be filled for the
unexpired term by the appointment of a new Director for the unexpired term
of such former Director, such appointment to be made by the remaining
Director elected as aforesaid.
(2) The affirmative vote or consent of the holders of at least
two-thirds of the outstanding shares of this Series, voting separately
as a class, will be required for any amendment to the Articles of
Incorporation of the Corporation that will adversely alter or change the
powers, preferences, privileges or rights of the shares of this Series,
except as set forth below. The affirmative vote or consent of the holders
of at least two-thirds of the outstanding shares of this Series and any
other series of preferred shares ranking on a parity with this Series as
to dividends and upon liquidation (including the shares of Series A,
Series B and Series D Preferred Stock and Adjustable Rate Preferred
Stock), voting as a single class without regard to series, will be
required to issue, authorize or increase the authorized amount of any
class or series of shares ranking prior to this Series as to dividends or
upon liquidation or to issue or authorize any obligation or security
convertible into or evidencing a right to purchase any such security, but
the Articles of Incorporation may be amended to increase the number of
authorized preferred shares ranking on a parity with or junior to this
Series or to create another class of preferred shares ranking on a parity
with or junior to this Series without the vote of the holders of
outstanding shares of this Series.
(3) The affirmative vote or consent of the holders of a
majority of the outstanding shares of this Series, voting separately as
a class, will be required for any amendment or repeal of the following
provisions of the Bylaws of the Corporation, which would be adverse to
the interests of the holders of shares of this Series, and for any other
changes to the Bylaws of the Corporation that affect these provisions in a
manner which would be adverse to the interests of the holders of shares of
this Series: Article IV, Section 2 (relating to the Corporation's
permissible Asset Coverage), Article VIII, Section 2(g) and (h) (relating
to the Corporation's investment policy) and each of the defined terms used
in any of the foregoing provisions.
(4) Except to the extent required pursuant to clause (3) above,
nothing herein shall be taken to require a class vote or consent in
connection with the authorization, designation, increase or issuance of
any shares of any class or series (including additional preferred shares
of any series) that rank junior to or on a parity with this Series as to
dividends and liquidation rights or in connection with the authorization,
designation, increase or issuance of any bonds, mortgages, debentures or
other debt obligations of the Corporation.
(5) The right to elect Directors set forth in clause (1)(B)
above is not intended to be the exclusive remedy of holders of the shares
of this Series in the event of a Debt Ratio Default.
(f) Conversion. The shares of this Series are not convertible
into shares of any other class or series of the capital stock of the
Corporation.
EXHIBIT 10.1
SIXTH AMENDMENT TO
AMENDED AND RESTATED ADVISORY CONTRACT
THIS SIXTH AMENDMENT TO AMENDED AND RESTATED ADVISORY CONTRACT (the
"Sixth Amendment"), dated as of January 12, 1995, amends the AMENDED AND
RESTATED ADVISORY CONTRACT dated as of September 30, 1991, as previously
amended (the "Contract"), entered into between STORAGE EQUITIES, INC., a
California corporation (the "Company"), and PUBLIC STORAGE ADVISERS, INC.,
a California corporation (the "Adviser").
R E C I T A L S
A. Defined terms used in this Sixth Amendment (that are not
otherwise defined) have the meanings assigned to those terms in the
Contract.
B. Pursuant to a Second Amendment to Amended and Restated Advisory
Contract dated as of May 14, 1992 (the "Second Amendment"), the Company
and the Adviser amended the Contract to establish the compensation payable
by the Company to the Adviser upon the issuance of preferred stock. As
amended pursuant to a Fifth Amendment to Amended and Restated Advisory
Contract dated as of August 9, 1994 (the "Fifth Amendment"), Section
11(a)(iii) of the Contract (the "Subordination Provision") provides that
the Adviser will not be entitled to payment of the Advisory Fee with
respect to services rendered during any quarter in which full cumulative
dividends on the Series A Preferred Stock or Series B Preferred Stock or
Adjustable Rate Preferred Stock or Series D Preferred Stock have not been
paid or declared and funds therefor set aside for payment.
C. The Company and the Adviser desire to amend the Contract to
provide that the Subordination Provision also applies to the issuance of
cumulative preferred stock, Series E in an underwritten offering.
NOW, THEREFORE, the parties hereby agree as follows:
1. Section 11(a)(iii) of the Contract is hereby amended in its
entirety to read as follows:
(iii) Series A Preferred Stock, Series B Preferred Stock,
Adjustable Rate Preferred Stock, Series D Preferred Stock and
Series E Preferred Stock. The Adviser will not be entitled to
payment of the Advisory Fee with respect to services rendered
during any quarter in which full cumulative dividends on the
Series A Preferred Stock or Series B Preferred Stock or
Adjustable Rate Preferred Stock or Series D Preferred Stock or
Series E Preferred Stock (as defined below) have not been paid
or declared and funds therefor set aside for payment. To the
extent that the Adviser receives a monthly payment or payments
of the Advisory Fee pursuant to Section 11(a)(ii) of the
Contract with respect to a quarter as to which the Adviser is
subsequently determined not to be entitled to payment of the
Advisory Fee, the Adviser shall promptly refund such amounts.
"Series A Preferred Stock means the currently outstanding shares
of the Company's 10% Cumulative Preferred Stock, Series A,
"Series B Preferred Stock" means the currently outstanding
shares of the Company's 9.20% Cumulative Preferred Stock,
Series B, "Adjustable Rate Preferred Stock" means the currently
outstanding shares of the Company's Adjustable Rate Cumulative
Preferred Stock, Series C, "Series D Preferred Stock" means the
currently outstanding shares of the Company's 9.50% Cumulative
Preferred Stock, Series D, and "Series E Preferred Stock" means
the shares of the Company's ___% Cumulative Preferred Stock,
Series E issued in the first underwritten offering following the
date of this Sixth Amendment.
2. The Second Amendment, as amended by the Third Amendment to
Amended and Restated Advisory Contract dated as of February 25, 1993 (the
"Third Amendment"), the Fourth Amendment to Amended and Restated Advisory
Contract dated as of June 7, 1994 (the "Fourth Amendment"), the Fifth
Amendment and this Sixth Amendment, is not intended to confer or give any
person (including any holder of the Series A Preferred Stock or Series B
Preferred Stock or Adjustable Rate Preferred Stock or Series D Preferred
Stock or Series E Preferred Stock) other than the parties hereto and their
successors or assigns any rights or remedies under or by reason of the
Second Amendment, the Third Amendment, the Fourth Amendment, the Fifth
Amendment or this Sixth Amendment. The Second Amendment, as amended by
the Third Amendment, the Fourth Amendment, the Fifth Amendment and this
Sixth Amendment, may be modified or terminated without the consent of the
holders of the Series A Preferred Stock or Series B Preferred Stock or
Adjustable Rate Preferred Stock or Series D Preferred Stock or Series E
Preferred Stock.
3. Except as expressly provided in this Sixth Amendment, all of the
provisions of the Contract are hereby ratified and confirmed.
IN WITNESS WHEREOF, the parties hereto have executed this Sixth
Amendment as of the day and year set forth at the beginning of this Sixth
Amendment.
STORAGE EQUITIES, INC.,
a California corporation
By: /S/ B. WAYNE HUGHES
-------------------
B. Wayne Hughes
Chairman of the Board
PUBLIC STORAGE ADVISERS, INC.,
a California corporation
By: /S/ HARVEY LENKIN
-----------------
Harvey Lenkin
President
