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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) September 18, 1996
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Public Storage, 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.)
701 Western Avenue, Glendale, California 91201-2397
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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)
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Item 5. Other Events
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On March 12, 1996, the Securities and Exchange Commission declared
effective the Registration Statement on Form S-3 (No. 333-00965) of Public
Storage, Inc. (the "Company"), which together with the securities previously
registered pursuant to the Company's Registration Statement on Form S-3
(No. 33-54755), permits the Company to issue an aggregate of $400,000,000 of
preferred stock, depositary shares, common stock and warrants.
Item 7. Financial Statements and Exhibits
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(c) Exhibits.
Exhibit 1.1 - Form of Underwriting Agreement.
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.
PUBLIC STORAGE, INC.
By: /s/ DAVID GOLDBERG
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David Goldberg
Senior Vice President
and General Counsel
Date: September 18, 1996
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EXHIBIT 1.1
4,651,200 SHARES
PUBLIC STORAGE, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
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September 18, 1996
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
277 Park Avenue
New York, New York 10172
Dear Sirs:
Public Storage, Inc., a real estate investment trust ("REIT") and a
California corporation (the "Company"), proposes to issue and sell 4,651,200
shares of its common stock, par value $.10 per share (the "Shares"), to
Donaldson, Lufkin & Jenrette Securities Corporation (the "Underwriter"). The
shares of common stock of the Company to be outstanding after giving effect to
the sales contemplated hereby are hereinafter referred to as the "Common Stock."
1. Registration Statement and Prospectus. The Company has filed
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with the Securities and Exchange Commission (the "Commission") a registration
statement, registration number 33-54755 ("Registration No. 33-54755"), and a
second registration statement, registration number 333-00965 ("Registration No.
333-00965," and together with Registration No. 33-54755, the "Registration
Statement"), on Form S-3, including the related prospec-
<PAGE>
tus included in the Registration Statement, for the registration under the
Securities Act of 1933, as amended (the "Act"), of the offering and sale of,
inter alia, the Shares. The Company may have filed one or more amendments
- ----- ----
thereto, including each related prospectus, and one or more prospectus
supplements thereto, each of which has previously been furnished to the
Underwriter. Any registration statement filed pursuant to Rule 462(b) under the
Act is herein referred to as the "Rule 462(b) Registration Statement," and,
after such filing, the term "Registration Statement" shall include the Rule
462(b) Registration Statement. The Company has filed with, or transmitted for
filing to, or 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.
2. Agreements to Sell and Purchase. On the basis of the
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representations and warranties contained in this Agreement, and subject to its
terms and conditions, the Company agrees to issue and sell, and the Underwriter
agrees to purchase from the Company, at a price per share of $21.50 (the
"Purchase Price"), 4,651,200 Shares.
The Company hereby agrees and the Company shall, concurrently with the
execution of this Agreement, deliver an agreement executed by each of the
directors and executive officers of the Company, pursuant to which each such
person agrees, not to offer, sell, contract to sell, grant any option to
purchase, or otherwise dispose of any common stock of the Company or any
securities convertible into or exercisable or exchangeable for such common stock
or in any other manner transfer all or a portion of the economic consequences
associated with the ownership of any such common stock, for a period of 30 days
after
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the date of the Prospectus Supplement without the prior written consent of the
Underwriter. The above shall also apply to the Company except for (i) offers
and sales of Common Stock to the shareholders of Partners Preferred Yield,
Inc., Partners Preferred Yield II, Inc., and Partners Preferred Yield, III, Inc.
(collectively, the "Partners Preferred Yield Companies") in connection with the
potential mergers of the Partners Preferred Yield Companies into the Company,
(ii) the conversion of the Company's Convertible Preferred Stock into Common
Stock, (iii) the grant of options under the Company's existing stock option
plans and the issuance of Common Stock in connection with the exercise of
outstanding Company stock options issued under such plans, (iv) the issuance of
stock or the grant of options in exchange for the acquisition of properties and
partnership interests, and (v) offers to issue, or issuances of, shares of
Common Stock to affiliates of the Company that enter into agreements
substantially in the form of this paragraph (other than offers or issuances as
part of the consideration for acquisitions of mini-warehouse facilities or
mortgages secured by mini-warehouse facilities).
3. Terms of Public Offering. The Company is advised by you that the
------------------------
Underwriter proposes (i) to make a public offering of the Shares as soon after
the filing of the Prospectus Supplement with the Commission as in the
Underwriter's judgment is advisable and (ii) initially to offer the Shares upon
the terms set forth in the Prospectus Supplement.
4. Delivery and Payment. Delivery to the Underwriter of and payment
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for the Shares shall be made at 10:00 A.M., New York City time, on the third or
fourth business day unless otherwise permitted by the Commission pursuant to
Rule 15c6-1 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act")(the "Closing Date"), following the date of the filing of the Prospectus
Supplement with the Commission, at such place as you shall designate. The
Closing Date and the location of delivery of and the form of payment for the
Shares may be varied by agreement between you and the Company.
Certificates for the Shares shall be registered in such names and
issued in such denominations as you shall request in writing not later than two
full business days prior to the Closing Date. Such
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certificates shall be made available to you for inspection not later than 9:30
A.M., New York City time, on the business day next preceding the Closing Date.
Unless you request that the Shares be delivered to your account at The
Depository Trust Company, certificates in definitive form evidencing the Shares
shall be delivered to you on the Closing Date, with any transfer taxes thereon
duly paid by the Company, against payment of the Purchase Price therefor by wire
transfer of immediately available funds to the order of the Company.
5. Agreements of the Company. The Company agrees with the
-------------------------
Underwriter 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 the Underwriter or any
dealer, file any amendment or supplement to the Registration Statement
(including any filing under Rule 462(b) under the Act) or the Prospectus, unless
a copy thereof shall first have been submitted to the Underwriter within a
reasonable period of time prior to the filing thereof and the Underwriter shall
not have objected thereto in good faith.
(b) The Company will use its best efforts to cause any Rule 462(b)
Registration Statement and any post-effective amendment to the Registration
Statement to become effective and will notify the Underwriter promptly, and will
confirm such advice in writing, (1) when any Rule 462(b) Registration Statement
and any post-effective amendment to the Registration Statement become effective,
(2) of the receipt of any comments from or any request by the Commission for
amendments or supplements to the Registration Statement or the Prospectus or for
additional information, (3) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement 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 5(e)
that in the judgment of the Company makes any statement made in the Registration
Statement or the Prospectus untrue or that requires the making of any changes in
the Registration Statement 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,
the Registration Statement or the Prospectus. If at any time the Commission
shall issue any order suspending the effectiveness of the Registration
Statement, the Company will make every reasonable effort to obtain the
withdrawal of such order at the earliest possible moment.
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(c) The Company will furnish to the Underwriter, without charge,
two copies of the signed copies of the Registration Statement and of any post-
effective amendment thereto, including financial statements and schedules, and
all exhibits thereto (including any document filed under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and incorporated, or deemed to be
incorporated, by reference into the Prospectus).
(d) The Company will comply with all the provisions of any
undertakings contained in the Registration Statement.
(e) The Company will deliver to the Underwriter, without charge, as
many copies of the Prospectus or any amendment or supplement thereto as the
Underwriter may reasonably request. The Company consents to the use of the
Prospectus or any amendment or supplement thereto by the Underwriter 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 Underwriter 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 5(a)
hereof, the Company will forthwith prepare and duly file with the Commission an
appropriate supplement or amendment thereto, and will deliver to the
Underwriter, without charge, such number of copies thereof as the Underwriter
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
Underwriter, if such document would be deemed to be incorporated by reference
into the Prospectus, which is not approved by the Underwriter after reasonable
notice thereof.
(f) The Company will cooperate with the Underwriter and counsel to
the Underwriter 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 Underwriter may reasonably request; provided, that in no
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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 Underwriter, 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
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previously reported information.
(g) During the period of five years commencing on the date hereof,
the Company will furnish to the Underwriter 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 the Underwriter 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 commencing after the Effective Date of
the Registration Statement, and satisfying the provisions of Section 11(a) of
the Act (including Rule 158 thereunder) and will file such earnings statement as
an exhibit to the next periodic report required by Section 13 or 15(d) of the
Exchange Act covering the period when the earnings statement is released.
(i) If this Agreement shall terminate or shall be terminated after
execution pursuant to any provisions hereof (otherwise than pursuant to notice
given by you terminating this Agreement pursuant to Section 9 hereof) or if this
Agreement shall be terminated by the Underwriter because of any failure or
refusal on the part of the Company to comply with the terms or fulfill any of
the conditions of this Agreement, the Company agrees to reimburse the
Underwriter for all out-of-pocket expenses (including fees and expenses of
counsel for the Underwriter) reasonably incurred by you in connection herewith.
(j) 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.
(k) The Company will apply the net proceeds from the offering and
sale of the Shares by the Underwriter in the manner set forth in the Prospectus
under "Use of Proceeds."
(l) The Company will use its best efforts to have the Shares
listed, subject to notice of issuance, on the New York Stock Exchange.
(m) The Company will pay all costs, expenses, fees and taxes
incident to (i) the preparation, printing, filing and distribution under the Act
of the Registration Statement (in-
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cluding financial statements and exhibits), and all amendments and supplements
to any of them prior to or during the period specified in paragraph (e), (ii)
the printing and delivery of the Prospectus and all amendments or supplements to
it during the period specified in paragraph (e), (iii) the printing and delivery
of this Agreement, the Preliminary and Supplemental Blue Sky Memoranda and all
other agreements, memoranda, correspondence and other documents printed and
delivered in connection with the offering of the Shares (including in each case
any disbursements of counsel for the Underwriters relating to such printing and
delivery), (iv) the registration or qualification of the Shares for offer and
sale under the securities or Blue Sky laws of the several states (including in
each case the fees and disbursements of counsel for the Underwriters relating to
such registration or qualification and memoranda relating thereto), (v) filings
and clearance with the National Association of Securities Dealers, Inc. in
connection with the offering, (vi) the listing of the Shares on the New York
Stock Exchange and (vii) furnishing such copies of the Registration Statement,
the Prospectus and all amendments and supplements thereto as may be requested
for use in connection with the offering or sale of the Shares by the Underwriter
or by dealers to whom Shares may be sold.
6. Representations and Warranties of the Company. The Company
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represents and warrants to the Underwriter that:
(a) The Company has filed with the Commission the Registration
Statement on Form S-3, including the related prospectus included in the
Registration Statement, for the registration under the Act of the offering and
sale of, inter alia, the Shares. The Company may have filed one or more
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amendments thereto, including each related prospectus, and one or more
prospectus supplements thereto, each of which has previously been furnished to
the Underwriter. The Company has filed with, or transmitted for filing to, or
shall promptly hereafter file with or transmit for filing to, the Commission a
Prospectus Supplement specifically relating to the Shares pursuant to Rule 424
under the Act. The Company has included or will include in such Registration
Statement, as amended at the Execution Time, and in the Prospectus Supplement
all information required by the Act and the rules thereunder to be included
therein with respect to the Shares and the offering thereof. As filed, such
Registration Statement, as so amended, and form of final prospectus contained in
the Registration Statement and Prospectus Supplement, and 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 Underwriter shall agree in writing to a modification, shall be in all
substantive respects in the form furnished to the Underwriter prior to the date
hereof or, to the extent not completed at the Execution Time, shall contain only
such specific additional information and other changes as the Company has
advised the
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Underwriter, prior to the Execution Time, will be included or made therein.
(b) On the Effective Date, the Registration Statement 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 thereunder; on the Effective Date, the Registration
Statement 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
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warranties as to the information contained in or omitted from the Registration
Statement or the Prospectus (or any supplement thereto) in reliance upon and in
conformity with information furnished in writing to the Company by the
Underwriter specifically for inclusion in the Registration Statement or the
Prospectus (or any supplement thereto).
(c) The Registration Statement has become effective under the Act,
and no stop order suspending the effectiveness of the Registration Statement 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 Exchange Act and the rules and regulations
thereunder.
(e) The only subsidiaries of the Company are the Subsidiaries (as
defined below). Each of the Company, SEI Arlington Acquisition Corporation
("SEI Arlington"), SEI Hypoluxo Acquisition Corporation ("Hypoluxo"), Arlington
Acquisition Co. ("Arlington"), PSTI/SEI - North Bergen Acquisition Corporation
("PSTI"), SEI-Sandy Acquisition Corporation ("Sandy"), PS Orangeco, Inc.
("Orangeco"), Public Storage Pick-Up & Delivery, Inc. ("PSPUD"), A-1 Easy
Storage ("A-1"), PSI Institutional Advisors, Inc. ("PSIIA"), Public Storage
Commercial Properties Group, Inc. ("PSCPG") and SEI - Firestone Acquisition
Corporation ("SEI Firestone" and, together with SEI Arlington, Hypoluxo,
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Arlington, PSTI, Sandy, Orangeco, PSPUD, A-1, PSIIA, PSCPG and SEI Firestone,
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 (in the case of Orangeco, PSPUD, A-1, PSIIA, and PSCPG, 95%
owned), 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 the date hereof approximately 70%, 66%, 50%, 42%, 51%, 51%,
51% and 50% 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
reflected in the Prospectus.
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(h) The Company, each Subsidiary and each Partnership maintains
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 or 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 (including the Incorporated Documents); 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, Class B common stock,
par value $.10 per share, of the Company (the "Class B 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, of the Company (the "Series D Preferred Stock"), 10%
Cumulative Preferred Stock, Series E, stated value $25.00 per share, of the
Company (the "Series E Preferred Stock"), 8.25% Convertible Preferred Stock,
stated value $25.00 per share, of the Company (the "Convertible Preferred
Stock"), 9.75% Cumulative Preferred Stock, Series F, stated value of $25.00 per
share, of the Company (the "Series F Preferred Stock"), 8-7/8% Cumulative
Preferred Stock, Series G, stated value of $25,000 per share, of the Company
(the "Series G Preferred Stock") 8.45% Cumulative Preferred Stock, Series H,
stated value of $25,000 per share, of the Company (the "Series H Preferred
Stock") and Convertible Preferred Stock, Series CC of the Company ("Series CC
Preferred Stock") have each been duly and validly authorized and issued in
compliance with all federal and state securities laws, and are fully paid and
nonassessable; the Shares been duly and validly authorized and, when issued and
delivered as described in this Agreement, will be fully paid and nonassessable;
application has been made to list the Shares on the New York Stock Exchange; the
form of certificate for the
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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.
(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 or any of their
respective officers or any of their respective properties, assets or rights of a
character required to be disclosed in the Registration Statement 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 Statement 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; this Agreement has been duly authorized, executed and
delivered by the Company and constitutes a valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms, except to
the extent that enforcement thereof may be limited by (i) bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereinafter
in effect relating to creditors' rights generally, and (ii) general principles
of equity (regardless of whether a proceeding is considered at law or in
equity).
(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 Underwriter. 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 by-laws, 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
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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 its 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, pay or terms or conditions of employment 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 by-laws of the Company or
any of the Subsidiaries or the partnership agreement of any of the Partnerships
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
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ordinary course) or to any such plan under Title IV of ERISA.
(r) Other than as described in the Prospectus (including the
Incorporated Documents), 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 by-laws 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 the Registration Statement.
(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 Underwriter 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 financial statements and
supporting schedules filed or to be filed with the Commission as part of (or
incorporated by reference in) the Registration Statement and the Prospectus are
independent public accountants with respect to the Company and any other
applicable entity, as required by the Act. The financial statements, together
with related schedules and notes, incorporated by reference in the Prospectus
and the Registration Statement comply as to form in all material respects with
the requirements of the Act. Such financial statements fairly
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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, and have
been prepared in accordance with generally accepted accounting principles,
except as otherwise expressly stated therein, as consistently applied throughout
such periods. The pro forma financial statements and the related notes thereto,
and the other pro forma financial information, included or incorporated by
reference in the Prospectus and the Registration Statement present fairly the
information shown therein, have been prepared in accordance with the
Commission's rules and guidelines with respect to pro forma financial statements
and have been properly compiled on the bases described therein, in all material
respects, and the assumptions used in the preparation thereof are reasonable and
the adjustments used therein are appropriate to give effect to the transactions
and circumstances referred to therein. The other financial and statistical
information and data included in the Prospectus and in the Registration
Statement 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) Except as disclosed in the Registration Statement and the
Prospectus (or any amendment or supplement thereto), subsequent to the
respective dates as of which such information is given in the Registration
Statement and the Prospectus (or any amendment or supplement thereto), neither
the Company, any of the Subsidiaries nor any of the Partnerships has incurred
any liability or obligation, direct or contingent, or entered into any
transaction, not in the ordinary course of business, that is material to the
Company, the Subsidiaries and the Partnerships taken as a whole, and there has
not been any material change in the capital stock, or material increase in the
short-term debt or long-term debt, of the Company, any Subsidiary or any of the
Partnerships, or any material adverse change, or any development (that relates
to the Company, the Subsidiaries and the Partnerships or to any of its
respective properties or assets) which may reasonably be expected to involve a
prospective material adverse change, in the condition (financial or other),
business, net worth or results of operations of the Company, the Subsidiaries
and the Partnerships taken as a whole.
(x) The Company has not distributed and, prior to the later to
occur of (i) the Closing Date and (ii) completion of the distribution of the
Shares, will not distribute any offering material in connection with the
offering and sale of the Shares other than the Registration Statement, the
Prospectus or other materials, if any, permitted by the Act.
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<PAGE>
(y) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that in all material respects (i)
transactions are executed in accordance with management's general or specific
authorization; (ii) transactions are recorded as necessary to permit preparation
of financial statements in conformity with generally accepted accounting
principles and to maintain accountability for assets; (iii) access to assets is
permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(z) To the Company's knowledge, neither the Company, any of its
Subsidiaries nor any of the Partnerships nor any employee or agent of the
Company, any Partnership, any Subsidiary, or any Partnership has made any
payment of funds of the Company, any Partnership or any Subsidiary or received
or retained any funds in violation of any law, rule or regulation, which
payment, receipt or retention of funds is of a character required to be
disclosed in the Prospectus.
(aa) The Company, each of the Subsidiaries and each of the
Partnerships have filed all tax returns required to be filed (except to the
extent extensions have been timely filed related thereto), which returns are
complete and correct in all material respects, and neither the Company, any
Partnership nor any Subsidiary is in default in the payment of any taxes which
were payable pursuant to said returns or any assessments with respect thereto.
(ab) To the best of the Company's knowledge, no labor disturbance by
the employees of the Company, the Subsidiaries or the Partnerships exists or is
imminent that would, individually or in the aggregate, have a Material Adverse
Effect. No collective bargaining agreement exists with any of the Company's
employees and, to the best of the Company's knowledge, no such agreement is
imminent.
(ac) The Company has been advised concerning the Investment Company
Act of 1940, as amended (the "1940 Act"), and the rules and regulations
thereunder, and has in the past conducted, and intends in the future to conduct,
its affairs in such a manner as to ensure that it will not become an "investment
company" or a company "controlled" by an "investment company" within the meaning
of the 1940 Act and such rules and regulations.
(ad) The terms which follow, when used in this Agreement, shall have
the meanings indicated. The term "the Effective Date" shall mean each date that
the Registration Statement and any post-effective amendment or amendments
thereto became or
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become effective. "Execution Time" shall mean the date and time that this
Agreement is executed and delivered by the parties hereto. "Prospectus" shall
mean the prospectus and any Prospectus Supplement relating to the Shares that is
first filed pursuant to Rule 424(b) after the Execution Time. "Registration
Statement" shall mean the Registration Statement 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 statement as so
amended. "Rule 424" refers to such rule under the Act. Any reference herein to
the Registration Statement, a Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include the documents incorporated by reference therein
either pursuant to the terms of the Registration Statement or pursuant to Item
12 of Form S-3 which were filed under the Exchange Act on or before the
Effective Date of the 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 Statement, 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 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.
7. Indemnification. (a) The Company agrees to indemnify and hold
---------------
harmless the Underwriter and each person, if any, who controls any Underwriter
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act,
from and against any and all losses, claims, damages, liabilities and judgments
caused by any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto) or any preliminary prospectus, or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as such
losses, claims, damages, liabilities or judgments are caused by any such untrue
statement or omission or alleged untrue statement or omission based upon and in
conformity with information relating to the Underwriter furnished in writing to
the Company by or on behalf of the Underwriter through you expressly for use
therein; provided, however, that the foregoing indemnity agreement with respect
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to any preliminary prospectus shall not inure to the benefit of the Underwriter
from whom the person asserting any such losses, claims, damages, liabilities and
judgments purchased Shares, or any person controlling the Underwriter, if a copy
of the Prospectus (as then amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) was not
16
<PAGE>
sent or given by or on behalf of the Underwriter to such person, if required by
law so to have been delivered, at or prior to the written confirmation of the
sale of the Shares to such person, and if the Prospectus (as so amended and
supplemented) would have cured the defect giving rise to such loss, claim,
damage, liability or judgment.
(b) In case any action shall be brought against the Underwriter or
any person controlling the Underwriter, based upon any preliminary prospectus,
the Registration Statement or the Prospectus or any amendment or supplement
thereto and with respect to which indemnity may be sought against the Company,
the Underwriter shall promptly notify the Company in writing and the Company
shall assume the defense thereof, including the employment of counsel reasonably
satisfactory to such indemnified party and payment of all fees and expenses.
The Underwriter or any such controlling person shall have the right to employ
separate counsel in any such action and participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of the Underwriter
or such controlling person unless (i) the employment of such counsel shall have
been specifically authorized in writing by the Company, (ii) the Company shall
have failed to assume the defense and employ counsel or (iii) the named parties
to any such action (including any impleaded parties) include both the
Underwriter or such controlling person and the Company and the Underwriter or
such controlling person shall have been advised by such counsel that there may
be one or more legal defenses available to it which are different from or
additional to those available to the Company (in which case the Company shall
not have the right to assume the defense of such action on behalf of the
Underwriter or such controlling person, it being understood, however, that the
Company shall not, in connection with any one such action or separate but
substantially similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances, be liable for the fees and
expenses of more than one separate firm of attorneys (in addition to any local
counsel) for the Underwriter and controlling persons, which firm shall be
designated in writing by the Underwriter and that all such fees and expenses
shall be reimbursed as they are incurred). The Company shall not be liable for
any settlement of any such action effected without its written consent but if
settled with the written consent of the Company, the Company agrees to indemnify
and hold harmless the Underwriter and any such controlling person from and
against any loss or liability by reason of such settlement. Notwithstanding the
immediately preceding sentence, if in any case where the fees and expenses of
counsel are at the expense of the indemnifying party and an indemnified party
shall have requested the indemnifying party to reimburse the indemnified party
for such fees and expenses of counsel as incurred, such indemnifying party
agrees that it shall be liable for any settlement of any action effected without
its written
17
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consent if (i) such settlement is entered into more than 30 business days after
the receipt by such indemnifying party of the aforesaid request and (ii) such
indemnifying party shall have failed to reimburse the indemnified party in
accordance with such request for reimbursement prior to the date of such
settlement. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
proceeding.
(c) The Underwriter agrees to indemnify and hold harmless the
Company, its directors, its officers who sign the Registration Statement and any
person controlling the Company within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, to the same extent as the foregoing indemnity
from the Company to the Underwriter but only with reference to information
relating to the Underwriter furnished in writing by or on behalf of the
Underwriter through you expressly for use in the Registration Statement or the
Prospectus. In case any action shall be brought against the Company, any of its
directors, any such officer or any person controlling the Company based on the
Registration Statement, the Prospectus or any preliminary prospectus and in
respect of which indemnity may be sought against the Underwriter, the
Underwriter shall have the rights and duties given to the Company (except that
if the Company shall have assumed the defense thereof, the Underwriter shall not
be required to do so, but may employ separate counsel therein and participate in
the defense thereof but the fees and expenses of such counsel shall be at the
expense of the Underwriter), and the Company, its directors, any such officers
and any person controlling the Company shall have the rights and duties given to
the Underwriter, by Section 7(b) hereof.
(d) If the indemnification provided for in this Section 7 is
unavailable to an indemnified party in respect of any losses, claims, damages,
liabilities or judgments referred to therein, then each indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute to the amount paid
or payable by such indemnified party as a result of such losses, claims,
damages, liabilities and judgments (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company on the one hand and the
Underwriter on the other hand from the offering of the Shares or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company and
the Underwriter in connection with the statements or omissions which resulted in
such losses,
18
<PAGE>
claims, damages, liabilities or judgments, as well as any other relevant
equitable considerations. The relative benefits received by the Company and the
Underwriter shall be deemed to be in the same proportion as the total net
proceeds from the offering (before deducting expenses) received by the Company,
and the total underwriting discounts and commissions received by the
Underwriter, bear to the total price to the public of the Shares, in each case
as set forth in the table on the cover page of the Prospectus. The relative
fault of the Company and the Underwriter shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission to state a material fact relates to information supplied by
the Company or the Underwriter and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
The Company and the Underwriter agree that it would not be just and
equitable if contribution pursuant to this Section 7(d) were determined by pro
rata allocation (even if the Underwriter were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, 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 7, the Underwriter shall not be
required to contribute any amount in excess of the amount by which the total
underwriting discount applicable to the Shares purchased by the Underwriter
exceeds the amount of any damages which the Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
8. Conditions of Underwriters' Obligations. The obligation of the
---------------------------------------
Underwriter to purchase the Shares under this Agreement is subject to the
satisfaction of each of the following conditions:
(a) All the representations and warranties of the Company contained
in this Agreement shall be true and correct on the Closing Date with the same
force and effect as if made on and as of the Closing Date.
(b) The Registration Statement (including any post-effective
amendment thereto) shall have become effective not
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<PAGE>
later than 5:00 P.M. (and in the case of a Registration Statement filed under
Rule 462(b) of the Act, not later than 10:00 P.M.), New York City time, on the
date of this Agreement or at such later date and time as you may approve in
writing, and at the Closing Date no stop order suspending the effectiveness of
the Registration Statement shall have been issued and no proceedings for that
purpose shall have been commenced or shall be pending before or contemplated by
the Commission.
(c)(i) Since the date of the latest balance sheet included in the
Registration Statement and the Prospectus, there shall not have been any
material adverse change, or any development involving a prospective material
adverse change, in the condition, financial or otherwise, or in the earnings,
affairs or business prospects, whether or not arising in the ordinary course of
business, of the Company, (ii) since the date of the latest balance sheet
included in the Registration Statement and the Prospectus, there shall not have
been any material change, or any development involving a prospective material
change, in the capital stock or in the long-term debt of the Company from that
set forth in the Registration Statement and Prospectus, (iii) the Company and
its subsidiaries shall have no liability or obligation, direct or contingent,
which is material to the Company and its subsidiaries, taken as a whole, other
than those reflected in the Registration Statement and the Prospectus and (iv)
on the Closing Date you shall have received a certificate dated the Closing
Date, signed by Harvey Lenkin and Ronald L. Havner, Jr., in their capacities as
the President and Senior Vice President and Chief Financial Officer of the
Company, confirming the matters set forth in paragraphs (a), (b) and (c) of this
Section 8.
(d) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Underwriter), dated the Closing Date,
of David Goldberg, counsel for the Company, to the effect that:
(i) Each of the Company, the Subsidiaries and 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;
(ii) All of the Company's ownership interests in the
Partnerships are owned free and clear
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of any perfected security interest and, to my knowledge, after due inquiry,
any other security interests, claims, liens or encumbrances;
(iii) 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 statements in the
Prospectus under the caption "Description of Common Stock and Class B
Common Stock," insofar as such statements constitute summaries of the
documents referred to therein, have been reviewed by such counsel and
fairly summarize the matters referred to therein in all material respects;
the outstanding shares of Common Stock, Class B Common Stock, Series A
Preferred Stock, Series B Preferred Stock, Series C Preferred Stock, Series
D Preferred Stock, Series E Preferred Stock, Series F Preferred Stock,
Series G Preferred Stock, Series H Preferred Stock, Convertible Preferred
Stock and Series CC 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, delivered and paid for by the
Underwriter as described in 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 forms of
certificates for the Shares are 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;
(iv) 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,
any of the Subsidiaries or any of the Partnerships of a character required
to be disclosed in the Registration Statement 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
Statement 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
(Amendment No. 3) for the fiscal year ended December 31, 1995, 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
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<PAGE>
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;
(v) The Registration Statement 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 Statement and the Prospectus and any
amendment or supplement thereto (other than the financial statements and
other financial information contained therein, as to which such counsel
need express no opinion) comply as to form in all material respects with
the requirements of the Act and the rules 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 thereunder (other than the financial statements and other financial
information contained therein, as to which such counsel need express no
opinion);
(vi) 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;
(vii) 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 the Exchange
Act and such as may be required under the Blue Sky laws of any jurisdiction
in connection with the purchase and distribution by the Underwriter of the
Shares;
(viii) The Company, each Subsidiary and each Partnership have
all requisite power and authority, and, to the best knowledge of such
counsel, 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
22
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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;
(ix) The Company and each of the Subsidiaries are not in
violation of its articles of incorporation or by-laws, 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 its 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;
(x) Neither the issue and sale of the Shares nor the
consummation of any of the other transactions contemplated by the Agreement
nor the fulfillment of the terms thereof will conflict with, result in a
breach or violation of, or constitute a default under any law or the
articles of incorporation or by-laws of the Company or the Subsidiaries or
the partnership agreement of any of the Partnerships 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;
(xi) No holders of securities of the Company have rights to the
registration of such securities under the Registration Statement, except as
provided therein;
(xii) Any required filing of the Prospectus, and any supplements
thereto, pursuant to Rule 424(b)
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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 Statement has been issued and no
proceedings for that purpose have been instituted or threatened;
(xiii) To the best of such counsel's knowledge, after reasonable
inquiry, neither the Company, any of the Subsidiaries nor any of the
Partnerships is in violation of any law, ordinance, administrative or
governmental rule or regulation applicable to the Company, any of the
Subsidiaries or any of the Partnerships or of any decree of any court or
governmental agency or body having jurisdiction over the Company, any of
the Subsidiaries or any of the Partnerships, the violation of which could
have a Material Adverse Effect on the Company, such Subsidiary or such
Partnership, as the case may be;
(xiv) The statements in the Registration Statement and
Prospectus, insofar as they are descriptions of contracts, agreements or
other legal documents, or refer to statements of law or legal conclusions,
are accurate and present fairly the information required to be shown in all
material respects;
(xv) The Company, the Subsidiaries and the Partnerships own or
have the right to use all patents, trademarks, trademark registrations,
service marks, service mark registrations, trade names, copyrights,
licenses, inventions, trade secrets and rights described in the Prospectus
as being owned by them or any of them or necessary for the conduct of their
respective businesses, and, other than routine proceedings which if
adversely determined would not materially affect the business of the
Company, the Subsidiaries and the Partnerships taken as a whole as
described in the Prospectus, such counsel is not aware of any claim to the
contrary or any challenge by any other person to the rights of the Company,
the Subsidiaries or the Partnerships with respect to the foregoing;
(xvi) Except as described in the Prospectus and in Section 6(r)
of the Agreement, to the best of such counsel's knowledge, after reasonable
inquiry, there are no outstanding options, warrants or other rights calling
for the issuance of, and there are no commitments, plans or arrangements to
issue, any shares of capital stock of the Company or any security
convertible into or exchangeable or exercisable for
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capital stock of the Company;
(xvii) Except as described in the Prospectus and in Section 6(r)
of the Agreement, to the best of such counsel's knowledge, after reasonable
inquiry, there is no holder of any security of the Company or any other
person who has the right, contractual or otherwise, to cause the Company to
sell or otherwise issue to them, or to permit them to underwrite the sale
of, the Shares or the right to have any Common Stock or other securities of
the Company included in the Registration Statement or the right, as a
result of the filing of the Registration Statement, to require registration
under the Act of any shares of Common Stock or other securities of the
Company.
In addition, such counsel shall state that he has participated in
conferences with representatives of the Underwriter, 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 Statement and the Prospectus and related matters were discussed
and, although such counsel does not pass upon and does not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement and the Prospectus, on the basis of the
foregoing (relying as to certain factual matters on the information provided to
such counsel by the Company and not on an independent investigation, but in the
absence of information to the contrary), no facts have come to such counsel's
attention which leads such counsel to believe that the Registration Statement,
as of its 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 such counsel need not express any comment with respect to the
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financial statements and other financial data included in the Registration
Statement or Prospectus.
(e) The Underwriter shall have received an opinion, dated the Closing
Date and satisfactory in form and substance to counsel for the Underwriter, from
Hogan & Hartson, counsel for the Company, to the effect that:
(i) The statements in the Prospectus under the heading "Certain
Federal Income Tax Considerations" and "Risk Factors - Tax Risks" fairly
summarize the federal income tax considerations likely to be material
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<PAGE>
to a holder of the Shares.
(ii) 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
Registration Statement, the Company will continue to qualify as a REIT
under sections 856 through 860 of the Code following the Merger of Public
Storage Management, Inc. ("PSMI") into the Company (the "Merger") so long
-- ----
as (A) the Company has met at all times since the Merger and continues to
--
meet the stock ownership and gross income requirements applicable to REITs
and (B) either PSMI at the time of (and after giving effect to) the Merger
was not considered to have any current or accumulated earnings and profits
for tax purposes or the Company made distributions prior to the end of 1995
in an amount sufficient to eliminate such earnings and profits. You may
rely upon our tax opinion filed as Exhibit 8.1 to the Registration
Statement to the same extent as if it were set forth in full herein.
(f) The Underwriter shall have received an opinion, dated the Closing
Date, from Skadden, Arps, Slate, Meagher & Flom, counsel to the Underwriter,
with respect to the Registration Statement, the Prospectus and this Agreement,
which opinion shall be satisfactory in all respects to the Underwriter, 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.
(g) You shall have received letters addressed to you, and dated the
date hereof and the Closing Date from Ernst & Young, independent certified
public accountants, substantially in the forms heretofore approved by you.
(h) (i) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall have been taken or, to the knowledge of the Company, shall be
contemplated by the Commission at or prior to the Closing Date; (ii) there shall
not have been any material change in the capital stock of the Company nor any
material increase in the short-term or long-term debt of the Company (other than
in the ordinary course of business) from that set forth or contemplated in the
Registration Statement or the Prospectus (or any amendment or supplement
thereto); (iii) there shall not have been, since the respective dates as of
which information is given in the Registration Statement and the Prospectus (or
any amendment or supplement thereto), except as may otherwise be stated in the
Registration Statement and
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Prospectus (or any amendment or supplement thereto), any material adverse change
in the condition (financial or other), business, prospects, properties, net
worth or results of operations of the Company, the Subsidiaries and the
Partnerships taken as a whole; (iv) the Company, the Subsidiaries and the
Partnerships shall not have any liabilities or obligations, direct or contingent
(whether or not in the ordinary course of business), that are material to the
Company, the Subsidiaries, and the Partnerships, taken as a whole, other than
those reflected in the Registration Statement or the Prospectus (or any
amendment or supplement thereto); and (v) all the representations and warranties
of the Company contained in this Agreement shall be true and correct in all
material respects on and as of the date hereof and on and as of the Closing Date
as if made on and as of the Closing Date, and you shall have received a
certificate, dated the Closing Date and signed by the chief executive officer
and the chief financial officer of the Company (or such other officers as are
acceptable to you), to the effect set forth in this Section 8(h) and in Section
8(i) hereof.
(i) The Company shall not have failed at or prior to the Closing Date
to have performed or complied with any of its agreements herein contained and
required to be performed or complied with by it hereunder at or prior to the
Closing Date.
(j) Prior to the Closing Date the Shares shall have been listed,
subject to notice of issuance, on the New York Stock Exchange.
(k) The Company shall have furnished or caused to be furnished to you
such further certificates and documents as you shall have requested.
(l) The Company shall have furnished to you "lock up" letters, in
form and substance satisfactory to you, signed by each of its current executive
officers and directors.
All such opinions, certificates, letters and other documents will be
in compliance with the provisions hereof only if they are satisfactory in form
and substance to you and your counsel.
Any certificate or document signed by any officer of the Company and
delivered to you, as Underwriter, or to your
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counsel, shall be deemed a representation and warranty by the Company to you as
to the statements made therein.
9. Effective Date of Agreement and Termination. This Agreement
-------------------------------------------
shall become effective upon the later of (i) execution of this Agreement and
(ii) when notification of the effectiveness of the Registration Statement has
been released by the Commission.
This Agreement may be terminated at any time prior to the Closing Date
by you by written notice to the Company if any of the following has occurred:
(i) since the respective dates as of which information is given in the
Registration Statement and the Prospectus, any material adverse change or
development involving a prospective material adverse change in the condition,
financial or otherwise, of the Company and its subsidiaries, taken as a whole,
or the earnings, affairs, or business prospects of the Company or any of its
subsidiaries, taken as a whole, whether or not arising in the ordinary course of
business, which would, in your judgment, make it impracticable to market the
Shares on the terms and in the manner contemplated in the Prospectus, (ii) any
outbreak or escalation of hostilities or other national or international
calamity or crisis or change in economic conditions or in the financial markets
of the United States or elsewhere that, in your judgment, is material and
adverse and would, in your judgment, make it impracticable to market the Shares
on the terms and in the manner contemplated in the Prospectus, (iii) the
suspension or material limitation of trading in securities on the New York Stock
Exchange, the American Stock Exchange or the Nasdaq National Market System or
limitation on prices for securities on any such exchange or National Market
System, (iv) the enactment, publication, decree or other promulgation of any
federal or state statute, regulation, rule or order of any court or other
governmental authority which in your opinion materially and adversely affects,
or will materially and adversely affect, the business or operations of the
Company or any Subsidiary, (v) the declaration of a banking moratorium by either
federal or New York State authorities or (vi) the taking of any action by any
federal, state or local government or agency in respect of its monetary or
fiscal affairs which in your opinion has a material adverse effect on the
financial markets in the United States.
10. Miscellaneous. Notices given pursuant to any provision of this
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Agreement shall be addressed as follows: (a) if to the Company, to Public
Storage, Inc., 701 Western, 2nd Floor, Glendale, California 91201-2397,
Attention: President; and (b) if to you, c/o Donaldson, Lufkin & Jenrette
Securities Corporation, 277 Park Avenue, New York, New York 10172, Attention:
Syndicate Department, or in any case to such other address as the person to be
notified may have requested in writing.
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The respective indemnities, contribution agreements, representations,
warranties and other statements of the Company, its officers and directors and
of the Underwriter set forth in or made pursuant to this Agreement shall remain
operative and in full force and effect, and will survive delivery of and payment
for the Shares, regardless of (i) any investigation, or statement as to the
results thereof, made by or on behalf of the Underwriter or by or on behalf of
the Company, the officers or directors of the Company or any controlling person
of the Company, (ii) acceptance of the Shares and payment for them hereunder and
(iii) termination of this Agreement.
If this Agreement shall be terminated by the Underwriter because of
any failure or refusal on the part of the Company to comply with the terms or to
fulfill any of the conditions of this Agreement or pursuant to clause (i) of
Section 9, the Company agrees to reimburse the Underwriter for all out-of-pocket
expenses (including the reasonable fees and disbursements of counsel) reasonably
incurred by it.
Except as otherwise provided, this Agreement has been and is made
solely for the benefit of and shall be binding upon the Company, the
Underwriter, any controlling persons referred to herein and their respective
successors and assigns, all as and to the extent provided in this Agreement, and
no other person shall acquire or have any right under or by virtue of this
Agreement. The term "successors and assigns" shall not include a purchaser of
any of the Shares from the Underwriter merely because of such purchase.
This Agreement shall be governed and construed in accordance with the
laws of the State of New York without regard to principles of conflict of laws.
This Agreement may be signed in various counterparts which together
shall constitute one and the same instrument.
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<PAGE>
Please confirm that the foregoing correctly sets forth the agreement
between the Company and the Underwriter.
Very truly yours,
PUBLIC STORAGE, INC.
By:
---------------------------------------
Name:
Title:
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By:
--------------------------------------
Name:
Title:
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