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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) March 12, 1997
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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 January 7, 1997, the Securities and Exchange Commission declared
effective the Registration Statement on Form S-3 (No. 333-18395) 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.
333-00965), permits the Company to issue an aggregate of $400,000,000 of
preferred stock, depositary shares, equity stock, 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: March 12, 1997
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EXHIBIT 1.1
[____] SHARES
PUBLIC STORAGE, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
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March [__], 1997
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
PAINEWEBBER INCORPORATED
c/o 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 [__] shares
(the "Firm Shares") of its common stock, par value $.10 per share, to Donaldson,
Lufkin & Jenrette Securities Corporation ("DLJ") and PaineWebber Incorporated
(together with DLJ, the "Underwriters"). The Company also proposes to sell to
the Underwriters an aggregate of not more than [__] additional shares of its
common stock (the "Additional Shares"), if requested by the Underwriters as
provided in Section 2 hereof. The Firm Shares and the Additional Shares are
herein collectively called the "Shares." 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 with
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the Securities and Exchange Commission (the "Commission") a registration
statement, registration number 333-00965 ("Registration No. 333-00965") and a
second registration statement, registration number 333-18395 (together with
Registration No. 333-00965, the "Registration Statement"), on Form S-3,
including the related prospectus 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
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more amendments thereto, including each related prospectus, and one or more
prospectus supplements thereto, each of which has previously been furnished to
the Underwriters. Any registration statement filed pursuant to Rule 462(b) under
the Act is herein referred to as the "Rule 462(b)
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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
Underwriters, acting severally and not jointly, agree to purchase from the
Company, at a price per share of $[__] (the "Purchase Price"), the number of
Firm Shares opposite such Underwriter's name in Schedule I hereto.
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Company agrees to issue
and sell, and each Underwriter shall have a right to purchase, severally and not
jointly, from time to time, up to an aggregate of [__] Additional Shares at the
Purchase Price. Additional Shares may be purchased as provided in Section 3
hereof solely for the purpose of covering over-allotments made in connection
with the offering of the Firm Shares. If any Additional Shares are to be
purchased, each Underwriter, severally and not jointly, agrees to purchase the
number of Additional Shares (subject to such adjustments to eliminate fractional
shares as DLJ may determine) which bears the same proportion to the total number
of Additional Shares to be purchased as the number of Firm Shares set forth
opposite the name of such Underwriter in Schedule I hereto bears to the total
number of Firm 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 the date of the Prospectus Supplement without the prior written consent of
DLJ. In the case of the Company only, the following exceptions shall apply:
(i) offers and sales of Common Stock to the shareholders of Public Storage
Properties XIV, Inc. and Public Storage Properties XV, Inc., (ii) the conversion
or redemption of the Company's Convertible Preferred Stock or Series CC
Preferred Stock (each as defined below) 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 described in
the first sentence 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).
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3. Terms of Public Offering. The Company is advised by the
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Underwriters that they propose (i) to make a public offering of the Shares as
soon after the filing of the Prospectus Supplement with the Commission as in the
Underwriters' 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 Underwriters 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 the Underwriters shall
designate. The Closing Date and the location of delivery of and the form of
payment for the Shares may be varied by agreement among the Underwriters and the
Company.
Delivery to the Underwriters of and payment for any Additional Shares
to be purchased by any of the Underwriters shall be made at such place as such
Underwriter shall designate in writing, at 10:00 a.m., New York City time, on
such date or dates (individually, an "Option Closing Date"), which may be the
same as the Closing Date but shall in no event be earlier than the Closing Date,
as shall be specified in a written notice from DLJ to the Company of the
Underwriters' determination to purchase a number, specified in said notice, of
Additional Shares. Any such notice may be given at any time not later than 30
days after the date of this Agreement. Any Option Closing Date and the location
of delivery of and payment for the Additional Shares may be varied by agreement
among the Underwriters and the Company.
Certificates for the Shares shall be registered in such names and
issued in such denominations as the Underwriters shall request in writing not
later than two full business days prior to the Closing Date or the applicable
Option Closing Date, as the case may be. Such certificates shall be made
available to the Underwriters for inspection not later than 9:30 a.m., New York
City time, on the business day next preceding the Closing Date or the applicable
Option Closing Date, as the case may be. Unless the Underwriters request that
the Shares be delivered to their respective accounts at The Depository Trust
Company, certificates in definitive form evidencing the Shares shall be
delivered to the Underwriters on the Closing Date or the applicable Option
Closing Date, as the case may be, 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
-------------------------
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 the Underwriters or any
dealer, file any amendment or supplement to
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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 Underwriters, within a reasonable period of time prior to the filing
thereof and neither of the Underwriters shall 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 Underwriters 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, any Preliminary Prospectus 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.
(c) The Company will furnish to the Underwriters, 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 Underwriters, without charge, as
many copies of the Prospectus or any amendment or supplement thereto as any
Underwriter may reasonably request. The Company consents to the use of the
Prospectus or any amendment or supplement thereto by the 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,
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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 Underwriters, without charge, such number of
copies thereof as any 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 Underwriters, if such document would be deemed to be
incorporated by reference into the Prospectus, which is not approved by the
Underwriters after reasonable notice thereof.
(f) The Company will cooperate with the Underwriters 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 Underwriters 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 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 date hereof,
the Company will furnish to the Underwriters 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 Underwriters 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 any Underwriter terminating this Agreement pursuant to Section 9) or if
this Agreement shall be terminated by any 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
Underwriters for all out-of-pocket expenses (including fees and
expenses of counsel for the Underwriters) reasonably incurred by the
Underwriters in connection herewith.
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(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 Common Stock to
facilitate the sale or resale of any of the Common Stock in violation of the
Act.
(k) The Company will apply the net proceeds from the offering and
sale of the Shares by the Underwriters 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 and the Pacific
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 (including financial statements and exhibits), and all
amendments and supplements to any of them prior to or during the period
specified in Section 5(e), (ii) the printing and delivery of the Prospectus and
all amendments or supplements to it during the period specified in Section 5(e),
(iii) the printing and delivery of this Agreement 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 the Pacific 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 Underwriters or by dealers to whom Shares may be
sold.
6. Representations and Warranties of the Company. The Company
---------------------------------------------
represents and warrants to each of the Underwriters 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 Underwriters. 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 Registra-
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tion 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
Underwriters shall agree in writing to a modification, shall be in all
substantive respects in the form furnished to the Underwriters 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 Underwriters, 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
Underwriters 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"), 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, Arlington, PSTI, Sandy, Orangeco, PSPUD, A-1, PSIIA and
PSCPG, 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"),
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PS Partners VI, Ltd. ("PSPVI"), PS Partners VII, Ltd. ("PSPVII") and PS Partners
VIII, Ltd. ("PSPVIII") and American Office Park Properties, L.P. ("AOPP" 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 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 69%, 74%, 60%, 54%, 51%, 52%, 58% and 53% of the limited
partnership units of PSPI, PSPII, PSPIII, PSPIV, PSPV, PSPVI, PSPVII and
PSPVIII, respectively. The Company owns as of the date hereof an approximately
85% economic interest in AOPP.
(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"), 8-5/8% Cumulative Preferred Stock, Series I, stated value of $25,000
per share, of the Company (the "Series I 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 and the Pacific Stock Exchange;
the form of certificate for the Shares is in valid and sufficient form in
compliance with New York Stock Exchange and Pacific 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
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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 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 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 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
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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 Employee Retirement Income
Security Act of 1974, as amended ("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 (including the
Incorporated Documents), and other than grants of options to purchase an
aggregate of 373,000 shares of Common Stock in the fourth quarter of 1996, 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
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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 Underwriters 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 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 present ed 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
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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.
(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 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.
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(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 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 or preliminary
prospectus supplement relating to the Shares, in each case filed pursuant to
Rule 424(b). "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 each Underwriter and each person, if any, who controls any 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, 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 any Underwriter furnished in writing to
the Company by or on behalf of such Underwriter expressly for use therein;
provided, however, that the foregoing indemnity agreement with respect to any
- -------- -------
Preliminary Prospectus shall not inure to the benefit of the Underwriter from
14
<PAGE>
whom the person asserting any such losses, claims, damages, liabilities and
judgments purchased Shares, or any person controlling such 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 sent or given by
or on behalf of such 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 any Underwriter or
any person controlling any 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,
such 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 Underwriters 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
Underwriters 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 any Underwriter or such controlling person and the Company and the
Underwriters 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
Underwriters 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 Underwriters and controlling persons, which firm shall be
designated in writing by the Underwriters 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 Underwriters 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 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
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<PAGE>
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) Each Underwriter, severally and not jointly, 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 Underwriters but only with
reference to information relating to such Underwriter furnished in writing by or
on behalf of such Underwriter 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 any Underwriter, such
Underwriter shall have the rights and duties given to the Company (except that
if the Company shall have assumed the defense thereof, such 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 such Underwriter), and the Company, its directors,
any such officers and any person controlling the Company shall have the rights
and duties given to such Underwriter, by Section 7(b).
(d) If the indemnification provided for in 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
Underwriters 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 Underwriters in connection with the statements or omissions which resulted
in such losses, claims, damages, liabilities or judgments, as well as any other
relevant equitable considerations. The relative benefits received by the
Company and the Underwriters 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
Underwriters, 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 Underwriters 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 Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
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The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to Section 7(d) were determined by pro rata
allocation (even if the Underwriters 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 Section 7, no Underwriter shall be required to
contribute any amount in excess of the amount by which the total underwriting
discount applicable to the Shares purchased by such Underwriter exceeds the
amount of any damages which such 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. The Underwriters'
obligations to contribute pursuant to Section 7 are several in proportion to the
respective numbers of Shares set forth opposite their names in Schedule I and
not joint.
8. Conditions of Underwriters' Obligations. The several obligations
---------------------------------------
of the Underwriters 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 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 the Underwriters 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, to the knowledge of the Company or
the Underwriters, 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
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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 the
Underwriters shall have received a certificate dated the Closing Date, signed by
Harvey Lenkin and John Reyes in their capacities as the President and Senior
Vice President and Chief Financial Officer of the Company, confirming the
matters set forth in Sections 8(a), (b) and (c).
(d) The Underwriters shall have received on the Closing Date an
opinion (satisfactory to the Underwriters and counsel for the Underwriters),
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 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 in all material respects;
the statements in the Prospectus under the captions "Description of Common
Stock and Class B Common Stock," "Description of Preferred Stock" and
"Description of Equity 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,
Series I 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 Underwriters as
described in the Agreement, will be fully paid and nonassessable; the
Shares have been duly authorized for listing, subject to official
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<PAGE>
notice of issuance, on the New York Stock Exchange and the Pacific Stock
Exchange; the forms of certificates for the Shares are in valid and
sufficient form in compliance with New York Stock Exchange and Pacific
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 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
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<PAGE>
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 Underwriters 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 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 this
Agreement 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 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;
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(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) 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),
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 capital stock of the Company;
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(xvii) Except as described in the Prospectus and in Section
6(r), 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 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 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
- --------
financial statements and other financial data included in the Registration
Statement or Prospectus.
(e) The Underwriters shall have received an opinion, dated the
Closing Date and satisfactory in form and substance to counsel for the
Underwriters, from Hogan & Hartson L.L.P., 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 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")
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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. The Underwriters 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 Underwriters shall have received an opinion, dated the
Closing Date, from Skadden, Arps, Slate, Meagher & Flom LLP, special counsel to
the Underwriters, with respect to the Registration Statement, the Prospectus and
this Agreement, which opinion shall be satisfactory in all respects to the
Underwriters, 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) The Underwriters shall have received letters addressed to them,
and dated the date hereof and the Closing Date from Ernst & Young LLP,
independent certified public accountants, substantially in the forms heretofore
approved by the Underwriters.
(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 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 the
Underwriters 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 the Underwriters), to the
effect set forth in Section 8(h) and in Section 8(i).
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<PAGE>
(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 and the Pacific
Stock Exchange.
(k) The Company shall have furnished or caused to be furnished to the
Underwriters such further certificates and documents as the Underwriters shall
have requested.
(l) The Company shall have furnished to the Underwriters "lock up"
letters, in form and substance satisfactory to the Underwriters, signed by each
of the Company's 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 the Underwriters and their counsel.
Any certificate or document signed by any officer of the Company and
delivered to the Underwriters, or to their counsel, shall be deemed a
representation and warranty by the Company to the Underwriters 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 any Underwriter 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 the judgment of any Underwriter, 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 the judgment of any
Underwriter, is material and adverse and would, in the judgment of any
Underwriter, 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,
24
<PAGE>
regulation, rule or order of any court or other governmental authority which in
the Underwriters' 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
the opinion of any Underwriter has a material adverse effect on the financial
markets in the United States.
10. Miscellaneous. Notices given pursuant to any provision of this
-------------
Agreement shall be addressed as follows: (a) if to the Company, to Public
Storage, Inc., 701 Western Avenue, 2nd Floor, Glendale, California 91201-2397,
Attention: President; and (b) if to either of the Underwriters, 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.
The respective indemnities, contribution agreements, representations,
warranties and other statements of the Company, its officers and directors and
of the Underwriters 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 any 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 Underwriters 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 Underwriters for all out-of-
pocket expenses (including the reasonable fees and disbursements of counsel)
reasonably incurred by them.
Except as otherwise provided, this Agreement has been and is made
solely for the benefit of and shall be binding upon the Company, the
Underwriters, 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 any 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.
References to a "Section" or a "Paragraph" are, unless otherwise
specified, to a section or a paragraph of this Agreement.
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This Agreement may be signed in various counterparts which together
shall constitute one and the same instrument.
26
<PAGE>
Please confirm that the foregoing correctly sets forth the agreement
between the Company and the Underwriters.
Very truly yours,
PUBLIC STORAGE, INC.
By: ________________________________
Name: Harvey Lenkin
Title: President
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
PAINEWEBBER INCORPORATED
By: Donaldson, Lufkin & Jenrette Securities Corporation
By: ________________________________________
Name: Steven L. Kantor
Title: Managing Director
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SCHEDULE I
Number of
Firm Shares
Underwriters to be Purchased
- ------------ ---------------
Donaldson, Lufkin & Jenrette Securities Corporation.......
PaineWebber Incorporated..................................
Total.................................................... [ ]
======
28
