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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 9, 1996
THE PRICE REIT, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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MARYLAND 1-13432 52-1746059
(STATE OR OTHER JURISDICTION OF (COMMISSION FILE NUMBER) (IRS EMPLOYER IDENTIFICATION NO.)
INCORPORATION)
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7979 IVANHOE AVENUE 92037
LA JOLLA, CALIFORNIA (ZIP CODE)
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
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REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (619) 551-2320
NONE
(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)
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ITEM 5. OTHER EVENTS.
On August 15, 1995 The Price REIT, Inc. (the "Company") filed a
registration statement (File No. 33-95832) on Form S-3 with the Securities and
Exchange Commission (the "Commission") relating to the public offering,
pursuant to Rule 415 under the Securities Act of 1933, as amended, of up to an
aggregate of $175,000,000 in securities of the Company (the "Registration
Statement"). On September 1, 1995, the Commission declared the Registration
Statement, as amended by Post-Effective Amendment No. 1, effective. (The
Registration Statement and definitive prospectus contained therein are
collectively referred to as the "Prospectus.")
The Company filed on September 11, 1996 a supplement to the Prospectus,
dated September 9, 1996, relating to the issuance and sale of up to 690,000
shares of the Company's common stock, $.01 par value per share (the "Common
Stock Supplement"), with the Commission. In connection with the filing of the
Common Stock Supplement with the Commission, the Company is filing certain
exhibits as part of this Form 8-K. See "Item 7. Financial Statements and
Exhibits."
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
The following exhibits are filed with this report on Form 8-K:
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Exhibit No. Description
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1.1 Form of Purchase Agreement between the Company and Merrill Lynch & Co., Merrill
Lynch, Pierce, Fenner & Smith Incorporated and Sutro & Co. Incorporated dated
September 9, 1996, with respect to the issuance and sale by the Company of up to
690,000 shares of the Company's common stock.
5.1 Opinion Letter of Ballard Spahr Andrews & Ingersoll regarding the validity of the
common stock.
8.1 Opinion of Gibson, Dunn & Crutcher LLP regarding certain tax matters.
23.1 Consent of Ballard Sphar Andrews & Ingersoll (included as part of Exhibit 5.1).
23.2 Consent of Gibson, Dunn & Crutcher LLP (included as part of Exhibit 8.1).
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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.
THE PRICE REIT, INC.
Date: September 12, 1996 By: /s/ GEORGE M. JEZEK
_________________________
George M. Jezek
Chief Financial Officer
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EXHIBIT INDEX
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Exhibit No. Description
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1.1 Form of Purchase Agreement between the Company and Merrill Lynch & Co., Merrill
Lynch, Pierce, Fenner & Smith Incorporated and Sutro & Co. Incorporated dated
September 9, 1996, with respect to the issuance and sale by the Company of up to
690,000 shares of the Company's common stock.
5.1 Opinion of Ballard Spahr Andrews & Ingersoll regarding the validity of the
common stock.
8.1 Opinion of Gibson, Dunn & Crutcher LLP regarding certain tax matters.
23.1 Consent of Ballard Sphar Andrews & Ingersoll (included as part of Exhibit 5.1).
23.2 Consent of Gibson, Dunn & Crutcher LLP (included as part of Exhibit 8.1).
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EXHIBIT 1.1
THE PRICE REIT, INC.
(a Maryland corporation)
Common Stock
(Par Value $.01 Per Share)
PURCHASE AGREEMENT
September 9, 1996
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
SUTRO & CO. INCORPORATED
c/o Merrill Lynch, Pierce, Fenner & Smith Incorporated
Merrill Lynch World Headquarters - North Tower
250 Vesey Street
World Financial Center
New York, New York 10281-1209
Ladies and Gentlemen:
The Price REIT, Inc., a Maryland corporation (the "Company"),
confirms its agreement with Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner &
Smith Incorporated ("Merrill Lynch"), and Sutro & Co. Incorporated ("Sutro," and
together with Merrill Lynch, the "Underwriters," which term shall also include
any underwriter substituted as hereinafter provided in Section 10 hereof), with
respect to (i) the sale by the Company and the purchase by the Underwriters,
acting severally and not jointly, of the respective numbers of shares of common
stock, par value $.01 per share, of the Company ("Common Shares") set forth in
Schedule A hereto and (ii) the grant by the Company to the Underwriters, acting
severally and not jointly, of the option described in Section 2(b) hereof to
purchase all or any part of 90,000 additional Common Shares to cover
over-allotments, if any. The aforesaid 600,000 Common Shares described in clause
(i) above (the "Initial Securities") to be purchased by the Underwriters and all
or any part of the 90,000 Common Shares subject to the option described in
Section 2(b) hereof (the "Option Securities") are collectively hereinafter
called the "Securities."
The Company understands that the Underwriters propose to make
a public offering of the Securities as soon as they deem advisable after this
Agreement has been executed and delivered.
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A registration statement on Form S-3 (No. 33-95832), and
pre-effective amendment No. 1 thereto, with respect to the Common Shares has (i)
been prepared by the Company in conformity with the requirements of the
Securities Act of 1933, as amended (the "Securities Act" or the "1933 Act"), and
the rules and regulations (the "Rules and Regulations" or the "1933 Act
Regulations") of the Securities and Exchange Commission (the "Commission")
promulgated thereunder for the offering from time to time of the Common Shares
and certain of the Company's debt and other equity securities in accordance with
Rule 415 of the Rules and Regulations (the "Shelf Securities"), (ii) been filed
with the Commission under the Securities Act and (iii) become effective under
the Securities Act. Copies of such registration statement and Amendment No. 1
thereto have been delivered by the Company to the Underwriters. Such
registration statement, as amended through the date of this Agreement, is, on
the one hand, and the prospectus constituting a part thereof and each prospectus
supplement relating to the offering of Common Shares to the Underwriters for use
(whether or not such prospectus supplement is required to be filed by the
Company pursuant to Rule 424(b) of the Rules and Regulations) (the "Prospectus
Supplement"), on the other hand, including all documents incorporated therein by
reference, as from time to time amended or supplemented pursuant to the
Securities Act, the Securities Exchange Act of 1934, as amended, and the rules
and regulations of the Commission thereunder (collectively, the "Exchange Act"
or the "1934 Act"), or otherwise, are referred to herein as the "Registration
Statement" and the "Prospectus," respectively; provided, however, that the
Prospectus Supplement shall be deemed to have supplemented the Prospectus only
with respect to the offering of Shelf Securities to which it relates; and
provided further, that if any revised prospectus shall be provided to the
Underwriters by the Company for use in connection with the offering of the
Securities which differs from the prospectus on file (whether or not such
revised prospectus is required to be filed by the company pursuant to Rule
424(b) of the 1933 Act Regulations), the term "Prospectus" shall refer to such
revised prospectus from and after the time it is first provided to the
Underwriters for such use. Any registration statement filed pursuant to Rule
462(b) of the 1933 Act Regulations 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. For purposes of this
Agreement, all references to the Registration Statement, the Prospectus or any
amendment or supplement to any of the foregoing shall be deemed to include the
copy filed with the Commission pursuant to its Electronic Data Gathering,
Analysis and Retrieval system ("EDGAR").
All references in this Agreement to financial statements and
schedules and other information which is "described," "disclosed," "contained,"
"included" or "stated" in the Registration Statement or the Prospectus (and all
other references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is or is deemed
to be incorporated by reference in the Registration Statement or the Prospectus,
as the case may be; and all references in this Agreement to amendments or
supplements to the Registration Statement or the Prospectus shall be deemed to
mean and include the filing of any document under the 1934 Act, which is or is
deemed to be incorporated by reference in the Registration Statement or the
Prospectus, as the case may be. If the Company elects to rely on Rule 434 under
the 1933 Act Regulations, all references to the Prospectus shall be deemed to
include, without limitation, the form of
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prospectus and the term sheet (the "Term Sheet"), taken together, provided to
the Underwriters by the Company in reliance on Rule 434 under the 1933 Act (the
"Rule 434 Prospectus").
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company
represents and warrants to each Underwriter as of the date hereof, as of the
Closing Time referred to in Section 2(c) hereof and as of each Date of Delivery
(if any) referred to in Section 2(b) hereof, and agrees with each Underwriter,
as follows:
(i) At the respective times the Registration
Statement, any Rule 462(b) Registration Statement and any
post-effective amendments thereto became effective, and at the
Closing Time (and, if any Option Securities are purchased, at
the Date of Delivery), the Registration Statement, the Rule
462(b) Registration Statement and any amendments and
supplements thereto complied and will comply in all material
respects with the requirements of the 1933 Act and the 1933
Act Regulations and did not and will not (taking into account
any applicable prospectus supplement) contain an untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the
statements therein not misleading. Neither the Prospectus nor
any amendments or supplements thereto, at the time the
Prospectus or any such amendment or supplement was issued and
at the Closing Time (and, if any Option Securities are
purchased, at the Date of Delivery), included or will include
an 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. The representations and warranties
in this subsection shall not apply to statements in or
omissions from the Registration Statement or Prospectus or any
amendments or supplements thereto made in reliance upon and in
conformity with information contained in the last paragraph of
the cover page of the Prospectus, the last paragraph on the
inside cover page of the Prospectus and the second paragraph
under the heading "Underwriting" in the Prospectus and
furnished to the Company in writing by any Underwriter through
Merrill Lynch expressly for use in the Registration Statement
or Prospectus. The Prospectus filed as part of the
Registration Statement as originally filed or as part of any
amendment thereto, or filed pursuant to Rule 424 under the
1933 Act, complied when so filed in all material respects with
the 1933 Act Regulations and, if applicable, the Prospectus
delivered to the Underwriters for use in connection with this
offering was identical to the electronically transmitted
copies thereof filed with the Commission pursuant to EDGAR,
except to the extent permitted by Regulation S-T promulgated
by the Commission ("Regulation S-T").
(ii) Each of the Registration Statement and any Rule
462(b) Registration Statement has become effective under the
1933 Act and no stop
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order suspending the effectiveness of the Registration
Statement or any Rule 462(b) Registration Statement or, in
each case, any part thereof has been issued and no proceeding
for that purpose has been instituted or is pending or, to the
knowledge of the Company, is contemplated by the Commission or
the state securities authority of any jurisdiction and any
request on the part of the Commission for additional
information has been complied with. No order preventing or
suspending the use of the Prospectus has been issued and no
proceeding for that purpose has been instituted or is pending
before or, to the knowledge of the Company, is contemplated
by, the Commission or the state securities authority of any
jurisdiction.
(iii) The documents incorporated by reference in the
Prospectus, when they became effective or were filed with the
Commission, as the case may be, conformed in all material
respects to the requirements of the Securities Act or the
Exchange Act, as applicable, and the rules and regulations of
the Commission thereunder, and none of such documents
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; and
any further documents so filed and incorporated by reference
in the Prospectus, when such documents become effective or are
filed with the Commission, as the case may be, will conform in
all material respects to the requirements of the Securities
Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder and will not contain
an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to
make the statements therein not misleading.
(iv) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the State of Maryland, is duly qualified to do
business and is in good standing as a foreign corporation in
each jurisdiction in which its ownership or lease of property
or the conduct of its business requires such qualification
(except where the failure to so qualify would not have a
material adverse effect on the consolidated financial
position, stockholders' equity, results of operations,
business affairs or business prospects of the Company), and
has all power and authority necessary to own or hold its
properties and to conduct the business in which it is engaged;
and the Company has no interest in any entity or person other
than (i) its ownership of all of the outstanding capital stock
of Price/Texas, Inc., a Texas corporation ("Price Texas"),
(ii) its ownership of all of the limited partnership interests
in Price/Baybrook, Ltd., a Texas limited partnership, and the
ownership by Price Texas of all of the general partnership
interests of Price/Baybrook, Ltd., (iii) its ownership of 100%
of the nonvoting preferred stock of K&F Development Company,
Inc., a California corporation (the "Development Company"),
(iv) its 50% partnership interest in Centrepoint Associates,
L.L.P., an Arizona limited liability partnership, (v) its 50%
general partnership interest in Hayden Plaza North Associates,
an Arizona general partnership, and (vi) the Development
Company's membership
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interests in Smithtown Venture Limited Liability Company, a
New York limited liability company and Bridgewater Community
Retail Center, LLC, a New Jersey limited liability company
(collectively, the "Affiliates," and the Company's interests
in the Affiliates are referred to herein collectively as the
"Interests").
(v) Each of the Affiliates has been duly organized
and is validly existing as a corporation, limited liability
company or partnership, as the case may be, and in good
standing under the laws of its jurisdiction of organization,
is duly qualified to do business and is in good standing as a
foreign corporation, limited liability company or partnership,
as the case may be, in each jurisdiction in which its
respective ownership or lease of property or the conduct of
its business requires such qualification (except where the
failure to so qualify would not have a material adverse effect
on the consolidated financial position, stockholders' equity,
results of operations, business affairs or business prospects
of the Company), and has all power and authority necessary to
own or hold its respective properties and to conduct the
business in which it is engaged; and none of the Affiliates,
other than Price/Baybrook, Ltd., is a "significant
subsidiary," as such term is defined in Rule 405 of the Rules
and Regulations.
(vi) The Company has an authorized capitalization as
set forth in the Prospectus, and all of the issued shares of
capital stock of the Company have been duly and validly
authorized and issued, are fully paid and non-assessable and
conform to the description thereof contained in the
Prospectus; and the Company's Interests have been duly and
validly authorized and issued and are fully paid and
non-assessable and are owned by the Company free and clear of
all liens, encumbrances, equities or claims.
(vii) The unissued Common Shares to be issued and
sold by the Company to the Underwriters hereunder have been
duly and validly authorized and, when issued and delivered
against payment therefor as provided herein, will be duly and
validly issued, fully paid and non-assessable, and will
conform to the description thereof contained in the
Prospectus; and the issuance of the Common Shares is not
subject to preemptive or other similar rights.
(viii) This Agreement has been duly authorized,
executed and delivered by the Company.
(ix) The execution, delivery and performance of this
Agreement by the Company and the consummation of the
transactions contemplated hereby will not conflict with or
result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement, partnership or joint
venture agreement or other agreement or instrument to which
the Company or any of the Affiliates is a
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party or by which the Company or any of the Affiliates is
bound or to which any of the property or assets of the Company
or any of the Affiliates is subject, nor will such actions
result in any violation of the provisions of the charter or
by-laws of the Company or any governing document of any of the
Affiliates or any statute or any order, rule or regulation of
any court or governmental agency or body having jurisdiction
over the Company or any of the Affiliates or any of their
properties or assets; and except for the registration of the
Common Shares under the Securities Act and such consents,
approvals, authorizations, registrations or qualifications as
have been obtained or made, or as may be required under the
Exchange Act and applicable state securities laws in
connection with the purchase and distribution of the Common
Shares by the Underwriters, no consent, approval,
authorization or order of, or filing or registration with, any
such court or governmental agency or body is required for the
execution, delivery and performance of this Agreement by the
Company and the consummation of the transactions contemplated
hereby.
(x) There are no contracts, agreements or
understandings between the Company and any person granting
such person the right to require the Company to file a
registration statement under the Securities Act with respect
to any securities of the Company owned or to be owned by such
person or to require the Company to include such securities in
the securities registered pursuant to the Registration
Statement or in any securities being registered pursuant to
any other registration statement filed by the Company under
the Securities Act.
(xi) Except as described in the Prospectus, the
Company has not sold or issued any Common Shares during the
six-month period preceding the date of the Prospectus,
including any sales pursuant to Rule 144A under, or
Regulations D or S of, the Securities Act, other than shares
issued pursuant to employee benefit plans, qualified stock
options plans, dividend reinvestment plans or other employee
compensation plans.
(xii) The Company has not sustained, since the date
of the latest audited financial statements included or
incorporated by reference in the Prospectus, any material loss
or interference with its business from fire, explosion, flood
or other calamity, whether or not covered by insurance, or
from any labor dispute or court or governmental action, order
or decree, otherwise than as set forth or contemplated in the
Prospectus; and, since such date, there has not been any
change in the capital stock or long-term debt of the Company
or any material adverse change, or any development involving a
prospective material adverse change, in or affecting the
general affairs, management, financial position, stockholders'
equity or results of operations of the Company, otherwise than
as set forth or contemplated in the Prospectus.
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(xiii) The financial statements (including the
related notes and supporting schedules) filed as part of the
Registration Statement or included or incorporated by
reference in the Prospectus present fairly the financial
condition and results of operations of the entities purported
to be shown thereby, at the dates and for the periods
indicated, and have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis
throughout the periods involved.
(xiv) Ernst & Young LLP, who have certified certain
financial statements of the Company, whose report appears in
the Prospectus or is incorporated by reference therein and who
have delivered the initial letter referred to in Section 5(d)
hereof, are independent public accountants as required by the
Securities Act and the Rules and Regulations and were
independent accountants as required by the Securities Act and
the Rules and Regulations during the periods covered by the
financial statements on which they reported contained or
incorporated in the Prospectus.
(xv) The Company and the Affiliates have good and
marketable title in fee simple to all real property and good
and marketable title to all personal property identified in
the Prospectus as being owned by them, in each case free and
clear of all liens, encumbrances and defects except such as
are described in the Prospectus or such as do not materially
affect the value of such property and do not materially
interfere with the use made and proposed to be made of such
property by the Company and the Affiliates; and all real
property and buildings held under lease by the Company and the
Affiliates are held by them under valid, subsisting and
enforceable leases, with such exceptions as are not material
and do not interfere with the use made and proposed to be made
of such property and buildings by the Company and the
Affiliates.
(xvi) The Company and the Affiliates carry, or are
covered by, insurance in such amounts and covering such risks
as is adequate for the conduct of their respective businesses
and the value of their respective properties and as is
customary for companies engaged in similar businesses in
similar industries.
(xvii) There are no legal or governmental proceedings
pending to which the Company or any of the Affiliates is a
party or of which any property or assets of the Company or any
of the Affiliates is the subject which, if determined
adversely to the Company or any of the Affiliates, might have
a material adverse effect on the consolidated financial
position, stockholders' equity, results of operations,
business affairs or business prospects of the Company and the
Affiliates; and to the best of the Company's knowledge, no
such proceedings are threatened or contemplated by
governmental authorities or threatened by others.
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(xviii) The conditions for use of Form S-3, as set
forth in the General Instructions thereto, have been
satisfied.
(xix) There are no contracts or other documents which
are required to be described in the Prospectus or filed as
exhibits to the Registration Statement by the Securities Act
or by the Rules and Regulations which have not been described
in the Prospectus or filed as exhibits to the Registration
Statement or incorporated therein by reference as permitted by
the Rules and Regulations.
(xx) No relationship, direct or indirect, exists
between or among the Company on the one hand, and the
directors, officers, stockholders, customers or suppliers of
the Company on the other hand, which is required to be
described in the Prospectus which is not so described.
(xxi) No labor disturbance by the employees of the
Company exists or, to the knowledge of the Company, is
imminent which might be expected to have a material adverse
effect on the consolidated financial position, stockholders'
equity, results of operations, business affairs or business
prospects of the Company.
(xxii) Since the date as of which information is
given in the Prospectus, and except as may otherwise be
disclosed in the Prospectus, the Company has not (i) issued or
granted any security other than shares issued pursuant to
employee benefit plans, qualified stock options plans,
dividend reinvestment plans or other employee compensation
plans, (ii) incurred any liability or obligation, direct or
contingent, other than liabilities and obligations which were
incurred in the ordinary course of business, (iii) entered
into any transaction not in the ordinary course of business or
(iv) declared or paid any dividend on its capital stock not in
the ordinary course of business.
(xxiii) Neither the Company nor any of the Affiliates
(i) is in violation of its charter, by-laws or other
organizational document, as applicable, (ii) is in default,
and no event has occurred which, with notice or lapse of time
or both, would constitute such a default, in the due
performance or observance of any term, covenant or condition
contained in any indenture, mortgage, deed of trust, loan
agreement, partnership or joint venture agreement or other
agreement or instrument to which it is a party or by which it
is bound or to which any of its properties or assets is
subject or (iii) is in violation of any law, ordinance,
governmental rule, regulation or court decree to
which it or its property or assets may be subject or has
failed to obtain any material license, permit, certificate,
franchise or other governmental authorization or permit
necessary to the ownership of its property or to the conduct
of its business, which default or violation might have a
material adverse effect on the consolidated financial
position, stockholders' equity, results of operations,
business affairs or business prospects of the Company.
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(xxiv) There has been no storage, disposal,
generation, manufacture, refinement, transportation, handling
or treatment of toxic wastes, medical wastes, hazardous wastes
or hazardous substances by the Company or any of the
Affiliates (or, to the knowledge of the Company, any of their
predecessors in interest) at, upon or from any of the property
now or previously owned or leased by the Company or the
Affiliates in violation of any applicable law, ordinance,
rule, regulation, order, judgment, decree or permit or which
would require remedial action under any applicable law,
ordinance, rule, regulation, order, judgment, decree or
permit, except for any violation or remedial action which
would not have, or could not be reasonably likely to have,
singularly or in the aggregate with all such violations and
remedial actions, a material adverse effect on the general
affairs, management, financial position, stockholders' equity
or results of operations of the Company; there has been no
material spill, discharge, leak, emission, injection, escape,
dumping or release of any kind onto such property or into the
environment surrounding such property of any toxic wastes,
medical wastes, solid wastes, hazardous wastes or hazardous
substances due to or caused by the Company or any of the
Affiliates or with respect to which the Company or any of the
Affiliates have knowledge, except for any such spill,
discharge, leak, emission, injection, escape, dumping or
release which would not have or would not be reasonably likely
to have, singularly or in the aggregate with all such spills,
discharges, leaks, emissions, injections, escapes, dumpings
and releases, a material adverse effect on the general
affairs, management, financial position, stockholders' equity
or results of operations of the Company; and the terms
"hazardous wastes", "toxic wastes", "hazardous substances" and
"medical wastes" shall have the meanings specified in any
applicable local, state, federal and foreign laws or
regulations with respect to environmental protection.
(xxv) Neither the Company nor any Affiliate is an
"investment company" within the meaning of such term under the
Investment Company Act of 1940 and the rules and regulations
of the Commission thereunder.
(xxvi) The Company has been and is organized in
conformity with the requirements for qualification as a real
estate investment trust under the Internal Revenue Code of
1986, as amended (the "Code"), and its method of operation has
at all times enabled, and its proposed method of operation
will enable, the Company to meet the requirements for taxation
as a real estate investment trust under the Code.
(b) Officer's Certificates. Any certificate signed by any
officer of the Company and delivered to the Underwriters or to counsel for the
Underwriters shall be deemed a representation and warranty by the Company to
each Underwriter as to the matters covered thereby.
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SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) Initial Securities. On the basis of the representations
and warranties herein contained and subject to the terms and conditions herein
set forth, the Company agrees to sell to each Underwriter, severally and not
jointly, and each Underwriter, severally and not jointly, agrees to purchase
from the Company, at the price per share set forth in Schedule C, the number of
Initial Securities set forth in Schedule A opposite the name of such
Underwriter, plus any additional number of Initial Securities which such
Underwriter may become obligated to purchase pursuant to the provisions of
Section 10 hereof.
(b) Option Securities. In addition, on the basis of the
representations and warranties herein contained and subject to the terms and
conditions herein set forth, the Company hereby grants an option to the
Underwriters to purchase up to an additional 90,000 Common Shares at the price
per share set forth in Schedule C. The option hereby granted will expire 30 days
after the date hereof and may be exercised in whole or in part from time to time
only for the purpose of covering over-allotments which may be made in connection
with the offering and distribution of the Initial Securities upon notice by the
Underwriters to the Company setting forth the number of Option Securities as to
which the several Underwriters are then exercising the option and the time and
date of payment and delivery for such Option Securities. Any such time and date
of delivery (a "Date of Delivery") shall be determined by the Underwriters, but
shall not be later than seven full business days after the exercise of said
option, nor in any event prior to the Closing Time. Each of the Underwriters,
acting severally and not jointly, will purchase that proportion of the total
number of Option Securities then being purchased which the number of Initial
Securities set forth in Schedule A opposite the name of such Underwriter bears
to the total number of Initial Securities, subject in each case to such
adjustments as the Underwriters in their discretion shall make to eliminate any
sales or purchases of fractional shares.
(c) Payment. Payment of the purchase price for, and delivery
of certificates for, the Initial Securities shall be made at the offices of
Gibson, Dunn & Crutcher LLP, 333 South Grand Avenue, Los Angeles, California
90071; or at such other place as shall be agreed upon by the Underwriters and
the Company, at 8:00 a.m. (Los Angeles time), on the third (fourth, if the
pricing occurs after 4:30 p.m. Eastern Time on any given day) business day after
the date hereof (unless postponed in accordance with the provisions of Section
10), or such other time not later than seven business days after such date as
shall be agreed upon by the Underwriters and the Company (such time and date of
payment and delivery being herein called the "Closing Time").
In addition, in the event that any or all of the Option
Securities are purchased by the Underwriters, payment of the purchase price for,
and delivery of certificates for, such Option Securities shall be made at the
above-mentioned offices of Gibson, Dunn & Crutcher LLP, or at such other place
as shall be agreed upon by the Underwriters and the Company, on each Date of
Delivery as specified in the notice from the Underwriters to the Company.
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Payment shall be made to the Company by wire transfer of
immediately available funds or similar same day funds payable to the order of
the Company against delivery to the Underwriters for the respective accounts of
the Underwriters of certificates for the Securities to be purchased by them.
Certificates for the Initial Securities and the Option Securities, if any, shall
be in such denominations and registered in such names as the Underwriters may
request in writing at least one full business day before the Closing Time or the
relevant Date of Delivery, as the case may be. It is understood that each
Underwriter has authorized the other Underwriter, for its account, to accept
delivery of, receipt for, and make payment of the purchase price for, the
Initial Securities and the Option Securities, if any, which it has agreed to
purchase. Merrill Lynch, individually and not as representative of the
Underwriters, may (but shall not be obligated to) make payment of the purchase
price for the Initial Securities or the Option Securities, if any, to be
purchased by Sutro whose check has not been received by the Closing Time or the
relevant Date of Delivery, as the case may be, but such payment shall not
relieve Sutro from its obligations hereunder. The certificates for the Initial
Securities and the Option Securities, if any, will be made available for
examination and packaging by the Underwriters in the City of New York not later
than 10:00 a.m. (Eastern time) on the last business day prior to the Closing
Time or the relevant Date of Delivery, as the case may be.
SECTION 3. Covenants of the Company. The Company covenants
with each Underwriter as follows:
(a) Compliance with Securities Regulations and Commission
Requests. Subject to Section 3(b), the Company will notify the Underwriters
immediately, and confirm the notice in writing, (i) when any post-effective
amendment to the Registration Statement becomes effective, or any supplement to
the Prospectus or any amended Prospectus shall have been filed, (ii) of the
receipt of any comments from the Commission, (iii) of any request by the
Commission for any amendment to the Registration Statement or any amendment or
supplement to the Prospectus or for additional information and (iv) of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or of any order preventing or suspending the use of the
Prospectus, or of the suspension of the qualification of the Securities for
offering or sale in any jurisdiction, or the initiation or threatening of any
proceedings for any of such purposes. The Company will promptly effect the
filings necessary pursuant to Rule 424(b) and will take such steps as it deems
necessary to ascertain promptly whether the form of prospectus transmitted for
filing under Rule 424(b) was received for filing by the Commission and, in the
event that it was not, it will promptly file such prospectus. The Company will
make every reasonable effort to prevent the issuance of any stop order and, if
any stop order is issued, to obtain the lifting thereof at the earliest possible
moment. If the Company elects to rely on Rule 434, the Company will provide the
Underwriters with copies of the form of Rule 434 Prospectus, in such number as
the Underwriters may reasonably request, and file or transmit for filing with
the Commission the form of Prospectus complying with Rule 434 of the 1933 Act in
accordance with Rule 424(b) of the 1933 Act Regulations by the close of business
in New York on the business day immediately succeeding the date of this
Agreement.
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(b) Filing of Amendments. The Company will give the
Underwriters notice of its intention to file or prepare any amendment to the
Registration Statement (including any filing under Rule 462(b)), any Term Sheet
or any amendment, supplement or revision to either the prospectus included in
the Registration Statement at the time it became effective or to the Prospectus,
whether pursuant to the 1933 Act, the 1934 Act or otherwise, will furnish the
Underwriters with copies of any such documents a reasonable amount of time prior
to such proposed filing or use, as the case may be, and will not file any such
documents to which the Underwriters or counsel for the Underwriters shall
reasonably object.
(c) Rule 434. If the Company uses Rule 434, it will comply
with the requirements of Rule 434.
(d) Delivery of Registration Statement. The Company will
deliver to each of the Underwriters and counsel for the Underwriters, without
charge, signed copies of the Registration Statement as originally filed and of
each amendment thereto (including exhibits filed therewith or incorporated by
reference therein and documents incorporated or deemed to be incorporated by
reference therein) and signed copies of all consents and certificates of
experts, and will also deliver to each of the Underwriters, without charge,
conformed copies of the Registration Statement as originally filed and of each
amendment thereto (excluding exhibits) for each of the Underwriters. The copies
of the Registration Statement and each amendment thereto furnished to the
Underwriters will be identical to the electronically transmitted copies thereof
filed with the Commission pursuant to EDGAR, except to the extent permitted by
Regulation S-T.
(e) Delivery of Prospectuses. The Company has delivered to
each Underwriter, without charge, as many copies of the Prospectus as such
Underwriter reasonably requested, and the Company hereby consents to the use of
such copies for purposes permitted by the 1933 Act. The Company will furnish to
each Underwriter, without charge, during the period when the Prospectus is
required to be delivered under the 1933 Act or the 1934 Act, such number of
copies of the Prospectus (as amended or supplemented) as such Underwriter may
reasonably request. The Prospectus and any amendments or supplements thereto
furnished to the Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to EDGAR, except
to the extent permitted by Regulation S-T.
(f) Continued Compliance with Securities Laws. The Company
will comply with the 1933 Act and the 1933 Act Regulations and the 1934 Act and
the 1934 Act Regulations so as to permit the completion of the distribution of
the Securities as contemplated in this Agreement and in the Prospectus. If at
any time when a prospectus is required by the 1933 Act to be delivered in
connection with sales of the Securities, any event shall occur or condition
shall exist as a result of which it is necessary, in the opinion of counsel for
the Underwriters or for the Company, to amend the Registration Statement or
amend or supplement the Prospectus in order that the Prospectus 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 not misleading in the light of
the circumstances existing at the time it is delivered to a purchaser, or if it
shall be necessary, in the opinion of such counsel, at any
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<PAGE> 13
such time to amend the Registration Statement or amend or supplement the
Prospectus in order to comply with the requirements of the 1933 Act or the 1933
Act Regulations, the Company will promptly prepare and file with the Commission,
subject to Section 3(b), such amendment or supplement as may be necessary to
correct such statement or omission or to make the Registration Statement or the
Prospectus comply with such requirements, and the Company will furnish to the
Underwriters such number of copies of such amendment or supplement as the
Underwriters may reasonably request.
(g) Blue Sky Qualifications. The Company will use its best
efforts, in cooperation with the Underwriters, to qualify the Securities for
offering and sale under the applicable securities laws of such states and other
jurisdictions of the United States as the Underwriters may designate; provided,
however, that the Company shall not be obligated to qualify as a foreign
corporation in any jurisdiction in which it is not so qualified, to file any
general consent to service of process or to subject itself to taxation. In each
jurisdiction in which the Securities have been so qualified, the Company will
file such statements and reports as may be required by the laws of such
jurisdiction to continue such qualification in effect for a period of not less
than one year from the effective date of the Registration Statement and any Rule
462(b) Registration Statement.
(h) Rule 158. The Company will make generally available to its
security holders as soon as practicable, but not later than 90 days after the
close of the period covered thereby, an earnings statement (in form complying
with the provisions of Rule 158 of the 1933 Act Regulations) covering a
twelve-month period beginning not later than the first day of the Company's
fiscal quarter next following the "effective date" (as defined in said Rule 158)
of the Registration Statement.
(i) Use of Proceeds. The Company will use the net proceeds
received by it from the sale of the Securities in the manner specified in the
Prospectus under the heading "USE OF PROCEEDS."
(j) Listing. The Company will use its best efforts to effect
the listing of the Securities on the New York Stock Exchange.
(k) Registration on Sale of Securities. During a period of 90
days from the date hereof, the Company will not, without the prior written
consent of Merrill Lynch, (i) directly or indirectly, offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase or otherwise
transfer or dispose of, any Common Shares or any other security convertible into
or exchangeable or exercisable for Common Shares or file any registration
statement under the 1933 Act with respect to any of the foregoing, or (ii) enter
into any swap or any other agreement or any transaction that transfers, in whole
or in part, directly or indirectly, the economic consequence of ownership of the
Common Shares, whether any such swap or transaction described in (i) or (ii)
above is to be settled by delivery of Common Shares or such other securities, in
cash or otherwise, except for (A) Common Shares issued pursuant to this
Agreement, or (B) Common Shares issued or options to purchase Common Shares
granted pursuant to existing employee benefit plans of the Company.
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<PAGE> 14
(l) REIT Qualification. The Company has, since its formation,
operated in such a manner, and will continue to operate in such a manner, as to
qualify for taxation as a "real estate investment trust" under the Code.
(m) Action by Company Regarding Price of Securities. Except
for the authorization of actions permitted to be taken by the Underwriters as
contemplated herein or in the Prospectus, the Company will not (i) take,
directly or indirectly, any action designed to cause or to result in, or that
might reasonably be expected to constitute, the stabilization or manipulation of
the price of any security of the Company to facilitate the sale or resale of the
Securities, (ii) sell, bid for or purchase the Securities or pay any person any
compensation for soliciting purchases of the Securities or (iii) pay or agree to
pay to any person any compensation for soliciting another to purchase any other
securities of the Company.
(n) Cuba Act. In accordance with the Cuba Act and without
limitation to the provisions of Sections 6 and 7 hereof, the Company agrees to
indemnify and hold harmless the Underwriters from and against any and all loss,
liability, claim, damage and expense whatsoever (including fees and
disbursements of counsel), as incurred, arising out of any violation by the
Company of the Cuba Act.
(o) Reporting Requirements. The Company, during the period
when the Prospectus is required to be delivered under the 1933 Act or the 1934
Act, will file all documents required to be filed with the Commission pursuant
to the 1934 Act within the time periods required by the 1934 Act and the 1934
Act Regulations.
(p) Representations and Warranties. Prior to the Closing Time,
the Company and the Operating Partnership will notify the Underwriters in
writing immediately if (i) any event occurs that renders any of the
representations and warranties of the Company contained herein inaccurate or
incomplete in any material respect or (ii) with respect to the representations
and warranties of the Company contained herein that are limited to materiality
of the Company and the Affiliates considered as one enterprise, any matter or
event occurs that would render such representation or warranty inaccurate or
incomplete if given with respect to the Company or any Affiliate on an
individual basis.
SECTION 4. Payment of Expenses.
(a) Expenses. The Company will pay all expenses incident to
the performance of its obligations under this Agreement, including (i) the
printing (or reproduction) and filing of the Registration Statement as
originally filed and of each amendment thereto, (ii) the preparation, issuance
and delivery of the certificates for the Securities to the Underwriters,
including any stock or other transfer taxes or duties payable upon the sale of
the Securities to the Underwriters, (iii) the fees and other charges of the
Company's counsel, accountants and other advisors, (iv) the qualification of the
Securities under securities laws in accordance with the provisions of Section
3(g) hereof, including filing fees and the reasonable fees and disbursements of
counsel for the Underwriters in connection therewith and in connection with the
preparation of the Blue Sky Survey and any
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supplement thereto, (v) the printing (or reproduction) and delivery to the
Underwriters of copies of the Registration Statement as originally filed and of
each amendment thereto and of the Prospectus and any amendments or supplements
thereto, (vi) the printing (or reproduction) and delivery to the Underwriters of
copies of the Blue Sky Survey, (vii) the fees of the National Association of
Securities Dealers, Inc. ("NASD"), including the reasonable fees and other
charges of counsel for the Underwriters in connection with the NASD's review of
the terms of the proposed public offering of the Securities, (viii) the fees and
expenses incurred in connection with the listing of the Common Shares on the New
York Stock Exchange and (ix) the fees and expenses of any transfer agent or
registrar for the Securities.
(b) Termination of Agreement. If this Agreement is terminated
by the Underwriters in accordance with the provisions of Section 5 or Section
9(a)(i) or Section 11 hereof, the Company shall reimburse the Underwriters for
all of their out-of-pocket expenses, including the reasonable fees and other
charges of counsel for the Underwriters.
SECTION 5. Conditions of Underwriters' Obligations. The
obligations of the Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Company contained in Section 1 hereof or
in certificates of any officer of the Company, delivered pursuant to the
provisions hereof, to the performance by the Company of its obligations
hereunder, and to the following further conditions:
(a) Effectiveness of Registration Statement. The Registration
Statement, including any Rule 462(b) Registration Statement, shall have become
effective, and at the Closing Time no stop order suspending the effectiveness of
the Registration Statement shall have been issued under the 1933 Act or
proceedings therefor initiated or threatened by the Commission, and any request
on the part of the Commission for additional information shall have been
complied with to the reasonable satisfaction of counsel to the Underwriters. The
Prospectus shall have been filed with the Commission pursuant to Rule 424(b) of
the 1933 Act Regulations within the prescribed time period, and prior to the
Closing Time the Company shall have provided evidence satisfactory to the
Underwriters of such timely filing, or a post-effective amendment providing such
information shall have been promptly filed and declared effective in accordance
with the requirements of the 1933 Act Regulations. If the Company has elected to
rely upon Rule 434, a Term Sheet shall have been filed with the Commission in
accordance with Rule 424(b).
(b) Opinion of Counsel for Company. At the Closing Time, the
Underwriters shall have received:
(i) The favorable opinion, dated as of the Closing
Time, of Gibson, Dunn & Crutcher LLP, counsel for the Company,
in form and substance reasonably satisfactory to counsel for
the Underwriters, to the effect that:
(A) The Company is duly qualified as a
foreign corporation to transact business and is in
good standing in the following states:
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Arizona, California, Connecticut, Maryland, New York,
Virginia and Texas;
(B) The Affiliates are validly existing and
in good standing under the laws of their respective
jurisdictions of organization, and have all power and
authority necessary to own or hold their respective
properties and conduct the businesses in which they
are engaged; and to the best of such counsel's
knowledge, the Company owns the non-voting preferred
stock of the Development Company free and clear of
all liens, encumbrances, equities or claims;
(C) To the best of such counsel's knowledge
and other than as set forth in the Prospectus, there
are no legal or governmental proceedings pending to
which the Company or any of the Affiliates is a party
or of which any property or assets of the Company or
any of the Affiliates is the subject which, if
determined adversely to the Company or any of the
Affiliates, might have a material adverse effect on
the consolidated financial position, stockholders'
equity, results of operations, business affairs or
business prospects of the Company; and, to the best
of such counsel's knowledge, no such proceedings are
threatened or contemplated by governmental
authorities or threatened by others;
(D) The Registration Statement was declared
effective under the Securities Act as of the date and
time specified in such opinion, the Prospectus was
filed with the Commission pursuant to the
subparagraph of Rule 424(b) of the Rules and
Regulations specified in such opinion on the date
specified therein and no stop order suspending the
effectiveness of the Registration Statement has been
issued and, to the knowledge of such counsel, no
proceeding for that purpose is pending or threatened
by the Commission;
(E) The Registration Statement and the
Prospectus and any further amendments or supplements
thereto made by the Company prior to such Date of
Delivery (other than the financial statements and
related schedules and other financial and related
statistical data included therein or omitted
therefrom, as to which such counsel need express no
opinion) comply as to form in all material respects
with the requirements of the Securities Act and the
Rules and Regulations; and the documents incorporated
by reference in the Prospectus and any further
amendment or supplement to any such incorporated
document made by the Company prior to such Date of
Delivery (other than the financial statements and
related schedules and other financial and related
statistical data included or omitted therefrom, as to
which such counsel need express no opinion), when
they became effective or were filed with the
Commission, as the case may be, complied as to form
in
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all material respects with the requirements of the
Securities Act or the Exchange Act, as applicable,
and the rules and regulations of the Commission
thereunder;
(F) The statements contained in the
Prospectus under the caption "Federal Income Tax
Considerations," insofar as they describe federal
statutes, rules and regulations, are correct in all
material respects;
(G) To the best of such counsel's knowledge,
there are no contracts or other documents which are
required to be described in the Prospectus or filed
as exhibits to the Registration Statement by the
Securities Act or by the Rules and Regulations which
have not been described or filed as exhibits to the
Registration Statement or incorporated therein by
reference as permitted by the Rules and Regulations;
(H) This Agreement has been duly executed
and delivered by the Company;
(I) The issue and sale of the Common Shares
being delivered on such Date of Delivery by the
Company and the compliance by the Company with all of
the provisions of this Agreement and the consummation
of the transactions contemplated hereby will not
conflict with or result in a breach or violation of
any of the terms or provisions of, or constitute a
default under, any agreement or instrument which is
filed as an exhibit to (i) the Company's Form 10-Q
for the fiscal quarter ended March 31, 1996 or (ii)
the Company's Form 10-K for the year ended December
31, 1995 (other than the purchase and sale agreements
listed as Exhibits 10.38, 10.39 and 10.45 to 10.49 of
such Form 10-K), nor will such actions result in any
violation of the provisions of the charter or by-laws
of the Company or governing documents of any of the
Affiliates or any statute or any order, rule or
regulation known to such counsel of any court or
governmental agency or body having jurisdiction over
the Company or any of its properties or assets; and,
except for the registration of the Common Shares
under the Securities Act and such consents,
approvals, authorizations, registrations or
qualifications as have been obtained or made or may
be required under the Exchange Act and applicable
state securities laws in connection with the purchase
and distribution of the Common Shares by the
Underwriters, no consent, approval, authorization or
order of, or filing or registration with, any such
court or governmental agency or body is required for
the execution, delivery and performance of this
Agreement by the Company and the consummation of the
transactions contemplated hereby;
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(J) To the best of such counsel's knowledge,
there are no contracts, agreements or understandings
between the Company and any person granting such
person the right to require the Company to file a
registration statement under the Securities Act with
respect to any securities of the Company owned or to
be owned by such person or to require the Company to
include such securities in the securities registered
pursuant to the Registration Statement or in any
securities being registered pursuant to any other
registration statement filed by the Company under the
Securities Act; and
(K) The Company has been and is organized in
conformity with the requirements for qualification as
a real estate investment trust under the Code, and
its method of operation has at all times enabled, and
its proposed method of operation as described in the
Prospectus and as represented by management will
enable, the Company to meet the requirements for
taxation as a real estate investment trust under the
Code.
(ii) The favorable opinion, dated as of the Closing
Time, of Ballard Spahr Andrews & Ingersoll, counsel for the
Company with respect to matters of Maryland law, in form and
substance reasonably satisfactory to counsel for the
Underwriters, to the effect that:
(A) The Company has been duly incorporated
and is validly existing as a corporation in good
standing under the laws of the State of Maryland and
has all corporate power and authority to own, lease
and operate its properties as described in the
Prospectus, to conduct the business in which it is
engaged and to perform its obligations under this
Agreement;
(B) The Common Shares have been duly
authorized for issuance and sale to the Underwriters
pursuant to this Agreement and, when issued and
delivered by the Company pursuant to this Agreement
against payment of the purchase price therefor, will
be validly issued and fully paid and non-assessable
and will conform in all material respects to the
description thereof contained in the Prospectus (with
reference to and when read in conjunction with the
information in "Prospectus Supplement Summary -
Recent Developments Other Recent Developments -
Simplified Common Stock Structure" in the Prospectus
Supplement) and will not be subject to preemptive or
other similar rights arising by operation of the
Maryland General Corporation Law (the "MGCL") or
under the charter or bylaws of the Company or any
agreement or other instrument known to such counsel;
(C) This Agreement has been duly authorized
by the Company;
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(D) The form of certificate used to evidence
the Stock is in due and proper form and complies with
all applicable statutory requirements under the laws
of the State of Maryland;
(E) The Company has an authorized
capitalization as set forth in the Prospectus, and
all of the issued shares of capital stock of the
Company have been duly and validly authorized and
issued, are fully paid and non-assessable and conform
in all material respects to the description thereof
contained in the Prospectus (with reference to and
when read in conjunction with the information in
"Prospectus Supplement Summary - Recent Developments
- Other Recent Developments - Simplified Common Stock
Structure" in the Prospectus Supplement) and are not
subject to preemptive or other similar rights arising
by operation of the MGCL or under the charter or
bylaws of the Company or any agreement or other
instrument known to such counsel;
(F) The information in the Prospectus under
the caption "Description of Stock" (except for the
information under the subsection thereof entitled
"Restrictions on Transfer"), to the extent that it
constitutes matters of Maryland law, summaries of
legal matters, documents or proceedings, or legal
conclusions, has been reviewed by them and is correct
in all material respects (with reference to and when
read in conjunction with the information in
"Prospectus Supplement Summary - Recent Developments
- Other Recent Developments - Simplified Common Stock
Structure" in the Prospectus Supplement), and the
information under "Description of Stock --
Restrictions on Transfer," to the extent that it
constitutes a summary of the provisions of the
Company's charter, has been reviewed by them and is
correct in all material respects.
(iii) The favorable opinion, dated as of the Closing
Time, of Dow, Cogburn & Friedman, counsel for the Company with
respect to matters of Texas law, in form and substance
reasonably satisfactory to counsel for the Underwriters, to
the effect that:
(A) Price/Baybrook, Ltd., a Texas limited
partnership, has been duly formed as a limited
partnership under the laws of the State of Texas and
all of its partnership interests have been duly and
validly authorized and issued and, to such counsel's
actual knowledge, are owned by the Company and
Price/Texas, Inc., a Texas corporation, free and
clear of all liens, encumbrances, equities or claims;
(B) Price/Texas, Inc., a Texas corporation,
has been duly incorporated as a corporation under the
laws of the State of Texas and all of its issued
capital stock has been duly and validly authorized
and is fully paid and non-assessable and, to such
counsel's actual
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knowledge, is owned by the Company free and clear of
all liens, encumbrances, equities or claims;
(iv) The favorable opinion, dated as of the Closing
Time, of Latham & Watkins, counsel for the Underwriters, with
respect to such matters as the Underwriters may reasonably
request.
(v) In giving their opinions required by subsections
(b)(i) and (b)(iv), respectively, of this Section 5, Gibson,
Dunn & Crutcher LLP and Latham & Watkins shall each
additionally state that nothing has come to their attention
that would lead them to believe that the Registration
Statement (except for financial statements and schedules and
other financial and related statistical data included or
incorporated by reference therein, as to which counsel need
make no statement), at the time it became effective, 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 (except for financial statements and schedules and
other financial and related statistical data included or
incorporated by reference therein, as to which counsel need
make no statement), at the time the Prospectus was issued
(unless the term "Prospectus" refers to a prospectus which has
been provided to the Underwriters by the Company for use in
connection with the offering of Securities which differs from
the Prospectus on file at the Commission at the time the
Registration Statement becomes effective, in which case at the
date of such prospectus), or at the Closing Time, included or
includes an untrue statement of a material fact or omitted or
omits 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. In giving its opinion,
Gibson, Dunn & Crutcher LLP and Latham & Watkins may rely as
to matters of Maryland law upon the opinion of Ballard Spahr
Andrews & Ingersoll, which opinions shall be in form and
substance reasonably satisfactory to counsel for the
Underwriters. Each such opinion required by subsections (b)(i)
and (b)(iv) shall not state that it is to be governed or
qualified by, or that it is otherwise subject to, any
treatise, written policy or other document relating to legal
opinions, including, without limitation, the Legal Opinion
Accord of the ABA Section of Business Law (1991).
(c) Closing Matters. At the Closing Time, (i) the Registration
Statement and the Prospectus shall contain all statements that are required to
be stated therein in accordance with the 1933 Act and the 1933 Act Regulations
and in all material respects shall conform to the requirements of the 1933 Act
and the 1933 Act Regulations, and neither the Registration Statement nor the
Prospectus shall contain an untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein (in the case of the Prospectus, in light of the circumstances
under which they were made) not misleading, (ii) the representations and
warranties in Section 1 hereof shall be true and correct with the same force and
effect as though expressly made at and as
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of the Closing Time, (iii) there shall not have been, since the date hereof or
since the respective dates as of which information is given in the Prospectus,
any material adverse effect on the consolidated financial position,
stockholders' equity, results of operations, business affairs or business
prospects of the Company, whether or not arising in the ordinary course of
business, (iv) no action, suit or proceedings at law or in equity shall be
pending or, to the knowledge of the Company, threatened against such entity or
any Affiliate before or by any court or governmental agency wherein an
unfavorable decision, ruling or finding might result in any material adverse
effect on the consolidated financial position, stockholders' equity, results of
operations, business affairs or business prospects of the Company other than as
set forth in the Prospectus, (v) no stop order suspending the effectiveness of
the Registration Statement or any part thereof has been issued and no
proceedings for that purpose have been instituted or, to the knowledge of the
Company, threatened by the Commission or by the state securities authority of
any jurisdiction and (vi) the Underwriters shall have received, at the Closing
Time, a Certificate of the Chief Executive Officer and the chief financial or
chief accounting officer of the Company, dated as of the Closing Time, stating
its compliance with subparagraphs (i) through (v) of this subsection (c), and
stating that the Company has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied at or prior to Closing Time.
As used in this Section 5(c) the term "Prospectus" means the Prospectus in the
form first used by the Underwriters to confirm sales of the Securities.
(d) Accountant's Comfort Letter. At the time of the execution
of this Agreement, the Underwriters shall have received from Ernst & Young LLP a
letter dated such date, in form and substance reasonably satisfactory to the
Underwriters, together with signed or reproduced copies of such letter for each
of the other Underwriters, containing statements and information of the type
ordinarily included in accountants' "comfort letters" to underwriters with
respect to the financial statements, pro forma financial statements and pro
forma and adjusted financial statements and information of the Company and its
affiliates and certain financial information contained in the Registration
Statement and the Prospectus.
(e) Bring-down Comfort Letter. At the Closing Time, the
Underwriters shall have received from Ernst & Young LLP a letter, dated as of
the Closing Time, to the effect that they reaffirm the statements made in the
letter furnished pursuant to subsection (d) of this Section 5, except that the
specified date referred to shall be a date not more than five days prior to the
Closing Time.
(f) Approval of Listing. At or prior to the Closing Time, the
Securities shall have been duly listed on the New York Stock Exchange, subject
only to official notice of issuance.
(g) No Objection. The NASD shall not have raised any objection
with respect to the fairness and reasonableness of the underwriting terms and
arrangements.
(h) Lock-Up Agreement. On or before the date of this
Agreement, the Underwriters shall have received a lock-up agreement,
substantially in the form of Exhibit B hereto, signed by each of the persons
listed on Schedule D hereto.
21
<PAGE> 22
(i) Additional Documents. At the Closing Time and at each Date
of Delivery, if any, counsel for the Underwriters shall have been furnished with
such documents and opinions as they may reasonably request for the purpose of
enabling them to pass upon the issuance and sale of the Securities as herein
contemplated and related proceedings, or in order to evidence the accuracy of
any of the representations or warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the Company in
connection with the issuance and sale of the Securities as herein contemplated
shall be reasonably satisfactory in form and substance to the Underwriters and
counsel for the Underwriters.
(j) Conditions to Purchase of Option Securities. In the event
that the Underwriters exercise their option provided in Section 2(b) hereof to
purchase all or any portion of the Option Securities, the representations and
warranties of the Company contained herein and the statements in any
certificates furnished by the Company hereunder shall be true and correct in all
material respects as of each Date of Delivery and, at the relevant Date of
Delivery, the Underwriters shall have received:
(i) Officers' Certificate. A certificate, dated such
Date of Delivery, of the Chief Executive Officer and the chief
financial or chief accounting officer of the Company
confirming that the certificate delivered at the Closing Time
pursuant to Section 5(c) hereof remains true and correct as of
such Date of Delivery.
(ii) Opinion of Counsel for Company. The favorable
opinion of Gibson, Dunn & Crutcher LLP, counsel for the
Company,in form and substance reasonably satisfactory to
counsel for the Underwriters, dated such Date of Delivery,
relating to the Option Securities to be purchased on such Date
of Delivery and otherwise to the same effect as the opinions
required by Sections 5(b)(i) and 5(b)(v) hereof.
(iii) Opinion of Maryland Counsel for Company. The
favorable opinion of Ballard Spahr Andrews & Ingersoll,
Maryland counsel for the Company, in form and substance
reasonably satisfactory to counsel for the Underwriters, dated
such Date of Delivery, relating to the Option Securities to be
purchased on such Date of Delivery and otherwise to the same
effect as the opinion required by Section 5(b)(ii) hereof.
(iv) Opinion of Texas Counsel for Company. The
favorable opinion of Dow, Cogburn & Friedman, Texas counsel
for the Company, in form and substance reasonably satisfactory
to counsel for the Underwriters, dated such Date of Delivery,
relating to the Option Securities to be purchased on such Date
of Delivery and otherwise to the same effect as the opinion
required by Section 5(b)(iii).
(v) Opinion of Counsel for Underwriters. The
favorable opinion of Latham & Watkins, counsel for the
Underwriters, dated such Date of
22
<PAGE> 23
Delivery, relating to the Option Securities to be purchased on
such Date of Delivery and otherwise to the same effect as the
opinions required by Sections 5(b)(iv) and 5(b)(v) hereof.
(vi) Bring-down Comfort Letter. A letter from Ernst &
Young LLP in form and substance satisfactory to the
Underwriters and dated such Date of Delivery, substantially
the same in form and substance as the letter furnished to the
Underwriters pursuant to Section 5(e) hereof, except that the
"specified date" in the letter furnished pursuant to this
Paragraph shall be a date not more than five days prior to
such Date of Delivery.
If any condition specified in this Section 5 shall not have
been fulfilled when and as required to be fulfilled, this Agreement, or, in the
case of any condition to the purchase of Option Securities on a Date of Delivery
which is after the Closing Time, the obligations of the several Underwriters to
purchase the relevant Option Securities, may be terminated by the Underwriters
by notice to the Company at any time at or prior to the Closing Time or such
Date of Delivery, and such termination shall be without liability of any party
to any other party except as provided in Section 4 and except that Sections 1, 6
and 7 hereof shall survive any such termination and remain in full effect.
SECTION 6. Indemnification.
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, as follows:
(i) against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, arising out of any
untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement (or any amendment
thereto), or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to
make the statements therein not misleading or arising out of
any untrue statement or alleged untrue statement of a material
fact contained in the Prospectus (or any amendment or
supplement thereto) or the omission or alleged omission
therefrom of a material fact necessary in order to make the
statements therein, in the light of the circumstances under
which they were made, not misleading;
(ii) against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, to the extent of
the aggregate amount paid in settlement of any litigation, or
any investigation or proceeding by any governmental agency or
body, commenced or threatened, or of any claim whatsoever for
which indemnification is provided under subsection (i) above,
if (subject to Section 6(d) below) such settlement is effected
with the written consent of the Company; and
23
<PAGE> 24
(iii) against any and all expense whatsoever
(including, the fees and charges of counsel chosen by Merrill
Lynch), reasonably incurred in investigating, preparing or
defending against any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever for which indemnification
is provided under subsection (i) above, to the extent that any
such expense is not paid under subsection (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information contained in the last paragraph
on the front cover page, the last paragraph on the inside front cover page and
the second paragraph in the section of the Prospectus under the heading
"UNDERWRITING" and furnished to the Company by any Underwriter expressly for use
in the Registration Statement (or any amendment thereto) or the Prospectus (or
any amendment or supplement thereto); and provided further, that this indemnity
agreement with respect to any preliminary prospectus supplement shall not inure
to the benefit of any Underwriter from whom the person asserting any such
losses, liabilities, claims, damages or expenses purchased Securities, or any
person controlling such Underwriter, if a copy of the Prospectus (as then
amended or supplemented if the Company shall have furnished any such amendments
or supplements thereto, but excluding documents incorporated or deemed to be
incorporated by reference therein) was not sent or given by or on behalf of such
Underwriter to such person, if such is required by law, at or prior to the
written confirmation of the sale of such Securities to such person and if the
Prospectus (as so amended or supplemented, if applicable) would have completely
corrected the defect giving rise to such loss, liability, claim, damage or
expense, except that this proviso shall not be applicable if such defect shall
have been corrected in a document which is incorporated or deemed to be
incorporated by reference in the Prospectus.
(b) Each Underwriter severally agrees to indemnify and hold
harmless the Company, the Company's directors, each of the officers of the
Company who signed the Registration Statement, and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act or Section
20 of the 1934 Act, against any and all loss, liability, claim, damage and
expense described in the indemnity contained in subsection (a) of this Section
6, as incurred, but only with respect to untrue statements or omissions, or
alleged untrue statements or omissions, made in the Registration Statement (or
any amendment thereto) or the Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with written information contained
in the last paragraph on the front cover page, the last paragraph on the inside
front cover page and the second paragraph in the section of the Prospectus under
the heading "UNDERWRITING" and furnished to the Company by such Underwriter
expressly for use in the Registration Statement (or any amendment thereto) or
the Prospectus (or any amendment or supplement thereto).
(c) Each indemnified party shall give notice as promptly as
reasonably practicable to each indemnifying party of any action commenced
against it in respect of which indemnity may be sought hereunder, but failure to
so notify an indemnifying party
24
<PAGE> 25
shall not relieve such indemnifying party from any liability which it may have
to the extent it is not materially prejudiced as a result thereof and in any
event shall not relieve it from any liability which it may have otherwise than
on account of this indemnity agreement. An indemnifying party may participate at
its own expense in the defense of any such action; provided, however, that
counsel to the indemnifying party shall not (except with the consent of the
indemnified party) also be counsel to the indemnified party. In no event shall
the indemnifying parties be liable for fees and expenses of more than one
counsel (in addition to any local counsel) separate from their own counsel for
all indemnified parties in connection with any one action or separate but
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances. No indemnifying party shall, without the
prior consent of the indemnified parties (which consent shall not be
unreasonably withheld), settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be sought
under this Section 6 or Section 7 hereof (whether or not the indemnified parties
are actual or potential parties thereto), unless such settlement, compromise or
consent (i) includes an unconditional release of each indemnified party from all
liability arising out of such litigation, investigation, proceeding or claim and
(ii) does not include a statement as to or an admission of fault, culpability or
a failure to act by or on behalf of any indemnified party.
(d) If at any time an indemnified party shall have requested
an indemnifying party to reimburse the indemnified party for the reasonable fees
and expenses of counsel, such indemnifying party agrees that it shall be liable
for any settlement of the nature contemplated by Section 6(a)(ii) effected
without its written consent if (i) such settlement is entered into more than 45
days after receipt by such indemnifying party of the aforesaid request, (ii)
such indemnifying party shall have received notice of the terms of such
settlement at least 30 days prior to such settlement being entered into and
(iii) such indemnifying party shall not have reimbursed such indemnified party
in accordance with such request prior to the date of such settlement.
SECTION 7. Contribution. If the indemnification provided for
in Section 6 hereof is for any reason unavailable to or insufficient (other than
by reason of the indemnified party not being entitled to indemnification in
accordance with the specific terms of Section 6 hereof) to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (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 Securities
pursuant to this Agreement or (ii) if the allocation provided by clause (i) 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 on the one hand and of the Underwriters on the
other hand in connection with the statements or omissions which resulted in such
losses, liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
25
<PAGE> 26
The relative benefits received by the Company on the one hand
and the Underwriters on the other hand in connection with the offering of the
Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the
Securities pursuant to this Agreement (before deducting expenses) received by
the Company and the total underwriting discount received by the Underwriters, in
each case as set forth on the cover of the Prospectus, or, if Rule 434 is used,
the corresponding location on the Term Sheet, bear to the aggregate initial
public offering price of the Securities as set forth on such cover.
The relative fault of the Company on the one hand and the
Underwriters on the other hand shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company and the Underwriters agree that it would not be
just and equitable if contribution pursuant to this Section 7 were determined by
pro rata allocation (even if the Underwriters were treated as one entity for
such purposes) or by any other method of allocation which does not take account
of the equitable considerations referred to above in this Section 7. The
aggregate amount of losses, liabilities, claims, damages and expenses incurred
by an indemnified party and referred to above in this Section 7 shall be deemed
to include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total discount received by it 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 1933 Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who
controls an Underwriter within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act shall have the same rights to contribution as such
Underwriter, and each director of the Company, each officer of the Company who
signed the Registration Statement, each person, if any, who controls the Company
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act,
shall have the same rights to contribution as the Company. The Underwriters'
respective obligations to contribute pursuant to this Section 7 are several in
26
<PAGE> 27
proportion to the number of Initial Securities set forth opposite their
respective names in Schedule A hereto and not joint.
SECTION 8. Representations, Warranties and Agreements to
Survive Delivery. All representations, warranties and agreements contained in
this Agreement, or contained in certificates of officers of the Company
submitted pursuant hereto, shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of any Underwriter or
controlling person, or by or on behalf of the Company, and shall survive
delivery of the Securities to the Underwriters.
SECTION 9. Termination of Agreement.
(a) The Underwriters may terminate this Agreement, by notice
to the Company, at any time at or prior to the Closing Time (i) if there has
been, since the date of this Agreement or since the respective dates as of which
information is given in the Registration Statement, any material adverse effect
on the consolidated financial position, stockholders' equity, results of
operations, business affairs or business prospects of the Company, or (ii) if
there has occurred any material adverse change in the financial markets in the
United States or elsewhere or any outbreak of hostilities or escalation thereof
or other calamity or crisis the effect of which is such as to make it, in the
judgment of the Underwriters, impracticable to market the Securities or to
enforce contracts for the sale of the Securities, or (iii) if trading in the
Common Shares has been suspended by the Commission or if trading generally on
either the New York Stock Exchange or the American Stock Exchange has been
suspended, or minimum or maximum prices for trading have been fixed, or maximum
ranges for prices for securities have been required, by either of said Exchanges
or by order of the Commission or any other governmental authority, or if a
banking moratorium has been declared by either federal or New York authorities.
(b) If this Agreement is terminated pursuant to this Section
9, such termination shall be without liability of any party to any other party
except as provided in Section 4 hereof, and provided further that Sections 1, 6
and 7 shall survive such termination and remain in full force and effect.
SECTION 10. Default by One of the Underwriters. If one of the
Underwriters shall fail at the Closing Time or Date of Delivery to purchase the
Securities which it is obligated to purchase under this Agreement (the
"Defaulted Securities"), the other Underwriter shall have the right, within 24
hours thereafter, to make arrangements for it, or any other underwriters, to
purchase all, but not less than all, of the Defaulted Securities in such amounts
as may be agreed upon and upon the terms herein set forth; if, however, such
arrangements have not been completed within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10%
of the number of Securities to be purchased on such date, the
non-defaulting Underwriter shall be obligated to purchase the full
amount thereof, or
27
<PAGE> 28
(b) if the number of Defaulted Securities exceeds 10% of the
number of Securities to be purchased on such date, this Agreement shall
terminate without liability on the part of any non-defaulting
Underwriter.
No action taken pursuant to this Section 10 shall relieve any
defaulting Underwriter from liability in respect of its default.
In the event of any such default which does not result in a
termination of this Agreement, either the Underwriters or the Company shall have
the right to postpone the Closing Time or a Date of Delivery for a period not
exceeding seven days in order to effect any required changes in the Registration
Statement or Prospectus or in any other documents or arrangements. As used
herein, the term "Underwriter" includes any person substituted for an
Underwriter under this Section 10.
SECTION 11. Default by the Company. If the Company shall fail
at Closing Time or at the Date of Delivery to sell the number of Securities that
it is obligated to sell hereunder, then this Agreement shall terminate without
any liability on the part of any non-defaulting party; provided, however, that
the provisions of Sections 4, 6 and 7 shall remain in full force and effect. No
action taken pursuant to this Section shall relieve the Company from liability,
if any, in respect of such default.
SECTION 12. Notices. All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
mailed or transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Underwriters at Merrill Lynch World
Headquarters, North Tower, World Financial Center, New York, New York
10281-1201, attention of Equity Capital Markets; notices to the Company shall be
directed to it at 145 South Fairfax Avenue, 4th Floor, Los Angeles, California
90036, attention of Joseph K. Kornwasser.
SECTION 13. Parties. This Agreement shall inure to the benefit
of and be binding upon the Underwriters and the Company and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Underwriters, the Company and their respective successors and the controlling
persons and officers and directors referred to in Sections 6 and 7 hereof and
their successors, heirs and legal representatives, any legal or equitable right,
remedy or claim under or in respect of this Agreement or any provision herein
contained. This Agreement and all conditions and provisions hereof and thereof
are intended to be for the sole and exclusive benefit of the Underwriters, the
Company and their respective successors, and said controlling persons and
officers and directors and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of Securities from
any Underwriter shall be deemed to be a successor by reason merely of such
purchase.
SECTION 14. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE
28
<PAGE> 29
PERFORMED IN THE STATE OF NEW YORK. EXCEPT AS OTHERWISE SET FORTH HEREIN,
SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 15. Effect of Headings. The Article and Section
headings herein are for convenience only and shall not affect the construction
hereof.
29
<PAGE> 30
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof,
whereupon this Instrument, along with all counterparts, will become a binding
agreement among the Underwriters and the Company in accordance with its terms.
Very truly yours,
THE PRICE REIT, INC.
By /s/ George M. Jezek
----------------------------------
George M. Jezek,
Chief Financial Officer
S-1
<PAGE> 31
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
SUTRO & CO. INCORPORATED
By: Merrill Lynch, Pierce, Fenner & Smith
Incorporated
By /s/ S. Todd Canty
-------------------------
Name: S. Todd Canty
Title: Vice President
<PAGE> 32
SCHEDULE A
NUMBER
NAME OF UNDERWRITER OF SECURITIES
------------------- -------------
Merrill Lynch, Pierce, Fenner & Smith Incorporated 300,000
Sutro & Co. Incorporated ......................... 300,000
-------
Total ................................... 600,000
=======
Schedule A-1
<PAGE> 33
SCHEDULE B
Number of Initial Number of Option
Securities to Be Sold Securities to Be Sold
by the Company by the Company
- ---------------------- ----------------------
600,000 90,000
Schedule B-1
<PAGE> 34
SCHEDULE C
600,000 Shares
THE PRICE REIT, INC.
(a Maryland corporation)
Common Stock
(Par Value $.01 Per Share)
1. The initial public offering price per share for the
Securities, determined as provided in said Section 2, shall be $32 1/8.
2. The purchase price per share for the Securities to be paid
by the several Underwriters shall be $30.435, being an amount equal to
the initial public offering price set forth above less $1.69 per share;
provided that the purchase price per share for any Option Securities
(as defined in the Purchase Agreement) purchased upon exercise of the
over-allotment option described in Section 2(b) of the Purchase
Agreement shall be reduced by an amount per share equal to any
dividends declared by the Company and payable on the Initial Securities
(as defined in the Purchase Agreement) but not payable on the Option
Securities.
Schedule C-1
<PAGE> 35
SCHEDULE D
Raymond E. Peet
Joseph K. Kornwasser
George M. Jezek
Thomas Scheers
Roy P. Drachman
William D. Jones
Walter Weisman
Keene Wolcott
Schedule D-1
<PAGE> 36
EXHIBIT B
_________ __, 1996
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
SUTRO & CO. INCORPORATED
c/o Merrill Lynch, Pierce, Fenner & Smith Incorporated
Merrill Lynch World Headquarters - North Tower
250 Vesey Street
World Financial Center
New York, New York 10281-1209
Re: Proposed Public Offering by The Price REIT, Inc.
------------------------------------------------
Dear Ladies and Gentleman:
The undersigned, a stockholder [and an officer and/or
director] of The Price REIT, Inc., a Maryland corporation (the "Company"),
understands that Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated ("Merrill Lynch"), and Sutro & Co. Incorporated propose to enter
into a Purchase Agreement (the "Purchase Agreement") with the Company providing
for the public offering of shares (the "Securities") of the Company's common
stock, par value $.01 per share (the "Common Stock"). In recognition of the
benefit that such an offering will confer upon the undersigned as a stockholder
[and an officer and/or director] of the Company, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
undersigned agrees with each underwriter to be named in the Purchase Agreement
that, during a period of 90 days from the date of the Purchase Agreement, the
undersigned will not, without the prior written consent of Merrill Lynch,
directly or indirectly, (i) offer, pledge (other than a pledge to a lending
institution as collateral or security for a bona fide loan), sell, contract to
sell, sell any option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant for the sale of, or otherwise
dispose of or transfer any shares of the Company's Common Stock or any security
convertible into or exchangeable or exercisable for Common Stock, whether now
owned or hereafter acquired by the undersigned or with respect to which the
undersigned has or hereafter acquires the power of disposition, or file any
registration statement under the Securities Act of 1933, as amended, with
respect to any of the foregoing or (ii) enter into any swap or any other
agreement or any transaction that
<PAGE> 37
EXHIBIT B
transfers in whole or in part, directly or indirectly, the economic consequence
of ownership of the Common Stock, whether any such swap or transaction described
in clause (i) or (ii) above is to be settled by delivery of Common Stock or
other securities, in cash or otherwise.
Very truly yours,
Signature: _________________________
Print Name: _________________________
<PAGE> 1
EXHIBIT 5.1
[BALLARD SPAHR ANDREWS & INGERSOLL LETTERHEAD]
September 11, 1996
The Price Reit, Inc.
7979 Ivanhoe Avenue
Suite 524
La Jolla, California 02037
Re: The Price Reit, Inc., a Maryland corporation,
(the "Company") - Registration Statement on Form S-3
(Registration No. 33-95832), as supplemented pertaining to
an additional six hundred thousand (600,000) shares plus an over-
allotment option of up to ninety thousand (90,000) shares
(collectively the "Shares") of common stock, par value one cent
($.01) per share ("Common Stock")
Ladies and Gentlemen:
In connection with the registration of the Shares under the Securities
Act of 1933 as amended (the "Act"), by the Company on Form S-3 (Registration
No. 33-95832) filed with the Securities and Exchange Commission (the
"Commission") on or about September 1, 1995 as supplemented by that certain
Prospectus Supplement (collectively the "Registration Statement"), you have
requested our opinion with respect to the matters set forth below.
We have acted as special Maryland corporate counsel for the Company in
connection with the matters described herein. In our capacity as special
Maryland corporate counsel to the Company, we have reviewed and are familiar
with proceedings taken and proposed to be taken by the Company in connection
with the authorization, issuance and sale of the Shares, and for purposes of
this opinion have assumed such proceedings will be timely completed in the
manner presently proposed. In addition, we have relied upon certificates and
advice from the officers of the Company upon which we believe we are justified
in relying and on various certificates from, and documents recorded with, the
State Department of Assessments and Taxation of Maryland (the "SDAT"), including
the charter of the Corporation (the "Charter"), consisting of Articles of
Amendment and Restatement filed with the SDAT on July 9, 1993, Articles of
Amendment filed with the SDAT on May 23, 1995, and Articles of Amendment filed
with the SDAT on June 13, 1996. We
<PAGE> 2
BALLARD SPAHR ANDREWS & INGERSOLL
The Price Reit, Inc.
September 11, 1996
Page 2
have also examined the Amended and Restated Bylaws of the Company adopted as of
June 9, 1993 (the "Bylaws") and Resolutions of the Board of Directors of the
Company adopted on or before July 1, 1996, August 28, 1996 and September 9,
1996, each in full force and effect as of the date hereof; and such laws,
records, documents, certificates, opinions and instruments as we deem necessary
to render this opinion.
We have assumed the genuineness of all signatures and the authenticity
of all documents submitted to us as originals and the conformity to the
originals of all documents submitted to us as certified, photostatic or
conformed copies. In addition, we have assumed that each person executing any
instrument, document or certificate referred to herein on behalf of any party
is duly authorized to do so.
Based on the foregoing, and subject to the assumptions and
qualifications set forth herein, it is our opinion that, as of the date of this
letter, the Shares have been duly authorized by all necessary corporation action
on the part of the Company, and the Shares will, upon issuance and delivery in
accordance with the terms and conditions described in the Registration Statement
against payment of the purchase price therefor as determined by the Board of
Directors of the Company or a committee thereof, be validly issued, fully paid
and nonassessable.
We consent to your filing this opinion as an exhibit to the Registration
Statement, and further consent to the filing of this opinion as an exhibit to
the applications to securities commissioners for the various states of the
United States for registration of the Shares. We also consent to the
identification of our firm as Maryland counsel to the Company in the section of
the Prospectus (which is part of the Registration Statement) entitled "Legal
Matters."
The opinions expressed herein are limited to the laws of the State of
Maryland and we express no opinion concerning any laws other than the laws of
the State of Maryland. Furthermore, the opinions presented in this letter are
limited to the matters specifically set forth herein and no other opinion shall
be inferred beyond the matters expressly stated.
The opinions expressed in this letter are solely for your use and may
not be relied upon by any other person without our prior written consent.
Very truly yours,
BALLARD SPAHR ANDREWS & INGERSOLL
-------------------------------------
Ballard Spahr Andrews & Ingersoll
<PAGE> 1
EXHIBIT 8.1
[GIBSON, DUNN & CRUTCHER LLP LETTERHEAD]
September 9, 1996
(213) 229-7000 C 72752-00006
The Price REIT, Inc.
145 South Fairfax Avenue
Fourth Floor
Los Angeles, California 90036
Re: The Price REIT, Inc.
Gentlemen:
We have acted as special counsel to The Price REIT, Inc., a Maryland
corporation (the "Company"), in connection with the sale by the Company of up
to 690,000 shares of Common Stock, par value $.01 per share, of the Company
(the "Common Stock"), including up to 90,000 shares of Common Stock to cover
over-allotments, if any, pursuant to a Registration Statement on Form S-3 (the
"Registration Statement") which was declared effective by the Securities and
Exchange Commission on September 1, 1995 (Registration No. 33-95832).
You have requested our opinion concerning certain of the federal income
tax consequences to the Company and the purchasers of Common Stock in
connection with the sale described above. This opinion is based on various
assumptions, and is conditioned upon certain representations made by the
Company as to factual matters. In addition, this opinion is based upon the
factual representations of the Company concerning its business and properties
as set forth in the Registration Statement.
We have made such legal and factual examinations and inquiries,
including an examination of originals or copies certified or otherwise
identified to our satisfaction of such documents, of corporate records and
other instruments as we have deemed necessary or appropriate for purposes of
this opinion.
<PAGE> 2
[GIBSON, DUNN & CRUTCHER LLP LETTERHEAD]
The Price REIT, Inc.
September 9, 1996
Page 2
We are opining herein as to the effect on the subject transaction only
of the federal income tax laws of the United States and we express no opinion
with respect to the applicability thereto, or the effect thereon, of other
federal laws, the laws of any other jurisdiction or as to any matters of
municipal law or the laws of any other local agencies within any state.
Based on such facts, assumptions and representations, it is our opinion
that:
(1) Commencing with the Company's taxable year ending December 31,
1991, the Company was organized in conformity with the requirements for
qualifications as a real estate investment trust, and its proposed method of
operation has enabled and will enable it to meet the requirements for
qualification and taxation as a real estate investment trust under the Internal
Revenue Code of 1986, as amended (the "Code").
(2) The information in the Registration Statement under the caption
"Federal Income Tax Considerations," to the extent that it constitutes matters
of law, summaries of legal matters, or legal conclusions, has been reviewed by
us and is accurate in all material respects.
This opinion is based on various statutory provisions, regulations
promulgated thereunder and interpretations thereof by the Internal Revenue
Service and the courts having jurisdiction over such matters, all of which are
subject to change either prospectively or retroactively. Also, any variation or
difference in the facts from those set forth in the Company's representations
may affect the conclusions stated herein. Moreover, the Company's qualification
and taxation as a real estate investment trust depends upon the Company's
ability to meet, through annual operating results, distribution levels and
diversity of stock ownership, the various qualification tests imposed under the
Code, the results of which will not be reviewed by Gibson, Dunn & Crutcher LLP.
Accordingly, no assurance can be given that the actual results of the Company's
operation for any one taxable year will satisfy such requirements.
We hereby consent to the use of our name and our opinion under the
heading "Legal Matters" in the Prospectus that forms a part of the Registration
Statement.
Very truly yours,
/s/ Gibson, Dunn & Crutcher LLP
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GIBSON, DUNN & CRUTCHER LLP
HB/clt/LT962410.005/3+
