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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): JANUARY 15, 1997
THE PRICE REIT, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
MARYLAND 1-13432 52-1746059
(STATE OR OTHER JURISDICTION OF (COMMISSION FILE NUMBER) (IRS EMPLOYER IDENTIFICATION
INCORPORATION) NO.)
7979 IVANHOE AVENUE
LA JOLLA, CALIFORNIA 92037
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
</TABLE>
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 November 25, 1996 The Price REIT, Inc. (the "Company") filed a
registration statement (File No. 333-16787) 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 December 23, 1996, the Commission declared the Registration Statement, as
amended by Amendment No. 1, effective. (The Registration Statement and
definitive prospectus contained therein are collectively referred to as the
"Prospectus.")
The Company filed on January 16, 1997 a supplement to the Prospectus,
dated January 15, 1997, relating to the issuance and sale of up to 1,840,000
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.
Exhibit No. Description
----------- -----------
1.1 Purchase Agreement by and among the Company and Merrill
Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Dean Witter Reynolds Inc. and Sutro & Co.
Incorporated, as representatives of the several
underwriters named therein, dated January 15, 1997, with
respect to the issuance and sale by the Company of up to
1,840,000 shares of the Company's common stock.
5.1 Opinion on 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 Spahr 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: January 17, 1997 By: /s/ GEORGE M. JEZEK
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George M. Jezek
Chief Financial Officer
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EXHIBIT 1.1
THE PRICE REIT, INC.
(a Maryland corporation)
Common Stock
(Par Value $.01 Per Share)
PURCHASE AGREEMENT
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January 15, 1997
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
DEAN WITTER REYNOLDS INC.
SUTRO & CO. INCORPORATED
as Representatives of the Several Underwriters
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"), Dean Witter Reynolds Inc. ("Dean
Witter") and Sutro & Co. Incorporated ("Sutro"), and each of the Underwriters
named in Schedule A hereto (collectively, the "Underwriters," which term shall
also include any underwriter substituted as hereinafter provided in Section 10
hereof), for whom Merrill Lynch, Dean Witter and Sutro are acting as
representatives (in such capacity, the "Representatives"), 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 240,000 additional Common Shares to cover over-allotments, if any. The
aforesaid 1,600,000 Common Shares described in clause (i) above (the "Initial
Securities") to be purchased by the Underwriters and all or any part of the
240,000 Common Shares subject to the option described in Section 2(b) hereof
(the "Option Securities") are collectively hereinafter called the "Securities."
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The Company understands that the Underwriters propose to make
a public offering of the Securities as soon as the Representatives deem
advisable after this Agreement has been executed and delivered.
A registration statement on Form S-3 (No. 333-16787) and
amendment No. 1 thereto dated December 23, 1996 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 Representatives. 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
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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 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
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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 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
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stock of K&F Development Company, Inc., a California
corporation (the "Development Company"), (iv) its 80%
membership interest in Smithtown Venture Limited Liability
Company, a New York limited liability company, (v) its 50%
partnership interest in Centrepoint Associates, L.L.P., an
Arizona limited liability partnership, (vi) its 50% general
partnership interest in Hayden Plaza North Associates, an
Arizona general partnership, and (vii) its 75% membership
interest in 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.
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(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 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 that certain Purchase Agreement dated as of
September 9, 1996, by and among the Company, Merrill Lynch and
Sutro, 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,
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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.
(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
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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.
(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
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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.
(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.
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(b) Officer's Certificates. Any certificate signed by
any officer of the Company and delivered to the Representatives 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.
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 240,000 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 Representatives 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 Representatives, 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 Representatives 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
Representatives and the Company, at 7:00 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 Representatives 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 &
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Crutcher LLP, or at such other place as shall be agreed upon by the
Representatives and the Company, on each Date of Delivery as specified in the
notice from the Representatives to the Company.
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 Representatives 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
Representatives 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 Representatives, 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 any Underwriter whose funds have not been received by the
Closing Time or the relevant Date of Delivery, as the case may be, but such
payment shall not relieve such Underwriter 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 Representatives 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 Representatives
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
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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.
(b) Filing of Amendments. The Company will give the
Representatives 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 Representatives 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 Representatives 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
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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 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 Representatives 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
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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.
(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 will notify the Representatives 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
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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
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 Representatives 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 Representatives 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 Representatives shall have received:
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(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: Arizona,
California, Connecticut, Maryland, New York,
Oklahoma, 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
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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 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
September 30, 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
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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;
(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 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;
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(C) This Agreement has been duly
authorized by the Company;
(D) The form of certificate used to
evidence the Common Shares 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 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 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 Latham & Watkins, counsel for the
Underwriters, with respect to such matters as the
Representatives may reasonably request.
(iv) In giving their opinions required by
subsections (b)(i) and (b)(iii), 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
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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)(iii) 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 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 Representatives 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 Representatives shall have received from Ernst
& Young LLP a letter dated
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such date, in form and substance reasonably satisfactory to the
Representatives, 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
Representatives 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 Representatives shall have received a lock-up agreement,
substantially in the form of Exhibit A hereto, signed by each of the persons
listed on Schedule D hereto.
(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 Representatives 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 Representatives 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.
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(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 Counsel for Underwriters. The
favorable opinion of Latham & Watkins, 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)(iii) and 5(b)(iv) hereof.
(vi) Bring-down Comfort Letter. A letter from
Ernst & Young LLP in form and substance satisfactory to the
Representatives and dated such Date of Delivery, substantially
the same in form and substance as the letter furnished to the
Representatives 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 Representatives 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
22
<PAGE> 23
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
(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 through Merrill
Lynch 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
23
<PAGE> 24
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 through Merrill
Lynch 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 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.
24
<PAGE> 25
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.
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
25
<PAGE> 26
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 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 Representatives 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 Representatives, 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
26
<PAGE> 27
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 or more of the Underwriters. If
one or more of the Underwriters shall fail at the Closing Time or Date of
Delivery to purchase the Securities which it or they are obligated to purchase
under this Agreement (the "Defaulted Securities"), the Representatives shall
have the right, within 24 hours thereafter, to make arrangements for one or
more of the non-defaulting Underwriters, or any other underwriter 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, the
Representatives shall not have completed such arrangements 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, each of
the non-defaulting Underwriter shall be obligated, severally and not
jointly, to purchase the full amount thereof in the proportions that
their respective underwriting obligations hereunder bear to the
underwriting obligations of all non-defaulting Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of
the number of Securities to be purchased on such date, this Agreement
or, with respect to any Date of Delivery which occurs after the
Closing Time, the obligation of the Underwriters to purchase and of
the Company to sell the Option Securities to be purchased and sold on
such Date of Delivery, 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, or in the case of a Date of Delivery which is
after the Closing Time, which does not result in a termination of the
obligation of the Underwriters to purchase and the Company to sell the relevant
Option Securities, as the case may be, either the Representatives 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 a 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.
27
<PAGE> 28
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 Representatives 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 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.
28
<PAGE> 29
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/ JOSEPH K. KORNWASSER
------------------------------
Joseph K. Kornwasser,
President and Chief
Executive Officer
S-1
<PAGE> 30
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
DEAN WITTER REYNOLDS INC.
SUTRO & CO. INCORPORATED
By: Merrill Lynch, Pierce, Fenner & Smith
Incorporated
By /s/ S. TODD CANTY
------------------------------------------
Name: S. Todd Canty
Title: Vice President
For themselves and as Representatives of the other
Underwriters named in Schedule A hereto.
S-2
<PAGE> 31
SCHEDULE A
<TABLE>
<CAPTION>
NUMBER
OF
NAME OF UNDERWRITER SECURITIES
------------------- ----------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith Incorporated . . . . . . . . . . . . . . . . . 397,918
Dean Witter Reynolds Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 397,916
Sutro & Co. Incorporated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 397,916
Alex. Brown & Sons Incorporated . . . . . . . . . . . . . . . . . . . . . . . . . . . 50,000
Lehman Brothers Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50,000
PaineWebber Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50,000
Prudential Securities Incorporated . . . . . . . . . . . . . . . . . . . . . . . . . 50,000
Salomon Brothers Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50,000
Smith Barney Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50,000
Crowell, Weedon & Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,250
Jefferies & Company, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,250
The Seidler Companies Incorporated . . . . . . . . . . . . . . . . . . . . . . . . . 21,250
Tucker Anthony Incorporated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,250
Wedbush Morgan Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,250
---------
TOTAL 1,600,000
</TABLE>
Schedule A-1
<PAGE> 32
SCHEDULE B
<TABLE>
<CAPTION>
Number of Initial Number of Option
Securities to Be Sold Securities to Be Sold
by the Company by the Company
--------------------- ---------------------
<S> <C>
1,600,000 240,000
</TABLE>
Schedule B-1
<PAGE> 33
SCHEDULE C
1,600,000 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
$37.625.
2. The purchase price per share for the Securities to be
paid by the several Underwriters shall be $35.65, being an amount
equal to the initial public offering price set forth above less $1.975
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> 34
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> 35
EXHIBIT A
_________ __, 1996
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
DEAN WITTER REYNOLDS INC.
SUTRO & CO. INCORPORATED
as Representatives of the Several Underwriters
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"), Dean Witter Reynolds Inc. 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
<PAGE> 36
EXHIBIT A
agreement or any transaction that 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]
January 17, 1997
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. 333-16787), as
supplemented pertaining to an additional one million six hundred
thousand (1,600,000) shares plus an over-allotment option of up to
two hundred forty thousand (240,000) 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.
333-16787) filed with the Securities and Exchange Commission (the "Commission")
on or about November 25, 1996, as amended, 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 31, 1995, and Articles of Amendment filed
with the SDAT on June 13, 1996. We
<PAGE> 2
BALLARD SPAHR ANDREWS & INGERSOLL
The Price Reit, Inc.
January 17, 1997
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 November 21, 1996, January 8, 1997 and January 17,
1997, 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 corporate 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
<PAGE> 1
EXHIBIT 8.1
[GIBSON, DUNN & CRUTCHER LLP LETTERHEAD]
January 17, 1997
(213) 229-7000 C72752-00017
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 issuance and sale by the
Company of 1,600,000 shares of Common Stock, $.01 par value per share, of the
Company (the "Common Stock"), including up to 240,000 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 December 23, 1996 (Registration No. 333-16787).
You have requested our opinion concerning certain of the federal income
tax consequences to the Company and the purchases 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.
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,
<PAGE> 2
GIBSON, DUNN & CRUTCHER LLP
The Price REIT, Inc.
January 17, 1997
Page 2
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) The Company is organized in conformity with the requirements for
qualification as a real estate investment trust, and its proposed method of
operation will enable it to meet the requirements for continued 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
