<PAGE> 1
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
April 16, 1997
----------------------------------
Date of Report
(Date of earliest event reported)
SHURGARD STORAGE CENTERS, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 0-23466 91-1080141
- --------------- ---------------- -------------------
(State or other (Commission File (IRS Employer
jurisdiction of No.) Identification No.)
incorporation)
1201 Third Avenue, Suite 2200
Seattle, Washington 98101
- --------------------------------------------------------------------------------
(Address of principal executive offices, including zip code)
(206) 624-8100
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
Exhibit Index on Page 4
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ITEM 5. OTHER EVENTS
Shurgard Storage Centers, Inc. (the "Company") is filing this Current
Report on Form 8-K in connection with the issuance of shares of its 8.80% Series
B Cumulative Redeemable Preferred Stock under the Company's shelf registration
statement on Form S-3 (File No. 333-21273), effective February 20, 1997 (the
"Registration Statement"). The exhibits listed below are being filed herewith
in lieu of filing them as an exhibit to the Registration Statement, and, since
this Form 8-K filing is incorporated by reference in the Registration
Statement, such exhibits are set forth in full in the Registration Statement.
ITEM 7. FINANCIAL STATEMENT, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
1.1 Purchase Agreement, dated April 16, 1997, between Merrill Lynch & Co. and
Smith Barney Inc., as representatives of the underwriters, and the Company
5.1 Opinion of Perkins Coie
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of Perkins Coie (contained in the opinion filed as Exhibit 5.1
hereto)
</TABLE>
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SIGNATURE
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.
SHURGARD STORAGE CENTERS, INC.
Dated: April 16, 1997
By /s/ Harrell Beck
-------------------------------------
Harrell Beck, Chief Financial Officer
<PAGE> 4
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description Page
- ----------- ----------- ----
<S> <C>
1.1 Purchase Agreement, dated April 16, 1997, between Merrill Lynch & Co. and
Smith Barney Inc., as representatives of the underwriters, and the Company
5.1 Opinion of Perkins Coie
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of Perkins Coie (contained in the opinion filed as Exhibit 5.1
hereto)
</TABLE>
<PAGE> 1
================================================================================
SHURGARD STORAGE CENTERS, INC.
(a Delaware corporation)
2,000,000 Shares
8.80% Series B Cumulative Redeemable Preferred Stock
PURCHASE AGREEMENT
Dated: April 16, 1997
================================================================================
<PAGE> 2
SHURGARD STORAGE CENTERS, INC.
(a Delaware corporation)
2,000,000 Shares
8.80% Series B Cumulative Redeemable Preferred Stock
PURCHASE AGREEMENT
April 16, 1997
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
SMITH BARNEY INC.
c/o Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Ladies and Gentlemen:
Shurgard Storage Centers, Inc., a Delaware corporation (the
"Company"), confirms its agreement with Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated ("Merrill Lynch"), and each of the other
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 and Smith Barney Inc.
are acting as representatives (in such capacity, the "Representatives"), with
respect to the issue and sale by the Company and the purchase by the
Underwriters, acting severally and not jointly, of the respective number of
shares of the Company's 8.80% Series B Cumulative Redeemable Preferred Stock,
par value $.001 per share (the "Series B Preferred Stock"), set forth in
Schedule A hereto, and with respect to 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 the 300,000 additional
shares of Series B Preferred Stock. The aforesaid 2,000,000 shares of Series B
Preferred Stock (the "Initial Securities") to be purchased by the Underwriters
and all or any part of the 300,000 shares of Series B Preferred Stock subject
to the option described in Section 2(b) hereof (the "Option Securities") are
collectively hereinafter called the "Securities."
The Company understands that the Underwriters propose to make a public
offering of the Securities as soon as the Representatives deem advisable after
this Agreement has been executed and delivered.
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The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-21273) relating to
the offering from time to time of debt securities, common stock or preferred
stock in accordance with Rule 415 under the Securities Act of 1933, as amended
(the "1933 Act"), and will file such additional amendments and supplements
thereto as may be required. Such registration statement has been declared
effective by the Commission. Such registration statement and the prospectus
constituting a part thereof and each prospectus supplement relating to the
offering of the Securities, including in each case all documents incorporated
or deemed to be incorporated therein by reference, and the information, if any,
deemed to be part thereof pursuant to Rule 434 of the rules and regulations of
the Commission under the 1933 Act (the "1933 Act Regulations"), as from time to
time amended or supplemented pursuant to the 1933 Act, the Securities Exchange
Act of 1934, as amended (the "1934 Act"), or otherwise, are referred to herein
as the "Registration Statement" and the "Prospectus," respectively, except 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. 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
final or preliminary prospectus and 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"). If the Company files a registration statement to
register a portion of the Securities and relies on Rule 462(b) for such
registration statement to become effective upon filing with the Commission (the
"Rule 462 Registration Statement"), then any reference to "Registration
Statement" herein shall be deemed to be to both the registration statement
referred to above (No. 333-21273) and the Rule 462 Registration Statement, as
each such registration statement may be amended pursuant to the 1933 Act. For
purposes of this Agreement, references to the Registration Statement, the
Prospectus, any preliminary prospectus or any term sheet 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 "contained," "included" or "stated" in the
Registration Statement or the Prospectus (or other references of like import)
shall be deemed to mean and include all such financial statements and schedules
and other information which is incorporated by reference in the Registration
Statement, the Prospectus or any preliminary prospectus, as the case may be;
and all references in this Agreement to amendments or supplements to the
Registration Statement, the Prospectus or any preliminary prospectus shall be
deemed to mean and include the filing of any document under the 1934 Act which
is or is deemed to be incorporated by reference in the Registration Statement,
Prospectus or any preliminary prospectus, as the case may be.
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 and as of the
Closing Time referred to in
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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) Compliance with Registration Requirements. The
Company meets the requirements for use of Form S-3 under the 1933 Act.
Each of the Registration Statement, any Rule 462 Registration
Statement and any post-effective amendments thereof has become
effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement or any Rule 462
Registration Statement has been issued under the 1933 Act and no
proceedings for that purpose have been instituted or are pending or,
to the knowledge of the Company, are contemplated by the Commission,
and any request on the part of the Commission for additional
information has been complied with.
At the respective times the Registration Statement, any Rule
462 Registration Statement and any post-effective amendments thereto
became effective and at the Closing Time, the Registration Statement,
the Rule 462 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 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
(unless the term "Prospectus" refers to a prospectus which has been
provided to the Underwriter by the Company for use in connection with
the offering of the Securities which differs from the Prospectus on
file at the Commission at the time the Registration Statement first
becomes effective, in which case at the time it is first provided to
the Underwriter for such use) 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 omitted or will 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. If Rule 434 is used, the Company will comply with the
requirements of Rule 434. Each preliminary prospectus and 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 Regulations and, if applicable, each
preliminary prospectus and the Prospectus delivered to the
Underwriters for use in connection with this offering was identical to
the electronically transmitted copies thereof filed with the
Commission pursuant to EDGAR, except to the extent permitted by
Regulation S-T. The representations and warranties in this subsection
shall not apply to statements in or omissions from the Registration
Statement or Prospectus made in reliance upon and in conformity with
information furnished to the Company in writing by the Underwriter
expressly for use in the Registration Statement or Prospectus.
(ii) Incorporated Documents. The documents incorporated
or deemed to be incorporated by reference in the Registration
Statement and the Prospectus, at the time they were or hereafter are
filed with the Commission, complied and will comply in all material
respects with the requirements of the 1933 Act and the 1934 Act, as
applicable, and the rules and regulations of the Commission
thereunder, and, when read together
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<PAGE> 5
with the other information in the Prospectus, at the time the
Registration Statement became effective, at the time the Prospectus
was issued and at the Closing Time (and, if any Option Securities are
purchased, at the Date of Delivery), did not 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. The representations and warranties in this
subsection shall not apply to statements in or omissions from the
Registration Statement or Prospectus made in reliance upon and in
conformity with information furnished to the Company in writing by the
Underwriter expressly for use in the Registration Statement or
Prospectus.
(iii) Independent Accountants. The accountants who
certified the financial statements and supporting schedules included
or incorporated by reference in the Registration Statement are
independent public accountants as required by the 1933 Act and the
1933 Act Regulations.
(iv) Financial Statements. The financial statements
included or incorporated by reference, except as otherwise described
therein, in the Registration Statement and the Prospectus, together
with the related schedules and notes, present fairly the financial
position of the Company and its consolidated subsidiaries at the dates
indicated and the statement of operations, stockholders' equity and
cash flows of the Company and its consolidated subsidiaries for the
periods specified, and except as otherwise stated in the Registration
Statement, said financial statements have been prepared in conformity
with generally accepted accounting principles ("GAAP") applied on a
consistent basis throughout the periods involved. The supporting
schedules, if any, included or incorporated by reference in the
Registration Statement present fairly in accordance with GAAP the
information required to be stated therein. The selected financial
data and the summary financial information included in the Prospectus
present fairly the information shown therein and, except as otherwise
described therein, have been compiled on a basis consistent with that
of the audited financial statements included in the Registration
Statement. The pro forma financial information included in the
Registration Statement and the Prospectus present fairly the
information shown therein, have been prepared in accordance with the
Commission's rules and guidelines with respect to pro forma financial
statements and have been properly compiled on the bases described
therein, and the assumptions used in the preparation thereof are
reasonable and the adjustments used therein are appropriate to give
effect to the transactions and circumstances referred to therein.
(v) No Material Adverse Change in Business. Since the
respective dates as of which information is given in the Registration
Statement and the Prospectus, except as otherwise stated therein, (A)
there has been no material adverse change in the condition, financial
or otherwise, or in the earnings, assets, business affairs or business
prospects of the Company and its Subsidiaries (as defined below),
considered as one enterprise, whether or not arising in the ordinary
course of business (a "Material Adverse Effect"), (B) there have been
no transactions entered into by the Company or any of its
Subsidiaries, other than those in the ordinary course of business,
which are material with respect to the Company and its Subsidiaries
considered as one enterprise, (C) there has been no casualty, loss or
condemnation or other adverse event with respect to any
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<PAGE> 6
Property (as defined herein) that would result in a Material Adverse
Effect and (D) except for dividends or distributions paid or made
solely to the Company by its corporate Subsidiaries and except for
regular quarterly dividends on the Class A Common Stock, par value
$.001 per share, of the Company (the "Class A Common Stock") and the
Class B Common Stock, par value $.001 per share, of the Company (the
"Class B Common Stock," and together with the Class A Common Stock,
the "Common Stock") in amounts per share that are consistent with past
practice, there has been no dividend or distribution of any kind
declared, paid or made by the Company on any class of its capital
stock. For purposes of this Agreement, the term "Subsidiary" shall
mean (i) any corporation, partnership, joint venture, limited
liability company or other entity the majority of the shares of the
non-voting capital stock or other equivalent ownership interests of
which (except directors' qualifying shares) are at the time directly
or indirectly owned by the Company, and the majority of the shares of
the voting capital stock or other equivalent ownership of which
(except for disqualifying shares) are at the time directly or
indirectly owned by Company, any Subsidiary and/or one or more
individuals of the Senior Executive Group (or, in the event of death
or disability of any of such individuals, his/her respective legal
representative(s)), or such individuals' successors in office as an
officer of the Company, and (ii) any other entity the accounts of
which are consolidated with the accounts of the Company. For purposes
of this Agreement, the term "Senior Executive Group" shall mean,
collectively, those individuals holding the offices of Chairman,
President, Chief Executive Officer, Chief Operating Officer or any
Senior Vice President or Executive Vice President of the Company.
(vi) Good Standing of the Company. The Company has been
duly incorporated and is validly existing as a corporation in good
standing under the laws of the State of Delaware and has corporate
power and authority to own, lease and operate its properties and to
conduct its business in which it is engaged or proposes to engage as
described in the Prospectus and to enter into and perform its
obligations under this Agreement. The Company is duly qualified as a
foreign corporation to transact business and is in good standing in
each other jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure to so qualify or to be
in good standing would not result in a Material Adverse Effect.
(vii) Good Standing of Corporate Subsidiaries. Each
corporate Subsidiary of the Company has been duly incorporated and is
validly existing as a corporation in good standing under the laws of
its state of incorporation with corporate power and authority to own,
lease and operate its properties and to conduct the business in which
it is engaged or proposes to engage as described in the Prospectus and
is duly qualified as a foreign corporation to transact business and is
in good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or
the conduct of business, except where the failure to so qualify or to
be in good standing would not result in a Material Adverse Effect.
All of the issued and outstanding shares of capital stock of each
corporate Subsidiary have been duly authorized and validly issued, are
fully paid and nonassessable and are owned by the
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Company, directly or through Subsidiaries, free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim or
equity.
(viii) Good Standing of Limited Partnerships. Each limited
partnership Subsidiary of the Company has been duly formed and is
validly existing as a limited partnership under the laws of the state
of its formation with partnership power and authority to own, lease
and operate its properties and to conduct the business in which it is
engaged or proposes to engage as described in the Prospectus and is
duly qualified as a foreign partnership to transact business and is in
good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or
the conduct of business, except where the failure to so qualify or to
be in good standing would not result in a Material Adverse Effect.
All of the limited partner interests in each of the limited
partnership Subsidiaries in which the Company or a corporate
Subsidiary is a general partner have been validly issued. All of the
limited partner interests in the limited partnership Subsidiaries
which are owned by the Company, directly or through Subsidiaries, have
been validly issued and all required capital contributions with
respect thereto have been made. All of the general partner and
limited partner interests in the limited partnership Subsidiaries
which are owned by the Company, directly or through Subsidiaries, are
owned free and clear of any security interest, mortgage, pledge, lien
or encumbrance, and of any claim or equity, except for claims and
equities which would not result in a Material Adverse Effect.
(ix) Good Standing of Other Subsidiaries. Each
Subsidiary of the Company which is not a corporate or limited
partnership Subsidiary (collectively, the "Other Subsidiaries"), is
validly existing under the laws of the state or jurisdiction of its
formation with all necessary power and authority to own, lease and
operate its properties and to conduct the business in which it is
engaged or proposes to engage as described in the Prospectus and is
duly qualified to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify or to be in good
standing would not result in a Material Adverse Effect. All interests
owned or held by the Company, directly or through Subsidiaries, in
each of the Other Subsidiaries are free and clear of any security
interest, mortgage, pledge, lien or encumbrance, except for those
granted pursuant to the joint venture agreements relating to the
formation of certain of the Other Subsidiaries to secure the
performance by the Company or applicable Subsidiary of its obligations
thereunder, and are free and clear of any claim or equity, except for
claims and equities which would not result in a Material Adverse
Effect. As used in this Agreement, the term "Other Subsidiaries"
includes SSC Benelux & Co., SCS, a Belgium societe en commandite
("Benelux").
(x) Authorization of Partnership/Joint Venture
Agreements. Each of the partnership and joint venture agreements to
which the Company or any of its Subsidiaries is a party, including the
agreements or documents pursuant to which Benelux was formed, has been
duly authorized, executed and delivered by such applicable party and
constitutes the valid and binding agreement thereof, and the
execution, delivery and performance of any of such agreements did not,
at the time of execution and delivery, and does not constitute a
breach of, or default under, the charter, bylaws, partnership
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agreement or similar organizational document of such party or any
material contract, lease or other instrument to which such party is a
party or by which its properties may be bound or any law,
administrative regulation or administrative or court decree.
(xi) Capitalization. The authorized, issued and
outstanding capital stock of the Company is as set forth in the
Prospectus in the "Shareholders' equity" section under the caption
"Capitalization" (except for subsequent issuances, if any, pursuant to
this Agreement, pursuant to reservations, agreements or employee
benefit plans referred to in the Prospectus or pursuant to the
exercise of convertible securities or options referred to in the
Prospectus). The shares of issued and outstanding capital stock of
the Company have been duly authorized and validly issued and are fully
paid and non-assessable; none of the outstanding shares of capital
stock of the Company was issued in violation of the preemptive or
other similar rights of any security holder of the Company.
(xii) Authorization of Agreement. This Agreement has been
duly authorized, executed and delivered by the Company and, assuming
due authorization, execution and delivery by the Underwriters, is a
valid and binding agreement of the Company, enforceable against the
Company in accordance with its terms, except as the enforcement
thereof may be limited by bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or similar laws affecting enforcement of
creditors' rights generally and except as enforcement thereof is
subject to general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or at law).
(xiii) Description of Capital Stock. The authorized
capital stock of the Company conforms to the descriptions thereof set
forth in the Prospectus under the headings "Description of Common
Stock," "Description of Preferred Stock" and "Restrictions on
Transfers of Capital Stock; Excess Stock," and in the Prospectus
Supplement under the heading "Description of Series B Preferred
Stock," and such descriptions conform to the rights set forth in the
instruments defining the same.
(xiv) Authorization of the Securities. The Securities
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
consideration set forth herein, will be validly issued, fully paid and
nonassessable; no holder of the Securities will be subject to personal
liability by reason of being such a holder; the issuance of the
Securities is not subject to any preemptive or similar rights and the
Securities will have priority in right of dividends and liquidation
over the Common Stock and the Company's Series A Junior Participating
Preferred Stock.
(xv) Absence of Defaults and Conflicts. Neither the
Company nor any of its Subsidiaries is in violation of its charter,
bylaws, partnership agreement, joint venture agreement or other
similar governing document or in default in the performance or
observance of any obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, deed of trust, loan or
credit agreement, note, lease or other agreement or instrument to
which the Company or any of its Subsidiaries is a party or by which it
or any of them may be bound, or to which any of the property or assets
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<PAGE> 9
of the Company or any Subsidiary is subject (collectively, "Agreements
and Instruments") except for such defaults that would not result in a
Material Adverse Effect; and the execution, delivery and performance
of this Agreement and the consummation of the transactions
contemplated herein and in the Registration Statement (including the
issuance and sale of the Securities and the use of the proceeds from
the sale of the Securities as described in the Prospectus under the
caption "Use of Proceeds") and compliance by the Company with its
obligations hereunder have been duly authorized by all necessary
corporate action and do not and will not, whether with or without the
giving of notice or passage of time or both, conflict with or
constitute a breach of, or default or Repayment Event (as defined
below) under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or
any Subsidiary pursuant to, the Agreements and Instruments (except for
such conflicts, breaches or defaults or liens, charges or encumbrances
that would not, either singly or in the aggregate, result in a
Material Adverse Effect), nor will such action result in any violation
of the provisions of the charter, bylaws, partnership agreement, joint
venture agreement or other similar governing document of the Company
or any Subsidiary or any applicable law, statute, rule, regulation,
judgment, order, writ or decree of any government, government
instrumentality or court, domestic or foreign, having jurisdiction
over the Company or any Subsidiary or any of their assets, properties
or operations, except for such violations of any such applicable law,
statute, rule, regulation, judgment, order, writ or decree of any
government, government instrumentality or court that would not, either
singly or in the aggregate, result in a Material Adverse Effect. As
used herein, a "Repayment Event" means any event or condition which
gives the holder of any note, debenture or other evidence of
indebtedness (or any person acting on such holder's behalf) the right
to require the repurchase, redemption or repayment of all or a portion
of such indebtedness by the Company or any Subsidiary.
(xvi) Absence of Labor Dispute. No labor dispute with the
employees of the Company or any Subsidiary exists or, to the knowledge
of the Company, is imminent, and the Company is not aware of any
existing or imminent labor disturbance by the employees of any of its
or any subsidiary's principal suppliers, manufacturers, customers or
contractors, which, in either case, may reasonably be expected to
result in a Material Adverse Effect.
(xvii) Absence of Proceedings. There is no action, suit,
proceeding, inquiry or investigation before or brought by any court or
governmental agency or body, domestic or foreign, now pending, or, to
the knowledge of the Company, threatened, against or affecting the
Company or any Subsidiary, or of which any of their respective
properties or assets is subject, which is required to be disclosed in
the Registration Statement (other than as disclosed therein), or which
might reasonably be expected to result in a Material Adverse Effect,
or which might reasonably be expected to materially and adversely
affect the consummation of the transactions contemplated in this
Agreement or the performance by the Company of its obligations
hereunder; the aggregate of all pending legal or governmental
proceedings to which the Company or any Subsidiary is a party or of
which any of their respective property or assets is the subject which
are not described in the Registration Statement, including ordinary
routine
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litigation incidental to the business, could not reasonably be
expected to result in a Material Adverse Effect.
(xviii) Accuracy of Exhibits. There are no contracts or
documents which are required to be described in the Registration
Statement, the Prospectus or the documents incorporated by reference
therein or to be filed as exhibits thereto by the 1933 Act, the 1933
Act Regulations, the 1934 Act or the rules and regulations of the
Commission under the 1934 Act (the "1934 Act Regulations") which have
not been so described and filed as required.
(xix) Possession of Intellectual Property. Neither the
Company nor any of its Subsidiaries is required to own or possess any
patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures),
trademarks, service marks, trade names or other intellectual property
(collectively, "Intellectual Property") in order to carry on the
business now operated by them, and neither the Company nor any of its
Subsidiaries has received any notice or is otherwise aware of any
infringement of or conflict with asserted rights of others with
respect to any Intellectual Property or of any facts or circumstances
which would render any Intellectual Property invalid or inadequate to
protect the interest of the Company or any of its subsidiaries
therein, and which infringement or conflict (if the subject of any
unfavorable decision, ruling or finding) or invalidity or inadequacy,
singly or in the aggregate, would result in a Material Adverse Effect.
(xx) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or
agency is necessary or required for the performance by the Company of
its obligations hereunder, in connection with the offering, issuance
or sale of the Securities hereunder or the consummation of the
transactions contemplated by this Agreement, except such as have been
already obtained or as may be required under the 1933 Act or the 1933
Act Regulations or state securities laws.
(xxi) Possession of Licenses and Permits. Each of the
Company and its Subsidiaries possess such permits, licenses,
approvals, consents and other authorizations (collectively,
"Governmental Licenses") issued by the appropriate federal, state,
local or foreign regulatory agencies or bodies necessary to conduct
its business as now operated, except for those the failure to possess
would not, either singly or in the aggregate, result in a Material
Adverse Effect. The Company and its Subsidiaries are in compliance
with the terms and conditions of all such Governmental Licenses,
except where the failure so to comply would not, singly or in the
aggregate, result in a Material Adverse Effect. All of the
Governmental Licenses are valid and in full force and effect, except
when the invalidity of such Governmental Licenses or the failure of
such Governmental Licenses to be in full force and effect would not
result in a Material Adverse Effect. Neither the Company nor any of
its Subsidiaries has received any notice of proceedings relating to
the revocation or modification of any such Governmental Licenses
which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would result in a Material Adverse
Effect.
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(xxii) Investment Company Act. The Company is not, and
upon the issuance and sale of the Securities as herein contemplated
and the application of the net proceeds therefrom as described in the
Prospectus will not be, an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in
the Investment Company Act of 1940, as amended (the "1940 Act").
(xxiii) Environmental Laws. Except as described in the
Registration Statement and except as would not, singly or in the
aggregate, result in a Material Adverse Effect, (A) neither the
Company nor any of its Subsidiaries is in violation of any federal,
state, local or foreign statute, law, rule, regulation, ordinance,
code, policy or rule of common law or any judicial or administrative
interpretation thereof, including any judicial or administrative
order, consent, decree or judgment, relating to pollution or
protection of human health, the environment (including, without
limitation, ambient air, surface water, groundwater, land surface or
subsurface strata) or wildlife, including, without limitation, laws
and regulations relating to the release or threatened release of
chemicals, pollutants, contaminants, wastes, toxic substances,
hazardous substances, petroleum or petroleum products (collectively,
"Hazardous Materials") or to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling
of Hazardous Materials (collectively, "Environmental Laws"), (B) the
Company and its Subsidiaries have all permits, authorizations and
approvals required under any applicable Environmental Laws and are
each in compliance with their requirements, (C) there are no pending
or threatened administrative, regulatory or judicial actions, suits,
demands, demand letters, claims, liens, notices of noncompliance or
violation, investigation or proceedings relating to any Environmental
Law against the Company or any of its subsidiaries and (D) there are
no events or circumstances that might reasonably be expected to form
the basis of an order for clean-up or remediation, or an action, suit
or proceeding by any private party or governmental body or agency,
against or affecting the Company or any of its subsidiaries relating
to Hazardous Materials or any Environmental Laws.
(xxiv) Title to Property. Except as described in the
Prospectus, (A) at the Closing Time, the Company or a Subsidiary, as
the case may be, will have good and marketable fee simple title
(except as set forth in clause (B) below and except for the Solana
Beach, CA, West Chester, PA and Hillcroft--Houston, TX properties
which are held by the Company under long-term leases (the "Leased
Properties")) to the land and improvements thereon of the properties
that are listed in the Company's Annual Report on Form 10-K in the
table set forth under Item 2--Properties (collectively, the "Shurgard
Properties") (in each case with title insurance thereon or binding
commitment for title insurance in full force and effect except where
the failure to have such title insurance would not, singly or in the
aggregate, result in a Material Adverse Effect) and all other assets
that are required for the effective operation of the Shurgard
Properties in the manner in which they are currently operated, (B) the
leases under which the Company or any Subsidiary holds any of the
Leased Properties are in full force and effect, and neither the
Company nor any Subsidiary, as the case may be, is in violation of or
default with respect to any of the terms or conditions of such leases,
except for such violations or defaults which would not, singly or in
the aggregate, result in a Material Adverse Effect, (C) except for a
mortgage securing a mortgage loan on the Company's property
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located in Bellingham, Washington, all liens, charges or encumbrances,
including without limitation any mortgage financing, on or affecting
any of the Shurgard Properties or the other property and assets of the
Company or any of its Subsidiaries which are required to be disclosed
in the Prospectus are described therein, (D) the Company or a
Subsidiary will be the lessor of all tenant leases at each of the
Shurgard Properties, and neither the Company nor any of its
Subsidiaries has notice of any default by any tenants under such
leases which, singly or in the aggregate, would result in a Material
Adverse Effect, (E) each of the Shurgard Properties, and to the best
knowledge of the Company, each of the real properties owned, occupied,
operated or managed by the Company or any of its Subsidiaries
(collectively, the "Properties") other than the Shurgard Properties,
complies in all material respects with all applicable federal, state
and local codes, laws and regulations (including, without limitation,
building and zoning codes, laws and regulations, and laws relating to
handicapped access to the Properties), except for such instances of
noncompliance that, singly or in the aggregate, would not result in a
Material Adverse Effect, (F) there are in effect for the Shurgard
Properties and other properties and assets of the Company and its
Subsidiaries, and to the best knowledge of the Company, for the
Properties other than the Shurgard Properties, insurance policies
covering risks and in amounts that are commercially reasonable for the
types of assets owned by them, and neither the Company nor any of its
Subsidiaries has received from any insurance company notice of any
material defects or deficiencies affecting the insurability of any
such assets or any notices of cancellation or intent to cancel any
such policies, except for such notices of cancellation received in the
ordinary course of business in connection with the annual renewal of
such policies, and (G) neither the Company nor any of its Subsidiaries
has knowledge of any pending or threatened condemnation proceedings,
zoning change, or other proceeding or action that will have a material
adverse effect on the size of, use of, improvements on, construction
on or access to any of the Properties and, singly or in the aggregate,
result in a Material Adverse Effect.
(xxv) Tax Matters. The Company and each of its
Subsidiaries have timely filed all federal, state, local and foreign
income, franchise, sales and other tax returns which have been
required to be filed, or have applied for an extension to file such
tax returns, and all such returns are complete and accurate in all
material respects, except for any failures to so file and complete
such returns or to so apply for such extensions with respect thereto
that, singly or in the aggregate, would result in a Material Adverse
Effect. The Company and each of its Subsidiaries have paid all taxes
required to be paid and any other assessment, fine or penalty levied
against it, to the extent that any of the foregoing is due and
payable, except for any such tax, assessment, fine or penalty which
the Company or its Subsidiary is contesting in good faith through
appropriate proceedings and as to which appropriate reserves have been
established, and except for any failures to pay any such tax, other
assessment, fine or penalty that, singly or in the aggregate, would
not result in a Material Adverse Effect.
(xxvi) Regulation M. None of the Company, any of its
Subsidiaries or any of their respective directors, officers or
controlling persons, has taken, directly or indirectly, any action
resulting in a violation of Regulation M under the 1934 Act or
designed to cause or to result in, or that has constituted or which
might reasonably be
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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.
(xxvii) No Broker's Fees. Neither the Company nor any of
its Subsidiaries has incurred any liability for finder's or broker's
fees or agent's commissions (other than those payable to the
Underwriters) in connection with the execution and delivery of this
Agreement, the offer and sale of the Securities or the transactions
contemplated thereby.
(xxviii) System of Internal Accounting Controls. The Company
and its Subsidiaries maintain a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with management's general or specific
authorization, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability,
(iii) access to assets is permitted only in accordance with
management's general or specific authorization and (iv) the recorded
accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to
any differences.
(xxix) Distribution of Registration Statement and
Prospectus. The Company has not distributed and, prior to the later
to occur of (i) the Closing Time and (ii) completion of the
distribution of the Securities, will not distribute any prospectus (as
such term is defined in the 1933 Act and the 1933 Act Regulations) in
connection with the offering and sale of the Securities other than the
Registration Statement, any preliminary prospectus, the Prospectus or
other materials, if any, permitted by the 1933 Act or by the 1933 Act
Regulations and approved by the Underwriters.
(xxx) REIT Status.The Company has been and is organized in
conformity with the requirements for qualification and taxation as a
real estate investment trust ("REIT") 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
(until the Company's Board of Directors determines that is in the best
interests of the Company's stockholders not to so qualify), the
Company to qualify as a REIT under the Code
(xxxi) Investment Grade Rating. The Company has received
an investment grade rating for its preferred stock offerings of Baa3
from Moody's Investor's Service Inc. ("Moody's") and BBB- by each of
Standard & Poor's Ratings Group, a division of McGraw-Hill, Inc.
(Standard & Poor's"), and Duff & Phelps Credit Rating Co. ("Duff &
Phelps").
(b) Officer's Certificates. Any certificate signed by any officer
of the Company or any of its subsidiaries 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.
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<PAGE> 14
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 set forth in Schedule B, the number of Initial
Securities set forth in Schedule A opposite the name of such Underwriter, plus
any additional number of Securities which such Underwriter may become obligated
to purchase pursuant to the provisions of Section 10 hereof. The initial
public offering price and the purchase price to be paid by the Underwriters for
the Securities, and the interest rate on the Securities are set forth on
Schedule B hereto and a prospectus supplement will be filed in accordance with
Rule 424(b) of the 1933 Act Regulations.
(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, severally and not jointly, to purchase up to an additional
300,000 shares of Series B Preferred Stock at the price per share set forth in
Schedule B. 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 unless
otherwise agreed by the Representatives and the Company. If the option is
exercised as to all or any portion of the Option Securities, 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
Perkins Coie, 1201 Third Avenue, 40th Floor, Seattle, Washington 98101, or at
such other place as shall be agreed upon by the Representatives and the
Company, at 7:00 A.M. (pacific daylight saving time) on the third business day
(fourth, if the pricing occurs after 1:30 P.M. (pacific daylight saving time)
on any given day) after the date hereof, or such other time not later than ten
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
"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 Perkins Coie, 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.
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<PAGE> 15
Payment shall be made to the Company by wire transfer of immediately
available funds to a bank account designated by the Company, against delivery
to the Underwriters for the respective accounts of the Underwriters of
certificates for the Securities to be purchased by them. 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
Securities 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 Securities to be purchased by any
Underwriter whose funds have not been received by the Closing Time or the
relevant Date of Delivery, but such payment shall not relieve such Underwriter
from its obligations hereunder.
(d) Denominations; Registration. 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. The certificates for the Initial Securities and
the Option Securities, if any, will be made available for examination and
packaging by the Underwriters in The City of New York not later than 10:00 A.M.
(eastern daylight saving time) on the 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) Prospectus Supplement. Promptly following the execution of
this Agreement, the Company will prepare a prospectus supplement setting forth
the terms of such Securities not otherwise specified in the Prospectus, the
price at which the Securities are to be purchased by the Underwriters from the
Company, the initial public offering price, the selling concession and
reallowances, if any, and such other information as the Underwriters and the
Company deem appropriate in connection with the offering of the Securities.
The Company will promptly transmit copies of the prospectus supplement to the
Commission for filing pursuant to Rule 424(b) of the 1933 Act Regulations and
will furnish to the Underwriters as many copies of the Prospectus and such
prospectus supplement as the Underwriters shall reasonably request.
(b) Compliance with Securities Regulations and Commission
Requests. The Company will notify the Representatives immediately, and confirm
the notice in writing, (i) when any post-effective amendment to the
Registration Statement shall become 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 any preliminary
prospectus supplement, or of the suspension of the qualification of the
Securities for offering or sale in any jurisdiction, or of the initiation or
threatening of any proceedings for any of such purposes. 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
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<PAGE> 16
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(c)(2) of the 1933 Act in accordance with Rule 424(b) of the 1933
Act by the close of business in New York on the business day immediately
succeeding the date of this Agreement.
(c) Filing of Amendments. The Company will give the
Representatives notice of its intention to file or prepare any post-effective
amendment to the Registration Statement or any amendment or supplement to the
Prospectus (including any revised prospectus or prospectus supplement which the
Company proposes for use by the Underwriters in connection with the offering of
the Securities which differs from the prospectus or prospectus supplement on
file at the Commission, whether or not such revised prospectus is required to
be filed pursuant to Rule 424(b) of the 1933 Act Regulations or any term sheet
prepared in reliance on Rule 434 of the 1933 Act Regulations), will furnish the
Representatives with copies of any such amendment or supplement within a
reasonable amount of time prior to such proposed filing or use, as the case may
be, and will not file any such amendment or supplement or use any such
Prospectus to which the Representatives or counsel for the Underwriters shall
reasonably object.
(d) Delivery of Registration Statements. The Company has
furnished or will deliver to the Representatives 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 the
Representatives, without charge, a conformed copy of the Registration Statement
as originally filed and of each amendment thereto (without 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 each preliminary 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, from time to time during the
period when the Prospectus is required to be delivered under the 1933 Act or
the 1934 Act, such number of copies of the Prospectus (as amended or
supplemented) as such Underwriter may reasonably request. The Prospectus and
any amendments or supplements thereto furnished to the Underwriters will be
identical to the electronically transmitted copies thereof filed with the
Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.
(f) Continued Compliance with Securities Laws. The Company will
comply with the 1933 Act and the 1933 Act Regulations and the 1934 Act and the
1934 Act Regulations so as to permit the completion of the distribution of the
Securities as contemplated in this Agreement and in the Prospectus. If at any
time when a prospectus is required by the 1933 Act to be delivered in
connection with sales of the Securities, any event shall occur or condition
shall exist as a result of which it is necessary, in the opinion of counsel for
the Underwriters or for the Company, to amend the Registration Statement or
amend or supplement the Prospectus in order
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<PAGE> 17
that the Prospectus will not include any untrue statements 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(c), 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 as the Underwriters may designate; provided, however, that the
Company shall not be obligated to file any general consent to service of
process or to qualify as a foreign corporation or as a dealer in securities in
any jurisdiction in which it is not so qualified or to subject itself to
taxation in respect of doing business in any jurisdiction in which it is not
otherwise so subject. 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 Registration Statement. The Company
will also supply the Underwriters with such information as is necessary for the
determination of the legality of the Securities for investment under the laws
of such jurisdictions as the Underwriters may request.
(h) Rule 158. The Company will timely file such reports pursuant
to the 1934 Act as are necessary in order to make generally available to its
security holders as soon as practicable an earnings statement for the purposes
of, and to provide the benefits contemplated by, the last paragraph of Section
11(a) of the 1933 Act.
(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 "Use of Proceeds".
(j) Listing. The Company will use its best efforts to list the
Securities on the New York Stock Exchange within 30 days of the date of this
Agreement.
(i) Restriction on Sale of Securities. During a period of 30 days
from the date of the Prospectus, 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 share of preferred stock or any securities
convertible into or exercisable or exchangeable for preferred stock 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 preferred stock, whether any such swap or
transaction described in clause (i) or (ii) above is to be settled by delivery
of Series B Preferred Stock or such other securities, in cash or otherwise.
The foregoing sentence shall not apply to (A) the
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<PAGE> 18
Securities to be sold hereunder or (B) any issuance of the Company's Series A
Junior Participating Preferred Stock.
(k) 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.
(l) Qualification as a REIT. The Company will use its best
efforts to meet the requirements to qualify as a REIT under the Code, unless
the Company's Board of Directors determines that it is in the best interest of
the Company's stockholders not to so qualify.
(m) Delivery of Reports. During the period from the Closing Time
until five years after the Closing Time, the Company will deliver to the
Underwriters, (i) promptly upon their becoming available, copies of all
current, regular and periodic reports of the Company mailed to its stockholders
or filed with any securities exchange or with the Commission or any
governmental authority succeeding to any of the Commission's functions, and
(ii) such other information concerning the Company or any of its Subsidiaries
as the Underwriters may reasonably request.
(n) Accuracy of Representations and Warranties. Prior to the
Closing Time, the Company will notify the Underwriters in writing immediately
if any event occurs that renders any of the representations and warranties of
the Company contained herein inaccurate or incomplete in any material respect.
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 preparation, printing and filing of the
Registration Statement (including financial statements and exhibits) as
originally filed and of each amendment thereto, (ii) the preparation, printing
and delivery to the Underwriters of this Agreement, any Agreement among
Underwriters and such other documents as may be required in connection with the
offering, purchase, sale, issuance or delivery of the Securities, (iii) the
preparation, issuance and delivery of the certificates for the Securities to
the Underwriters, (iv) the fees and disbursements of the Company's counsel,
accountants and other advisors, (v) 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, (vi) the printing and
delivery to the Underwriters of copies of each preliminary prospectus, any Term
Sheets and of the Prospectus and any amendments or supplements thereto, (vii)
the preparation, printing and delivery to the Underwriters of copies of the
Blue Sky Survey and any supplement thereto, (viii) the fees and expenses of any
transfer agent or registrar for the Securities, (ix) any fees payable in
connection with the rating of the Securities and (x) the filing fees incident
to, and the reasonable fees and disbursements of counsel to the Underwriters in
connection with, the review, if any, by the National Association of Securities
Dealers, Inc. (the "NASD") of the terms of the sale of the Securities.
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(b) Termination of Agreement. If this Agreement is terminated by
the Underwriters in accordance with the provisions of Section 5 or Section
9(a)(i) hereof, the Company shall reimburse the Underwriters for all of their
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriters.
SECTION 5. Conditions of Underwriters' Obligations. The
obligations of the several 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 or any subsidiary of
the Company delivered pursuant to the provisions hereof, to the performance by
the Company of its covenants and other obligations hereunder, and to the
following further conditions:
(a) Effectiveness of Registration Statement. The Registration
Statement, including any Rule 462 Registration Statement, has become effective
and at 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. A prospectus
supplement shall have been transmitted to the Commission for filing in
accordance with Rule 424(b) of the 1933 Act Regulations within the prescribed
time period and prior to Closing Time the Company shall have provided evidence
satisfactory to the Underwriters of such timely filing, or a post-effective
amendment providing such information shall have been promptly filed and
declared effective in accordance with the requirements of the 1933 Act
Regulations.
(b) Opinion of Counsel for Company. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of Closing
Time, of Perkins Coie, counsel for the Company, in form and substance
satisfactory to counsel for the Underwriters, together with signed or
reproduced copies of such letter for each of the other Underwriters to the
effect set forth in Exhibit A hereto and to such further effect as counsel to
the Underwriters may reasonably request.
(c) Opinion of Counsel for Underwriters. At Closing Time, the
Underwriters shall have received the favorable opinion, dated as of Closing
Time, of Latham & Watkins, counsel for the Underwriters, together with signed
or reproduced copies of such letter for each of the other Underwriters with
respect to the matters set forth in clauses (i), (vii) (solely as to the
matters set forth in the first sentence), (xii), (xiii), (xiv) (solely as to
information in the Prospectus under "Description of Series B Preferred Stock"
and "Description of Preferred Stock"), (xvii) and the penultimate paragraph of
Exhibit A hereto. In giving such opinion such counsel may rely, as to all
matters governed by the laws of jurisdictions other than the law of the State
of New York, the federal law of the United States and the General Corporation
Law of the State of Delaware, upon the opinions of counsel satisfactory to the
Underwriters. Such counsel may also state that, insofar as such opinion
involves factual matters, they have relied, to the extent they deem proper,
upon certificates of officers of the Company and its Subsidiaries and
certificates of public officials.
(d) Officers' Certificate. At Closing Time, there shall not have
been, since the date hereof or since the respective dates as of which
information is given in the Prospectus, any
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<PAGE> 20
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
Subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, and the Underwriters shall have received a
certificate of the President or a Vice President of the Company and of the
Chief Financial Officer of the Company, dated as of Closing Time, to the effect
that (i) there has been no such material adverse change, (ii) the
representations and warranties in Section 1(a) hereof are true and correct with
the same force and effect as though expressly made at and as of Closing Time,
(iii) 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, (iv) no
action, suit or proceedings at law or in equity shall be pending or, to the
knowledge of the Company, threatened against the Company or any of its
Subsidiaries before or by any court or governmental agency wherein an
unfavorable decision, ruling or finding might result in any such material
adverse change and (v) no stop order suspending the effectiveness of the
Registration Statement has been issued and, to the knowledge of the Company, no
proceedings for that purpose have been instituted or are pending or are
contemplated by the Commission.
(e) Accountant's Comfort Letter. At the time of the execution of
this Agreement, the Underwriters shall have received from Deloitte & Touche LLP
a letter dated such date, in form and substance satisfactory to the
Underwriters, together with signed or reproduced copies of such letter for each
of the other Underwriters containing statements and information of the type
ordinarily included in accountants' "comfort letters" to underwriters with
respect to the financial statements and certain financial information contained
in the Registration Statement and the Prospectus or incorporated therein by
reference.
(f) Bring-down Comfort Letter. At Closing Time, the Underwriters
shall have received from Deloitte & Touche LLP a letter, dated as of Closing
Time, to the effect that they reaffirm the statements made in the letter
furnished pursuant to subsection (e) of this Section, except that the specified
date referred to shall be a date not more than three business days prior to
Closing Time.
(g) Maintenance of Rating. At the Closing Time, the Securities
shall be rated at least Baa3 by Moody's and BBB- by each of Standard & Poor's
and Duff & Phelps, and the Company shall have delivered to the Underwriters a
letter dated the Closing Time, from each such rating agency, or other evidence
satisfactory to the Underwriters, confirming that the Securities have such
ratings; and since the date of this Agreement, there shall not have occurred a
downgrading in the rating assigned to the Securities or any of the Company's
other securities by any "nationally recognized statistical rating agency," as
that term is defined by the Commission for purposes of Rule 436(g)(2) under the
1933 Act, and no such organization shall have publicly announced that it has
under surveillance or review its rating of the Securities or any of the
Company's other securities.
(h) 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:
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<PAGE> 21
(i) A certificate, dated such Date of Delivery,
of the Chairman of the Board and Chief Executive Officer and
the Chief Financial Officer of the Company confirming that the
certificate delivered at the Closing Time pursuant to Section
5(d) hereof remains true and correct as of such Date of
Delivery.
(ii) The favorable opinion of Perkins Coie,
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) hereof.
(iii) 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 opinion
required by Section 5(c) hereof.
(iv) A letter from Deloitte & Touche 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(f) 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.
(v) Subsequent to the date of this Agreement, no
downgrading shall have occurred in the rating accorded the
Securities or of any of the Company's other securities by any
"nationally recognized statistical rating agency," as that
term is defined by the Commission for purposes of Rule
436(g)(2) under the 1933 Act, and no such organization shall
have publicly announced that it has under surveillance or
review its rating of the Securities or any of the Company's
other securities.
(i) Additional Documents. At Closing Time, counsel for the
Underwriters shall have been furnished with such documents and opinions as they
may require for the purpose of enabling them to pass upon the issuance and sale
of the Securities as herein contemplated, 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 satisfactory in form and substance to the Underwriters and counsel for
the Underwriters.
(j) Termination of Agreement. If any condition specified in this
Section shall not have been fulfilled when and as required to be fulfilled,
this Agreement may be terminated by the Underwriters by notice to the Company
at any time at or prior to Closing Time, 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, 7 and 8 shall survive any such termination and
remain in full force and effect.
20
<PAGE> 22
SECTION 6. Indemnification.
(a) Indemnification of Underwriters. 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), including the
information deemed to be part of the Registration Statement pursuant
to Rule 434 of the 1933 Act Regulations, if applicable, or the
omission or alleged omission therefrom of a material fact required to
be stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospectus
or 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 based upon any such untrue
statement or omission, or any such alleged untrue statement or
omission; provided that (subject to Section 6(d) below) any such
settlement is effected with the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred
(including, subject to the fourth sentence of 6(c) below, the fees and
disbursements 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 based upon any such
untrue statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under (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 furnished to the Company by any
Underwriter through Merrill Lynch expressly for use in the Registration
Statement (or any amendment thereto) or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto). The foregoing
indemnification with respect to any untrue statement contained in or omission
from a preliminary prospectus shall not inure to the benefit of any Underwriter
(or any person controlling any such Underwriter) from whom the person asserting
any such loss, liability, claim, damage or expense purchased any of the
Securities which are the subject thereof if such person was not sent or given a
copy of the Prospectus (or the Prospectus as amended or supplemented) (in each
case exclusive of the documents from which information is incorporated by
reference) at or prior to the written confirmation of the sale if such
preliminary prospectus was corrected in the Prospectus (or the
21
<PAGE> 23
Prospectus as amended or supplemented); provided, however, that the Company
shall have complied with its Prospectus delivery obligations under Section 3(e)
hereof.
(b) Indemnification of Company, Directors and Officers. Each
Underwriter severally agrees to indemnify and hold harmless the Company, its
directors, each of its officers who signed the Registration Statement, and each
person, if any, who controls the Company within the meaning of Section 15 of
the 1933 Act or Section 20 of the 1934 Act against any and all loss, liability,
claim, damage and expense described in the indemnity contained in subsection
(a) of this Section, 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
furnished to the Company by such Underwriter through Merrill Lynch expressly
for use in the Registration Statement (or any amendment thereto) or such
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto).
(c) Actions against Parties; Notification. 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 hereunder 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. In the case of parties indemnified pursuant to
Section 6(a) above, counsel to the indemnified parties shall be selected by
Merrill Lynch and shall be reasonably satisfactory to the Company, and, in the
case of parties indemnified pursuant to Section 6(b) above, counsel to the
indemnified parties shall be selected by the Company and shall be reasonably
satisfactory to Merrill Lynch. 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. If it so elects within a
reasonable time after receipt of such notice, an indemnifying party, jointly
with any other indemnifying party(s) receiving such notice, may assume the
defense of such action with counsel chosen by it and approved by the
indemnified parties defendant in such action, unless such indemnified parties
reasonably object to such assumption on the ground that there may be legal
defenses available to them which are different from or in addition to those
available to such indemnifying party. If an indemnifying party assumes the
defense of such action, the indemnifying parties shall not be liable for any
fees and expenses of counsel for the indemnified parties incurred thereafter in
connection with such action. 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 written consent
of the indemnified parties, 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
22
<PAGE> 24
statement as to or an admission of fault, culpability or a failure to act by or
on behalf of any indemnified party.
(d) Settlement without Consent if Failure to Reimburse. If at any
time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for 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.
(e) For purposes of this Section 6, all references to the
Registration Statement, any preliminary prospectus or the Prospectus, or any
amendment or supplement to any of the foregoing, shall be deemed to include,
without limitation, any electronically transmitted copies thereof, including,
without limitation, any copies filed with the Commission pursuant to EDGAR.
SECTION 7. Contribution. If the indemnification provided for
in Section 6 hereof is for any reason unavailable to or insufficient 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, 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 any such untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Underwriters and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
23
<PAGE> 25
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
purpose) 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
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of any 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, 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
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 in certificates of officers of the Company or any of its
subsidiaries 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) Termination; General. The Underwriters may terminate this
Agreement, by notice to the Company, at any time at or prior to Closing Time
(i) if there has been, since the time of execution of this Agreement or since
the respective dates as of which information is given in the Prospectus, any
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
Subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, or (ii) if there has occurred any material adverse
change in the financial markets in the United States or elsewhere, any outbreak
of hostilities or escalation thereof or other calamity or crisis or any change
or
24
<PAGE> 26
development involving a prospective change in national or international
political, financial or economic conditions, in each case the effect of which
is such as to make it, in the judgment of the Underwriters, impracticable to
market the Securities or to enforce contracts for the sale of the Securities,
or (iii) if trading in any securities of the Company has been suspended or
materially limited by the Commission or the New York Stock Exchange, or if
trading generally on the American Stock Exchange or the New York Stock Exchange
or in the Nasdaq National Market has been suspended or materially limited, or
minimum or maximum prices for trading have been fixed, or maximum ranges for
prices have been required, by any of said exchanges or by such system or by
order of the Commission, the National Association of Securities Dealers, Inc.
or any other governmental authority, or (iv) if a banking moratorium has been
declared by either Federal or New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that
Sections 1, 6, 7 and 8 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 Closing Time to purchase the
Securities which it or they are obligated to purchase under this Agreement (the
"Defaulted Securities"), the Underwriters shall have the right, within 24 hours
thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than
all, of the Defaulted Securities in such amounts as may be agreed upon and upon
the terms herein set forth; if, however, the Underwriters 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 hereunder, each of the non-defaulting
Underwriters 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 hereunder, this Agreement shall terminate
without liability on the part of any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a
termination of this Agreement, either the Underwriters or the Company shall
have the right to postpone Closing Time 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.
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<PAGE> 27
SECTION 11. Notices. All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
mailed or transmitted by any standard form of telecommunication. Notices to
the Underwriters shall be directed to the Underwriters at Merrill Lynch & Co.,
10900 Wilshire Boulevard, Suite 900, Los Angeles, California 90024, attention
Paul M. Meurer, and notices to the Company shall be directed to it at 1201
Third Avenue, Suite 2200, Seattle, Washington 98101, attention of Charles K.
Barbo, Chairman of the Board and Chief Executive Officer.
SECTION 12. Parties. This Agreement shall each 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 and the Company and their respective successors and the
controlling persons and officers and directors referred to in Sections 6 and 7
and their 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 are
intended to be for the sole and exclusive benefit of the Underwriters and 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 13. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
EXCEPT AS OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK
CITY TIME.
SECTION 14. Effect of Headings. The Article and Section
headings herein and the Table of Contents are for convenience only and shall
not affect the construction hereof.
26
<PAGE> 28
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 between the Underwriters and the Company in accordance with its
terms.
Very truly yours,
SHURGARD STORAGE CENTERS, INC.
By: /s/ Harrell L. Beck
--------------------------------
Name: Harrell L. Beck
Title: Senior Vice President, Chief
Financial Officer and Treasurer
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
SMITH BARNEY INC.
By: Merrill Lynch, Pierce, Fenner &
Smith Incorporated
By: /s/ Paul M. Meurer
-----------------------------
Name: Paul M. Meurer
-----------------------------
Title: Vice President
-----------------------------
For themselves and as Representatives of the other Underwriters named in
Schedule A hereto.
27
<PAGE> 29
SCHEDULE A
2,000,000 Shares
8.80% Series B Cumulative Redeemable Preferred Stock
<TABLE>
<CAPTION>
Number of
Name of Underwriter Shares
------------------- -----------
<S> <C>
Merrill Lynch, Pierce, Fenner &
Smith Incorporated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 862,500
Smith Barney Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 862,500
Alex. Brown & Sons Incorporated . . . . . . . . . . . . . . . . . . . . . . . . . . 25,000
Dain Bosworth Incorporated . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,000
Legg Mason Wood Walker, Incorporated . . . . . . . . . . . . . . . . . . . . . . . 25,000
Morgan Keegan & Company, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,000
Oppenheimer & Co., Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,000
Piper Jaffray Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,000
Ragen MacKenzie Incorporated . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,000
Raymond James & Associates, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . 25,000
Stone & Youngberg . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,000
Sutro & Co. Incorporated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,000
Wheat, First Securities, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,000
---------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,000,000
=========
</TABLE>
1
<PAGE> 30
SCHEDULE B
SHURGARD STORAGE CENTERS, INC.
2,000,000 Shares
8.80% Series B Cumulative Redeemable Preferred Stock
1. The initial public offering price of the Securities,
determined as provided in Section 2, shall be $25.00.
2. The purchase price per share for the Securities to be paid by
the several Underwriters shall be $24.2125, being an amount equal to the
initial public offering price set forth above less $.7875 per share; provided
that the purchase price per share for any Option Securities purchased upon the
exercise of the over-allotment option described in Section 2(b) shall be
reduced by an amount per share equal to any dividends or distributions declared
by the Company and payable on the Initial Securities but not payable on the
Option Securities.
3. The dividend rate on the Securities will be 8.80% per annum.
4. The Securities are not redeemable prior to June 30, 2002. On
or after June 30, 2002, the Securities may be redeemed at the option of the
Company, in whole or in part, at a redemption price of $25.00 per share, plus
accumulated and unpaid distributions, if any, thereon. The redemption price of
the Securities (other than any portion thereof consisting of accumulated and
unpaid distributions) may only be paid from the sale proceeds of other capital
stock of the Company, which may include other classes or series of preferred
shares, and from no other source.
1
<PAGE> 1
Exhibit 5.1
[Perkins Coie Letterhead]
April 16, 1997
Shurgard Storage Centers, Inc.
1201 Third Avenue, Suite 2200
Seattle, Washington 98101
Gentlemen and Ladies:
We have acted as counsel to you in connection with (i) the proceedings
for the authorization and issuance by Shurgard Storage Centers, Inc. (the
"Company") of up to 2,000,000 shares of the Company's 8.80% Series B Cumulative
Redeemable Preferred Stock, par value $.001 per share (the "Series B Preferred
Shares"), together with an additional 300,000 shares if the underwriters
exercise an overallotment option (the "Overallotment Shares") and (ii) the
preparation and filing of a prospectus supplement to the Company's Registration
Statement on Form S-3, File No. 333-21273, which was declared effective by the
Securities and Exchange Commission on February 20, 1997 (the "Registration
Statement"), which you have filed with the Securities and Exchange Commission
with respect to the Series B Preferred Shares and the Overallotment Shares (the
"Prospectus Supplement").
We have examined the Registration Statement, the Prospectus Supplement
and such documents and records of the Company and other documents as we have
deemed necessary for the purpose of this opinion.
Based upon the foregoing, we are of the opinion that upon the due
execution by the Company and registration by its registrar of the Series B
Preferred Shares and the Overallotment Shares, and the sale of the Series B
Preferred Shares and the Overallotment Shares as contemplated by the
Registration Statement and the Prospectus Supplement and in accordance with the
applicable corporate, stockholder and governmental authorizations, the Series B
Preferred Shares and the Overallotment Shares will be duly authorized, validly
issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Form 8-K, and to the reference to our firm the Prospectus Supplement and the
Registration Statement under the headings "Legal Matters."
Very truly yours,
PERKINS COIE
<PAGE> 1
Exhibit 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to incorporation by reference into Shurgard Storage Centers, Inc.'s
Registration Statement on Form S-3, File No. 333-21273 (the "Registration
Statement") of our report dated February 28, 1997, which is included in the
Annual Report on Form 10-K of Shurgard Storage Centers, Inc. for the year ended
December 31, 1996. We also consent to the reference to us under the heading
"Experts" in the Prospectus dated February 20, 1997 which is a part of the
Registration Statement.
DELOITTE & TOUCHE LLP
Seattle, Washington
April 16, 1997
