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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 27, 1997
Prime Retail, Inc.
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(Exact name of registrant as specified in its charter)
Maryland 0-23616 52-1836258
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
100 East Pratt Street
Nineteenth Floor, Baltimore, Maryland 21202
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (410) 234-0782
No Change
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(Former name or former address, if changed since last report)
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Item 5. Other Events.
The purpose of this Current Report on Form 8-K is to file the following
documents for incorporation into the Registration Statement on Form S-3 (File
No. 333-29437) filed by the Registrant on June 17, 1997 (the "Registration
Statement"): (i) Form of Underwriting Agreement (attached hereto as Exhibit
1.1); (ii) Amended and Restated Articles of Incorporation of Prime Retail,
Inc., as amended (attached hereto as Exhibit 3.1); (iii) Amended and Restated
Bylaws of Prime Retail, Inc. (attached hereto as Exhibit 3.2); (iv) Articles
Supplementary filed with the Maryland Secretary of State on February 19, 1997
classifying and designating 175,800 shares of Preferred Stock as 8.5% Series
B Cumulative Participating Preferred Stock and 87,900 shares of Excess
Preferred Stock as Excess Series B Preferred Stock (attached hereto as
Exhibit 4.1); (v) Opinion of Winston and Strawn regarding the validity of the
securities registered (attached hereto as Exhibit 5.1); and (vi) Opinion of
Winston & Strawn regarding tax matters (attached hereto as Exhibit 8.1).
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
Number Description
1.1 Form of Underwriting Agreement between the Registrant and
the Underwriter.
3.1 Amended and Restated Articles of Incorporation of Prime
Retail, Inc., as amended (Restated to incorporate
amendment dated May 29, 1996 for purposes of Regulation S-T
Section 232.102(c) only) (incorporated by reference to the
same titled exhibit in the Company's registration statement
on Form S-11 (Registration No. 333-1666))
3.2 Amended and Restated Bylaws of Prime Retail, Inc.
(incorporated by reference to the same titled exhibit in the
Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1995 (File No. 0-23616))
4.1 Articles Supplementary filed with the Maryland Secretary
of State on February 19, 1997 classifying and designating
175,800 shares of Preferred Stock as 8.5% Series B Cumulative
Participating Preferred Stock and 87,900 shares of Excess
Preferred Stock as Excess Series B Preferred Stock
5.1 Opinion of Winston & Strawn regarding the validity of the
securities registered.
8.1 Opinion of Winston & Strawn regarding tax matters.
23.2 Consents of Winston & Strawn included in Exhibits 5.1 and
8.1
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
PRIME RETAIL, INC.
(Registrant)
Date: August 27, 1997
By: /s/ Robert P. Mulreaney
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Name: Robert P. Mulreaney
Title: Executive Vice President,
Chief Financial Officer
and Treasurer
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EXHIBIT INDEX
Number Description Page Number
In This Report
1.1 Form of Underwriting Agreement between
the Registrant and the Underwriter.
3.1 Amended and Restated Articles of Incorporation of
Prime Retail, Inc., as amended (restated to
incorporate amendment dated May 29, 1996 for purposes
of Regulation S-T Section 232.102(c) only)
(incorporated by reference to the same titled exhibit
in the Company's registration statement on Form S-11
(Registration No. 333-1666))
3.2 Amended and Restated Bylaws of Prime Retail, Inc.
(incorporated by reference to the same titled
exhibit in the Company's Annual Report on
Form 10-K for the fiscal year ended
December 31, 1995 (File No. 0-23616))
4.1 Articles Supplementary filed with the Maryland
Secretary of State on February 19, 1997 classifying
and designating 175,800 Shares of Preferred Stock as
8.5% Series B Cumulative Participating Convertible
Preferred Stock and 87,900 Shares of Excess
Preferred Stock as Excess Series B Preferred Stock
5.1 Opinion of Winston & Strawn regarding the validity of
the securities registered.
8.1 Opinion of Winston & Strawn regarding tax matters.
23.2 Consents of Winston & Strawn included in Exhibits 5.1
and 8.1
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PRIME RETAIL, INC. Exhibit 1.1
(a Maryland corporation)
Preferred Stock, Depositary Shares, Preferred Stock Warrants,
Common Stock and Common Stock Warrants
UNDERWRITING AGREEMENT
August 26, 1997
FRIEDMAN, BILLINGS, RAMSEY & CO., INC.
1001 Nineteenth Street North
Arlington, Virginia 22209
Ladies and Gentlemen:
Prime Retail, Inc., a Maryland corporation (the "Company"), proposes to
issue and sell up to $300,000,000 aggregate initial public offering price of its
(i) shares of preferred stock, par value $.01 per share (the "Preferred Stock"),
(ii) shares of Preferred Stock represented by Depositary Shares (the "Depositary
Shares"), (iii) warrants exercisable for Preferred Stock ("Preferred Stock
Warrants"), (iv) shares of common stock, par value $.01 per share (the "Common
Stock"), and (v) warrants exercisable for Common Stock ("Common Stock Warrants")
in amounts, at prices and on terms to be determined at the time of offering.
The Preferred Stock will be issued in one or more series and each series of
Preferred Stock may vary, as applicable, as to the title, specific number of
shares, rank, stated value, liquidation preference, dividend rate or rates (or
method of calculation), dividend payment dates, redemption provisions, sinking
fund requirements, conversion provisions (and terms of the related Underlying
Securities (as defined below)) and any other variable terms as set forth in the
applicable articles supplementary (each, the "Articles Supplementary") relating
to such series of Preferred Stock. A series of Preferred Stock may be
represented by Depositary Shares that are evidenced by depositary receipts (the
"Depositary Receipts") issued pursuant to a deposit agreement (each, a "Deposit
Agreement") among the Company, the depositary identified therein (the
"Depositary") and the registered holders of the Depositary Receipts issued
thereunder. The Preferred Stock Warrants will be issued pursuant to a Preferred
Stock Warrant Agreement (the "Preferred Stock Warrant Agreement") between the
Company and a warrant agent (the "Preferred Stock Warrant Agent"). The Common
Stock Warrants will be issued pursuant to a Common Stock Warrant Agreement (the
"Common Stock Warrant Agreement," the Common Stock Warrant Agreement and the
Preferred Stock Warrant Agreement are referred to herein as the "Warrant
Agreements") between the Company and a warrant agent (the "Common Stock Warrant
Agent").
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As used herein, "Securities" shall mean the Preferred Stock, Depositary
Shares, Preferred Stock Warrants, Common Stock or Common Stock Warrants or any
combination thereof initially issuable by the Company and "Underlying
Securities" shall mean the Common Stock or Preferred Stock issuable upon
conversion, exercise or surrender of the Preferred Stock, Depositary Shares,
Preferred Stock Warrants or Common Stock Warrants, as applicable. Unless the
context otherwise requires, as used herein, "you" and "your" shall mean the
party to whom this Agreement is addressed together with the other parties, if
any, identified in the applicable Terms Agreement (as hereinafter defined) as
additional co-managers with respect to Underwritten Securities (as hereinafter
defined) purchased pursuant thereto.
Whenever the Company determines to make an offering of Securities through
you, or through an underwriting syndicate managed by you, the Company will enter
into an agreement (each a "Terms Agreement") providing for the sale of such
Securities (the "Underwritten Securities") to, and the purchase and offering
thereof by, you and such other underwriters, if any, selected by you (the
"Underwriters," which term shall include you, whether acting as sole Underwriter
or as a member of an underwriting syndicate, as well as any Underwriter
substituted pursuant to Section 9 hereof). The Terms Agreement relating to the
offering of Underwritten Securities shall specify the number of Underwritten
Securities to be initially issued (the "Initial Underwritten Securities"), the
name of each Underwriter participating in such offering (subject to substitution
as provided in Section 9 hereof) and the name of any Underwriter other than you
acting as co-manager in connection with such offering, the number of Initial
Underwritten Securities which each such Underwriter severally agrees to
purchase, whether such offering is on a fixed or variable price basis and, if on
a fixed price basis, the initial offering price, the price at which the Initial
Underwritten Securities are to be purchased by the Underwriters, the form, time,
date and place of delivery and payment and any delayed delivery arrangements of
the Initial Underwritten Securities and any other material variable terms of the
Initial Underwritten Securities (including, but not limited to, current ratings,
if applicable, designations, liquidation preferences, conversion provisions,
redemption provisions and sinking fund requirements), as well as the material
variable terms of any related Underlying Securities. In addition, if
applicable, such Terms Agreement shall specify whether the Company has agreed to
grant to the Underwriters an option to purchase additional Securities to cover
over-allotments, if any, and the number of Underwritten Securities subject to
such option (the "Option Underwritten Securities"). As used herein, the term
"Underwritten Securities" shall include the Initial Underwritten Securities and
all or any portion of any Option Underwritten Securities. The Terms Agreement,
which shall be substantially in the form of Exhibit A hereto, may take the form
of an exchange of any standard form of written telecommunication between you and
the Company. Each offering of Underwritten Securities through you as sole
Underwriter or through an underwriting syndicate managed by you will be governed
by this Agreement, as supplemented by the applicable Terms Agreement and such
Terms Agreement shall inure to the benefit of and be binding upon each
Underwriter participating in the offering of such Underwritten Securities.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-29437) for the
registration of the Securities under the Securities Act of 1933, as amended (the
"1933 Act"), and the
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offering thereof from time to time in accordance with Rule 430A or Rule 415 of
the rules and regulations of the Commission under the 1933 Act (the "1933 Act
Regulations"), and the Company has filed such amendments thereto as may have
been required prior to the execution of the applicable Terms Agreement. Such
registration statement (as amended) has been declared effective by the
Commission. Such registration statement and the prospectus constituting a part
thereof (including in each case the information, if any, deemed to be part
thereof pursuant to Rule 430A(b) of the 1933 Act Regulations, and each
prospectus supplement relating to the offering of Underwritten Securities
pursuant to Rule 430A or Rule 415 of the 1933 Act Regulations (a "Prospectus
Supplement")), including all documents incorporated therein by reference, 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
collectively referred to herein as the "Registration Statement" and the
"Prospectus," respectively; provided, that if any revised Prospectus shall be
provided to you by the Company for use in connection with the offering of
Underwritten Securities which differs from the Prospectus on file at the
Commission at the time the Registration Statement became effective (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
each such revised prospectus from and after the time it is first provided to you
for such use; provided, further, that a Prospectus Supplement shall be deemed to
have supplemented the Prospectus only with respect to the offering of
Underwritten Securities to which it relates. Any registration statement
(including any supplement thereto or information which is deemed part thereof)
filed by the Company under Rule 462(b) of the 1933 Act Regulations (a "Rule
462(b) Registration Statement") shall be deemed to be part of the Registration
Statement. Any prospectus (including any amendment or supplement thereto or
information which is deemed part thereof) included in the Rule 462(b)
Registration Statement and any term sheet as contemplated by Rule 434 of the
1933 Act Regulations (a "Term Sheet") shall be deemed to be part of the
Prospectus. All references in this Agreement to financial statements and
schedules and other information which is "contained," "included," "set forth,"
"contemplated" or "stated" in the Registration Statement or the Prospectus (and
all other references of like import) shall be deemed to mean and include all
such financial statements and schedules and other information which is or is
deemed to be incorporated by reference in the Registration Statement or the
Prospectus, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement or the Prospectus shall
be deemed to mean and include the filing of any document under the 1934 Act
which is or is deemed to be incorporated by reference in the Registration
Statement or the Prospectus, as the case may be. For purposes of this
Agreement, all references to the Registration Statement, any preliminary
prospectus, preliminary prospectus supplement, Prospectus or Prospectus
Supplement or any Term Sheet or any amendment or supplement to the foregoing
shall be deemed to include the copy filed with the Commission pursuant to its
Electronic Data Gathering, Analysis and Retrieval system ("EDGAR").
Section 1. Representations and Warranties of the Company and the
Operating Partnership.
1(a) The Company and Prime Retail, L.P., a Delaware limited partnership
(the "Operating Partnership"), jointly and severally, represent and warrant to,
and agree
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with, you as of the date hereof and to you and each other Underwriter named in
the applicable Terms Agreement, as of the date thereof, as of the Closing Time
(as defined below) and, if applicable, as of each Date of Delivery (as defined
below) (in each case, a "Representation Date"), as follows:
(i) The Registration Statement, at the time it became effective,
complied, and the Registration Statement at each Representation Date will
comply in all material respects with the requirements of the 1933 Act and
the 1933 Act Regulations 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, and the
Prospectus and any amendments and supplements thereto, at each
Representation Date (unless the term "Prospectus" refers to a prospectus
that has been provided to you by the Company for use in connection with the
offering of Underwritten Securities which differs from the Prospectus on
file at the Commission at the time the Registration Statement became
effective, in which case at the time it is first provided to you for such
use) and at the Closing Time referred to in Section 2(c) hereof, will
comply in all material respects with the requirements of the 1933 Act and
the 1933 Act Regulations and will not contain an untrue statement of a
material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading; provided, however, that the representations and
warranties in this subsection shall not apply to statements in or omissions
from the Registration Statement or Prospectus made in any statement
provided by the Underwriters in writing for the express purpose of being
included in the Prospectus. If the Company elects to rely upon Rule 434 of
the 1933 Act Regulations, the Company will comply with Rule 434. If a
Rule 462(b) Registration Statement is required in connection with the
offering and sale of the Underwritten Securities, the Company has complied
or will comply with the requirements of Rule 111 of the 1933 Act
Regulations relating to the payment of filing fees therefor.
(ii) The documents incorporated or deemed to be incorporated by
reference in 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 1934 Act and the rules and regulations of the
Commission thereunder (the "1934 Act Regulations") and, when read together
with the other information in the Prospectus, at the time the Registration
Statement became effective and as of each Representation Date or during the
period specified in Section 3(a)(v), did not and will not include 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, in light of
the circumstances under which they were made, not misleading.
(iii) No stop order suspending the effectiveness of the
Registration Statement or any part thereof has been issued and no
proceeding for that purpose has been instituted or, to the knowledge of the
Company or the Operating Partnership, threatened by the Commission or by
the state securities authority of any jurisdiction. No order preventing or
suspending the use of the Prospectus has
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been issued and no proceeding for that purpose has been instituted or, to
the knowledge of the Company or the Operating Partnership, threatened by
the Commission or by the state securities authority of any jurisdiction.
(iv) Ernst & Young LLP, who have certified the financial statements
and financial statement schedules included in or incorporated by reference
into the Registration Statement and the Prospectus, are independent public
accountants as required by the 1933 Act and the 1933 Act Regulations.
(v) The financial statements (including the notes thereto) included
in or incorporated by reference into the Registration Statement and the
Prospectus present fairly the financial position of the respective entity
or entities presented therein at the respective dates indicated and the
results of their operations for the respective periods specified, and
except as otherwise stated in the Registration Statement, such financial
statements have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis. The financial
statement schedules included in or incorporated by reference into the
Registration Statement present fairly the information required to be stated
therein. The financial information and data included in or incorporated by
reference into the Registration Statement and the Prospectus present fairly
the information included therein and have been prepared on a basis
consistent with that of the financial statements included in or
incorporated by reference into the Registration Statement and the
Prospectus and the books and records of the respective entities presented
therein. Other than the historical or pro forma financial statements (and
schedules) included or incorporated by reference therein, no other
historical or pro forma financial statements (or schedules) are required by
the 1933 Act or the 1933 Act Regulations to be included in or incorporated
by reference into the Registration Statement. Except as reflected or
disclosed in the financial statements included in or incorporated by
reference into the Registration Statement or otherwise set forth in the
Prospectus, none of the Company, the Operating Partnership or the
Significant Subsidiaries (as hereinafter defined) are subject to any
material indebtedness, obligation, or liability, contingent or otherwise,
known to the Company.
(vi) 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, or business affairs of
the Company, the Operating Partnership and the Significant Subsidiaries
considered as a single enterprise, whether or not arising in the ordinary
course of business, (B) no material casualty loss or material condemnation
or other material adverse event has occurred with respect to any of the
Properties (as the same are defined in the Prospectus), (C) there have been
no acquisitions or other transactions entered into by the Company, the
Operating Partnership or any Significant Subsidiary that are material with
respect to such entities, considered as a single enterprise, or would
result in any inaccuracy in the representations contained in
Section 1(a)(v) above, (D) there has been no dividend or distribution of
any kind declared, paid, or made by the Company on any class of its capital
stock or by the Operating Partnership
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with respect to its partnership interests, (E) there has been no change in
the capital stock of the Company or the partnership interests of the
Operating Partnership or any Significant Subsidiary, and (F) there has been
no increase in the indebtedness of the Company, the Operating Partnership
or any Significant Subsidiary that is material to such entities, considered
as a single enterprise.
(vii) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Maryland, with corporate power and authority to own its properties, conduct
its business as described in the Prospectus and to enter into and perform
its obligations under this Agreement, the applicable Terms Agreement, any
Deposit Agreement, the Delayed Delivery Contracts (as defined herein), any
Common Stock Warrant Agreement and any Preferred Stock Warrant Agreement
and the other agreements to which it is a party. The Company has been duly
qualified as a foreign corporation for the transaction of business and is
in good standing under the laws of each other jurisdiction in which such
qualification is required, whether by reason of the ownership, leasing, or
management of any properties or the conduct of any other business, except
where the failure to so qualify would not have a material adverse effect on
the condition, financial or otherwise, or the earnings, assets or business
affairs of the Company, the Operating Partnership and the Significant
Subsidiaries, considered as a single enterprise.
(viii) The Operating Partnership and each other partnership which
directly owns the Company's interests in the Properties (each such
partnership individually, other than the Operating Partnership, a "Property
Partnership" and collectively, the "Property Partnerships") has been duly
organized and is validly existing as a partnership in good standing (to the
extent applicable) under the laws of its jurisdiction of organization, with
partnership power and authority to own its properties, conduct its business
as described in the Prospectus and, with respect to the Operating
Partnership, enter into and perform its obligations under this Agreement,
the applicable Terms Agreement, any Deposit Agreement, the Delayed Delivery
Contracts, any Common Stock Warrant Agreement and any Preferred Stock
Warrant Agreement and the other agreements to which it is a party. The
Operating Partnership and each Property Partnership has been duly qualified
for the transaction of business and is in good standing (to the extent
applicable) under the laws of each other jurisdiction in which such
qualification is required, whether by reason of the ownership, leasing, or
management of any properties (including the Properties) or the conduct of
any other business, except where the failure to so qualify would not have a
material adverse effect on the condition, financial or otherwise, or the
earnings, assets or business affairs of the Company, the Operating
Partnership and the Significant Subsidiaries, considered as a single
enterprise. All of the partnership interests in each Property Partnership
have been duly and validly authorized and issued, are fully paid, and
(except as described in the Prospectus) are owned directly or indirectly by
the Company or the Operating Partnership, free and clear of all liens,
encumbrances, equities or claims.
(ix) Each Significant Subsidiary within the meaning of Rule 1-02 of
Regulation S-X (the "Significant Subsidiary") has been duly formed and is
validly
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existing and in good standing under the laws of the jurisdiction of its
formation. Each Significant Subsidiary has the power and authority to own,
lease and operate its properties and to conduct the business in which it is
engaged, and is duly qualified as a foreign corporation or partnership and
is in good standing in each other jurisdiction where such qualification is
required. All of the issued and outstanding shares of capital stock, LLC
interests and partnership interests of each Significant Subsidiary have
been duly authorized and validly issued, are gully paid and are owned free
and clear of security interest, mortgage, pledge, lien, encumbrance, claim
or equity other than as set forth in the Registration Statement or
Prospectus. The ownership of the shares of capital stock of each
Significant Subsidiary is as described in the Registration Statement or
Prospectus.
(x) The Company has an authorized capitalization as set forth in the
Prospectus (except for subsequent issuances thereof, if any, contemplated
under this Agreement, pursuant to employee benefit plans referred to in the
Prospectus or pursuant to the exercise of convertible securities or options
referred to in the Prospectus), and all of the issued shares of capital
stock of the Company conform in all material respects to all statements
relating thereto contained in the Prospectus. All such shares of
capital stock have been duly and validly authorized and issued, are fully
paid and non-assessable, are not subject to preemptive or other similar
rights, and have been offered and sold in compliance with all applicable
laws (including federal and state securities laws). Except as described in
the Prospectus, there are no outstanding securities convertible into or
exchangeable for any capital stock of the Company and no outstanding
options, rights (preemptive or otherwise) or warrants to purchase or to
subscribe for such shares or any other securities of the Company.
(xi) The Common Stock has been, or as of the date of the applicable
Terms Agreement will have been, duly authorized for issuance and sale to
the Underwriters pursuant to this Agreement and, when issued and delivered
as provided herein and in the applicable Terms Agreement, the Common Stock
will be validly issued, fully paid and non-assessable; the Preferred Stock
has been, or as of the date of the applicable Terms Agreement will have
been, duly authorized and classified and when Articles Supplementary
setting the terms of the Preferred Stock are duly executed and filed for
record with the Maryland State Department of Assessments and Taxation
("SDAT") and the Preferred Stock is duly paid for, sold and issued, and
certificates therefor are duly executed, countersigned and delivered as
provided herein and in the applicable Terms Agreement or the Delayed
Delivery Contracts, the Preferred Stock will be validly issued, fully paid
and non-assessable; when Depositary Receipts evidencing any Depositary
Shares are issued and delivered against deposit of Preferred Stock and
against payment for the Depositary Shares pursuant to this Agreement, the
Terms Agreement relating to the Depositary Shares and the Deposit
Agreement, the Preferred Stock will be validly issued, fully paid and
non-assessable, and the Depositary Receipts will be legally issued and will
entitle the holders thereof to the rights specified in the Depositary
Receipts and the Deposit Agreement; the Preferred Stock, if applicable,
conforms to the Articles Supplementary; the Underwritten Securities being
sold pursuant to the applicable Terms Agreement conform, in all material
respects, to the descriptions
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thereof contained in the Prospectus; the issuance of the Underwritten
Securities is not subject to preemptive or similar rights.
(xii) Before the Closing Time for any Depositary Shares, the
Deposit Agreement will be duly authorized and executed by the Company, and
assuming due authorization, execution and delivery by the Depositary, the
Deposit Agreement will constitute a valid and legally binding instrument of
the Company enforceable against the Company in accordance with its terms,
except as (A) the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors'
rights generally, (B) the availability of equitable remedies may be limited
by equitable principles of general applicability, and (C) rights to
indemnity and contribution thereunder may be limited by state or federal
securities laws or the public policy underlying such laws.
(xiii) If applicable, the Common Stock issuable upon conversion of
any of the Preferred Stock or the Depositary Shares and upon the exercise
of the Common Stock Warrants have been, or as of the date of such Terms
Agreement will have been, duly and validly authorized and reserved for
issuance by the Company upon such conversion or exercise by all necessary
action and such shares, when issued upon such conversion or exercise, will
be duly and validly issued, fully paid and non-assessable and the issuance
of such shares upon such conversion or exercise will not be subject to
preemptive or other similar rights arising by operation of law, under the
charter and by-laws of the Company or under any agreement to which the
Company or any of its Significant Subsidiaries is a party, or otherwise.
The Common Stock so issuable will conform in all material respects to the
descriptions thereof in the Prospectus.
(xiv) If applicable, the Preferred Stock issuable upon the
exercise of the Preferred Stock Warrants have been, or as of the date of
such Terms Agreement will have been, duly and validly authorized and
reserved for issuance by the Company upon such exercise by all necessary
action and such shares, when issued upon such exercise, will be duly and
validly issued, fully paid and non-assessable and the issuance of such
shares upon such exercise will not be subject to preemptive or other
similar rights arising by operation of law, under the charter and by-laws
of the Company or under any agreement to which the Company or any of its
Significant Subsidiaries is a party, or otherwise. The Preferred Stock so
issuable will conform in all material respects to the descriptions thereof
in the Prospectus.
(xv) If applicable, the Common Stock Warrants have been duly
authorized by the Company for issuance and sale pursuant to this Agreement,
and, when issued and delivered in the manner provided for in this Agreement
and any Terms Agreement and countersigned by the Common Stock Warrant Agent
as provided in the Common Stock Warrant Agreement, against payment of the
consideration therefor specified in the applicable Terms Agreement, will be
duly executed, countersigned, issued and delivered and will constitute
valid and legally binding obligations of the Company entitled to the
benefits provided by the Warrant Agreement under which they are issued.
The terms of the Common Stock Warrants conform in all material respects to
all statements and descriptions related thereto contained in the
Prospectus. The issuance of the Common Stock Warrants is not
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subject to any preemptive or other similar rights, except as described in
the Prospectus.
(xvi) If applicable, the Preferred Stock Warrants have been duly
authorized by the Company for issuance and sale pursuant to this Agreement,
and, when issued and delivered in the manner provided for in this Agreement
and any Terms Agreement and countersigned by the Preferred Stock Warrant
Agent as provided in the Preferred Stock Warrant Agreement, against payment
of the consideration therefor specified in the applicable Terms Agreement,
will be duly executed, countersigned, issued and delivered and will
constitute valid and legally binding obligations of the Company entitled to
the benefits provided by the Warrant Agreement under which they are issued.
The terms of the Preferred Stock Warrants conform in all material respects
to all statements and descriptions related thereto contained in the
Prospectus. The issuance of the Preferred Stock Warrants is not subject to
any preemptive or other similar rights, except as described in the
Prospectus.
(xvii) The applicable Warrant Agreement, if any, will have been
duly authorized, executed and delivered by the Company prior to the
issuance of any applicable Underwritten Securities, and will constitute a
valid and legally binding agreement of the Company enforceable against the
Company in accordance with its terms, except as (A) the enforceability
thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally, (B) the
availability of equitable remedies may be limited by equitable principles
of general applicability, and (C) rights to indemnity and contribution
thereunder may be limited by state or federal securities laws or the public
policy underlying such laws.
(xviii) The Underwritten Securities being sold pursuant to the
applicable Terms Agreement and each applicable Deposit Agreement, as of the
date of the Prospectus, and any Underlying Securities, when issued and
delivered in accordance with the terms of the related Underwritten
Securities, will conform in all material respects to the statements
relating thereto contained in the Prospectus and will be in substantially
the form filed or incorporated by reference, as the case may be, as an
exhibit to the Registration Statement.
(xix) None of the Company, the Operating Partnership, or any
Significant Subsidiary is in violation of its charter, by-laws, certificate
of limited partnership, partnership agreement, or other organizational
document, as applicable. None of the Company, the Operating Partnership or
any Significant Subsidiary is in default in the performance or observance
of any obligation, agreement, covenant, or condition contained in any
material contract, indenture, mortgage, deed of trust, loan agreement or
other material agreement or instrument to which the Company, the Operating
Partnership, or any Significant Subsidiary is a party or by which the
Company, the Operating Partnership, or any Significant Subsidiary is bound
or to which any of the property or assets of the Company, the Operating
Partnership, or any Significant Subsidiary is subject, except where a
default thereunder would not have a material adverse effect on the
condition, financial or otherwise, or the earnings, assets, or business
affairs of the Company, the Operating Partnership,
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and the Significant Subsidiaries, considered as a single enterprise. For
purposes of this paragraph the phrase "material contract, indenture,
mortgage, deed of trust, loan agreement or other material agreement or
instrument" shall mean any contract, indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument that is required to be
filed or incorporated by reference as an exhibit to a registration
statement on Form S-3 pursuant to Section 601(b) of Regulation S-K.
(xx) (A) This Agreement has been duly authorized, executed, and
delivered by the Company and the Operating Partnership, and, assuming due
authorization, execution, and delivery by you, is a valid and binding
agreement of the Company and the Operating Partnership, enforceable against
the Company and the Operating Partnership, in accordance with its terms;
and (B) at each Representation Date, the applicable Terms Agreement and the
Delayed Delivery Contracts will have been duly authorized, executed, and
delivered by the Company and, assuming due authorization, execution, and
delivery by you, will be a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms; provided that
the enforceability of the foregoing agreements described in (A) and (B) may
be limited by bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or
affecting creditors' rights and the availability of equitable remedies may
be limited by equitable principles of general applicability, provided
further that rights to indemnity and contribution thereunder may be limited
by state or federal securities laws or the public policy underlying such
laws.
(xxi) The issuance and sale of the Underwritten Securities by the
Company, the performance by the Company, the Operating Partnership, and the
Significant Subsidiaries of their respective obligations under this
Agreement, the applicable Terms Agreement or any Warrant Agreement and the
consummation of the transactions herein and therein contemplated, including
the application of the net proceeds from the sale of the Underwritten
Securities as described in the Prospectus do not and will not (A) conflict
with or result in a breach or violation of any of the terms or provisions
of, constitute a default under, or result in the acceleration of the
maturity of any indebtedness under, any material contact, indenture,
mortgage, deed of trust, loan agreement or other material agreement or
instrument to which the Company or the Operating Partnership or any
Significant Subsidiary is a party or by which the Company, the Operating
Partnership or any Significant Subsidiary is bound or to which any of the
property or assets of the Company, the Operating Partnership or any
Significant Subsidiary is subject or (B) result in any violation of the
provisions of the certificate of incorporation or by-laws, certificate of
limited partnership, partnership agreement or other organizational
documents, as the case may be, of the Company, the Operating Partnership,
or any Significant Subsidiary, or any statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction
over the Company, the Operating Partnership, or any Significant Subsidiary
or any of their respective properties. For purposes of this paragraph the
phrase "material contract, indenture, mortgage, deed of trust, loan
agreement or other material agreement or instrument" shall mean any
contract, indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument that is required to be filed or
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incorporated by reference as an exhibit to a registration statement on Form
S-3 pursuant to Section 601(b) of Regulation S-K.
(xxii) Except to the extent obtained prior to the Closing Time, no
consent, approval, authorization, order, registration or qualification of
or with any court or governmental agency or body or any other person is
required for the performance by the Company, the Operating Partnership and
the Significant Subsidiaries of their obligations under this Agreement, the
applicable Terms Agreement or in connection with the transactions
contemplated by this Agreement, such Terms Agreement, any Deposit Agreement
or the Delayed Delivery Contracts except the registration under the 1933
Act of the Underwritten Securities and such consents, approvals,
authorizations, registrations or qualifications as may be required under
state or foreign securities or Blue Sky laws.
(xxiii) Other than as set forth or contemplated in the Prospectus,
there are no legal or governmental proceedings pending to which the Company
, the Operating Partnership or any Significant Subsidiary is a party or of
which any property of the Company, the Operating Partnership, or any
Significant Subsidiary is the subject which, if determined adversely to the
Company, the Operating Partnership or any Significant Subsidiary, would
individually or in the aggregate be reasonably expected to have a material
adverse effect on the consolidated financial position, stockholders' equity
(including, with respect to the Operating Partnership and the Significant
Subsidiaries, partnership capital) or results of operations of the Company,
the Operating Partnership, and the Significant Subsidiaries, and, to the
best knowledge of the Company and the Operating Partnership, no such
proceedings are threatened or contemplated by governmental authorities or
threatened by others.
(xxiv) The Company, the Operating Partnership, and the Significant
Subsidiaries have good and marketable title in fee simple to all real
property and good and marketable title to all personal property owned by
them, as described in the Prospectus, in each case free and clear of all
liens, encumbrances and defects except such as are described in the
Prospectus or such as do not materially adversely affect the value of such
property and do not materially adversely interfere with the use made and
proposed to be made of such property by the Company, the Operating
Partnership, and the Significant Subsidiaries; and any real property and
buildings described in the Prospectus as being held under lease by the
Company, the Operating Partnership, or any Significant Subsidiary are held
by it under valid, subsisting and enforceable leases with such exceptions
as are not material and do not materially adversely interfere with the use
made and proposed to be made of such property and buildings by the Company,
the Operating Partnership, and the Significant Subsidiaries.
(xxv) The Company is organized in conformity with the requirements
for qualification as a real estate investment trust under the Internal
Revenue Code of 1986, as amended (the "Code"), the Company's method of
operation has enabled it to meet the requirements for qualification and
taxation as a real estate investment trust under the Code, and its method
of operation enables it to continue to meet the requirements for taxation
as a real estate investment trust under the Code.
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(xxvi) Neither the Company, the Operating Partnership nor any of
the Significant Subsidiaries is, and upon the issuance and sale of the
Underwritten Securities as herein contemplated and the application of the
net proceeds therefrom as described in the Prospectus will not be (i) an
"investment company" or a company "controlled" by an "investment company"
within the meaning of the Investment Company Act of 1940, as amended (the
"Investment Company Act"), or (ii) a "holding company" or a "subsidiary
company" of a "registered holding company," as defined in the Public
Utility Holding Company Act of 1935, as amended.
(xxvii) Except as set forth in the Prospectus, no holder of any
securities of the Company or the Operating Partnership has any rights to
require the Company or the Operating Partnership to register any securities
of the Company or the Operating Partnership under the 1933 Act.
(xxviii) Other than this Agreement and any applicable Terms
Agreement, the Company is not a party to any contract, agreement or
understanding with any person that would give rise to a valid claim against
the Company for a brokerage commission, finder's fee or like payment in
connection with the sale of the Underwritten Securities.
(xxix) No statement, representation, warranty or covenant made by
the Company or the Operating Partnership in any certificate or document
required by this Agreement to be delivered to the Underwriters was or will
be, when made, inaccurate, untrue or incorrect in any material respect.
(xxx) Neither of the Company nor the Operating Partnership, nor
any of their directors, officers or controlling persons, has taken and will
take, directly or indirectly, any action resulting in a violation of
Rule 10b-6 under the 1934 Act, or designed to cause or result in or that
has constituted or reasonably might be expected to constitute, the
stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of the Underwritten Securities.
1(b) Any certificate signed by any officer or attorney-in-fact of the
Company or the Operating Partnership and delivered to you or your counsel shall
be deemed a representation and warranty by such entity to you as to the matters
covered thereby.
Section 2. Sale and Delivery to Underwriters; Closing; Reservation of
Shares.
2(a) The several commitments of the Underwriters to purchase the
Underwritten Securities pursuant to the applicable Terms Agreement shall be
deemed to have been made on the basis of the representations and warranties
herein contained and shall be subject to the terms and conditions set forth
herein or in the applicable Terms Agreement.
2(b) In addition, on the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Company
may grant, if so provided in the applicable Terms Agreement relating to the
Initial
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Underwritten Securities, an option to the Underwriters named in such Terms
Agreement, severally and not jointly, to purchase up to the number of the Option
Underwritten Securities set forth therein at a price per Option Underwritten
Security equal to the price per Initial Underwritten Security, less an amount
equal to any dividends or distributions declared by the Company and paid or
payable on the Initial Underwritten Securities but not payable on the Option
Underwritten Securities. Such option, if granted, will expire 30 days or such
lesser number of days as may be specified in the applicable Terms Agreement
after the Representation Date relating to the Initial Underwritten Securities,
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 Underwritten Securities upon notice by you to
the Company setting forth the number of Option Underwritten Securities as to
which the several Underwriters are then exercising the option and the time, date
and place of payment and delivery for such Option Underwritten Securities. Any
such time and date of payment and delivery (each, a "Date of Delivery") shall be
determined by you, but shall not be later than seven full business days and not
be earlier than two full business days after the exercise of said option, unless
otherwise agreed upon by you and the Company. If the option is exercised as to
all or any portion of the Option Underwritten Securities, each of the
Underwriters, acting severally and not jointly, will purchase that proportion of
the total number of Option Underwritten Securities then being purchased which
the number of Initial Underwritten Securities each such Underwriter has
severally agreed to purchase as set forth in such Terms Agreement bears to the
total number of Initial Underwritten Securities, subject to such adjustments as
you in your discretion shall make to eliminate any sales or purchases of a
fractional number of Option Underwritten Securities.
2(c) Payment of the purchase price for and delivery of the Initial
Underwritten Securities to be purchased by the Underwriters shall be made at the
offices of Friedman, Billings, Ramsey & Co., Inc., 1001 Nineteenth Street North,
Arlington, Virginia, or at such other place as shall be agreed upon by you and
the Company, at 10:00 a.m., Washington, D.C. time, on the fourth business day
following the date of the applicable Terms Agreement, (or the third business day
if required under Rule 15c6-1 of the 1934 Act, or unless postponed in accordance
with the provisions of Section 9), or such other time not later than 10 business
days after such date as shall be agreed upon by you and the Company (each such
time and date of payment and delivery being herein called a "Closing Time"). In
addition, in the event that any or all of the Option Underwritten Securities are
purchased by the Underwriters, payment of the purchase price for and the
delivery of such Option Underwritten Securities shall be made at the
above-mentioned offices of Friedman, Billings, Ramsey & Co., Inc., or at such
other place as shall be mutually agreed upon by the Representative and the
Company, on the relevant Date of Delivery as specified in the notice from you to
the Company. Payment shall be made to the Company in same day funds, in each
case against delivery to you for the respective accounts of the Underwriters of
certificates for the Underwritten Securities to be purchased by the
Underwriters. The Underwritten Securities, or, if applicable, Depositary
Receipts evidencing the Depositary Shares, shall be in such authorized
denominations and registered in such names as you may request in writing at
least two business days before the applicable Closing Time or the relevant Date
of Delivery, as the case may be. It is understood that each Underwriter has
authorized you, for its account, to accept delivery of, receipt for, and make
payment of the purchase price for, the Underwritten Securities
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which it has agreed to purchase. You, individually and not as the
representative of the Underwriters, may (but shall not be obligated to) make
payment of the purchase price for the Underwritten Securities to be purchased by
any Underwriter whose check has not been received by the Closing Time or the
relevant date of Delivery, as the case may be, but such payment shall not
relieve such Underwriter from its obligations hereunder. The Underwritten
Securities will be made available for examination and packaging by you not later
than 10:00 a.m., Washington, D.C. time, on the last business day prior to the
Closing Time or the relevant Date of Delivery, as the case may be.
2(d) If authorized by the applicable Terms Agreement, the Underwriters
named therein may solicit offers to purchase Underwritten Securities from the
Company pursuant to delayed delivery contracts ("Delayed Delivery Contracts")
substantially in the form of Exhibit B hereto with such changes therein as the
Company may approve. As compensation for arranging Delayed Delivery Contracts,
the Company will pay to you at Closing Time, for the respective accounts of the
Underwriters, a fee specified in the applicable Terms Agreement for each of the
Underwritten Securities for which Delayed Delivery Contracts are made at the
applicable Closing Time as is specified in the applicable Terms Agreement. Any
Delayed Delivery Contracts are to be with institutional investors of the types
described in the Prospectus. At the applicable Closing Time, the Company will
enter into Delayed Delivery Contracts (for not less than the minimum number of
Underwritten Securities per Delayed Delivery Contract specified in the
applicable Terms Agreement) with all purchasers proposed by the Underwriters and
previously approved by the Company as provided below, but not for an aggregate
number of Underwritten Securities in excess of that specified in the applicable
Terms Agreement. The Underwriters will not have any responsibility for the
validity or performance of Delayed Delivery Contracts.
You shall submit to the Company, at least three business days prior to the
applicable Closing Time, the names of any institutional investors with which it
is proposed that the Company will enter into Delayed Delivery Contracts and the
number of Underwritten Securities to be purchased by each of them, and the
Company will advise you, at least two business days prior to the applicable
Closing Time, of the names of the institutions with which the making of Delayed
Delivery Contracts is approved by the Company and the number of Underwritten
Securities to be covered by each such Delayed Delivery Contract.
The number of Underwritten Securities agreed to be purchased by the several
Underwriters pursuant to the applicable Terms Agreement shall be reduced by the
number of Underwritten Securities covered by Delayed Delivery Contracts, as to
each Underwriter as set forth in a written notice delivered by you to the
Company; provided, however, that the total number of Underwritten Securities to
be purchased by all Underwriters shall be the total number of Underwritten
Securities covered by the applicable Terms Agreement, less the number of
Underwritten Securities covered by Delayed Delivery Contracts.
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Section 3. Covenants of the Company and the Operating Partnership.
3(a) Each of the Company and the Operating Partnership covenants with
you as follows:
(i) In respect of each offering of Underwritten Securities, the
Company will prepare a Prospectus Supplement setting forth the number
of Underwritten Securities covered thereby and their terms not
otherwise specified in the Prospectus pursuant to which the
Underwritten Securities are being issued, the names of the
Underwriters participating in the offering and the number of
Underwritten Securities which each severally has agreed to purchase,
the names of the Underwriters acting as co-managers in connection with
the offering, the price at which the Underwritten Securities are to be
purchased by the Underwriters from the Company, the initial public
offering price, if any, the selling concession and reallowance, if
any, and such other information as you and the Company deem
appropriate in connection with the offering of the Underwritten
Securities; and 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 within the time period required by
such Rule and will furnish to the Underwriters named therein as many
copies of the Prospectus and such Prospectus Supplement as you shall
reasonably request. If, at the time that the Registration Statement
became effective, any information shall have been omitted therefrom in
reliance upon Rule 430A of the 1933 Act Regulations, then immediately
following execution of the applicable Terms Agreement, the Company
will prepare, and file or transmit for filing with the Commission in
accordance with such Rule 430A and Rule 424(b) of the 1933 Act
Regulations, copies of an amended Prospectus or, if required by such
Rule 430A, a post-effective amendment to the Registration Statement
(including an amended Prospectus), including all information so
omitted.
(ii) The Company will notify you immediately, and confirm such
notice in writing, of (i) the effectiveness of any amendment to the
Registration Statement, (ii) the transmittal to the Commission for
filing of any Prospectus Supplement or other supplement or amendment
to the Prospectus or any document to be filed pursuant to the 1934
Act, (iii) the receipt of any comments from the Commission, (iv) 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 (v) 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, or of the suspension of the qualification of the
Underwritten Securities or offering or sale in any jurisdiction, or of
any proceedings for any of such purposes; and the Company will make
every reasonable effort to prevent the issuance of any such stop order
and, if any stop order is issued, to obtain the lifting thereof at the
earliest possible moment.
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<PAGE>
(iii) At any time when the Prospectus is required to be
delivered under the 1933 Act or the 1934 Act in connection with sales
of the Underwritten Securities, the Company will (i) give you notice
of its intention to prepare or file any amendment to the Registration
Statement (including any post-effective amendment) or any amendment or
supplement to the Prospectus (including any revised prospectus that
the Company proposes for use by the Underwriters in connection with
the offering of the Shares that differs from the prospectus on file at
the Commission at the time the Registration Statement becomes
effective, whether or not such revised prospectus is required to be
filed pursuant to Rule 424(b) of the 1933 Act Regulations),
(ii) furnish the Underwriters with copies of any such amendments or
supplements a reasonable time prior to the proposed filing or use
thereof, and (iii) not file any such amendment or any supplement or
use any such prospectus to which the Representative shall reasonably
object promptly after reasonable notice thereof.
(iv) Promptly from time to time, the Company will take such
action as you may reasonably request to qualify the Underwritten
Securities for offering and sale under the securities laws of such
jurisdictions as you may request and to comply with such laws so as to
permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the
distribution of the Underwritten Securities, provided that in
connection therewith the Company shall not be required to qualify as a
foreign corporation or to file a general consent to service of process
in any jurisdiction.
(v) The Company will furnish each Underwriter with copies of the
Prospectus in such quantities as such Underwriter may from time to
time reasonably request. If at any time when the Prospectus is
required by the 1933 Act or the 1934 Act to be delivered in connection
with an offering or sale of the Underwritten Securities, and if at
such time any event shall have occurred as a result of which the
Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made when such Prospectus is
delivered, not misleading, or, if for any other reason it shall be
necessary during such period to amend or supplement the Prospectus in
order to comply with the 1933 Act and the 1933 Act Regulations, the
Company will notify you and will prepare and furnish without charge to
the Underwriters and to any dealer in securities as many copies as the
Underwriters may from time to time reasonably request of an amended
Prospectus or a supplement to the Prospectus which will correct such
statement or omission or effect such compliance.
(vi) The Company will make generally available to its
securityholders as soon as practicable, but in any event not later
than eighteen months after the "effective date of the Registration
Statement" (as defined in Rule 158(c)), an earnings statement of the
Company and its
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Significant Subsidiaries (which need not be audited) complying with
Section 11(a) of the 1933 Act and the rules and regulations thereunder
(including, at the option of the Company, Rule 158).
(vii) If the applicable Terms Agreement specifies that any
related Underlying Securities include Common Stock or Preferred Stock,
the Company shall reserve and keep available at all times, free of
preemptive or other similar rights, a sufficient number of shares of
Common Stock and/or Preferred Stock, as applicable, for the purpose of
enabling the Company to satisfy any obligations to issue such
Underlying Securities upon conversion of the Preferred Stock or
Depositary Shares or upon the exercise of the Common Stock Warrants or
Preferred Stock Warrants, as applicable.
(viii) 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
Section 13, 14 or 15 of the 1934 Act within the time periods required
by the 1934 Act and the 1934 Act Regulations.
(ix) On or prior to each Closing Time, the Company will cause
Articles Supplementary relating to any Preferred Stock or Preferred
Stock represented by Depositary Shares to be sold on the applicable
Delivery Date to be filed for record with the SDAT in accordance with
the laws of the State of Maryland.
(x) From the date hereof until five years after each Closing
Time, the Company will furnish to you and your Counsel copies of all
reports or other communications (financial or other) furnished to
stockholders, and deliver to you, as soon as they are available,
copies of any reports and financial statements furnished to or filed
with the Commission pursuant to Section 13, 14 or 15 of the 1934 Act
or any national securities exchange or quotation system on which any
class of securities of the Company is listed.
(xi) The Company will use its best efforts to meet the
requirements to continue to qualify as a "real estate investment
trust" under the Code.
(xii) The Company and the Operating Partnership will not
invest, reinvest or otherwise use the proceeds received by the Company
or the Operating Partnership from the sale of the Underwritten
Securities in such a manner, or take any action or omit to take any
action, that would cause the Company or the Operating Partnership to
become an "investment company" as that term is defined in the
Investment Company Act.
(xiii) The Company will use the net proceeds of the sale of
the Underwritten Securities for the purposes described in the
Prospectus under "Use of Proceeds."
(xiv) The Company will take all action to ensure that any
security of the Company included in the Nasdaq National Market or
listed on any
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national securities exchange as of the date hereof will continue to be
so listed.
(xv) Except for the authorization of actions permitted to be
taken by you as contemplated herein or in the Prospectus, neither the
Company nor the Operating Partnership will (A) take, directly or
indirectly, any action designed to cause or to result in, or that
might reasonably be expected to constitute, the stabilization or
manipulation of the price of any security of the Company to facilitate
the sale or resale of the Underwritten Securities, (B) sell, bid for
or purchase the Underwritten Securities or pay any person any
compensation for soliciting purchases of the Underwritten Securities,
or (C) pay or agree to pay to any person any compensation for
soliciting another to purchase any other securities of the Company.
(xvi) During the period from the date of the applicable Terms
Agreement until the termination of any lock-up, blackout or similar
restrictions set forth in such Terms Agreement or the applicable
Closing Time, whichever is later with respect to the Underwritten
Securities covered thereby, the Company and the Operating Partnership
will not, without the prior written consent of the Representative,
directly or indirectly, sell, offer to sell, grant any option for the
sale of, or otherwise dispose of, any security of the same class or
series or ranking on a parity with such Underwritten Securities (other
than Underwritten Securities which are to be sold pursuant to such
Terms Agreement) or, if such Terms Agreement relates to Underwritten
Securities that are convertible into Common Stock, any Common Stock or
any security convertible into Common Stock (except for Common Stock
issued (i) in accordance with this Agreement, (ii) in connection with
the Company's employee stock option plans, (iii) upon the conversion
of shares of Convertible Preferred Stock or exercise of warrants
outstanding on the date of such Terms Agreement, (iv) upon the
exchange of Common Units pursuant to the Operating Partnership
Agreement, or (v) as otherwise contemplated in the Prospectus except
as may otherwise be provided in the applicable Terms Agreement.
Section 4. Payments of Fees and Expenses. The Company and the
Operating Partnership covenant and agree with one another and you that (a) the
Company will pay or cause to be paid the following: (i) the printing and filing
of the Registration Statement as originally filed and of each amendment thereto,
(ii) the preparation, issuance and delivery of the Underwritten Securities or
any related Underlying Securities, any certificates for the Underwritten
Securities or such Underlying Securities or Depositary Receipts evidencing the
Depositary Shares, as applicable, to the Underwriters, including capital duties,
stamp duties, and stock transfer taxes, if any, (iii) the fees and other charges
of the Company's counsel and accountants, (iv) the qualification of the
Underwritten Securities under securities laws and real estate syndication laws
in accordance with the provisions of Section 3(a)(iv) hereof, including filing
fees and the reasonable fees and other charges of counsel for the Underwriters
in connection therewith and in connection with the preparation of the Blue Sky
Memorandum, (v) the printing and delivery to the Underwriters of copies of the
Registration Statement as originally filed and
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of each amendment thereto, of the preliminary prospectuses, and of the
Prospectus and any amendments or supplements thereto, (vi) the printing and
delivery to the Underwriters of copies of the Blue Sky Memorandum; (vii) the fee
of the NASD, including the reasonable fees and other charges of counsel for the
Underwriters in connection with the NASD's review of the terms of the proposed
public offering of the Shares, (viii) the fees and expenses incurred in
connection with the listing of the Common Stock on the Nasdaq National Market,
including filing and listing fees, (ix) the costs and expenses of the deposit of
Preferred Stock under any Deposit Agreement in exchange for Depositary Receipts,
including the charges of the Depositary in connection therewith and (x) the fees
and expenses of the Depositary, including the fees and disbursements of counsel
for the Depositary. Except as provided in this Agreement, any Terms Agreement
or engagement letter, the Underwriters will pay all of their own costs and
expenses, including the fees of their counsel, stock transfer taxes based on
resale of any of the Underwritten Securities made by them and any advertising
expenses connected with any offers they may make.
If the applicable Terms Agreement is canceled or terminated by you in
accordance with the provisions of Section 5 hereof, the Company also shall
reimburse the Underwriters for its out-of-pocket expenses, including the
reasonable fees and other charges of counsel for the Underwriters, to the extent
provided in and limited by Section 8 hereof, and subject to any limitations set
forth in the applicable engagement letter.
Section 5. Conditions of Underwriters' Obligations. The obligations
of the Underwriters hereunder, as to the Underwritten Securities to be delivered
at any Date of Delivery, shall be subject to the condition that all
representations and warranties and other statements of the Company and the
Operating Partnership herein are, at and as of the date hereof and of the
applicable Closing Time, true and correct, the condition that the Company and
the Operating Partnership shall have each performed all of their obligations
hereunder theretofore to be performed, and the following additional conditions:
5(a) The Registration Statement shall have become effective under the
1933 Act and no stop order suspending the effectiveness of the Registration
Statement or any part thereof shall have been issued and no proceeding for
that purpose shall have been initiated or threatened by the Commission; and
all requests for additional information on the part of the Commission shall
have been complied with to you and your counsel's reasonable satisfaction.
A prospectus containing information relating to the description of the
Underwritten Securities and any related Underlying Securities, the specific
method of distribution and similar matters shall have been filed within the
prescribed time period, and prior to the applicable Closing Time with the
Commission in accordance with Rule 424(b) (or any required post-effective
amendment providing such information shall have been filed and declared
effective in accordance with the requirements of Rule 430A), or, if the
Company has elected to rely upon Rule 434 of the 1933 Act Regulations, a
Term Sheet including the Rule 434 information shall have been filed with
the Commission in accordance with Rule 424(b)(7). The rating assigned by
any nationally recognized statistical rating organization to any Preferred
Stock of the Company as of the date of the applicable Terms Agreement shall
not have been lowered since such date nor shall any such rating
organization have publicly announced that it has placed any Preferred Stock
of the Company on what is commonly termed a "watch list" for
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possible downgrading. There shall not have come to your attention any
facts that would cause you to believe that the Prospectus, together with
the applicable Prospectus Supplement, at the time it was required to be
delivered to purchasers of the Underwritten Securities, included an untrue
statement of a material fact or omitted to state a material fact necessary
in order to make the statements therein, in light of the circumstances
existing at such time, not misleading.
5(b) Hogan & Hartson L.L.P., counsel for the Underwriters, shall have
furnished to you such opinion or opinions, dated as of the applicable
Closing Time, with respect to the incorporation of the Company, this
Agreement, the applicable Terms Agreement, the validity of the Underwritten
Securities being delivered as of the applicable Closing Time, the
Registration Statement, the Prospectus, and other related matters as you
may reasonably request, and such counsel shall have received such papers
and information as they may reasonably request to enable them to pass upon
such matters.
5(c) Winston & Strawn, counsel for the Company, shall have furnished
to you their written opinion, dated as of the applicable Closing Time, in
form and substance satisfactory to you, to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Maryland, with corporate power and authority to own its properties
and conduct its business as described in the Prospectus.
(ii) The Company has an authorized capitalization as set forth in
the Prospectus; all of the issued shares of capital stock of the
Company (including the Underwritten Securities being delivered at the
applicable Closing Time) have been duly and validly authorized and
issued and are fully paid and non-assessable; the terms of the
Underwritten Securities conform in all material respects to all
statements and descriptions related thereto contained in the
Prospectus.
(iii) Each of the Operating Partnership and each Significant
Subsidiary has been duly organized and is validly existing as a
partnership or corporation, as the case may be, in good standing (to
the extent applicable) under the laws of its jurisdiction of
organization; the partnership agreement of the Operating Partnership
has been duly authorized, executed and delivered by the Company and
the Operating Partnership and, assuming the due authorization,
execution and delivery where applicable by each of the
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parties thereto other than the Company and the Operating Partnership,
constitutes valid and legally binding obligations of the Company and
the Operating Partnership, enforceable in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium, and similar laws of general applicability
relating to or affecting creditors' rights and to the effect of
general principles of equity; and the partnership agreement of each
Significant Subsidiary that is a partnership has been duly authorized,
executed and delivered by the parties thereto and, assuming the due
authorization, execution and delivery where applicable by each of the
parties thereto other than the Company, the Operating Partnership, and
any Significant Subsidiary constitutes valid and legally binding
obligations of the Company, the Operating Partnership, and the
Significant Subsidiaries, as applicable, enforceable in accordance
with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium, and similar laws of general
applicability relating to or affecting creditors' rights and to the
effect of general principles of equity (such counsel being entitled to
rely in respect of the opinion in this clause in respect of matters of
fact upon certificates of officers of the Company or its Significant
Subsidiaries, provided that such counsel shall state that they believe
that both the Underwriters and they are justified in relying upon such
certificates).
(iv) Each of the Company, the Operating Partnership, and the
Significant Subsidiaries has been duly qualified as a foreign
corporation, limited partnership, or otherwise, as appropriate, for
the transaction of business and is in good standing (to the extent
applicable) under the laws of each other jurisdiction specified in
such opinion (which shall include each jurisdiction in which the
Company, the Operating Partnership, or any Significant Subsidiary)
owns, leases, or manages properties, or conducts any other business,
so as to require such qualification, or is subject to no material
liability or disability by reason of failure to be so qualified in any
such jurisdiction (such counsel being entitled to rely in respect of
the opinion in this clause in respect of matters of fact upon
certificates of officers of the Company and governmental authorities,
provided that such counsel shall state that they believe that both the
Underwriters and they are justified in relying upon such
certificates).
(v) To the best of such counsel's knowledge and other than as
set forth in the Prospectus, there are no legal or governmental
proceedings pending to which the Company, the Operating Partnership,
or any Significant Subsidiary is a party or of which any property of
the Company, the Operating Partnership, or any Significant Subsidiary
is the subject which would individually or in the aggregate, be
reasonably expected to have a material adverse effect on the
consolidated financial position, stockholders' equity or results of
operations of the Company and its Significant Subsidiaries; and, to
the best of such counsel's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or threatened
by others.
(vi) Each of this Agreement and the applicable Terms Agreement
has been duly authorized, executed, and delivered by the Company and
the Operating Partnership. The Underwritten Securities and, if
applicable, the deposit of the Preferred Stock in accordance with the
provisions of a Deposit Agreement, have been duly and validly
authorized by all necessary action, and when executed, authenticated
and delivered in accordance with this Agreement against payment of the
consideration set forth in the applicable Terms Agreement will be
validly issued, fully paid and non-assessable and will be valid and
legally binding obligations of the Company, enforceable
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against the Company in accordance with their terms. The issuance of
the Underwritten Securities is not subject to any statutory preemptive
rights or, to counsel's knowledge, any contractual rights to subscribe
for more shares. If applicable, the form of certificate used to
evidence the Underwritten Securities complies with all applicable
statutory requirements.
(vii) If applicable, the Common Stock issuable upon
conversion of any of the Preferred Stock or Depositary Shares and upon
the exercise of the Common Stock Warrants have been duly authorized
and reserved for issuance upon such conversion or exercise by all
necessary action and such shares, when issued upon such conversion or
exercise will be validly issued and will be fully paid and
non-assessable, and the issuance of such shares upon such conversion
or exercise will not be subject to any statutory preemptive rights or,
to counsel's knowledge, any contractual rights to subscribe for more
shares; and the Common Stock so issuable conform in all material
respects to the descriptions thereof in the Prospectus.
(viii) If applicable, the Preferred Stock issuable upon the
exercise of the Preferred Stock Warrants have been duly authorized and
reserved for issuance by the Company upon such exercise by all
necessary action and such shares, when issued upon such exercise, will
be validly issued and will be fully paid and non-assessable, and the
issuance of such shares upon such exercise will not be subject to any
statutory preemptive rights or, to counsel's knowledge, any
contractual rights to subscribe for more shares; and the Preferred
Stock so issuable will conform in all material respects to the
descriptions thereof in the Prospectus.
(ix) The Common Stock Warrants, if such Underwritten Securities
are Common Stock Warrants, have been duly authorized by the Company
for issuance and sale pursuant to this Agreement, and, when issued and
delivered in the manner provided for in this Agreement and any Terms
Agreement and countersigned by the Common Stock Warrant Agent as
provided in the Common Stock Warrant Agreement, against payment of the
consideration therefor specified in the applicable Terms Agreement,
will be duly executed, countersigned, issued and delivered and will
constitute valid and legally binding obligations of the Company
entitled to the benefits provided by the Warrant Agreement under which
they are issued. The terms of the Common Stock Warrants conform in
all material respects to all statements and descriptions related
thereto contained in the Prospectus. The issuance of the Common Stock
Warrants is not subject to any preemptive or other similar rights,
except as described in the Prospectus.
(x) The Preferred Stock Warrants, if such Underwritten
Securities are Preferred Stock Warrants, have been duly authorized by
the Company for issuance and sale pursuant to this Agreement, and,
when issued and delivered in the manner provided for in this Agreement
and any Terms Agreement and countersigned by the Preferred Stock
Warrant Agent as provided in the Preferred Stock Warrant Agreement,
against payment of the consideration therefor specified in the
applicable Terms Agreement, will be duly
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executed, countersigned, issued and delivered and will constitute
valid and legally binding obligations of the Company entitled to the
benefits provided by the Warrant Agreement under which they are
issued. The terms of the Preferred Stock Warrants conform in all
material respects to all statements and descriptions related thereto
contained in the Prospectus. The issuance of the Preferred Stock
Warrants is not subject to any preemptive or other similar rights,
except as described in the Prospectus.
(xi) The applicable Warrant Agreement, if any, has been duly
authorized, executed and delivered by the Company and (assuming due
authorization, execution and delivery of the Warrant Agreement by the
Warrant Agent) will constitute a valid and legally binding agreement
of the Company enforceable against the Company in accordance with its
terms, except as (A) the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally, (B) the availability of
equitable remedies may be limited by equitable principles of general
applicability, and (C) rights to indemnity and contribution thereunder
may be limited by state or federal securities laws or the public
policy underlying such laws.
(xii) The applicable Deposit Agreement, if any, has been duly
authorized, executed and delivered by the Company and (assuming due
authorization, execution and delivery of the Deposit Agreement by the
Depositary) constitutes a valid and binding obligation of the Company
enforceable in accordance with its terms except as (A) the
enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights
generally, (B) the availability of equitable remedies may be limited
by equitable principles of general applicability, and (C) rights to
indemnity and contribution thereunder may be limited by state or
federal securities laws or the public policy underlying such laws; and
the Deposit Agreement, if any, conforms in all material respects to
all statements relating thereto contained in the Prospectus.
(xiii) The issuance and sale of the Underwritten Securities
being delivered at such Closing Time by the Company, the performance
by the Company, the Operating Partnership, and the Significant
Subsidiaries of their respective obligations under this Agreement, the
applicable Terms Agreement, and the consummation of the transactions
herein and therein contemplated, including the application of the net
proceeds from the sale of the Underwritten Securities as described in
the Prospectus will not (A) conflict with or result in a breach or
violation of any of the terms or provisions of, constitute a default
under, or result in the acceleration of the maturity of any
indebtedness under, any indenture, mortgage, deed of trust, loan
agreement, or other agreement or instrument filed or incorporated by
reference in the Registration Statement to which the Company or the
Operating Partnership or any Significant Subsidiary is a party or by
which the Company, the Operating Partnership, or any Significant
Subsidiary is
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bound or to which any of the property or assets of the Company, the
Operating Partnership, or any Significant Subsidiary is subject or
(B) result in any violation of the provisions of the certificate of
incorporation or by-laws, certificate of limited partnership,
partnership agreement or other organizational documents, as the case
may be, of the Company, the Operating Partnership, or any Significant
Subsidiary, or any statute or any order, rule or regulation known to
such counsel of any court or governmental agency or body having
jurisdiction over the Company, the Operating Partnership, or any
Significant Subsidiary or any of their respective properties.
(xiv) No consent, approval, authorization, order,
registration or qualification of or with any court or governmental
agency or body or other person is required for the issuance and sale
of the Underwritten Securities by the Company or the performance by
the Company, the Operating Partnership, or any Significant Subsidiary
of their respective obligations under this Agreement, the applicable
Terms Agreement, and the consummation of the transactions herein and
therein contemplated, other than such consents, approvals,
authorizations, registrations or qualifications as have been obtained
prior to such Closing Time or may be required under state securities
or Blue Sky laws in connection with the purchase and distribution of
the Underwritten Securities by the Underwriters.
(xv) The statements made under the captions "Description of
Capital Stock" in the Prospectus, to the extent they constitute
matters of law or legal conclusions or constitute summaries of
documents described therein, are true and accurate in all material
respects, and fairly present the information provided therein.
(xvi) The Company is not, and (assuming the application by
the Company of the net proceeds of the issue and sale of the
Underwritten Securities in the manner described in the Prospectus
under the caption "Use of Proceeds") after giving effect to the
issuance and sale of the Underwritten Securities by the Company will
not be, an "investment company" or a company "controlled" by an
"investment company" within the meaning of the Investment Company Act.
(xvii) At the time the Registration Statement became effective
and at each Representation Date, the Registration Statement and
Prospectus (except for financial statements and schedules and related
notes included therein, and the other financial, statistical, and
accounting data included in the Registration Statement or Prospectus
as to which such counsel need not express any opinion), excluding the
documents incorporated by reference therein complied as to form in all
material respects with the requirements of the 1933 Act and the 1933
Act Regulations.
(xviii) Each document heretofore filed pursuant to the 1934 Act
and incorporated or deemed to be incorporated by reference in the
Prospectus (except for financial statements and schedules and other
financial
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information included or incorporated by reference therein, as to which
such counsel need not express any opinion) complied as to form in all
material respects with the requirements of the 1934 Act and the
applicable 1934 Act Regulations in effect at the date of their
respective filings.
(xix) To the knowledge of such counsel, there is no action,
suit, or proceeding before or by any court or governmental agency or
body, domestic or foreign, now pending or threatened against the
Company, the Operating Partnership, any Significant Subsidiary, or any
officer or director of any of the foregoing that is required to be
disclosed in the Registration Statement (other than as disclosed
therein). To the knowledge of such counsel, there are no contracts or
documents of a character that are required to be described in the
Prospectus or filed as exhibits to or incorporated by reference into
the Registration Statement by the 1933 Act or the 1933 Act Regulations
that have not been so described or filed.
(xx) The Company is organized in conformity with the requirements
for qualification as a real estate investment trust under the Code,
the Company's method of operation has enabled it to meet the
requirements for qualification and taxation as a real estate
investment trust under the Code, and its method of operation enables
it to continue to meet the requirements for taxation as a real estate
investment trust under the Code.
(xxi) The statements made in the Prospectus under the caption
"Certain Federal Income Tax Considerations," to the extent they
constitute matters of law or legal conclusions have been reviewed by
such counsel and fairly summarize the federal income tax
considerations that are likely to be material to a holder of Shares.
(xxii) The Articles Supplementary relating to the Preferred
Stock and the Depositary Shares, if any, have been filed for record
with the SDAT pursuant to the laws of the State of Maryland and the
number of Preferred Stock and the title, par value, liquidation
preference, ranking, dividend rate or rates (or method of
calculation), dividend payment dates, redemption or sinking fund
requirements, conversion provisions and other terms of the Preferred
Stock have been set forth therein.
In giving its opinion required by this Section 5(c), such counsel
shall additionally state that, although it has not independently verified
and is not passing upon and assumes no responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration or
Prospectus (except to the extent specified in paragraphs (viii), (ix), (x)
and (xii) above), no facts have come to the attention of such counsel that
lead it to believe that, as of its effective date, the Registration
Statement or any further amendment thereto made by the Company prior to
such Date of Delivery contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary
to make the statements therein not misleading (it being understood that
such counsel need express no opinion as to the financial statements and
related notes thereto and the
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other financial, statistical, and accounting data included in the
Registration Statement or the Prospectus) or that, as of its date, the
Prospectus or any further amendment or supplement thereto made by the
Company prior to such Date of Delivery contained an untrue statement of a
material fact or omitted to state a material fact necessary to make the
statements therein, in light of the circumstances in which they were made,
not misleading (it being understood that such counsel need express no
opinion as to the financial statements and related notes thereto and the
other financial, statistical, and accounting data included in the
Registration Statement or the Prospectus) or that, as of such Date of
Delivery, either the Registration Statement or the Prospectus or any
further amendment or supplement thereto made by the Company prior to such
Date of Delivery contains an untrue statement of a material fact or omits
to state a material fact necessary to make the statements therein, in light
of the circumstances in which they were made, not misleading (it being
understood that such counsel need express no opinion as to the financial
statements and related notes thereto and the other financial, statistical,
and accounting data included in the Registration Statement or the
Prospectus).
In rendering such opinion, such counsel may state that they express no
opinion as to the laws of any jurisdiction other than the laws of the
United States, the general corporate law of Maryland and the general
corporate law of Delaware.
5(d) (i) At the time of the execution of the applicable Terms
Agreement, Ernst & Young LLP shall have furnished to you a letter or
letters, dated such date, in form and substance satisfactory to you, to the
effect set forth in Annex I hereto and (ii) at Closing Time, you shall have
received from Ernst & Young LLP a letter, dated as of the applicable
Closing Time, to the effect that they reaffirm the statements made in the
letter furnished pursuant to subsection (e)(i) of this Section 5, and, if
the Company has elected to rely upon Rule 430A of the 1933 Act Regulations,
to the further effect that they have carried out procedures specified in
paragraph (v) of Annex I with respect to certain amounts, percentages, and
financial information specified by you and deemed to be part of the
Registration Statement pursuant to Rule 430A(b) and have found such
amounts, percentages and financial information to be in agreement with the
records specified in such paragraph (v).
5(e) The Registration Statement and the Prospectus shall contain all
statements that are required to be stated therein in accordance with the
1933 Act and the 1933 Act Regulations and shall conform in all material
respects to the requirements of the 1933 Act and the 1933 Act Regulations.
Neither the Registration Statement nor the Prospectus shall contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein
not misleading.
5(f) No action, suit, or proceeding at law or in equity shall be
pending or, to the knowledge of the Company or the Operating Partnership,
be threatened against the Company, the Operating Partnership or any
Significant Subsidiary, that would be required to be described in the
Prospectus other than as described therein.
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<PAGE>
5(g) (A) Neither the Company nor any of its Significant Subsidiaries
shall have sustained since the date of the latest audited financial
statements included in the Prospectus any loss or interference with its
business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth or contemplated in the
Prospectus, and (B) since the respective dates as of which information is
given in the Prospectus there shall not have been any change in the capital
stock, partnership interests, or long-term debt of the Company, the
Operating Partnership or any Significant Subsidiary or any change, or any
development involving a prospective change, in or affecting the general
affairs, management, financial position, stockholders' equity or results of
operations of the Company, the Operating Partnership, and the Significant
Subsidiaries, otherwise than as set forth or contemplated in the
Prospectus, the effect of which, in any such case described in clause (A)
or (B), is in your judgment so material and adverse as to make it
impracticable or inadvisable to proceed with the public offering or the
delivery of the Underwritten Securities being delivered at such Date of
Delivery on the terms and in the manner contemplated in the Prospectus.
5(h) On or after the date hereof there shall not have occurred any of
the following: (i) any material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs, assets or business
prospects of the Company, the Operating Partnership and their Significant
Subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business other than as disclosed in the Prospectus, or
(ii) there has occurred any material adverse change in the financial
markets in the United States or any outbreak of hostilities or escalation
thereof or other calamity or crisis or any change or 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 your judgment, impracticable to market the Underwritten Securities
or to enforce contracts for the sale of the Underwritten Securities, or
(iii) trading in any securities of the Company has been suspended or
limited by the Commission or the New York Stock Exchange, Inc. or if
trading generally on the New York Stock Exchange, Inc. or the American
Stock Exchange, Inc. has been suspended or limited, or, minimum or maximum
prices for trading have been fixed, or maximum ranges for prices have been
required, by either of said exchanges or order of the Commission or any
other governmental authority, (iv) a banking moratorium has been declared
by either Federal or New York authorities, if the effect of any such event
specified in this paragraph (h), in the Representative's judgment, makes it
impracticable or inadvisable to proceed with the public offering or the
delivery of the Underwritten Securities being delivered at such Date of
Delivery on the terms and in the manner contemplated by the Prospectus.
5(i) To the extent required by any Terms Agreement, the Underwritten
Securities to be sold by the Company at such Date of Delivery shall have
been duly authorized for inclusion on the Nasdaq National Market, if
applicable.
5(j) The Company shall have furnished or caused to be furnished to the
Representative at such Date of Delivery certificates of officers of the
Company
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satisfactory to the Underwriters as to the accuracy of the representations
and warranties of the Company herein at and as of such Date of Delivery, as
to the performance by the Company of all of its obligations hereunder to be
performed at or prior to such Date of Delivery, as to the matters set forth
in subsections (a) and (f) through (h) of this Section and as to such other
matters as the Representative may reasonably request.
If any condition specified in this Section 5 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 the
Closing Time, and such termination shall be without liability of any party to
any other party except as provided in Section 8 hereof.
Section 6. Indemnification.
6(a) The Company and the Operating Partnership, jointly and severally,
will 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,
against any losses, claims, damages, or liabilities to which any Underwriter or
such controlling person may become subject, under the 1933 Act or otherwise,
insofar as such losses, claims, damages, or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospectus, the
Registration Statement, or the Prospectus, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and will reimburse the Underwriters and
such controlling persons for any legal or other expenses reasonably incurred by
the Underwriters or such controlling persons in connection with investigating or
defending any such action or claim as such expenses are incurred; provided,
however, that (i) none of the Company or the Operating Partnership shall be
liable in any such case to the extent that any such loss, claim, damage, or
liability arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in any statement provided by the
Underwriters in writing for the express purpose of being included in the
Prospectus and (ii) such indemnity with respect to any Preliminary Prospectus
shall not inure to the benefit of the Underwriters (or any person controlling
the Underwriters) if the person asserting any such loss, claim, damage or
liability did not receive a copy of the Prospectus (or the Prospectus as
supplemented) at or prior to the confirmation of the sale of Shares to such
person in any case where such delivery is required by the 1933 Act and the
untrue statement or omission of a material fact contained in such Preliminary
Prospectus was corrected in the Prospectus (or the Prospectus as supplemented).
6(b) Each Underwriter severally agrees to indemnify and hold harmless
the Company, and the Operating Partnership and each of the Company's directors,
each officer of the Company who signed the Registration Statement, and each
other person who controls the Company within the meaning of the 1933 Act,
against any losses, claims, damages, or liabilities to which the Company or the
Operating Partnership, or each such other person may become subject, under the
1933 Act or otherwise, insofar as such losses, claims, damages, or liabilities
(or actions in respect thereof) arise out of or are based upon
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<PAGE>
an untrue statement or alleged untrue statement of a material fact contained in
any preliminary prospectus, the Registration Statement, or the Prospectus, or
any amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in any
statement provided by the Underwriters in writing for the express purpose of
being included in the Prospectus, and will reimburse the Company, the Operating
Partnership, or each such other person for any legal or other expenses
reasonably incurred by the Company, the Operating Partnership, or each such
other person in connection with investigating or defending any such action or
claim as such expenses are incurred.
6(c) Promptly after receipt by an indemnified party under subsection
6(a), (b) or (c) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party (who
shall not, except with the consent of the indemnified party, be counsel to the
indemnifying party), and, after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party under such
subsection for any legal expenses of other counsel or any other expenses, in
each case subsequently incurred by such indemnified party, in connection with
the defense thereof other than reasonable costs of investigation, unless such
indemnified party reasonably objects to such assumption on the ground that the
named parties to any such action (including any impleaded parties) include both
such indemnified party and an indemnifying party and such indemnified party
reasonably believes that there may be legal defenses available to it that are
different from or in addition to those available to such indemnifying party. In
no event shall the indemnifying parties be liable for fees and expenses of more
than one counsel (in addition to local counsel) separate from their own counsel
for all indemnified parties in connection with any one action or separate but
similar related actions in the same jurisdiction arising out of the same general
allegations or circumstances.
6(d) If the indemnification provided for in this Section 6 is
unavailable to, or insufficient to hold harmless, an indemnified party under
subsection 6(a), (b) or (c) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Company and the Operating Partnership on the
one hand and the Underwriters on the other from the offering of the Underwritten
Securities. If, however, the allocation provided by the immediately preceding
sentence is not permitted by
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<PAGE>
applicable law or if the indemnified party failed to give the notice required
under subsection 6(c) above, then each indemnifying party shall contribute to
such amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company and the Operating Partnership on the one hand and the
Underwriters on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities (or actions in respect
thereof), as well as any other relevant equitable considerations. The relative
benefits received by the Company and the Operating Partnership on the one hand
and the Underwriters on the other shall be deemed to be in the same proportion
as the total net proceeds from the offering of the Underwritten Securities
purchased under this Agreement (before deducting expenses) received by the
Company or the Operating Partnership bear to the total underwriting discounts
and commissions received by the Underwriters with respect to the Underwritten
Securities purchased under this Agreement, in each case as set forth in the
table on the cover page of the Prospectus. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company or the Operating
Partnership, on the one hand or the Underwriters on the other and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company, the Operating Partnership and
the Underwriters agree that it would not be just and equitable if contributions
pursuant to this subsection 6(e) 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 subsection 6(e). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities (or
actions in respect thereof) referred to above in this subsection 6(e) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this subsection 6(e), the
Underwriters shall be required to contribute any amount in excess of the amount
by which the total price at which the Underwritten Securities underwritten by it
and distributed to the public were offered to the public exceeds the amount of
any damages which the Underwriters has otherwise been required to pay by reason
of such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the 1933 Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.
6(e) The obligations of the Company and the Operating Partnership under
this Section 6 shall be in addition to any liability which the Company or the
Operating Partnership may otherwise have and shall extend, upon the same terms
and conditions, to each person, if any, who controls the Underwriters within the
meaning of the 1933 Act; and the obligations of the Underwriters under this
Section 6 shall be in addition to any liability which the Underwriters may
otherwise have and shall extend, upon the same terms and conditions, to each
officer and director of the Company (including any person who, with his or her
consent, is named in the Registration Statement as about to become a director of
the Company) and to each person, if any, who controls the Company or the
Operating Partnership within the meaning of the 1933 Act.
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<PAGE>
Section 7. Representations, Warranties and Agreements to Survive
Delivery. The respective indemnities, agreements, representations, warranties
and other statements of the Company, the Operating Partnership, and the
Underwriters, as set forth in this Agreement and the applicable Terms Agreement
or made by or on behalf of them, respectively, pursuant to this Agreement, shall
remain in full force and effect, regardless of any investigation (or any
statement as to the results thereof) made by or on behalf of the Underwriters or
any controlling person of the Underwriters, or the Company, the Operating
Partnership, or any officer or director or controlling person of the Company,
the Operating Partnership, and shall survive delivery of and payment for the
Underwritten Securities.
Section 8. Termination of Agreement.
8(a) This Agreement (excluding the applicable Terms Agreement) may be
terminated for any reason at any time by the Company and the Operating
Partnership or by you upon the giving of 5 days' prior written notice of such
termination to the other party hereto.
8(b) You may terminate the applicable Terms Agreement, by notice to
the Company, at any time at or prior to the applicable Closing Time or any
relevant Date of Delivery, if (i) there has been, since the time of execution of
such Terms 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, assets or business prospects
of the Company, the Operating Partnership and their Significant Subsidiaries
considered as one enterprise, whether or not arising in the ordinary course of
business other than as disclosed in the Prospectus, or (ii) there has occurred
any material adverse change in the financial markets in the United States or any
outbreak of hostilities or escalation thereof or other calamity or crisis or any
change or 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 your judgment, impracticable to market
the Underwritten Securities or to enforce contracts for the sale of the
Underwritten Securities, or (iii) trading in any securities of the Company has
been suspended or limited by the Commission or the New York Stock Exchange, Inc.
or if trading generally on the New York Stock Exchange, Inc. or the American
Stock Exchange, Inc. has been suspended or limited, or, minimum or maximum
prices for trading have been fixed, or maximum ranges for prices have been
required, by either of said exchanges or order of the Commission or any other
governmental authority, (iv) a banking moratorium has been declared by either
Federal or New York authorities, or (v) if the rating assigned by any nationally
recognized statistical rating organization to any Preferred Stock of the Company
as of the date of the applicable Terms Agreement shall have been lowered since
such date or if any such rating organization shall have publicly announced that
it has placed any Preferred Stock of the Company on what is commonly termed a
"watch list" for possible downgrading. As used in this Section 8(b), the term
"Prospectus" means the Prospectus in the form first used to confirm sales of the
Underwritten Securities.
8(c) If this Agreement or the applicable Terms Agreement is terminated
pursuant to this Section 8, such termination shall be without liability of any
party to any
- 31 -
<PAGE>
other party except as provided in Section 4 hereof, and provided further that
Sections 1, 6 and 7 shall survive such termination and remain in full force and
effect.
Section 9. Default by One or More of the Underwriters. If one or
more of the Underwriters shall fail at the applicable Closing Time or the
relevant Date of Delivery, as the case may be, to purchase the Underwritten
Securities which it or they are obligated to purchase under the applicable Terms
Agreement (the "Defaulted Securities"), you 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, you shall not have completed such
arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed ten
percent (10%) of the Underwritten Securities to be purchased on such
date pursuant to such Terms Agreement, the non-defaulting Underwriters
shall be obligated 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 ten percent
(10%) of the Underwritten Securities to be purchased on such date
pursuant to such Terms Agreement, such Terms Agreement (or, with
respect to the Underwriters' exercise of any applicable over-allotment
option for the purchase of Option Underwritten Securities on a Date of
Delivery after the Closing Time, the obligations of the Underwriters
to purchase, and the Company to sell, such Option Underwritten
Securities on such Date of Delivery) shall terminate without liability
on the part of any non-defaulting Underwriter.
No action taken pursuant to this Section 9 shall relieve any
defaulting Underwriter from liability in respect of its default.
In the event of any such default which does not result in (i) a
termination of the applicable Terms Agreement or (ii) in the case of a Date of
Delivery after the Closing Time, a termination of the obligations of the
Underwriters and the Company with respect to the related Option Underwritten
Securities, as the case may be, you and the Company each shall have the right to
postpone the 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.
Section 10. Notices. All statements, requests, notices and
agreements hereunder shall be in writing, and, if to the Underwriters, shall be
delivered or sent by mail, telex or facsimile transmission to Friedman,
Billings, Ramsey & Co., Inc., 1001 Nineteenth Street North, Arlington, Virginia
22209, Attention: Eric Billings; if to the Company or the Operating Partnership,
shall be delivered or sent by mail, telex or facsimile transmission to the
address of the Company set forth in the Registration Statement, Attention: C.
Alan Schroeder. Any such statements, requests, notices or agreements shall take
effect at the time of receipt thereof.
- 32 -
<PAGE>
Section 11. Parties. This Agreement and the applicable Terms
Agreement shall be binding upon, and inure solely to the benefit of, (i) the
Underwriters, the Company and the Operating Partnership, and (ii) to the extent
provided in Sections 6 and 7 hereof, the officers and directors of the Company,
the Operating Partnership, and each person who controls the Company, the
Operating Partnership, or the Underwriters, and their respective heirs,
executors, administrators, successors and assigns, and no other person shall
acquire or have any right under or by virtue of this Agreement or the applicable
Terms Agreement. No purchaser of any of the Underwritten Securities from the
Underwriters shall be deemed a successor or assign merely by reason of such
purchase.
Section 12. Time of Essence. Time shall be of the essence of this
Agreement and the Pricing Agreement. As used herein, the term "business day"
shall mean any day when the Commission's office in Washington, D.C. is open for
business.
Section 13. Choice of Law. This Agreement and the applicable Terms
Agreement shall be governed by and construed in accordance with the laws of the
State of Maryland.
Section 14. Counterparts. This Agreement may be executed by any
one or more of the parties hereto in any number of counterparts, each of which
shall be deemed to be an original, but all such counterparts shall together
constitute one and the same instrument.
- 33 -
<PAGE>
If the foregoing is in accordance with your understanding, please sign
and return to us four counterparts hereof, and, upon the acceptance hereof by
you, this letter and such acceptance hereof shall constitute a binding agreement
between you, the Company and the Operating Partnership.
Very truly yours,
PRIME RETAIL, INC.
By: _________________________________
Name:
Title:
PRIME RETAIL, L.P.
By: PRIME RETAIL, INC.
By: ____________________________
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
FRIEDMAN, BILLINGS, RAMSEY
& CO., INC.
By: ________________________________
Name:
Title:
- 34 -
<PAGE>
ANNEX I
Pursuant to Section 5(e) of the Underwriting Agreement, the
accountants shall furnish letters to the Representative to the effect that:
(i) They are independent certified public accountants with respect to
the Company and its subsidiaries within the meaning of the 1933 Act and the
applicable rules and regulations thereunder;
(ii) In their opinion, the financial statements and any supplemental
financial information and schedules audited (and, if applicable, and/or pro
forma financial information examined) by them and included in the
Prospectus or the Registration Statement comply as to form in all material
respects with the applicable accounting requirements of the 1933 Act and
the related published rules and regulations thereunder; and, if applicable,
they have made a review in accordance with standards established by the
American Institute of Certified Public Accountants of the unaudited
consolidated interim financial statements as indicated in their reports
thereon, copies of which have been furnished to the Underwriters;
(iii) The unaudited selected financial information with respect to
the consolidated results of operations and financial position of the
Company for the five recent fiscal years included in the Prospectus agrees
with the corresponding amounts (after restatements where applicable) in the
audited consolidated financial statements for such five fiscal years for
such fiscal years;
(iv) On the basis of limited procedures, not constituting an audit in
accordance with generally accepted auditing standards, consisting of a
reading of the unaudited financial statements and other information
referred to below, a reading of the latest available interim financial
statements of the Company and its subsidiaries, inspection of the minute
books of the Company and its subsidiaries since the date of the latest
audited financial statements included in the Prospectus, inquiries of
officials of the Company and its subsidiaries responsible for financial and
accounting matters and such other inquiries and procedures as may be
specified in such letter, nothing came to their attention that caused them
to believe that:
(A) the unaudited consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the Prospectus do not comply as to form in all material
respects with the applicable accounting requirements of the 1933 Act
and the related published rules and regulations thereunder, or are not
in conformity with generally accepted accounting principles applied on
a basis substantially consistent with the basis for the audited
consolidated statements of income, consolidated balance sheets and
consolidated statements of cash flows included in the Prospectus;
<PAGE>
(B) any other unaudited income statement data and balance sheet
items included in the Prospectus do not agree with the corresponding
items in the unaudited consolidated financial statements from which
such data and items were derived, and any such unaudited data and
items were not determined on a basis substantially consistent with the
basis for the corresponding amounts in the audited consolidated
financial statements included in the Prospectus;
(C) the unaudited financial statements which were not included
in the Prospectus but from which were derived any unaudited condensed
financial statements referred to in Clause (A) and any unaudited
income statement data and balance sheet items included in the
Prospectus and referred to in Clause (B) were not determined on a
basis substantially consistent with the basis for the audited
consolidated financial statements included in the Prospectus;
(D) as of a specified date not more than five days prior to the
date of such letter, there have been any changes in the consolidated
capital stock (other than issuances of capital stock upon exercise of
options and stock appreciation rights, upon earn-outs of performance
shares and upon conversions of convertible securities, in each case
which were outstanding on the date of the latest financial statements
included in the Prospectus) or any increase in the consolidated
long-term debt of the Company and its subsidiaries, or any decreases
in consolidated net current assets or other items specified by the
Underwriters or any increases in any items specified by the
Underwriters, in each case as compared with amounts shown in the
latest balance sheet included in the Prospectus, except in each case
for changes, increases or decreases which the Prospectus discloses
have occurred or may occur or which are described in such letter; and
(E) for the period from the date of the latest financial
statements included in the Prospectus to the specified date referred
to in Clause (D) there were any decreases in consolidated net revenues
or operating profit or the total or per share amounts of consolidated
net income or other items specified by the Underwriters, or any
increases in any items specified by the Underwriters, in each case as
compared with the comparable period of the preceding year and with any
other period of corresponding length specified by the Underwriters,
except in each case for decreases or increases which the Prospectus
discloses have occurred or may occur or which are described in such
letter; and
- 2 -
<PAGE>
(v) In addition to the audit referred to in their report(s)
included in the Prospectus and the limited procedures, inspection of
minute books, inquiries and other procedures referred to in paragraphs
(iii) and (iv) above, they have carried out certain specified
procedures, not constituting an audit in accordance with generally
accepted auditing standards, with respect to certain amounts,
percentages and financial information specified by the Underwriters,
which are derived from the general accounting records of the Company
and its subsidiaries, which appear in the Prospectus, or in Part II
of, or in exhibits and schedules to, the Registration Statement
specified by the Underwriters, and have compared certain of such
amounts, percentages and financial information with the accounting
records of the Company and its subsidiaries and have found them to be
in agreement.
- 3 -
<PAGE>
EXHIBIT A
PRIME RETAIL, INC.
(a Maryland corporation)
Preferred Stock, Depositary Shares, Preferred Stock Warrants,
Common Stock and Common Stock Warrants
TERMS AGREEMENT
To: Prime Retail, Inc.
100 East Pratt Street
Baltimore, Maryland 21202
Ladies and Gentlemen:
We understand that Prime Retail, Inc., a Maryland corporation (the
"Company"), proposes to issue and sell [_____ shares of its common stock, par
value $.01 per share (the "Common Stock")] [_____ shares of its preferred stock,
par value $.01 per share (the "Preferred Stock")] [in the form of _____
depositary shares (the "Depositary Shares") each representing ____ of a share of
Preferred Stock] [________ warrants exercisable for ________ shares of Preferred
Stock (the "Preferred Stock Warrants")] [______ warrants exercisable for ______
shares of Common Stock (the "Common Stock Warrants")] (such securities also
being hereinafter referred to as the "Initial Underwritten Securities").
Subject to the terms and conditions set forth or incorporated by reference
herein, we [the underwriters named below (the "Underwriters")] offer to
purchase, severally and not jointly, the number of Underwritten Securities
[opposite their names set forth below at the purchase price set forth below, and
a proportionate share of Option Underwritten Securities set forth below, to the
extent any are purchased.
Number of
Underwriter Initial Underwritten Securities
Total [$]________________
<PAGE>
The Underwritten Securities shall have the following terms:
[Common Stock]
Title:
Number of shares:
Number of Option Underwritten Securities:
Initial public offering price per share: $
Purchase price per share: $
Listing requirements:
Black-out provisions:
Lock-up provisions:
Other terms and conditions (including expense reimbursement):
Closing date and location:
[Preferred Stock]
Title:
Rank:
Ratings:
Number of shares:
Number of Option Underwritten Securities:
Dividend rate (or formula) per share: $
Dividend payment dates:
Stated value: $
Liquidation preference per share: $
Redemption provisions:
Ranking:
Sinking fund requirements:
Conversion provisions:
Listing requirements:
Black-out provisions:
Voting and other rights:
Initial public offering price per share: $____ plus accumulated dividends, if
any, from _____
Purchase price per share: $____ plus accumulated dividends, if any, from _____
Other terms and conditions (including expense reimbursement):
Closing date and location:
[Depositary Shares]
Title:
Fractional Amount of Preferred Stock represented by each Depositary Share:
Ratings:
Rank:
Number of shares:
Number of Option Underwritten Securities:
Dividend rate (or formula) per share:
Dividend payment dates:
- 2 -
<PAGE>
Liquidation preference per share:
Redemption provisions:
Sinking fund requirements:
Conversion provisions:
Listing requirements:
Black-out provisions:
Initial public offering price per share: $____ plus accumulated dividends, if
any, from _____
Purchase price per share: $____ plus accumulated dividends, if any, from _____
Other terms and conditions (including expense reimbursement):
Closing date and location:
[Common Stock Warrants]
Title:
Number of shares:
Number of Option Underwritten Securities:
Initial public offering price per share: $
Purchase price per share: $
Listing requirements:
Exercise provisions:
Black-out provisions:
Lock-up provisions:
Other terms and conditions (including expense reimbursement):
Closing date and location:
[Preferred Stock Warrants]
Title:
Rank:
Ratings:
Number of shares:
Number of Option Underwritten Securities:
Dividend rate (or formula) per share: $
Dividend payment dates:
Stated value: $
Liquidation preference per share: $
Ranking:
Redemption provisions:
Sinking fund requirements:
Conversion provisions:
Exercise provisions:
Listing requirements:
Black-out provisions:
Voting and other rights:
Initial public offering price per share: $____ plus accumulated dividends, if
any, from _____
Purchase price per share: $____ plus accumulated dividends, if any, from _____
Other terms and conditions (including expense reimbursement):
- 3 -
<PAGE>
Closing date and location:
All of the provisions contained in the document attached as Annex I
entitled "PRIME RETAIL, INC. Preferred Stock, Depositary Shares, Preferred Stock
Warrants, Common Stock and Common Stock Warrants--Underwriting Agreement" are
hereby incorporated by reference in their entirety herein and shall be deemed to
be a part of this Terms Agreement to the same extent as if such provisions had
been set forth in full herein. Terms defined in such document are used herein
as therein defined.
Please accept this offer no later than _____ o'clock P.M. (Washington,
D.C. time) on _____________ by signing a copy of this Terms Agreement in the
space set forth below and returning the signed copy to us.
Very truly yours,
FRIEDMAN, BILLINGS, RAMSEY & CO., INC.
By: __________________________________
Authorized Signatory
[Acting on behalf of itself and the other named
Underwriters.]
Accepted:
PRIME RETAIL, INC.
By: _________________________________
Name:
Title:
- 4 -
<PAGE>
EXHIBIT B
PRIME RETAIL, INC.
(a Maryland corporation)
[Title of Securities]
DELAYED DELIVERY CONTRACT
_______________ __, 1997
Prime Retail, Inc.
100 East Pratt Street
Baltimore, Maryland 21202
Attention:
Ladies and Gentlemen:
The undersigned hereby agrees to purchase from Prime Retail, Inc. (the
"Company"), and the Company agrees to sell to the undersigned on ______________
__, 19__ (the "Delivery Date"), ________________________ of the Company's
[insert title of security] (the "Securities"), offered by the Company's
Prospectus dated ________________ __, 19__, as supplemented by its Prospectus
Supplement dated ______________ __, 19__, receipt of which is hereby
acknowledged, at a purchase price of $_____ per share, and on further terms and
conditions set forth in this contract.
Payment for the Securities which the undersigned has agreed to
purchase on the Delivery Date shall be made to the Company or its order by
[certified or official bank check in New York Clearing House] [same day] funds
at the office of __________________________________________, on the Delivery
Date, upon delivery to the undersigned of the Securities to be purchased by the
undersigned in definitive form and in such denominations and registered in such
names as the undersigned may designate in written or telegraphic communication
addressed to the Company not less than five full business days prior to the
Delivery Date.
The obligation of the undersigned to take delivery of and make payment
for the Securities on the Delivery Date shall be subject only to the conditions
that (1) the purchase of the Securities to be made by the undersigned shall not
on the Delivery Date be prohibited under the laws of the jurisdiction to which
the undersigned is subject and (2) the Company, on or before _________________
__, 19__, shall have sold to the Underwriters of the Securities (the
"Underwriters") such principal amount of the Securities as is sold to them
pursuant to the Terms Agreement dated _______________ __, 19__ between the
<PAGE>
Company and the Underwriters. The obligation of the undersigned to take delivery
of and make payment for the Securities shall not be affected by the failure of
any purchaser to take delivery of and make payments for the Securities pursuant
to other contracts similar to this contract. The undersigned represents and
warrants to you that its investment in the Securities is not, as of the date
hereof, prohibited under the laws of any jurisdiction to which the undersigned
is subject and which govern such investment.
Promptly after completion of the sale to the Underwriters, the Company
will mail or deliver to the undersigned at its address set forth below notice to
such effect, accompanied by a copy of the opinions of counsel for the Company
delivered to the Underwriters in connection therewith.
By the execution hereof, the undersigned represents and warrants to
the Company that all necessary corporate action for the due execution and
delivery of this contract and the payment for and purchase of the Securities has
been taken by it and no further authorization or approval of any governmental or
other regulatory authority is required for such execution, delivery, payment or
purchase, and that, upon acceptance hereof by the Company and mailing or
delivery of a copy as provided below, this contract will constitute a valid and
binding agreement of the undersigned in accordance with its terms.
This contract will inure to the benefit of and be binding upon the
parties hereto and their respective successors, but will not be assignable by
either party hereto without the written consent of the other.
It is understood that the Company will not accept Delayed Delivery
Contracts for an aggregate amount of Securities in excess of $________ and that
the acceptance of any Delayed Delivery Contract is in the Company's sole
discretion and, without limiting the foregoing, need not be on a first-come,
first-served basis. If this contract is acceptable to the Company, it is
requested that the Company sign the form of acceptance on a copy hereof and mail
or deliver a signed copy hereof to the undersigned at its address set forth
below. This will become a binding contract between the Company and the
undersigned when such copy is so mailed or delivered.
- 2 -
<PAGE>
This Delayed Delivery Contract shall be governed by the laws of the State
of New York.
Yours very truly,
___________________________________
(Name of Purchaser)
By:________________________________
(Title)
___________________________________
___________________________________
(Address)
Accepted as of the date first above written.
PRIME RETAIL, INC.
By:________________________________
Name:
Title:
- 3 -
<PAGE>
PURCHASER - PLEASE COMPLETE AT TIME OF SIGNING
The name and telephone number of the representative of the Purchaser with
whom details of delivery on the Delivery Date may be discussed are as follows:
(Please print.)
Telephone No.
Name (including Area Code)
----- ---------------------
- 4 -
<PAGE>
EXHIBIT 4.1
PRIME RETAIL, INC.
___________
Articles Supplementary Classifying and Designating 175,800 Shares
of Preferred Stock as
8.5% Series B Cumulative Participating Convertible Preferred Stock
and 87,900 Shares of Excess Preferred Stock as
Excess Series B Preferred Stock
___________
Prime Retail, Inc., a Maryland corporation (the "Corporation"), having
its principal office in the State of Maryland in the City of Baltimore, hereby
certifies to the State Department of Assessments and Taxation of Maryland that:
The Corporation's Articles of Amendment and Restatement of Articles of
Incorporation, as amended through the dated hereof (the "Articles") set forth
the terms, preferences and rights of (i) the Corporation's 8.5% Series B
Cumulative Participating Convertible Preferred Stock, $.01 par value per share
(the "Series B Preferred Stock") and (ii) the Corporation's Excess Series B
Preferred Stock (the "Excess Series B Preferred Stock").
The Articles also authorize the Corporation to issue, among other
shares of capital stock, 75,000,000 shares of Common Stock, $.01 par value per
share (the "Common Stock"), 15,000,000 shares of Preferred Stock, $.01 par value
per share (the "Preferred Stock"), and 7,500,000 shares of Excess Preferred
Stock, $.01 par value per share (the "Excess Preferred Stock").
Pursuant to authority conferred upon the Board of Directors by the
Articles and Bylaws of the Corporation, the Board of Directors adopted
resolutions authorizing the creation and issuance of up to $100 million in
aggregate public offering price of Common Stock and/or Preferred Stock and
adopted resolutions granting the Executive Committee of the Board of Directors
(the "Executive Committee") with full power and authority, subject to the
foregoing resolution, to determine the preferences and other rights, voting
powers, restrictions, limitations as to dividends, qualifications, and terms and
conditions of redemption of the shares of any series of Preferred Stock to be so
issued.
Pursuant to such authority, the Executive Committee adopted
resolutions authorizing the Corporation to issue and sell (i) up to 2,392,000
shares of Common Stock having an aggregate public offering price of up to
$26,000,000 and (ii) 175,800 shares of Series B Preferred Stock having an
aggregate public offering price of $3,999,450.
In accordance with the foregoing, the number of shares of Preferred
Stock to be designated as Series B Preferred Stock and the number of shares of
Excess Preferred Stock to be designated as Excess Series B Preferred Stock and
the other terms and conditions of such shares of
<PAGE>
capital stock, as determined by the Executive Committee, are as follows:
Section 1. (a) Designation of Additional Shares of Series B
Preferred Stock. Of the 15,000,000 shares of Preferred Stock authorized by the
Articles, 175,800 are hereby designated as Series B Preferred Stock and the
number of shares which shall constitute such series shall be increased by
175,800.
(b) Other Rights, Terms and Conditions. The preferences, rights,
voting powers, restrictions, limitations as to dividends, qualifications,
redemption rights, voting powers, dividend rate and other rights, terms and
conditions of the shares hereby designated as Series B Preferred Stock shall be
as set forth in the Articles.
Section 2. (a) Designation of Additional Shares of Excess Series
B Preferred Stock. Of the 7,500,000 authorized shares of Excess Preferred
Stock, 87,900 are hereby designated as Excess Series B Preferred Stock and the
number of shares which shall constitute such series shall be increased by
87,900.
(b) Other Rights, Terms and Conditions. The preferences, rights,
voting powers, restrictions, limitations as to dividends, qualifications,
redemption rights, voting powers, dividend rate and other rights, terms and
conditions of the shares hereby designated as Excess Series B Preferred Stock
shall be as set forth in the Articles.
[signature page follows]
2
<PAGE>
IN WITNESS WHEREOF, the Corporation has caused these Articles
Supplementary to be signed in its name and on its behalf by its Senior Vice
President-General Counsel and Secretary and attested by its Assistant Secretary
on this 19th day of February, 1997 and its said Senior Vice President-General
Counsel and Secretary acknowledged under penalties of perjury that these
Articles Supplementary are the corporate act of said Corporation and that to the
best of his knowledge, information and belief, the matters and facts set forth
herein are true in all material respects.
PRIME RETAIL, INC.
By: /s/ C. Alan Schroeder
--------------------------------------
Name: C. Alan Schroeder
Title: Senior Vice President-General
Counsel and Secretary
Attest:
/s/ R. Kelvin Antill
- ----------------------------------
Name: R. Kelvin Antill
Title: Assistant Secretary
3
<PAGE>
EXHIBIT 5.1
Winston & Strawn
35 West Wacker Drive
Chicago, Illinois 60601
August 27, 1997
Prime Retail, Inc.
100 E. Pratt Street
19th Floor
Baltimore, Maryland 21202
Re: Issuance of Shares of Common Stock
Gentlemen:
We have acted as special counsel to Prime Retail Inc., a Maryland
corporation (the "Company"), in connection with the proposed issuance and sale
by the Company of up to 10,000,000 shares of the Company's Common Stock, $.01
par value per share (the "Common Shares"), pursuant to an Underwriting
Agreement dated as of the date hereof (the "Underwriting Agreement") among the
Company, Prime Retail, L.P. and Friedman, Billings, Ramsey & Co., Inc. (the
"Underwriter") and the related Terms Agreement dated as of the date hereof
between the Company and the Underwriter (the "Terms Agreement"). Capitalized
terms used herein and not otherwise defined have the meaning ascribed to such
terms in the Underwriting Agreement.
In connection with this opinion, we have examined and are familiar
with originals or copies, certified or otherwise identified to our satisfaction,
of (i) the Registration Statement on Form S-3 (File No. 333-29437) filed by the
Company with the Commission on June 17, 1997 (the "Registration Statement"),
(ii) the Prospectus dated August 27, 1997 constituting a part of the
Registration Statement, (iii) the Prospectus Supplement dated August 27, 1997
constituting a part of the Registration Statement, (iv) the Amended and Restated
Articles of Incorporation, as amended through the date hereof (the "Charter"),
(v) the Amended and Restated By-Laws of the Company, (vi) certain resolutions of
the Board of Directors of the Company and the Executive Committee thereof
relating to the offering and issuance of the Shares, and (vii) such other
documents as we have deemed necessary or appropriate as a basis for the opinions
set forth below. In such examination, we have assumed the genuineness of all
signatures, the legal capacity of natural persons, the authenticity of all
documents submitted to us as originals, the conformity to original documents of
all documents submitted to us as certified or photostatic copies and the
authenticity of the originals of such latter documents. In making our
examination of the documents executed or to be executed by parties other than
the Company, we have assumed that such parties have the power, corporate or
other, to enter into and perform all obligations thereunder and we have also
assumed the due
<PAGE>
Prime Retail, Inc.
August 27, 1997
Page
authorization by all requisite action, corporate or other, and execution and
delivery by such parties of such documents and the validity and binding effect
thereof. As to any facts material to this opinion which we did not
independently establish or verify, we have relied upon statements and
representations of officers and other representatives of the Company and others.
Based upon and subject to the assumptions, qualifications and
limitations set forth herein, we are of the opinion that the Common Shares
have been duly and validly authorized and, when issued and sold pursuant to
the Underwriting Agreement and the Terms Agreement, will be duly and validly
issued, fully paid and nonassessable.
The foregoing opinion is limited to the laws of the United States and
the Maryland General Corporation Law.
This opinion is rendered as of the date hereof and we undertake no,
and disclaim any, obligation to advise you of any changes in any matter set
forth herein, regardless of whether changes in such matters come to our
attention after the date hereof. This opinion is furnished to you solely for
your benefit and is not to be used, circulated, quoted or otherwise referred to
for any other purpose without our prior written consent. Notwithstanding the
foregoing, we hereby consent to the incorporation by reference of this opinion
to the Registration Statement and to the use of our name in the Prospectus
Supplement relating to the Shares and constituting a part of the Registration
Statement. In giving this consent, we do not thereby admit that we are included
in the category of persons whose consent is required under Section 7 of the
Securities Act of 1933, as amended, or the rules and regulations of the
Securities and Exchange Commission.
Very truly yours,
/s/ Winston & Strawn
<PAGE>
EXHIBIT 8.1
Winston & Strawn
35 West Wacker Drive
Chicago, Illinois 60601
August 27, 1997
Prime Retail, Inc.
100 East Pratt Street
Nineteenth Floor
Baltimore, Maryland 21202
Re: Qualification as REIT and Prospectus Federal Income Tax
Disclosure
Ladies and Gentlemen:
We have acted as special tax counsel to Prime Retail, Inc., a Maryland
corporation (the "Company"), in connection with the stock offering contemplated
by the Company's Registration Statement on Form S-3 (File No. 333-29437), which
was filed with the Securities and Exchange Commission ("SEC") on June 17, 1997
(the "Registration Statement"), the Prospectus dated August 27, 1997
constituting a part thereof (the "Prospectus"), and the Prospectus Supplement
dated August 27, 1997 also constituting a part thereof (the "Prospectus
Supplement"). Capitalized terms used herein and not otherwise defined shall
have the meanings assigned to such terms in the Prospectus.
You have requested our opinion concerning (i) whether the Company is
organized in conformity with the requirements for qualification as a real estate
investment trust ("REIT") for federal income tax purposes, (ii) whether the
Company's method of operation has enabled it to meet the requirements for
qualification and taxation as a REIT under the provisions of the Internal
Revenue Code of 1986, as amended (the "Code") and (iii) whether the Company's
method of operation enables it to continue to meet the requirements for
qualification as a REIT. In rendering this opinion, we have examined and relied
upon the descriptions of the Company, the Operating Partnership, and the
Property Partnerships and their respective investments, as well as proposed
investments, activities, operations, and governance, as set forth in the
Prospectus and Prospectus Supplement. We have reviewed originals or copies,
certified or otherwise identified to our satisfaction, of the Amended and
Restated Articles of Incorporation of the Company as amended on May 29, 1996
(the "Charter"), the Agreement of Limited Partnership of the Operating
Partnership, each of the Property Partnerships' agreements as amended, the
Registration Statement, the Prospectus, the Prospectus Supplement and such other
documents, agreements, and information as we have deemed necessary for purposes
of rendering the opinions contained herein. For purposes of such examination,
we have assumed the genuineness of all signatures on originals or copies, the
legal capacity of natural persons, the authority of any individual or
individuals who executed any
<PAGE>
Prime Retail, Inc.
August 27, 1997
Page 2
such documents on behalf of any other person, the authenticity of all documents
submitted to us as originals and the conformity to originals or certified copies
of all copies submitted to us as certified or reproduction copies.
We have also reviewed and, with your permission, are relying upon the
Officer's Certificate dated February 14, 1997 and reaffirmed as of the date
hereof and executed by a duly authorized officer of the Company, setting forth
certain representations relating to the formation, ownership, operation, future
method of operation, and compliance with the REIT and partnership provisions of
the Code of the Company, the Operating Partnership, each of the Property
Partnerships, Prime Retail Services, Inc. (the "Services Corporation"), Prime
Retail Services Limited Partnership (the "Services Partnership"), Prime Retail
Finance, Inc. ("Finance"), Prime Retail Finance II, Inc. ("Finance II"), Prime
Retail Finance III, Inc. ("Finance III"), Prime Retail Finance IV, Inc.
("Finance IV") and Prime Retail Finance Limited Partnership (the "Finance
Partnership"). We have further relied on and assumed the truth and correctness
of (i) the Company's representations in the Agreement of Limited Partnership of
the Operating Partnership and (ii) the certificates of public officials with
respect to the formation of certain limited partnerships. Moreover, for the
purpose of rendering our opinion, we have assumed that no partner in the
Operating Partnership, the Services Partnership, the Finance Partnership, or any
of the Property Partnerships will elect to be excluded from all or part of
subchapter K of the Code.
For the purposes of rendering this opinion, we have not made an
independent investigation of the facts set forth in any of the aforementioned
documents, including without limitation, the Prospectus, the Prospectus
Supplement, and the Officer's Certificate. We have consequently relied upon
your representations that the information presented in such documents or
otherwise furnished to us accurately and completely describes all material facts
relevant to this opinion. We are not, however, aware of any material facts and
circumstances contrary to or inconsistent with the foregoing representations or
the assumptions made herein.
In rendering this opinion, we have assumed that the transactions
contemplated by the Prospectus or the Prospectus Supplement will be consummated
in accordance with the operative documents, and such documents accurately
reflect the material facts of such transactions. In addition, the opinions set
forth herein are based on the correctness of the following specific assumptions:
(i) the Company, the Operating Partnership, the Property Partnerships, the
Services Corporation, the Services Partnership, Finance, Finance II, Finance
III, Finance IV and the Finance Partnership will each be operated in the manner
described in the relevant partnership agreement or other organizational
documents and in the Prospectus or Prospectus Supplement and in accordance with
applicable laws; and (ii) each partner in the Operating Partnership, in each of
the Property Partnerships, in the Services Partnership, and in the Finance
Partnership has been motivated in acquiring its respective partnership interest
by such partner's anticipation of economic rewards apart
<PAGE>
Prime Retail, Inc.
August 27, 1997
Page 3
from tax considerations.
Our opinion is based upon the current provisions of the Code, Treasury
Regulations promulgated thereunder, current administrative rulings, judicial
decisions, and other applicable authorities, all as in effect on the date
hereof. All of the foregoing authorities are subject to change or new
interpretation, both prospectively and retroactively, and such changes or
interpretation, as well as changes in the facts as they have been represented to
us or assumed by us, could affect our opinion. Our opinion is rendered only as
of the date hereof and we take no responsibility to update this opinion after
this date. Our opinion does not foreclose the possibility of a contrary
determination by the Internal Revenue Service (the "IRS") or by a court of
competent jurisdiction, or of a contrary position by the IRS or Treasury
Department in regulations or rulings issued in the future.
Based on the foregoing, and subject to the limitations, qualifications
and exceptions set forth herein, we are of the opinion that:
1. The Company is organized in conformity with the requirements for
qualification as a REIT, and the Company's method of operation has enabled it to
meet the requirements for qualification and taxation as a REIT under the Code,
and its method of operation enables it to continue to meet the requirements for
qualification as a REIT.
2. The discussion in the Prospectus under the heading "CERTAIN
FEDERAL INCOME TAX CONSIDERATIONS" fairly summarizes the federal income tax
considerations that are likely to be material to a holder of Common Stock.
The Company's qualification and taxation as a REIT depend upon the
Company's ability to meet on a continuing basis, through actual annual operating
and other results, the various requirements under the Code and described in the
Prospectus with regard to, among other things, the sources of gross income, the
composition of assets, the level of distributions to stockholders, and the
diversity of its stock ownership. Winston & Strawn undertakes no responsibility
to, and will not review the Company's compliance with these requirements on a
continuing basis. Accordingly, no assurance can be given that the actual
results of the Company's operations, the nature of its assets, the amount and
types of its gross income, the level of its distributions to stockholders and
the diversity of its stock ownership for any given taxable year will satisfy
the requirements under the Code for qualification and taxation as a REIT. In
particular, we would note that, although the Company's Charter contains certain
provisions which restrict the ownership and transfer of the Company's capital
stock and which are intended to prevent concentration of stock ownership, such
provisions do not ensure that the Company will be able to satisfy the
requirement set forth in Code section 856(a)(6) that it not be "closely held"
within the meaning of Code section 856(h)for any
<PAGE>
Prime Retail, Inc.
August 27, 1997
Page 4
given taxable year, primarily, though not exclusively, as a
result of fluctuations in value among the different classes of the Company's
capital stock.
Other than as expressly stated above, we express no opinion on any
issue relating to the Company, the Operating Partnership, the Services
Partnership, the Services Corporation, the Finance Partnership, Finance, Finance
II, Finance III, Finance IV or any of the Property Partnerships or to any
investment therein.
This opinion is being delivered to you solely for use in connection
with the Prospectus as of the date hereof. This opinion is solely for the
benefit of the above-named addressee and may not be relied upon by any other
person in any manner whatsoever without our prior written permission.
Notwithstanding the foregoing, we hereby consent to the incorporation by
reference of this opinion to the Registration Statement and to the use of our
name in the Prospectus under the caption "CERTAIN FEDERAL INCOME TAX
CONSIDERATIONS." In giving this consent, we do not admit that we are included
in the category of persons whose consent is required under section 7 of the
Securities Act of 1933, as amended, or the rules and regulations of the SEC.
Very truly yours,
/s/ Winston & Strawn
