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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): February 14, 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. 333-19505) filed by the Registrant on January 10, 1997, as amended
through the date hereof (the "Registration Statement"): (i) Form of
Underwriting Agreement (attached hereto as Exhibit 1.1); (ii) Opinion of
Winston & Strawn regarding the validity of the securities registered
(attached hereto as Exhibit 5.1); (iii) Opinion of Winston & Strawn
regarding tax matters (attached hereto as Exhibit 8.1); and (iv) Consent of
Independent Auditors.
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
Number Description
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1.1 Form of Underwriting Agreement between the Registrant and the
Underwriter.
5.1 Opinion of Winston & Strawn regarding the validity of the
securities registered.
8.1 Opinion of Winston & Strawn regarding tax matters.
23.1 Consent of Independent Auditors.
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: February 14, 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
Page Number
Number Description In This Report
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1.1 Form of Underwriting Agreement between the
Registrant and the Underwriter.
5.1 Opinion of Winston & Strawn regarding the
validity of the securities registered.
8.1 Opinion of Winston & Strawn regarding tax
matters.
23.1 Consent of Independent Auditors
23.2 Consents of Winston & Strawn included in Exhibits
5.1 and 8.1.
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EXHIBIT 1.1
PRIME RETAIL, INC.
(a Maryland corporation)
Preferred Stock, Depositary Shares, Preferred Stock Warrants,
Common Stock and Common Stock Warrants
UNDERWRITING AGREEMENT
February 14, 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 $100,000,000 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. 333-19505) 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
fully 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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(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
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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.
(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 caption "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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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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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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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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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 5.1
Winston & Strawn
35 West Wacker Drive
Chicago, Illinois 60601
February 14, 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 (a) up to 2,080,000 shares of the Company's Common
Stock, $.01 par value per share (the "Common Shares"), and (b) up to 175,800
shares of the Company's 8.5% Series B Cumulative Participating Convertible
Preferred Stock, $.01 par value per share (the "Convertible Preferred Shares"
and, collectively with the Common Shares, the "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.
333-19505) filed by the Company with the Commission on January 10, 1997, as
amended by Amendment No. 1 to the Registration Statement filed by the Company
with the Commission on January 30, 1997 (the "Registration Statement"), (ii)
the Prospectus dated February 14, 1997 constituting a part of the
Registration Statement, (iii) the Prospectus Supplement dated February 14, 1997
constituting a part of the Registration Statement, (iv) the Amended and
Restated Articles of Incorporation, as amended through the date hereof (the
"Charter"), and the Amended and Restated By-Laws of the Company, (v) the form
of the Articles Supplementary to the Charter (the "Articles Supplementary")
to be filed with the Secretary of State of the State of Maryland and
designating 175,800 of the shares of Preferred Stock authorized thereunder as
Convertible Preferred Shares, (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.
<PAGE>
Prime Retail, Inc.
February 14, 1997
Page 2
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 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
1. 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.
2. Upon the due filing of the Articles Supplementary with the
Secretary of State of the State of Maryland, the Convertible Preferred Shares
will be 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.
3. The shares of Common Stock, $.01 par value per share, of the
Company issuable upon conversion of the Convertible Preferred Shares in
accordance with the Charter have been duly and validly authorized and, when
issued upon such conversion, 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
<PAGE>
Prime Retail, Inc.
February 14, 1997
Page 3
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
February 14, 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.
333-19505), which was initially filed with the Securities and Exchange
Commission ("SEC") on January 10, 1997 (the "Registration Statement") as
amended by Amendment No. 1 thereto filed with the SEC on January 30, 1997,
the Prospectus dated February 14, 1997 constituting a part thereof (the
"Prospectus"), and the Prospectus Supplement dated February 14, 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
<PAGE>
Prime Retail, Inc.
February 14, 1997
Page 2
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 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 on 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.
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
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Prime Retail, Inc.
February 14, 1997
Page 3
acquiring its respective partnership interest by such partner's anticipation
of economic rewards apart 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,
Convertible Preferred Stock or Warrants.
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
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Prime Retail, Inc.
February 14, 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
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in
the Registration Statement (Form S-3 No. 333-19505) and related Prospectus
Supplement of Prime Retail, Inc. and to the incorporation by reference
therein of our report dated January 30, 1996, with respect to the
consolidated financial statements of Prime Retail, Inc., included in its
Annual Report (Form 10-K/A-1) for the year ended December 31, 1995 and our
reports dated January 30, 1996 and November 14, 1996, with respect to the
statements of revenue and certain expenses of Grove City Factory Shops and
the JMJ Acquired Properties, respectively, for the year ended December 31,
1995, included in the Prime Retail, Inc. Current Report on Form 8-K/A-2 dated
January 30, 1997, both filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
Baltimore, Maryland
February 13, 1997
