- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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 March 14, 1997
(Date of earliest event reported) (March 11, 1997)
Storage USA, Inc.
(Exact name of registrant as specified in its charter)
Tennessee 001-12190 62-1251239
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
10440 Little Patuxent Parkway,
Suite 1100,
Columbia, Maryland 21044
(Address and zip code of
principal executive offices)
Registrant's telephone number, including area code: (410) 730-9500
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
Item 5. Other Events
Registrant has entered into an Underwriting Agreement with Goldman,
Sachs & Co. in connection with the sale of 1.4 million shares of Registrant's
common stock (the "Offering") pursuant to Registrant's Prospectus Supplement
dated as of March 11, 1997, to a Prospectus dated February 26, 1997, included as
part the Registration Statement on Form S-3 (No. 333- 21991) filed with the
Commission on February 19, 1997. Pursuant to the Underwriting Agreement, the
Company has granted Goldman, Sachs & Co. a 30-day option to purchase up to an
aggregate of 210,000 additional shares to cover over-allotments. The
Underwriting Agreement is attached hereto as Exhibit 1.
Item 7. Financial Statements, ProForma Financial Information and Exhibits
(c) Exhibits.
The following exhibits are filed herewith:
Exhibit Description
------- -----------
1 Underwriting Agreement and related Pricing Agreement,
dated March 11, 1997, between Registrant, SUSA
Partnership, L.P. and Goldman, Sachs & Co.
8 Opinion of Hunton & Williams, dated March 14, 1997
-2-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
STORAGE USA, INC.
(Registrant)
Date: March 14, 1997 By: /s/ Christopher P. Marr
-----------------------------------
Christopher P. Marr
Vice President - Financial Reporting and
Controller
-3-
<PAGE>
EXHIBIT INDEX
Exhibit Description Page
- ------- ----------- ----
1 Underwriting Agreement between Registrant, SUSA
Partnership, L.P. and Goldman, Sachs & Co.,
dated March 11, 1997.
8 Opinion of Hunton & Williams, dated March 14, 1997
-4-
STORAGE USA, INC.
Common Stock
par value $0.01 per share
Underwriting Agreement
March 11, 1997
Goldman, Sachs & Co., 85 Broad Street, New York, New York 10004.
Ladies and Gentlemen:
From time to time Storage USA, Inc., a Tennessee corporation (the
"Company"), and the general partner of SUSA Partnership, L.P., a Tennessee
limited partnership (the "Operating Partnership"), and the Operating Partnership
propose to enter into one or more Pricing Agreements (each a "Pricing
Agreement") in the form of Annex I hereto, with such additions and deletions as
the parties thereto may determine, and, subject to the terms and conditions
stated herein and therein, to issue and sell to the firms named in Schedule I to
the applicable Pricing Agreement (such firms constituting the "Underwriters"
with respect to such Pricing Agreement and the securities specified therein)
certain shares of its Common Stock, par value $0.01 per share (the "Shares"),
specified in Schedule II to such Pricing Agreement (with respect to such Pricing
Agreement, the "Firm Shares"). If specified in such Pricing Agreement, the
Company may grant to the Underwriters the right to purchase at their election an
additional number of shares, specified in such Pricing Agreement as provided in
Section 3 hereof (the "Optional Shares"). The Firm Shares and the Optional
Shares, if any, which the Underwriters elect to purchase pursuant to Section 3
hereof are herein collectively called the "Designated Shares".
The terms and rights of any particular issuance of Designated Shares
shall be as specified in the Pricing Agreement relating thereto.
1. Particular sales of Designated Shares may be made from time to time
to the Underwriters of such Shares, for whom the firms designated as
representatives of the Underwriters of such Shares in the Pricing Agreement
relating thereto will act as representatives (the "Representatives"). The term
"Representatives" also refers to a single firm acting as sole representative of
the Underwriters and to an Underwriter or Underwriters who act without any firm
being designated as their representatives. This Underwriting Agreement shall not
be construed as an obligation of the Company to sell any of the Shares or as an
obligation of any of the Underwriters to purchase any of the Shares.
1
<PAGE>
The obligation of the Company to issue and sell any of the Shares and the
obligation of any of the Underwriters to purchase any of the Shares shall be
evidenced by the Pricing Agreement with respect to the Designated Shares
specified therein. Each Pricing Agreement shall specify the aggregate number of
the Firm Shares, the maximum number of Optional Shares, if any, the initial
public offering price of such Firm and Optional Shares or the manner of
determining such price, the purchase price to the Underwriters of such
Designated Shares, the names of the Underwriters of such Designated Shares, the
names of the Representatives of such Underwriters, the number of such Designated
Shares to be purchased by each Underwriter and the commission, if any, payable
to the Underwriters with respect thereto and shall set forth the date, time and
manner of delivery of such Firm and Optional Shares, if any, and payment
therefor. The Pricing Agreement shall also specify (to the extent not set forth
in the registration statement and prospectus with respect thereto) the terms of
such Designated Shares. A Pricing Agreement shall be in the form of an executed
writing (which may be in counterparts), and may be evidenced by an exchange of
telegraphic communications or any other rapid transmission device designed to
produce a written record of communications transmitted. The obligations of the
Underwriters under this Agreement and each Pricing Agreement shall be several
and not joint.
2. The Company and the Operating Partnership, jointly and severally,
represent and warrant to, and agree with, each of the Underwriters that:
(a) A registration statement on Form S-3 (File No. 333-21991)
in respect of the Shares has been filed with the Securities and Exchange
Commission (the "Commission"); such registration statement and any
post-effective amendment thereto, each in the form heretofore delivered or to be
delivered to the Representatives, and, excluding exhibits to such registration
statement, but including all documents incorporated by reference in the
prospectus included therein, to the Representatives for each of the other
Underwriters, have been declared effective by the Commission in such form; no
other document with respect to such registration statement or document
incorporated by reference therein has heretofore been filed, or transmitted for
filing, with the Commission (other than prospectuses filed pursuant to Rule
424(b) of the rules and regulations of the Commission under the Securities Act
of 1933, as amended (the "Act"), each in the form heretofore delivered to the
Representatives); and no stop order suspending the effectiveness of such
registration statement has been issued and no proceeding for that purpose has
been initiated or threatened by the Commission (any preliminary prospectus
included in such registration statement or filed with the Commission pursuant to
Rule 424(a) of the rules and regulations of the Commission under the Act, is
hereinafter called a "Preliminary Prospectus"; the various parts of such
registration statement, including all exhibits thereto and the documents
incorporated by reference in the prospectus contained in the registration
statement at the time such part of the registration statement became effective,
each as amended at the time such part of the registration statement became
effective, are hereinafter collectively called the "Registration Statement"; the
prospectus relating to the Shares, in the form in which it has most recently
been filed, or transmitted for filing, with the Commission on or prior
2
<PAGE>
to the date of this Agreement, is hereinafter called the "Prospectus"; any
reference herein to any Preliminary Prospectus or the Prospectus shall be deemed
to refer to and include the documents incorporated by reference therein pursuant
to the applicable form under the Act, as of the date of such Preliminary
Prospectus or Prospectus, as the case may be; any reference to any amendment or
supplement to any Preliminary Prospectus or the Prospectus shall be deemed to
refer to and include any documents filed after the date of such Preliminary
Prospectus or Prospectus, as the case may be, under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), and incorporated by reference in such
Preliminary Prospectus or Prospectus, as the case may be; any reference to any
amendment to the Registration Statement shall be deemed to refer to and include
any annual report of the Company filed pursuant to Section 13(a) or 15(d) of the
Exchange Act after the effective date of the Registration Statement that is
incorporated by reference in the Registration Statement; and any reference to
the Prospectus as amended or supplemented shall be deemed to refer to the
Prospectus as amended or supplemented in relation to the applicable Designated
Shares in the form in which it is filed with the Commission pursuant to Rule
424(b) under the Act in accordance with Section 5(a) hereof, including any
documents incorporated by reference therein as of the date of such filing);
(b) The documents incorporated by reference in the Prospectus,
when they become effective or were filed with the Commission, as the case may
be, conformed in all material respects to the requirements of the Act or the
Exchange Act, as applicable, and the rules and regulations of the Commission
thereunder, and none of such documents contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading; and any further
documents so filed and incorporated by reference in the Prospectus or any
further amendment or supplement thereto, when such documents become effective or
are filed with the Commission, as the case may be, will conform in all material
respects to the requirements of the Act or the Exchange Act, as applicable, and
the rules and regulations of the Commission thereunder and will not contain an
untrue statement of a material fact or omit to state a fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided, however,
that this representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with information furnished in
writing to the Company by an Underwriter of Designated Shares through the
Representatives expressly for use in the Prospectus as amended or supplemented
relating to such Shares;
(c) The Registration Statement and the Prospectus conform, and
any further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements of the Act
and the rules and regulations of the Commission thereunder and do not and will
not, as of the applicable effective date as to the Registration Statement and
any amendment thereto, and as of the applicable filing date as to the Prospectus
and any amendment or supplement thereto, contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary
3
<PAGE>
to make the statements therein not misleading; provided, however, that this
representation and warranty shall not apply to any statements or omissions made
in reliance upon and in conformity with information furnished in writing to the
Company by an Underwriter of Designated Shares through the Representatives
expressly for use in the Prospectus as amended or supplemented relating to such
Shares;
(d) None of the Company, Storage USA Trust, a Maryland
business trust and a limited partner of the Operating Partnership (the "Trust"),
or the Operating Partnership or any of their respective subsidiaries has
sustained since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus any material loss or interference
with its business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth or contemplated in the Prospectus
(for purposes of this Underwriting Agreement, the terms "subsidiary" and
"subsidiaries" refer to any corporation, partnership, limited liability company,
trust or other organization or association in which an entity owns a direct or
indirect interest); and, since the respective dates as of which information is
given in the Registration Statement and the Prospectus, there has not been any
material change in the capital stock, partnership interests or beneficial
interests, as applicable, long-term debt, obligations under capital leases or
short-term borrowings of the Company, the Operating Partnership, or the Trust or
any material adverse change, or any development involving a prospective material
adverse change, in or affecting the general affairs, management, financial
position, shareholders' equity, partnership capital or results of operations, as
applicable, of the Company, the Trust, or the Operating Partnership, if any,
otherwise than as set forth or contemplated in the Prospectus as amended or
supplemented;
(e) The Company, the Operating Partnership and their
subsidiaries have good and marketable title in fee simple to all real property,
including the self-storage facilities described in the Prospectus as amended or
supplemented or otherwise described in the applicable Pricing Agreement as being
owned by such entities (each a "Facility" and together the "Facilities"), and
good and marketable title to all personal property owned by them, in each case
free and clear of all liens, encumbrances and defects except such as are
described in the Prospectus as amended or supplemented or such as do not
materially affect the value of such property and do not materially interfere
with the use made or proposed to be made of such property by them; and any real
property and buildings held under lease by the Company and the Operating
Partnership are held by them under valid, subsisting and enforceable leases with
such exceptions as are not material and do not interfere with the use made or
proposed to be made of such property and buildings by the Company and the
Operating Partnership, as the case may be; the improvements at the Facilities,
if any, are, or upon completion of scheduled improvements and repairs will be,
in good condition and repair and, to the knowledge of the Company and the
Operating Partnership, there are no material latent or patent defects in the
condition of any of the Facilities, the structural elements thereof, or the
mechanical systems therein, except for any such defect, damage, or condition
that has been corrected or will be corrected in the ordinary course of business
as
4
<PAGE>
part of scheduled maintenance and improvement programs or that, if not so
corrected, could not reasonably be expected to 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 their respective
subsidiaries, taken as a whole; and each of the Facilities complies with all
applicable codes, laws and regulations (including, without limitation, building
and zoning codes, laws and regulations and laws relating to access to the
Facilities), except where noncompliance with such codes, laws or regulations
could not reasonably be expected to 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 their respective subsidiaries,
taken as a whole; and neither the Company nor the Operating Partnership has
knowledge of any pending or threatened condemnation proceedings, zoning changes
or other proceedings or actions that will in any manner affect the size of, use
of, improvements or construction on or access to the Facilities, except such
proceedings or actions that could not reasonably be expected to 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 their
respective subsidiaries, taken as a whole.
(f) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Tennessee, with power and authority (corporate and other) to own, lease, license
and operate its properties and conduct its business as described in the
Prospectus, as amended or supplemented, and 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 it owns or leases properties or
conducts any business so as to require such qualification, or is subject to no
material liability or disability by reason of the failure to be so qualified in
any such jurisdiction;
(g) The Operating Partnership has been duly formed and is
validly existing as a limited partnership under the Tennessee Revised Uniform
Limited Partnership Act with power and authority (partnership and other) to own,
lease and operate its properties and conduct its business as described in the
Prospectus, and has been duly qualified as a foreign partnership for the
transaction of business and is in good standing under the laws of each
jurisdiction in which it owns or leases properties or conducts any business so
as to require such qualification, or is subject to no material liability or
disability by reason of the failure to be so qualified in any such jurisdiction;
(h) The Trust has been duly formed and is validly existing as
a business trust in good standing under the laws of the State of Maryland, with
power and authority (trust and other) to own its limited partnership interest in
the Operating Partnership and to conduct any business appropriate in connection
therewith, and has been duly qualified as a foreign trust for the transaction of
such business and is in good standing under the laws of each other jurisdiction
in which it conducts any business so as to require such qualification, or is
subject to no material liability or disability by reason of the failure to be so
qualified in any such jurisdiction; the only activity of the Trust is the
ownership of its
5
<PAGE>
limited partnership interest in the Company and taking such activity, if any, as
may be appropriate in connection therewith;
(i) The Company has no subsidiaries other then the Trust and
Operating Partnership and the Operating Partnership has no subsidiaries other
than (i) SUSA Management, Inc., a wholly-owned subsidiary, (ii) Clarendon
Storage Associates L.P., in which it owns a 50% general partnership interest,
(iii) SUSA/38th Avenue, Capitola, L.P., in which it owns an 86% general
partnership interest and (iv) the following entities, each of which is directly
or indirectly wholly-owned by the Operating Partnership: Storage USA Franchise
Corp., Tamiami Mini-Storage Partners, Ltd., 441 Mini-Storage Partners, Ltd.,
Sunset Mini-Storage Partners, Ltd., Dade County Mini-Storage Associates Ltd.,
Southeast Mini-Storage Limited Partners, Buzzman Partners I Ltd. Partnership,
Buzzman Partners II Ltd. Partnership, Storage USA of Palm Beach County, L.P.,
Storage USA Construction, Inc., Peachtree Development II, Inc., SUSA New Jersey,
Inc., SUSA Harrison, L.P., SUSA Secaucus, L.P., SUSA Hackensack, L.P., SUSA
Orange, L.P. and Preston Self Storage Limited;
(j) The Second Amended and Restated Agreement of Limited
Partnership of SUSA Partnership, L.P., dated as of September 21, 1994, as
amended by the First Amendment to Second Amended and Restated Agreement of
Limited Partnership of SUSA Partnership, L.P., dated as of March 19, 1996, and
the Second Amendment to Second Amended and Restated Agreement of Limited
Partnership of SUSA Partnership, L.P., dated as of June 14, 1996, and the Third
Amendment to Second Amended and Restated Agreement of Limited Partnership of
SUSA Partnership, L.P., dated as of August 14, 1996 (the "Operating Partnership
Agreement"), has been duly authorized, executed and delivered by each partner
thereto and is valid, legally binding and enforceable in accordance with its
terms, except to the extent enforceability may be limited by bankruptcy,
insolvency, reorganization or other laws of general applicability relating to or
affecting creditors' rights or by general equity principles, whether considered
at law or in equity; all of the partnership interests of the Operating
Partnership have been duly and validly authorized and issued and are fully paid
and conform to the description thereof contained in the Prospectus as amended or
supplemented; and all of the general partnership interests in the Operating
Partnership are owned directly by the Company, in each case free and clear of
all liens, encumbrances, equities or claims;
(k) The Company is the sole general partner of the Operating
Partnership and owns, directly and through the Trust, the partnership interests
in the Operating Partnership described in the Prospectus as amended or
supplemented;
(l) The Company has an authorized capitalization as set forth
in the Prospectus as amended or supplemented, and all of the issued shares of
capital stock of the Company have been duly and validly authorized and issued,
are fully paid and
6
<PAGE>
non-assessable and conform to the description of the capital stock of the
Company contained in the Prospectus;
(m) The Shares have been duly and validly authorized, and,
when the Firm Shares are issued and delivered pursuant to this Agreement and the
Pricing Agreement with respect to such Designated Shares and, in the case of any
Optional Shares, pursuant to Over-allotment Options (as defined in Section 3
hereof) with respect to such Shares, such Designated Shares will be duly and
validly issued and fully paid and non-assessable; the Shares conform to the
description thereof contained in the Registration Statement and the Designated
Shares will conform to the description thereof contained in the Prospectus as
amended or supplemented with respect to such Designated Shares;
(n) No preemptive rights of shareholders exist with respect to
any of the Shares. No person or entity holds the rights to require or
participate in the registration under the Act of the Shares pursuant to the
Registration Statement and, except as set forth in the Prospectus, no person
holds the right to require registration under the Act of any shares of Stock of
the Company at any other time;
(o) The issue and sale of the Shares and the compliance by the
Company and the Operating Partnership with all of the provisions of this
Agreement, any Pricing Agreement and each Over-allotment Option, if any, and the
consummation of the transactions contemplated herein and therein will not
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the Company, the
Operating Partnership or any of their respective subsidiaries is a party or by
which the Company, the Operating Partnership or any of their respective
subsidiaries is bound or to which any of the property or assets of the Company,
the Operating Partnership or any of their respective subsidiaries is subject,
nor will such action result in any violation of the provisions of the Amended
Charter or By-laws of the Company, the certificate of limited partnership of the
Operating Partnership, the Operating Partnership Agreement 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 of their
respective subsidiaries or any of their properties; and no consent, approval,
authorization, order, registration or qualification of or with any such court or
governmental agency or body is required for the issue and sale of the Shares or
the consummation by the Company and the Operating Partnership of the
transactions contemplated by this Agreement or any Pricing Agreement or any
Over-allotment Option, except such as have been, or will have been prior to each
Time of Delivery (as defined in Section 4 hereof), been obtained under the Act
and such consents, approvals, authorizations, registrations or qualifications as
may be required under state securities or Blue Sky laws in connection with the
purchase and distribution of the Shares by the Underwriters;
7
<PAGE>
(p) None of the Company, the Trust, or the Operating
Partnership is in violation of its charter and by-laws (in the case of the
Company), its certificate of limited partnership or the Operating Partnership
Agreement (in the case of the Operating Partnership)or the Declaration of Trust
(in the case of the Trust) or in default in the performance or observance of any
material obligation, agreement, covenant or condition contained in any
indenture, mortgage, deed of trust, loan agreement, lease or other agreement or
instrument to which it is a party or by which it or any of its properties may be
bound;
(q) The statements set forth in the Prospectus under the
captions "Description of Capital Stock" and "Restrictions on Transfer of Capital
Stock", insofar as they purport to constitute a summary of the terms of the
Shares, under the caption "Restrictions on Transfer of Capital Stock", under the
caption "Federal Income Tax Considerations", under the caption "Certain Federal
Income Tax Considerations", under the caption "Plan of Distribution", under the
caption "Underwriting", and under Item 15 of Part II of the Registration
Statement, insofar as they purport to describe the provisions of the laws and
documents referred to therein, are accurate, complete and fair in all material
respects;
(r) Other than as set forth in the Prospectus as amended or
supplemented, there are no legal or governmental proceedings pending to which
the Company, the Operating Partnership or any of their respective subsidiaries
is a party or of which any property of the Company, the Operating Partnership or
any of their respective subsidiaries is the subject which, if determined
adversely to the Company, the Operating Partnership or any of their respective
subsidiaries, would individually or in the aggregate have a material adverse
effect on the current or future consolidated financial position, shareholders'
equity, including, with respect to the Operating Partnership, partnership
capital, or results of operations of the Company, the Operating Partnership and
their respective subsidiaries, in each case, taken as a whole; and, to the best
of the Company's knowledge, no such proceedings are threatened or contemplated
by governmental authorities or threatened by others;
(s) Neither the Company, the Trust nor the Operating
Partnership is or, after giving effect to the offering and sale of the Shares,
will be an "investment company" or an entity "controlled" by an "investment
company", as such terms are defined in the Investment Company Act of 1940, as
amended (the "Investment Company Act");
(t) Neither the Company nor any of its affiliates does
business with the government of Cuba or with any person or affiliate located in
Cuba within the meaning of Section 517.075, Florida Statutes;
(u) The Company, the Operating Partnership and their
respective subsidiaries maintain, or will have in full force and effect at each
Time of Delivery (as defined in Section 4 hereof), insurance on all of the
Facilities, other assets and operations (issued by
8
<PAGE>
issuers of recognized financial responsibility) of the types and in the amounts
generally deemed adequate for their respective businesses and, to the best
knowledge of the Company and the Operating Partnership, consistent with
insurance coverage maintained by similar companies in similar businesses,
including, but not limited to, insurance covering real and personal property
owned or managed by the Company, the Operating Partnership and their respective
subsidiaries against theft, damage, destruction, acts of vandalism and all other
risks customarily insured against, all of which insurance is in full force and
effect;
(v) Except as otherwise disclosed in the Prospectus as amended
or supplemented, neither the Company nor the Operating Partnership (with respect
to the Facilities) or, to the knowledge of the Company or the Operating
Partnership, any owner of, or any party to any of the acquisition agreements
relating to any facility that the Company expects to purchase (directly or
through any subsidiary) has authorized or conducted, or has knowledge of the
generation, transportation, storage, presence, use, treatment, disposal, release
or other handling of any hazardous substance, asbestos, radon, polychlorinated
byphenyls ("PCBs"), petroleum product or waste (including crude oil or any
fraction thereof), natural gas, liquified gas, synthetic gas or other material
defined, regulated, controlled or potentially subject to any remediation
requirement under an environmental law (collectively, "Hazardous Materials") on,
in, under or affecting any real property comprising any part of such Facilities
owned or by any means controlled by, or facilities to be acquired by, the
Company or the Operating Partnership, except in full compliance with and as
would not result in any liability under any federal, state and local laws,
ordinances, rules, regulations, and other governmental requirements relating to
pollution, control of chemicals, management of waste, discharges of materials
into the environment, health, safety, natural resources, and the environment
(collectively, "Environmental Laws") other than such instances of noncompliance
as could not reasonably be expected to 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 their respective subsidiaries,
taken as a whole; and the Company, the Operating Partnership and their
respective subsidiaries are, and, to the knowledge of the Company and the
Operating Partnership, the entities from which any of the Facilities were
acquired with respect to the real property comprising any part of the Facilities
owned or by any means controlled by the Company were, at the time of
acquisition, in compliance with all Environmental Laws, except for such
instances of noncompliance as could not reasonably be expected to 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 their respective subsidiaries, taken as a whole; and the Company, the
Operating Partnership and each of their respective subsidiaries have and are in
compliance with and, to the knowledge of the Company and the Operating
Partnership, the entities from which any Facility was acquired were, at the time
of acquisition, in compliance with, all licenses, permits, registrations and
government authorizations necessary to operate under all applicable
Environmental Laws, except for such instances of noncompliance as could not
reasonably be expected to have a material adverse effect on the condition,
financial or otherwise, or the earnings, assets or business
9
<PAGE>
affairs of the Company, the Operating Partnership and their respective
subsidiaries, taken as a whole. Except as otherwise disclosed in the Prospectus,
none of the Company, the Operating Partnership or any of their respective
subsidiaries with respect to any Facility, nor, to the knowledge of the Company
and the Operating Partnership, any owner of any facility proposed to be
purchased directly or indirectly by the Company, has received any written or
oral notice from any governmental entity or any other person of any claim and
there is no pending or threatened claim, litigation, or any administrative
agency proceeding that (with respect to any such facility proposed to be
purchased by the Company, or any owner of such facility, to the knowledge of the
Company and the Operating Partnership) (a) alleges a violation of any
Environmental Laws by the Company, the Operating Partnership, any of their
respective subsidiaries or that alleges that any such person is a liable party
or potentially responsible party under the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. ss. 9601, et seq., or any state
superfund law; (b) has resulted in or could result in the attachment of an
environmental lien on any of the Facilities or such facilities; or (c) alleges
contamination of any of the Facilities or such facilities, damage to natural
resources, property damage or personal injury based on their activities or the
activities of their predecessors or third parties (whether at the Facilities,
such facilities or elsewhere) involving Hazardous Materials, whether arising
under the Environmental Laws, common law principles, or other legal standards;
(w) Each subsidiary of the Operating Partnership has the
requisite power and authority to own its properties and conduct its business,
and has been duly qualified as a foreign corporation or otherwise for the
transaction of business, in each case as described in the Prospectus as amended
or supplemented, and is in good standing under the laws of each other
jurisdiction in which it owns or leases property, or conducts any business so as
to require such qualification, except where such failure to be so qualified or
to be in good standing in any such jurisdiction could not reasonably be expected
to 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 their respective subsidiaries, taken as a whole; and
(x) Each of Coopers & Lybrand, L.L.P. and such other
accountants acceptable to you, if any, who have certified certain financial
statements of the Company, the Operating Partnership and their respective
subsidiaries, respectively, are independent public accountants as required by
the Act and the rules and regulations of the Commission thereunder.
3. Upon the execution of the Pricing Agreement applicable to any
Designated Shares and authorization by the Representatives of the release of the
Firm Shares, the several Underwriters propose to offer the Firm Shares for sale
upon the terms and conditions set forth in the Prospectus as amended or
supplemented.
10
<PAGE>
The Company may specify in the Pricing Agreement applicable to any
Designated Shares that the Company thereby grants to the Underwriters the right
(an "Overallotment Option") to purchase at their election up to the number of
Optional Shares set forth in such Pricing Agreement, on the terms set forth in
the paragraph above, for the sole purpose of covering over-allotments in the
sale of the Firm Shares. Any such election to purchase Optional Shares may be
exercised by written notice from the Representatives to the Company, given
within a period specified in the Pricing Agreement, setting forth the aggregate
number of Optional Shares to be purchased and the date on which such Optional
Shares are to be delivered, as determined by the Representatives but in no event
earlier than the First Time of Delivery (as defined in Section 4 hereof) or,
unless the Representatives and the Company otherwise agree in writing, earlier
than or later than the respective number of business days after the date of such
notice set forth in such Pricing Agreement.
The number of Optional Shares to be added to the number of Firm Shares
to be purchased by each Underwriter as set forth in Schedule I to the Pricing
Agreement applicable to such Designated Shares shall be, in each case, the
number of Optional Shares which the Company has been advised by the
Representatives have been attributed to such Underwriter; provided that, if the
Company has not been so advised, the number of Optional Shares to be so added
shall be, in each case, that proportion of Optional Shares which the number of
Firm Shares to be purchased by such Underwriter under such Pricing Agreement
bears to the aggregate number of Firm Shares (rounded as the Representatives may
determine to the nearest 100 shares). The total number of Designated Shares to
be purchased by all the Underwriters pursuant to such Pricing Agreement shall be
the aggregate number of Firm Shares set forth in Schedule I to such Pricing
Agreement plus the aggregate number of Optional Shares which the Underwriters
elect to purchase.
4. Certificates for the Firm Shares and the Optional Shares to be
purchased by each Underwriter pursuant to the Pricing Agreement relating
thereto, in the form specified in such Pricing Agreement and in such authorized
denominations and registered in such names as the Representatives may request
upon at least forty-eight hours' prior notice to the Company, shall be delivered
by or on behalf of the Company to the Representatives for the account of such
Underwriter, against payment by such Underwriter or on its behalf of the
purchase price therefor by certified or official bank check or checks or by wire
transfer, payable to the order of the Company in the funds specified in such
Pricing Agreement, (i) with respect to the Firm Shares, all in the manner and at
the place and time and date specified in such Pricing Agreement or at such other
place and time and date as the Representatives and the Company may agree upon in
writing, such time and date being herein called the "First Time of Delivery" and
(ii) with respect to the Optional Shares, if any, in the manner and at the time
and date specified by the Representatives in the written notice given by the
Representatives of the Underwriters' election to purchase such Optional Shares,
or at such other time and date as the Representatives and the Company may agree
upon in writing, such time and date, if not the First Time of Delivery, herein
called the
11
<PAGE>
"Second Time of Delivery". Each such time and date for delivery is herein called
a "Time of Delivery".
5. The Company agrees with each of the Underwriters of any Designated
Shares:
(a) To prepare the Prospectus as amended and supplemented in
relation to the applicable Designated Shares in a form approved by the
Representatives and to file such Prospectus pursuant to Rule 424(b) under the
Act not later than the Commission's close of business on the second business day
following the execution and delivery of the Pricing Agreement relating to the
applicable Designated Shares, or, if applicable, such earlier time as may be
required by Rule 424(b); to make no further amendment or any supplement to the
Registration Statement or Prospectus as amended or supplemented after the date
of the Pricing Agreement relating to such Shares and prior to any Time of
Delivery for such Shares which shall be disapproved by the Representatives for
such Shares promptly after reasonable notice thereof; to advise the
Representatives promptly of any such amendment or supplement after any Time of
Delivery for such Shares and furnish the Representatives with copies thereof; to
file promptly all reports and any definitive proxy or information statements
required to be filed by the Company with the Commission pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act for so long as the delivery of a
prospectus is required in connection with the offering or sale of such Shares,
and during such same period to advise the Representatives, promptly after it
receives notice thereof, of the time when any amendment to the Registration
Statement has been filed or becomes effective or any supplement to the
Prospectus or any amended Prospectus has been filed with the Commission, of the
issuance by the Commission of any stop order or of any order preventing or
suspending the use of any prospectus relating to the Shares, of the suspension
of the qualification of such Shares for offering or sale in any jurisdiction, of
the initiation or threatening of any proceeding for any such purpose, or of any
request by the Commission for the amending or supplementing of the Registration
Statement or Prospectus or for additional information; and, in the event of the
issuance of any such stop order or of any such order preventing or suspending
the use of any prospectus relating to the Shares or suspending any such
qualification, promptly to use its best efforts to obtain the withdrawal of such
order;
(b) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify such Shares for offering and
sale under the securities laws of such jurisdictions as the Representatives 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 such Shares, 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;
(c) To furnish the Underwriters with copies of the Prospectus
as amended or supplemented in such quantities as the Representatives may from
time to time reasonably
12
<PAGE>
request, and, if the delivery of a prospectus is required at any time in
connection with the offering or sale of the Shares 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 same period to amend or supplement the Prospectus or to file under
the Exchange Act any document incorporated by reference in the Prospectus in
order to comply with the Act or the Exchange Act to notify the Representatives
and upon their request to file such document and to prepare and furnish without
charge to each Underwriter and to any dealer in securities as many copies as the
Representatives 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;
(d) To 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) under
the Act), an earnings statement of the Company and its subsidiaries (which need
not be audited) complying with Section 11(a) of the Act and the rules and
regulations of the Commission thereunder (including, at the option of the
Company, Rule 158);
(e) During the period beginning from the date of the Pricing
Agreement for such Designated Shares and continuing to and including the later
of (i) the termination of trading restrictions for such Designated Shares, as
notified to the Company by the Representatives and (ii) the last Time of
Delivery for such Designated Shares, not to offer, sell, contract to sell or
otherwise dispose of, except as provided hereunder, any securities of the
Company that are substantially similar to the Designated Shares, including but
not limited to any securities that are convertible into or exchangeable for, or
any options or other rights that represent the right to acquire, any such
substantially similar securities (other than pursuant to employee stock option
plans existing on, or upon the conversion or exchange of convertible or
exchangeable securities outstanding as of, the date of the Pricing Agreement for
such Designated Shares), without the prior written consent of the
Representatives;
(f) To furnish to its shareholders as soon as practicable
after the end of each fiscal year an annual report (including a balance sheet
and statements of income, shareholders' equity and cash flows of the Company and
its consolidated subsidiaries, including the Operating Partnership, certified by
independent public accountants) and, as soon as practicable after the end of
each of the first three quarters of each fiscal year (beginning with the fiscal
quarter ending after the effective date of the Registration Statement),
consolidated summary financial information of the Company and its subsidiaries
for such quarter in reasonable detail;
13
<PAGE>
(g) During a period of five years from the date of any Pricing
Agreement, to furnish to you copies of all reports or other communications
(financial or other) furnished to shareholders, and to deliver to you (i) as
soon as they are available, copies of any reports and financial statements
furnished to or filed with the Commission or any national securities exchange on
which any class of securities of the Company is listed; and (ii) such additional
information concerning the business and financial condition of the Company as
you may from time to time reasonably request (such financial statements to be on
a consolidated basis to the extent the accounts of the Company and its
subsidiaries are consolidated in reports furnished to its shareholders generally
or to the Commission);
(h) To use the net proceeds received by it from the sale of
the Shares pursuant to this Agreement in the manner specified in the Prospectus
as amended or supplemented under the caption "Use of Proceeds";
(i) To make the elections and take the procedural steps
described in the Prospectus under the caption "Federal Income Tax
Considerations" in a timely fashion, and to otherwise use its best efforts to
meet the requirements to qualify, for its taxable year ended December 31, 1994,
as a real estate investment trust ("REIT") under the Internal Revenue Code of
1986, as amended (the "Code");
(j) Not to invest, reinvest, or otherwise use the proceeds
received by the Company in such a manner, or take any action, or omit to take
any action, that would cause the Company, the Operating Partnership or any of
their respective subsidiaries to become an "investment company" as that term is
defined in the Investment Company Act; and
(k) To use its best efforts to supplementally list, subject to
notice of issuance, the Shares on the New York Stock Exchange (the "Exchange").
6. The Company covenants and agrees with the several Underwriters that
the Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Shares under the Act and all other
expenses in connection with the preparation, printing and filing of the
Registration Statement, any Preliminary Prospectus and the Prospectus and
amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers; (ii) the cost of printing or producing
any Agreement among Underwriters, this Agreement, any Pricing Agreement, any
Blue Sky Memorandum, closing documents and any other documents in connection
with the offering, purchase, sale and delivery of the Shares; (iii) all expenses
in connection with the qualification of the Shares for offering and sale under
state securities laws as provided in Section 5(b) hereof, including the
reasonable fees and disbursements of counsel for the Underwriters in connection
with such qualification and in connection with the Blue Sky survey (iv) all fees
and expenses in connection with listing the Shares on the Exchange; (v) the
filing fees incident to, and the reasonable fees and disbursements of counsel
for the Underwriters in connection with,
14
<PAGE>
securing any required review by the National Association of Securities Dealers,
Inc. of the terms of the sale of the Shares; (vi) the cost of preparing stock
certificates; (vii) the cost and charges of any transfer agent or registrar; and
(viii) all other costs and expenses incident to the performance of its
obligations hereunder and under any Over-allotment Options which are not
otherwise specifically provided for in this Section. It is understood, however,
that, except as provided in this Section, and Sections 8 and 11 hereof, the
Underwriters will pay all of their own costs and expenses, including the fees of
their counsel, stock transfer taxes on resale of any of the Shares by them, and
any advertising expenses connected with any offers they may make.
7. The obligations of the Underwriters of any Designated Shares under
the Pricing Agreement relating to such Designated Shares shall be subject, in
the discretion of the Representatives, to the condition that all representations
and warranties and other statements of the Company and the Operating Partnership
herein and other statements of the Company and the Operating Partnership in or
incorporated by reference in the Pricing Agreement relating to such Designated
Shares are, at and as of each Time of Delivery for such Designated Shares true
and correct, the condition that the Company and the Operating Partnership shall
have performed all of their obligations hereunder theretofore to be performed,
and the following additional conditions:
(a) The Prospectus as amended or supplemented in relation to
such Designated Shares shall have been filed with the Commission pursuant to
Rule 424(b) within the applicable time period prescribed for such filing by the
rules and regulations under the Act and in accordance with Section 5(a) hereof;
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 the Representatives' reasonable satisfaction;
(b) Counsel for the Underwriters shall have furnished to the
Representatives such opinion or opinions, dated each Time of Delivery for such
Designated Shares, with respect to the incorporation of the Company, the
validity of the Shares being delivered at such Time of Delivery, the
Registration Statement, the Prospectus as amended or supplemented and other
matters as the Representatives 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; provided, however, that with respect to
all matters of Tennessee law, counsel for the Underwriters may rely on the
opinion of Hunton & Williams delivered pursuant to subsection (c) hereof;
(c) Hunton & Williams, counsel for the Company, shall have
furnished to you their written opinion, dated each Time of Delivery for such
Designated Shares, in form and substance satisfactory to you, to the effect
that:
15
<PAGE>
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Tennessee, with all requisite corporate power and authority to own,
lease, license and operate its properties and conduct its business as
described in the Prospectus as amended or supplemented;
(ii) The Company has an authorized capitalization as set
forth in the Prospectus as amended or supplemented, and all of the
issued shares of capital stock of the Company (including the Designated
Shares being delivered at such Time of Delivery) have been duly and
validly authorized and issued and are fully paid and non-assessable;
and the Designated Shares conform to the description thereof contained
in the Prospectus as amended or supplemented;
(iii) The Operating Partnership has been duly formed and is
validly existing as a limited partnership under the laws of the State
of Tennessee, with all requisite partnership power and authority to own
or lease its properties and conduct its business as described in the
Prospectus;
(iv) The Company has been duly qualified as a foreign
corporation for the transaction of business and is in good standing or
validly existing, as the case may be, under the laws of each other
jurisdiction in which it owns or leases properties 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 upon opinions of local counsel
and in respect of matters of fact upon certificates of officers of the
Company, provided that such counsel shall state that they believe that
both you and they are justified in relying upon such opinions and
certificates);
(v) The Trust has been duly formed and is validly existing
as a trust in good standing under the laws of the State of Maryland,
with power and authority (trust and other) to own its interest in the
Operating Partnership and conduct any business necessary or appropriate
in connection therewith;
(vi) To 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 of their
respective subsidiaries is a party or of which any property of the
Company, the Operating Partnership or any of their respective
subsidiaries is the subject which, if determined adversely to the
Company, the Operating Partnership or any of their respective
subsidiaries, would individually or in the aggregate have a material
adverse effect on the current or future consolidated financial
position, shareholders' equity, including, with respect to the
Operating Partnership, partnership capital, or results of operations of
the Company, the Operating Partnership and its subsidiaries; and, to
such counsel's knowledge, no
16
<PAGE>
such proceedings are threatened or contemplated by governmental
authorities or threatened by others;
(vii) This Agreement and the Pricing Agreement with respect to
the Designated Shares have been duly authorized, executed and delivered
by each of the Company and the Operating Partnership;
(viii) The issue and sale of the Designated Shares being
delivered at such Time of Delivery by the Company and the compliance by
the Company and the Operating Partnership with all of the provisions of
this Agreement and the Pricing Agreement with respect to the Designated
Shares and the consummation of the transactions herein and therein
contemplated and the application of the proceeds from the sale of the
Shares as described in the Prospectus will not result in a breach or
violation of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument known to such counsel to which the Company, the
Operating Partnership or any of their respective subsidiaries is a
party or by which the Company, the Operating Partnership or any of
their respective subsidiaries is bound or to which any of the property
or assets of the Company, the Operating Partnership or any of their
respective subsidiaries is subject, nor will such action result in any
violation of the provisions of the Amended Charter or By-laws of the
Company, the Operating Partnership Agreement of the Operating
Partnership 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 of
their respective subsidiaries or any of their properties;
(ix) No consent, approval, authorization, order, registration
or qualification of or with any such court or governmental agency or
body is required for the issue and sale of the Designated Shares being
delivered at such Time of Delivery or the consummation by the Company
and the Operating Partnership of the transactions contemplated by this
Agreement or such Pricing Agreement, except such as have been obtained
under the Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under state
securities or Blue Sky laws in connection with the purchase and
distribution of the Designated Shares by the Underwriters;
(x) To such counsel's knowledge, neither the Company, the
Operating Partnership nor any of their respective subsidiaries is in
violation of its Charter or By-laws, or, in the case of the Operating
Partnership, the Operating Partnership Agreement, or in default in the
performance or observance of any material obligation, agreement,
covenant or condition contained in any indenture, mortgage, deed of
trust, loan agreement, lease or other agreement or instrument known to
such counsel to which the Company is a party or by which the Company,
the Operating
17
<PAGE>
Partnership or any of their respective subsidiaries or any of their
properties may be bound;
(xi) Each of the Company's partnership subsidiaries,
including, without limitation, the Operating Partnership, will be
treated for Federal income tax purposes as a partnership and not as an
association taxable as a corporation and will not be treated as a
"publicly traded partnership" as defined in the Code;
(xii) Commencing with the Company's taxable year ending
December 31, 1994 and assuming that the elections and other procedural
steps described in the Prospectus under the caption "Federal Income Tax
Considerations" are completed by the Company in a timely fashion, the
Company has been organized in conformity with the requirements for
qualification as a REIT, and its current and proposed method of
operation will enable it to meet the requirements for qualification and
taxation as a REIT under the Code; and each of the Company's
subsidiaries that is organized as a partnership or a limited liability
company, including, without limitation, the Operating Partnership, will
be treated for federal income tax purposes as a partnership and not as
an association taxable as a corporation and will not be treated as a
"publicly traded partnership" as defined in the Code;
(xiii) The statements set forth in the Prospectus under the
captions "Description of Capital Stock" and "Restrictions on Transfer
of Capital Stock", insofar as they purport to constitute a summary of
the terms of the Shares, under the captions "Certain Federal Income Tax
Considerations" and "Federal Income Tax Considerations", under the
captions "Underwriting" and "Plan of Distribution" and under Item 15 of
Part II of the Registration Statement, insofar as they purport to
describe the provisions of the laws and documents referred to therein,
are accurate, complete and fair in all material respects;
(xiv) Neither the Company nor the Operating Partnership is,
and (assuming the application by the Company of the proceeds of the
issue and sale of the Shares in the manner described in the Prospectus
under the caption "Use of Proceeds") after giving effect to the issue
and sale of the Shares by the Company will not be, an "investment
company" or an entity "controlled" by an "investment company", as such
terms are defined in the Investment Company Act;
(xv) The documents incorporated by reference in the
Prospectus as amended or supplemented (other than the financial
statements and related schedules and other financial and statistical
information therein, as to which such counsel need express no opinion),
when they became effective or were filed with the Commission, as the
case may be, complied as to form in all material respects with the
requirements of the Act or the Exchange Act, as applicable, and the
rules and regulations of the Commission thereunder; and such counsel
has no reason to believe
18
<PAGE>
that any of such documents, when they became effective or were so
filed, as the case may be, contained, in the case of a registration
statement which became effective under the Act, an untrue statement of
a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading, or, in the case of other documents which were filed under
the Act or the Exchange Act with the Commission, an untrue statement of
a material fact or omitted to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under
which they were made when such documents were so filed, not misleading;
and
(xvi) The Registration Statement and the Prospectus as amended
or supplemented, and any further amendments and supplements thereto
made by the Company prior to such Time of Delivery (other than the
financial statements and related schedules and other financial and
statistical information therein, as to which such counsel need express
no opinion) comply as to form in all material respects with the
requirements of the Act and the rules and regulations thereunder;
although they do not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the
Registration Statement or the Prospectus, except for those referred to
in the opinion in subsection (xiii) of this Section 7(c), they have no
reason to believe that, as of its effective date, the Registration
Statement or any further amendment thereto made by the Company prior to
such Time of Delivery (other than the financial statements and related
schedules and other financial and statistical information therein, as
to which such counsel need express no opinion) contained an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading or that, as of its date, the Prospectus as
amended or supplemented or any further amendment or supplement thereto
made by the Company prior to such Time of Delivery (other than the
financial statements and related schedules and other financial
information therein, as to which such counsel need express no opinion)
contained an untrue statement of a material fact or omitted to state a
material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading or that,
as of such Time of Delivery, either the Registration Statement or the
Prospectus as amended or supplemented or any further amendment or
supplement thereto made by the Company prior to such Time of Delivery
(other than the financial statements and related schedules and other
financial and statistical information therein, as to which such counsel
need express no opinion) contains an untrue statement of a material
fact or omits to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading; and they do not know of any amendment to the
Registration Statement required to be filed or of any contracts or
other documents of a character required to be filed as an exhibit to
the Registration Statement or required to be incorporated by reference
into the Prospectus as amended or supplemented or required to be
described in the
19
<PAGE>
Registration Statement or the Prospectus as amended or supplemented
which are not filed or incorporated by reference or described as
required.
(d) On the date of the Pricing Agreement for such Designated
Shares and at each Time of Delivery for such Designated Shares, the independent
accountants of the Company who have certified the financial statements of the
Company and its subsidiaries included or incorporated by reference in the
Registration Statement shall have furnished to the Representatives a letter,
dated the effective date of the Registration Statement or the date of the most
recent report filed with the Commission containing financial statements and
incorporated by reference in the Registration Statement, if the date of such
report is later than such effective date, and a letter dated such Time of
Delivery, respectively, to the effect set forth in Annex II hereto, and with
respect to such letter dated such Time of Delivery, as to such other matters as
the Representatives may reasonably request and in form and substance
satisfactory to the Representatives;
(e) (i) Neither the Company nor the Operating Partnership
shall have sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus as amended prior to the
date of the Pricing Agreement relating to the Designated Shares 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 as amended prior to the date of the Pricing
Agreement relating to the Designated Shares, and (ii) since the respective dates
as of which information is given in the Prospectus as amended prior to the date
of the Pricing Agreement relating to the Designated Shares there shall not have
been any change in the capital stock or partnership interests, as applicable,
long-term debt, obligations under capital leases or short-term borrowings of the
Company, the Operating Partnership or any of their respective subsidiaries or
any change, or any development involving a prospective change, in or affecting
the general affairs, management, financial position, shareholders' equity,
including, with respect to the Operating Partnership, partnership capital, or
results of operations of the Company, the Operating Partnership and their
respective subsidiaries, taken as a whole, otherwise than as set forth or
contemplated in the Prospectus as amended prior to the date of the Pricing
Agreement relating to the Designated Shares, the effect of which, in any such
case described in Clause (i) or (ii), is in the judgment of the Representatives
so material and adverse as to make it impracticable or inadvisable to proceed
with the public offering or the delivery of the Designated Shares being
delivered at such Time of Delivery on the terms and in the manner contemplated
in the Prospectus as amended relating to the Designated Shares;
(f) On or after the date of the Pricing Agreement relating to
the Designated Shares (i) no downgrading shall have occurred in the rating
accorded to the debt securities of the Company or the Operating Partnership by
any "nationally recognized statistical rating organization", as that term is
defined by the Commission for purposes of Rule 436(g)(2)
20
<PAGE>
under the Act, and (ii) no such organization shall have publicly announced that
it has under surveillance or review, with possible negative implications, its
rating of any of the debt securities of the Company or the Operating
Partnership;
(g) On or after the date of the Pricing Agreement relating to
the Designated Shares there shall not have occurred any of the following: (i) a
suspension or material limitation in trading in securities generally on the New
York Stock Exchange; (ii) a suspension or material limitation in trading in the
Company's securities on the New York Stock Exchange, (iii) a general moratorium
on commercial banking activities declared by either Federal or New York State
authorities; or (iv) the outbreak or escalation of hostilities involving the
United States or the declaration by the United States of a national emergency or
war, if the effect of any such event specified in this Clause (iv) in the
judgment of the Representatives makes it impracticable or inadvisable to proceed
with the public offering or the delivery of the Designated Shares being
delivered at such Time of Delivery on the terms and in the manner contemplated
in the Prospectus as first amended or supplemented relating to the Designated
Shares;
(h) The Shares to be sold at such Time of Delivery shall have
been duly listed, subject to notice of issuance, on the Exchange; and
(i) The Company shall have furnished or caused to be furnished
to the Representatives at each Time of Delivery for the Designated Shares
certificates of officers of the Company satisfactory to the Representatives as
to the accuracy of the representations and warranties of the Company herein at
and as of such Time of Delivery, as to the performance by the Company of all of
its obligations hereunder to be performed at or prior to such Time of Delivery,
as to the matters set forth in subsections (a) and (e) of this Section and as to
such other matters as you may reasonably request. In addition, the Company shall
to the extent set forth in the Pricing Agreement have furnished or caused to be
furnished to the Representatives at each Time of Delivery for the Designated
Shares certificates of good standing or valid existence issued by an appropriate
official of each of the several states in which the Company or the Operating
Partnership has been duly qualified as a foreign corporation or foreign
partnership, respectively, for the transaction of business or in which either
the Company or the Operating Partnership owns or leases, or, at such Time of
Delivery, proposes to own or lease, properties.
8. (a) The Company and the Operating Partnership, jointly and
severally, will indemnify and hold harmless each Underwriter against any losses,
claims, damages or liabilities, joint or several, to which such Underwriter may
become subject, under the 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, any preliminary prospectus supplement,
the Registration Statement, the Prospectus as amended or supplemented and any
other prospectus relating to the Shares, or any amendment or supplement thereto,
or
21
<PAGE>
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 each Underwriter for any
legal or other expenses reasonably incurred by such Underwriter in connection
with investigating or defending any such action or claim as such expenses are
incurred; provided, however, that the Company and the Operating Partnership
shall not 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 Preliminary
Prospectus, any preliminary prospectus supplement, the Registration Statement,
the Prospectus as amended or supplemented and any other prospectus relating to
the Shares, or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by any Underwriter
of Designated Shares through the Representatives expressly for use in the
Prospectus as amended or supplemented relating to such Shares.
(b) Each Underwriter will indemnify and hold harmless the
Company and the Operating Partnership against any losses, claims, damages or
liabilities, joint or several, to which the Company or the Operating Partnership
may become subject, under the 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, any preliminary prospectus supplement,
the Registration Statement, the Prospectus as amended or supplemented and any
other prospectus relating to the Shares, 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 Preliminary Prospectus, any preliminary
prospectus supplement, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Shares, or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through the
Representatives expressly for use therein; and will reimburse the Company and
the Operating Partnership for any legal or other expenses reasonably incurred by
the Company and the Operating Partnership in connection with investigating or
defending any such action or claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) 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,
22
<PAGE>
to the extent that it shall wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel 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. No indemnifying party shall, without the written consent of the
indemnified party, effect the settlement or compromise of, or consent to the
entry of any judgment with respect to, any pending or threatened action or claim
in respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified party is an actual or potential party to such
action or claim) unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability arising out of
such action or claim and (ii) does not include any statement as to or an
admission of fault, culpability or a failure to act, by or on behalf of any
indemnified party.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) 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 of the Designated Shares on the other from the
offering of the Designated Shares. If, however, the allocation provided by the
immediately preceding sentence is not permitted by applicable law or if the
indemnified party failed to give the notice required under subsection (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 of the Designated
Shares 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 such Underwriters on the other shall be deemed to be in the same proportion
as the total net proceeds from such offering (before deducting expenses)
received by the Company and the Operating Partnership bear to the total
underwriting discounts and commissions received by such Underwriters. 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 and the Operating Partnership on the one hand or such Underwriters on
the other and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
23
<PAGE>
The Company, the Operating Partnership and the Underwriters agree that it would
not be just and equitable if contributions pursuant to this subsection (d) 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 (d). 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 (d) 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 (d), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at which
the applicable Designated Shares underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of 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 Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The obligations of the Underwriters of Designated
Shares in this subsection (d) to contribute are several in proportion to their
respective underwriting obligations with respect to such Shares and not joint.
(e) The obligations of the Company and the Operating
Partnership under this Section 8 shall be in addition to any liability which the
Company and the Operating Partnership may otherwise have and shall extend, upon
the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section 8 shall be in addition to any liability which
the respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each officer and director of the Company and each
partner of the Operating Partnership and to each person, if any, who controls
the Company and the Operating Partnership within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to purchase
the Firm Shares or Optional Shares which it has agreed to purchase under the
Pricing Agreement relating to such Shares, the Representatives may in their
discretion arrange for themselves or another party or other parties to purchase
such Shares on the terms contained herein. If within thirty-six hours after such
default by any Underwriter the Representatives do not arrange for the purchase
of such Shares, then the Company shall be entitled to a further period of
thirty-six hours within which to procure another party or other parties
satisfactory to the Representatives to purchase such Shares on such terms. In
the event that, within the respective prescribed period, the Representatives
notify the Company that they have so arranged for the purchase of such Shares,
or the Company notifies the Representatives that it has so arranged for the
purchase of such Shares, the Representatives or the Company shall have the right
to postpone a Time of Delivery for such Shares for a period of not more than
seven days, in order to effect whatever changes may thereby be made necessary in
the
24
<PAGE>
Registration Statement or the Prospectus as amended or supplemented, or in any
other documents or arrangements, and the Company agrees to file promptly any
amendments or supplements to the Registration Statement or the Prospectus which
in the opinion of the Representatives may thereby be made necessary. The term
"Underwriter" as used in this Agreement shall include any person substituted
under this Section with like effect as if such person had originally been a
party to the Pricing Agreement with respect to such Designated Shares.
(b) If, after giving effect to any arrangements for the
purchase of the Shares of a defaulting Underwriter or Underwriters by the
Representatives and the Company as provided in subsection (a) above, the
aggregate number of such Shares which remains unpurchased does not exceed
one-eleventh of the aggregate number of all the Shares to be purchased at such
Time of Delivery, then the Company shall have the right to require each
non-defaulting Underwriter to purchase the number of shares which such
Underwriter agreed to purchase under the Pricing Agreement relating to the
Designated Shares and, in addition, to require each non-defaulting Underwriter
to purchase its pro rata share (based on the number of Shares which such
Underwriter agreed to purchase under such Pricing Agreement) of the Shares of
such defaulting Underwriter or Underwriters for which such arrangements have not
been made; but nothing herein shall relieve a defaulting Underwriter from
liability for its default.
(c) If, after giving effect to any arrangements for the
purchase of the Firm Shares or Optional Shares, as the case may be, of a
defaulting Underwriter or Underwriters by the Representatives and the Company as
provided in subsection (a) above, the aggregate number of such Shares which
remains unpurchased exceeds one-eleventh of the aggregate number of all the
Shares to be purchased at such Time of Delivery as referred to in subsection (b)
above, or if the Company shall not exercise the right described in subsection
(b) above to require non-defaulting Underwriters to purchase Shares of a
defaulting Underwriter or Underwriters, then the Pricing Agreement relating to
such Firm Shares or the Over-allotment Option relating to such Optional Shares,
as the case may be, shall thereupon terminate, without liability on the part of
any non-defaulting Underwriter or the Company, except for the expenses to be
borne by the Company and the Underwriters as provided in Section 6 hereof and
the indemnity and contribution agreements in Section 8 hereof; but nothing
herein shall relieve a defaulting Underwriter from liability for its default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Company, the Operating Partnership and the several
Underwriters, as set forth in this 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 any Underwriter or any controlling person of any
Underwriter, or the Company, the Operating Partnership or any officer or
director or controlling person of the Company or the Operating Partnership, and
shall survive delivery of and payment for the Shares.
25
<PAGE>
11. If any Pricing Agreement or Over-allotment Option shall be
terminated pursuant to Section 9 hereof, neither the Company nor the Operating
Partnership shall then be under any liability to any Underwriter with respect to
the Firm Shares or Optional Shares with respect to which such Pricing Agreement
shall have been terminated except as provided in Sections 6 and 8 hereof; but,
if for any other reason, any Designated Shares are not delivered by or on behalf
of the Company as provided herein, the Company will reimburse the Underwriters
through the Representatives for all out-of-pocket expenses approved in writing
by the Representatives, including fees and disbursements of counsel, reasonably
incurred by the Underwriters in making preparations for the purchase, sale and
delivery of such Designated Shares, but the Company shall then be under no
further liability to any Underwriter with respect to such Designated Shares
except as provided in Sections 6 and 8 hereof.
12. In all dealings hereunder, the Representatives of the Underwriters
of Designated Shares shall act on behalf of each of such Underwriters, and the
parties hereto shall be entitled to act and rely upon any statement, request,
notice or agreement on behalf of any Underwriter made or given by such
Representatives jointly or by such of the Representatives, if any, as may be
designated for such purpose in the Pricing Agreement.
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 the address of the Representatives as set forth in the
Pricing Agreement; and 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: Secretary; provided,
however, that any notice to an Underwriter pursuant to Section 8(c) hereof shall
be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its Underwriters' Questionnaire, or
telex constituting such Questionnaire, which address will be supplied to the
Company by the Representatives upon request. Any such statements, requests,
notices or agreements shall take effect upon receipt thereof.
13. This Agreement and each Pricing Agreement shall be binding upon,
and inure solely to the benefit of, the Underwriters, the Company, the Operating
Partnership and, to the extent provided in Sections 8 and 10 hereof, the
officers and directors of the Company and each person who controls the Company,
the Operating Partnership or any Underwriter, 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 any such
Pricing Agreement. No purchaser of any of the Shares from any Underwriter shall
be deemed a successor or assign by reason merely of such purchase.
14. Time shall be of the essence of each 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.
26
<PAGE>
15. This Agreement and each Pricing Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
16. This Agreement and each Pricing Agreement may be executed by any
one or more of the parties hereto and thereto in any number of counterparts,
each of which shall be deemed to be an original, but all such respective
counterparts shall together constitute one and the same instrument.
If the foregoing is in accordance with your understanding, please sign
and return to us five counterparts hereof, and upon the acceptance hereof by
you, on behalf of each of the Underwriters, this letter and such acceptance
hereof shall constitute a binding agreement between each of the Underwriters,
the Company and the Operating Partnership. It is understood that your acceptance
of this letter on behalf of each of the Underwriters is pursuant to the
authority set forth in a form of Agreement among Underwriters, the form of which
shall be submitted to the Company for examination upon request, but without
warranty on your part as to the authority of the signers thereof.
27
<PAGE>
Very truly yours,
Storage USA, Inc.
By: ____________________________
Name:
Title:
SUSA Partnership, L.P.
By: Storage USA, Inc.,
General Partner
By: ____________________________
Name:
Title:
Accepted as of the date hereof:
Goldman, Sachs & Co.
By: ___________________________
(Goldman, Sachs & Co.)
28
<PAGE>
ANNEX I
Pricing Agreement
Goldman, Sachs & Co.,
[Name(s) of Co-Representative(s),]
As Representatives of the several
Underwriters named in Schedule I hereto,
[c/o Goldman, Sachs & Co.,
85 Broad Street,
New York, New York 10004.]
, 19..
Ladies and Gentlemen:
Storage USA, Inc., a Tennessee corporation (the "Company"),
proposes, subject to the terms and conditions stated herein and in the
Underwriting Agreement, dated March ___, 1997 (the "Underwriting Agreement"),
between the Company and SUSA Partnership, L.P., a Tennessee limited partnership
(the "Operating Partnership"), on the one hand and Goldman, Sachs & Co. [and
(names of Co-Representatives named therein)] on the other hand], to issue and
sell to the Underwriters named in Schedule I hereto (the "Underwriters") the
Shares specified in Schedule II hereto (the "Designated Shares") consisting of
Firm Shares and any Optional Shares the Underwriters may elect to purchase. Each
of the provisions of the Underwriting Agreement is incorporated herein by
reference in its entirety, and shall be deemed to be a part of this Agreement to
the same extent as if such provisions had been set forth in full herein; and
each of the representations and warranties set forth therein shall be deemed to
have been made at and as of the date of this Pricing Agreement, except that each
representation and warranty which refers to the Prospectus in Section 2 of the
Underwriting Agreement shall be deemed to be a representation or warranty as of
the date of the Underwriting Agreement in relation to the Prospectus (as therein
defined), and also a representation and warranty as of the date of this Pricing
Agreement in relation to the Prospectus as amended or supplemented relating to
the Designated Shares which are the subject of this Pricing Agreement. Each
reference to the Representatives herein and in the provisions of the
Underwriting Agreement so incorporated by reference shall be deemed to refer to
you. Unless otherwise defined herein, terms defined in the Underwriting
Agreement are used herein as therein defined. The Representatives designated to
act on behalf of the Representatives and on behalf of each of the Underwriters
of the Designated Shares pursuant to Section 12 of the Underwriting Agreement
and the address of the Representatives referred to in such Section 12 are set
forth in Schedule II hereto.
An amendment to the Registration Statement, or a supplement to
the Prospectus, as the case may be, relating to the Designated Shares, in the
form heretofore delivered to you is now proposed to be filed with the
Commission.
1
<PAGE>
Subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, the Company agrees to
issue and sell to each of the Underwriters, and each of the Underwriters agrees,
severally and not jointly, to purchase from the Company, at the time and place
and at the purchase price to the Underwriters set forth in Schedule II hereto,
the number of Firm Shares set forth opposite the name of such Underwriter in
Schedule I hereto and, (b) in the event and to the extent that the Underwriters
shall exercise the election to purchase Optional Shares, as provided below, the
Company agrees to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Company at
the purchase price to the Underwriters set forth in Schedule II hereto that
portion of the number of Optional Shares as to which such election shall have
been exercised.
The Company hereby grants to each of the Underwriters the right
to purchase at their election up to the number of Optional Shares set forth
opposite the name of such Underwriter in Schedule I hereto on the terms referred
to in the paragraph above for the sole purpose of covering over-allotments in
the sale of the Firm Shares. Any such election to purchase Optional Shares may
be exercised by written notice from the Representatives to the Company given
within a period of 30 calendar days after the date of this Pricing Agreement,
setting forth the aggregate number of Optional Shares to be purchased and the
date on which such Optional Shares are to be delivered, as determined by the
Representatives, but in no event earlier than the First Time of Delivery or,
unless the Representatives and the Company otherwise agree in writing, no
earlier than two or later than ten business days after the date of such notice.
If the foregoing is in accordance with your understanding,
please sign and return to us ___ counterparts hereof, and upon acceptance hereof
by you, on behalf of each of the Underwriters, this letter and such acceptance
hereof, including the provisions of the Underwriting Agreement incorporated
herein by reference, shall constitute a binding agreement between each of the
Underwriters and the Company. It is understood that your acceptance of this
letter on behalf of each of the Underwriters is or will be pursuant to the
authority set forth in a form of Agreement among Underwriters, the form of which
shall be submitted to the Company for examination, upon request, but without
warranty on the part of the Representatives as to the authority of the signers
thereof.
Very truly yours,
Storage USA, Inc.
By: ____________________________
Name:
Title:
2
<PAGE>
SUSA Partnership, L.P.
By: Storage USA, Inc.
By: ____________________________
Name:
Title:
Accepted as of the date hereof:
[Goldman, Sachs & Co.
[Name(s) of Co-Representative(s)]
[By:].........................................................
(Goldman, Sachs & Co.)
On behalf of each of the Underwriters
3
<PAGE>
SCHEDULE I
<TABLE>
<CAPTION>
Number of
Optional
Shares to be
Total Number of Purchased if
Firm Shares Maximum Option
Underwriter to be Purchased Exercised
----------- --------------- ---------
<S> <C>
Goldman, Sachs & Co..........................................
--------------- ---------
Total...............................................
=============== =========
</TABLE>
4
<PAGE>
SCHEDULE II
Title of Designated Shares:
Number of Designated Shares:
Number of Firm Shares:
Maximum Number of Optional Shares:
Initial Offering Price to Public:
[$........ per Share]
Purchase Price by Underwriters:
[$........ per Share]
Form of Designated Shares:
Definitive form, to be made available for checking [and packaging] at least
twenty-four hours prior to the Time of Delivery at the office of [The
Depository Trust Company or its designated custodian] [the Representatives]
Specified Funds for Payment of Purchase Price:
[[New York] Clearing House (next day) funds] [Wire transfer of same day
funds]
[Describe any blackout provisions with respect to the Designated Shares]
Time of Delivery:
......... a.m. (New York City time), .................., 19..
Closing Location:
Names and Addresses of Representatives:
Designated Representatives:
Address for Notices, etc.:
Other Terms:
<PAGE>
ANNEX II
Pursuant to Section 7(d) of the Underwriting Agreement, the
accountants shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with respect
to the Company and its subsidiaries within the meaning of the Act and the
applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules audited (and, if applicable,
financial forecasts and/or pro forma financial information) examined by them and
included or incorporated by reference in the Registration Statement or the
Prospectus comply as to form in all material respects with the applicable
accounting requirements of the Act or the Exchange Act, as applicable, 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 consolidated interim financial
statements, selected financial data, pro forma financial information, financial
forecasts and/or condensed financial statements derived from audited financial
statements of the Company for the periods specified in such letter, as indicated
in their reports thereon, copies of which have been separately furnished to the
representative or representatives of the Underwriters (the "Representatives")
such term to include an Underwriter or Underwriters who act without any firm
being designated as its or their representatives;
(iii) They have made a review in accordance with standards
established by the American Institute of Certified Public Accountants of the
unaudited condensed consolidated statements of income, consolidated balance
sheets and consolidated statements of cash flows included in the Prospectus
and/or included in the Company's quarterly report on Form 10- Q incorporated by
reference into the Prospectus as indicated in their reports thereon copies of
which have been separately furnished to the Representatives; and on the basis of
specified procedures including inquiries of officials of the Company who have
responsibility for financial and accounting matters regarding whether the
unaudited condensed consolidated financial statements referred to in paragraph
(vi)(A)(i) below comply as to form in all material respects with the applicable
accounting requirements of the Act and the Exchange Act and the related
published rules and regulations, nothing came to their attention that caused
them to believe that the unaudited condensed consolidated financial statements
do not comply as to form in all material respects with the applicable accounting
requirements of the Act and the Exchange Act and the related published rules and
regulations;
(iv) The unaudited selected financial information with respect to
the consolidated results of operations and financial position of the Company for
the fiscal years included in the Prospectus and included or incorporated by
reference in Item 6 of the Company's
1
<PAGE>
Annual Report on Form 10-K for the most recent fiscal year agrees with the
corresponding amounts (after restatement where applicable) in the audited
consolidated financial statements for such fiscal years which were included or
incorporated by reference in the Company's Annual Reports on Form 10-K for such
fiscal years;
(v) They have compared the information in the Prospectus under
selected captions with the disclosure requirements of Regulation S-K and on the
basis of limited procedures specified in such letter nothing came to their
attention as a result of the foregoing procedures that caused them to believe
that this information does not conform in all material respects with the
disclosure requirements of Items 301, 302, 402 and 503(d), respectively, of
Regulation S-K;
(vi) On the basis of limited procedures, not constituting an
examination 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, the Operating Partnership and their subsidiaries,
inspection of the minute books of the Company and its subsidiaries since the
date of the latest audited financial statements included or incorporated by
reference in the Prospectus, inquiries of officials of the Company, the
Operating Partnership and their 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) (i) the unaudited condensed consolidated statements of
income, consolidated balance sheets and consolidated statements of cash
flows included in the Prospectus and/or included or incorporated by
reference in the Company's Quarterly Reports on Form 10-Q incorporated by
reference in the Prospectus do not comply as to form in all material
respects with the applicable accounting requirements of the Exchange Act
and the related published rules and regulations, or (ii) any material
modifications should be made to the unaudited condensed consolidated
statements of income, consolidated balance sheets and consolidated
statements of cash flows included in the Prospectus or included in the
Company's Quarterly Reports on Form 10-Q incorporated by reference in the
Prospectus for them to be in conformity with generally accepted
accounting principles;
(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 or incorporated by reference in the Company's Annual Report on
Form 10-K for the most recent fiscal year;
2
<PAGE>
(C) the unaudited financial statements which were not included
in the Prospectus but from which were derived the 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 financial statements included
or incorporated by reference in the Company's Annual Report on Form 10-K
for the most recent fiscal year;
(D) any unaudited pro forma consolidated condensed financial
statements included or incorporated by reference in the Prospectus do not
comply as to form in all material respects with the applicable accounting
requirements of the Act and the published rules and regulations
thereunder or the pro forma adjustments have not been properly applied to
the historical amounts in the compilation of those statements;
(E) 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 balance sheet included or
incorporated by reference in the Prospectus) or any increase in the
consolidated long-term debt of the Company and the Operating Partnership,
as applicable, and their subsidiaries, or any decreases in consolidated
net current assets or stockholders' equity or other items specified by
the Representatives, or any increases in any items specified by the
Representatives, in each case as compared with amounts shown in the
latest balance sheet included or incorporated by reference 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
(F) for the period from the date of the latest financial
statements included or incorporated by reference in the Prospectus to the
specified date referred to in Clause (E) 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
Representatives, or any increases in any items specified by the
Representatives, in each case as compared with the comparable period of
the preceding year and with any other period of corresponding length
specified by the Representatives, except in each case for increases or
decreases which the Prospectus discloses have occurred or may occur or
which are described in such letter; and
(vii) In addition to the audit referred to in their report(s)
included or incorporated by reference in the Prospectus and the limited
procedures, inspection of minute books, inquiries and other procedures referred
to in paragraphs (iii) and (vi) above, they have carried out certain specified
procedures, not constituting an audit in accordance with
3
<PAGE>
generally accepted auditing standards, with respect to certain amounts,
percentages and financial information specified by the Representatives which are
derived from the general accounting records of the Company, the Operating
Partnership and their subsidiaries, which appear in the Prospectus (excluding
documents incorporated by reference), or in Part II of, or in exhibits and
schedules to, the Registration Statement specified by the Representatives or in
documents incorporated by reference in the Prospectus specified by the
Representatives, and have compared certain of such amounts, percentages and
financial information with the accounting records of the Company, the Operating
Partnership and their subsidiaries and have found them to be in agreement.
All references in this Annex II to the Prospectus shall be deemed to
refer to the Prospectus (including the documents incorporated by reference
therein) as defined in the Underwriting Agreement as of the date of the letter
delivered on the date of the Pricing Agreement for purposes of such letter and
to the Prospectus as amended or supplemented (including the documents
incorporated by reference therein) in relation to the applicable Designated
Securities for purposes of the letter delivered at the Time of Delivery for such
Designated Securities.
4
<PAGE>
Pricing Agreement
Goldman, Sachs & Co., 85 Broad Street, New York, New York 10004.
March 11, 1997
Ladies and Gentlemen:
Storage USA, Inc., a Tennessee corporation (the "Company"),
proposes, subject to the terms and conditions stated herein and in the
Underwriting Agreement, dated March 11, 1997 (the "Underwriting Agreement"),
between the Company and SUSA Partnership, L.P., a Tennessee limited partnership
(the "Operating Partnership"), on the one hand and Goldman, Sachs & Co. on the
other hand, to issue and sell to the Underwriter named in Schedule I hereto (the
"Underwriter") the Shares specified in Schedule II hereto (the "Designated
Shares") consisting of Firm Shares and any Optional Shares the Underwriter may
elect to purchase. Each of the provisions of the Underwriting Agreement is
incorporated herein by reference in its entirety, and shall be deemed to be a
part of this Agreement to the same extent as if such provisions had been set
forth in full herein; and each of the representations and warranties set forth
therein shall be deemed to have been made at and as of the date of this Pricing
Agreement, except that each representation and warranty which refers to the
Prospectus in Section 2 of the Underwriting Agreement shall be deemed to be a
representation or warranty as of the date of the Underwriting Agreement in
relation to the Prospectus (as therein defined), and also a representation and
warranty as of the date of this Pricing Agreement in relation to the Prospectus
as amended or supplemented relating to the Designated Shares which are the
subject of this Pricing Agreement. Each reference to the Representatives herein
and in the provisions of the Underwriting Agreement so incorporated by reference
shall be deemed to refer to you. Unless otherwise defined herein, terms defined
in the Underwriting Agreement are used herein as therein defined. The address of
the Underwriter referred to in Section 12 of the Underwriting Agreement is
Goldman, Sachs & Co., 85 Broad Street, New York, New York 10004.
An amendment to the Registration Statement, or a supplement to
the Prospectus, as the case may be, relating to the Designated Shares, in the
form heretofore delivered to you is now proposed to be filed with the
Commission.
Subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, the Company agrees to
issue and sell to the Underwriter, and the Underwriter agrees to purchase from
the Company, at the time and place and at the purchase price to the Underwriter
set forth in Schedule II hereto, the number of Firm Shares set forth opposite
the name of such Underwriter in Schedule I hereto and, (b) in the event and to
the extent that the Underwriter shall exercise the
<PAGE>
election to purchase Optional Shares, as provided below, the Company agrees to
issue and sell to the Underwriter, and the Underwriter agrees to purchase from
the Company at the purchase price to the Underwriter set forth in Schedule II
hereto that portion of the number of Optional Shares as to which such election
shall have been exercised.
The Company hereby grants to the Underwriter the right to
purchase at its election up to the number of Optional Shares set forth opposite
the name of such Underwriter in Schedule I hereto on the terms referred to in
the paragraph above for the sole purpose of covering over-allotments in the sale
of the Firm Shares. Any such election to purchase Optional Shares may be
exercised by written notice from the Underwriter to the Company given within a
period of 30 calendar days after the date of this Pricing Agreement, setting
forth the aggregate number of Optional Shares to be purchased and the date on
which such Optional Shares are to be delivered, as determined by the
Underwriter, but in no event earlier than the First Time of Delivery or, unless
the Underwriter and the Company otherwise agree in writing, no earlier than two
or later than ten business days after the date of such notice.
If the foregoing is in accordance with your understanding,
please sign and return to us four counterparts hereof, and upon acceptance
hereof by you, this letter and such acceptance hereof, including the provisions
of the Underwriting Agreement incorporated herein by reference, shall constitute
a binding agreement between you and the Company.
<PAGE>
Very truly yours,
Storage USA, Inc.
By:_____________________________
Name:
Title:
SUSA Partnership, L.P.
By: Storage USA, Inc.
By:_____________________________
Name:
Title:
Accepted as of the date hereof:
Goldman, Sachs & Co.
By:.................................
(Goldman, Sachs & Co.)
<PAGE>
SCHEDULE I
<TABLE>
<CAPTION>
Number of
Optional
Shares to be
Total Number of Purchased if
Firm Shares Maximum Option
Underwriter to be Purchased Exercised
----------- --------------- ---------
<S> <C>
Goldman, Sachs & Co.......................................... 1,400,000 210,000
---------- ---------
Total............................................... 1,400,000 210,000
========= ========
</TABLE>
<PAGE>
SCHEDULE II
Title of Designated Shares:
Common Stock, par value $.01 per share
Number of Designated Shares:
Number of Firm Shares: 1,400,000
Maximum Number of Optional Shares: 210,000
Initial Offering Price to Public:
The Designated Shares may be offered by the Underwriter from time to time
for sale in one or more transactions on the NYSE or otherwise, at market
prices prevailing at the time of sale, at prices related to prevailing
market prices, or at negotiated prices, subject to prior sale when, as and
if delivered to and accepted by the Underwriter. The Underwriter may effect
such transactions by selling Designated Shares to or through dealers.
Purchase Price by Underwriter:
$36.241875 per Share
Form of Designated Shares:
Definitive form, to be made available for checking at least twenty-four
hours prior to the Time of Delivery at the office of Goldman, Sachs & Co.,
85 Broad Street, New York, New York 10004.
Specified Funds for Payment of Purchase Price:
Wire transfer of same day funds.
Lock-out Provision:
Notwithstanding Section 5(e) of the Underwriting Agreement and in place of
such Section 5(e), the Company has agreed that during the period beginning
from the date of this Pricing Agreement and continuing to and including the
date 90 days after the date of this Pricing Agreement, not to offer, sell,
contract to sell or otherwise dispose of any securities of the Company
(other than pursuant to employee stock incentive plans or dividend
reinvestment plans existing, or on the conversion or exchange of
convertible or exchangeable securities outstanding, on the date of this
Pricing Agreement) which are substantially similar to the Shares or which
are convertible or exchangeable into securities which are substantially
similar to the Shares, without the prior written consent of Goldman, Sachs
& Co., except for the shares of Common Stock offered hereby or to be sold
to Security Capital U.S. Realty as described in the Prospectus Supplement
dated the date hereof or units of partnership interest in the Operating
Partnership (provided that with respect to any units issued after the date
hereof, the conversion of such units to Common Stock will be subject to the
90 day restriction described above).
Time of Delivery:
10:00 a.m. (New York City time), March 17, 1997
Closing Location:
c/o Sullivan & Cromwell, 125 Broad Street, New York, New York 10004
March 14, 1997
Storage USA, Inc.
10440 Little Patuxent Parkway
Suite 1100
Columbia, Maryland 21044
Storage USA, Inc.
Qualification as
Real Estate Investment Trust
Ladies and Gentlemen:
We have acted as counsel to Storage USA, Inc., a Tennessee
corporation (the "Company"), in connection with the preparation of a Form S-3
registration statement (the "Registration Statement") filed with the Securities
and Exchange Commission on February 26, 1997 with respect to the offering and
sale (the "Offering") of 1,400,000 shares of common stock of the Company, par
value $.01 per share (the "Common Stock"), and the Company's contribution of the
net proceeds of the Offering, through its wholly-owned subsidiary, Storage USA
Trust (the "Trust"), to SUSA Partnership L.P., a Tennessee limited partnership
(the "Operating Partnership"), in exchange for an additional limited partnership
interest in the Operating Partnership. The Operating Partnership currently owns,
directly or indirectly, 242 self-storage facilities. You have requested our
opinion regarding certain U.S. federal income tax matters in connection with the
Offering.
The Operating Partnership owns interests in certain
self-storage facilities through the following subsidiary partnerships (the
"Subsidiary Partnerships"): (i) Storage-USA of Palm Beach County Limited
Partnership, a Maryland limited partnership, (ii) SUSA/38th Avenue, Capitola,
L.P., a California limited partnership, (iii) Clarendon Storage Associates
Limited Partnership, a Virginia
<PAGE>
Storage USA, Inc.
March 14, 1997
Page 2
limited partnership, (iv) Buzzman Partners I, Limited Partnership, a
Pennsylvania limited partnership, (v) Buzzman Partners II, Limited Partnership,
a Pennsylvania limited partnership, (vi) Tamiami Mini-Storage Partners, Ltd., a
Florida limited partnership, (vii) 441 Mini-Storage Partners, Ltd., a Florida
limited partnership, (viii) Sunset Mini-Storage Partners, Ltd., a Florida
limited partnership, (ix) Southeast Mini-Storage Limited Partners, a Florida
limited partnership, (x) Dade County Mini-Storage Associates, Ltd., a Florida
limited partnership, (xi) Preston Self Storage, Ltd., a Texas limited
partnership, (xii) SUSA Hackensack, LP, a Tennessee limited partnership, (xiii)
SUSA Harrison, LP, a Tennessee limited partnership, (xiv) SUSA Seacaucus, LP, a
Tennessee limited partnership, (xv) SUSA Orange, LP, a Tennessee limited
partnership, (xvi) Cole/Morgan, Ltd., a Texas limited partnership, (xvii) SUSA
Nashville, L.P., a Tennessee limited partnership, and (xviii) SUSA Mesa, L.P. a
Tennessee limited partnership.
The Operating Partnership also owns 94% of the nonvoting
stock, and 5% of the voting stock, of SUSA Management, Inc., a Tennessee
corporation ("Management"). The remaining stock of Management is owned by Dean
Jernigan. Management conducts all of the Company's third-party management
business and its sales of locks and storage supplies. In addition, the Operating
Partnership owns 100% of the nonvoting stock of each of Storage USA Franchise
Corp., a Tennessee corporation ("Franchise"), and Storage USA Construction,
Inc., a Tennessee corporation ("Construction"), representing 97.5% of the equity
interests in each such corporation. The voting stock of Franchise and
Construction, representing 2.5% of the equity interests in each such
corporation, is owned by Dean Jernigan.
In giving the opinions set forth below, we have examined the following:
1. the Company's Charter, as amended and re-stated;
2. the Company's Bylaws;
3. the prospectus (the "Prospectus") and the related
prospectus supplement (the "Prospectus Supplement") contained as part of the
Registration Statement;
<PAGE>
Storage USA, Inc.
March 14, 1997
Page 3
4. the Second Amended and Restated Agreement of Limited
Partnership of the Operating Partnership, dated as of September 21, 1994, among
the Company, as general partner, and several limited partners, as amended on
March 19, 1996, June 14, 1996, and August 14, 1996 (the "Operating Partnership
Agreement");
5. the Agreement of Limited Partnership of Storage-USA of Palm
Beach County Limited Partnership, dated May 2, 1991, as amended by the Third
Amendment to the Agreement of Limited Partnership, dated June 30, 1996, among
the Company, the Operating Partnership, Franchise, and other limited partners;
6. the Limited Partnership Agreement of SUSA/38th Avenue,
Capitola, L.P., dated June 1, 1995, among the Operating Partnership, as general
partner, and several limited partners;
7. the Limited Partnership Agreement of Clarendon Storage
Associates Limited Partnership, dated as of November 11, 1994, among Highclar,
L.L.C., a Virginia limited liability company, as general partner, the Operating
Partnership as general partner, Highland Limited Partnership, a Virginia limited
partnership, as limited partner, and the Operating Partnership as limited
partner;
8. the Second Amended Limited Partnership Agreement of Buzzman
Partners I, Limited Partnership, dated May 22, 1996, between among CRM Realty II
Joint Venture, a New York joint venture ("CRM"), the Operating Partnership, as
general and limited partner, and Management, as limited partner;
9. the Second Amended Limited Partnership Agree- ment of
Buzzman Partners II, Limited Partnership, dated May 22, 1996, among CRM, the
Operating Partnership, as general and limited partner, and Management, as
limited partner;
10. the Amended and Restated Agreement of Limited Partnership
of Tamiami Mini-Storage Partners, L.P., dated as of May 19, 1995, between the
Operating Partnership, as general partner, and the Company, as limited partner;
<PAGE>
Storage USA, Inc.
March 14, 1997
Page 4
11. the Amended and Restated Agreement of Limited Partnership
of 441 Mini-Storage Partners, Ltd., dated as of May 19, 1995, between the
Operating Partnership, as general partner, and the Company, as limited partner;
12. the Amended and Restated Agreement of Limited Partnership
of Sunset Mini-Storage Partners, Ltd., dated as of May 19, 1995, between the
Operating Partnership, as general partner, and the Company, as limited partner;
13. the Amended and Restated Agreement of Limited Partnership
of Southeast Mini-Storage Limited Partners, dated September 7, 1995, between the
Operating Partnership, as general partner, and Management, as limited partner;
14. the Amended and Restated Agreement of Limited Partnership
of Dade County Mini-Storage Associates, Ltd., dated September 7, 1995, between
the Operating Partnership, as general partner, and Management, as limited
partner;
15. the Agreement of Limited Partnership of Preston Self
Storage, Ltd., dated November 30, 1993, as amended by the First Amendment to the
Agreement of Limited Partnership, dated November 9, 1995, between Peachtree
Development II, Inc., a Texas corporation, as general partner, and the Operating
Partnership, as limited partner;
16. the Limited Partnership Agreement of SUSA Hackensack LP,
dated November 27, 1996, between SUSA New Jersey, Inc., a wholly-owned
subsidiary of Franchise, as general partner ("New Jersey, Inc.", and the
Operating Partnership, as limited partner;
17. the Limited Partnership Agreement of SUSA Harrison LP,
dated November 27, 1996, between New Jersey, Inc., as general partner, and the
Operating Partnership, as limited partner;
18. the Limited Partnership Agreement of SUSA Seacaucus LP,
dated November 27, 1996, between New Jersey, Inc., as general partner, and the
Operating Partnership, as limited partner;
19. the Limited Partnership Agreement of SUSA Orange LP, dated
November 27, 1996, between New Jersey, Inc., as general partner, and the
Operating Partnership, as limited partner;
<PAGE>
Storage USA, Inc.
March 14, 1997
Page 5
20. the Agreement of Limited Partnership of Cole/Morgan, Ltd.,
dated as of September 13, 1994, as amended by the First Amendment to the
Agreement of Limited Partnership, dated as of December 31, 1996, among Jesse B.
Morgan, Cole Partners, Ltd., and the Operating Partnership;
21. the Limited Partnership Agreement of SUSA Nashville, L.P.,
dated October 4, 1996, between SUSA Tennessee, Inc. and the Operating
Partnership
22. the Limited Partnership Agreement of SUSA Mesa, L.P.,
dated October 17, 1996, between SUSA Arizona, Inc. and the Operating
Partnership; and
23. such other documents as we have deemed neces- sary or
appropriate for purposes of this opinion.
In connection with the opinions rendered below, we have
assumed generally that:
1. Each of the documents referred to above has been duly
authorized, executed, and delivered; is authentic, if an original, or is
accurate, if a copy; and has not been amended.
2. Each partner (a "Partner") of the Operating Partnership and
the Subsidiary Partnerships (each, a "Partnership") other than the Company and
the Trust that is a corporation or other entity has a valid legal existence.
3. Each Partner has full power, authority, and legal right to
enter into and to perform the terms of the Operating Partnership Agreement and
the partnership agreements of the Subsidiary Partnerships (each, a "Partnership
Agreement"), and the transactions contemplated thereby.
4. Each Partnership operates in accordance with the governing
law of the state in which it was formed and the Partnership Agreement pursuant
to which it was formed.
5. Each Partnership Agreement has remained in substantially
the same form as it was upon the most recent amendment and restatement thereof,
and has not been amended in any material respect (except upon the substitution
of partners in accordance with the terms of such Partnership Agreement).
6. During its taxable year ended December 31, 1997 and
subsequent taxable years, the Company has operated and will continue to operate
in such a manner that makes and
<PAGE>
Storage USA, Inc.
March 14, 1997
Page 6
will continue to make the representations contained in a certificate, dated the
date hereof and executed by a duly appointed officer of the Company (the
"Officer's Certificate"), true for such years.
7. The Company will not make any amendments to its
organizational documents or the organizational documents of the Operating
Partnership, the Subsidiary Partnerships, Management, Franchise, or Construction
after the date of this opinion that would affect its qualification as a real
estate investment trust ("REIT") for any taxable year.
8. No action will be taken by the Company, the Operating
Partnership, the Subsidiary Partnerships, Management, Franchise, or Construction
after the date hereof that would have the effect of altering the facts upon
which the opinions set forth below are based.
In connection with the opinions rendered below, we also have
relied upon the correctness of the representations contained in the Officer's
Certificate. We have performed no due diligence and have made no efforts to
verify the accuracy and genuineness of the documents and assumptions set forth
above, or the representations set forth in the Officer's Certificate. However,
where representations in the Officer's Certificate involve matters of law, we
have explained to the Company's representatives the relevant and material
sections of the Internal Revenue Code of 1986, as amended (the "Code"), the
Treasury regulations thereunder (the "Regulations"), published rulings of the
Internal Revenue Service (the "Service"), and other relevant authority to which
such representations relate and are satisfied that the Company's representatives
understand such provisions and are capable of making such representations.
Based on the documents and assumptions set forth above, the
representations set forth in the Officer's Certificate, and the assumptions, if
any, and representations in the Prospectus and the Prospectus Supplement under
the captions "Federal Income Tax Considerations" and "Certain Federal Income Tax
Considerations" (which are incorporated herein by reference), we are of the
opinion that:
(a) commencing with the Company's taxable year ended December
31, 1994, assuming that the elections
<PAGE>
Storage USA, Inc.
March 14, 1997
Page 7
and other procedural steps described in the Prospectus under the
caption "Federal Income Tax Considerations" are completed by the
Company in a timely fashion, the Company has been organized in
conformity with the requirements for qualification as a REIT, and its
current and proposed method of operation will enable it to meet the
requirements for qualification and taxation as a REIT under the Code;
(b) the statements set forth in the Prospectus and the
Prospectus Supplement under the captions "Federal Income Tax
Considerations" and "Certain Federal Income Tax Considerations,"
insofar as they purport to describe the provisions of the laws and
documents referred to therein, are accurate, fair, and complete in all
material respects; and
(c) each Partnership will be treated for federal income tax
purposes as a partnership and not as a corporation or an association
taxable as a corporation or as a publicly traded partnership.
We will not review on a continuing basis the Company's compliance with the
documents or assumptions set forth above, or the representations set forth in
the Officer's Certificate. Accordingly, no assurance can be given that the
actual results of the Company's operations for its 1997 and subsequent taxable
years will satisfy the requirements for qualification and taxation as a REIT.
The foregoing opinions are based on current provisions of the
Code and the Regulations, published administrative interpretations thereof, and
published court decisions. The Service has not issued Regulations or
administrative interpretations with respect to various provisions of the Code
relating to REIT qualification. No assurance can be given that the law will not
change in a way that will prevent the Company from qualifying as a REIT.
The foregoing opinions are limited to the U.S. federal income
tax matters addressed herein, and no other opinions are rendered with respect to
other federal tax matters or to any issues arising under the tax laws of any
other country, or any state or locality. We undertake no obligation to update
the opinions expressed herein after the
<PAGE>
Storage USA, Inc.
March 14, 1997
Page 8
date of this letter. This opinion letter is solely for the information and use
of the addressee, and it may not be distributed, relied upon for any purpose by
any other person, quoted in whole or in part or otherwise reproduced in any
document, or filed with any governmental agency without our express written
consent.
Very truly yours,
/s/ Hunton & Williams
