<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) JUNE 25, 1996
STORAGE TRUST REALTY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
MARYLAND 1-13462 43-1689825
(STATE OR OTHER (COMMISSION (I.R.S. EMPLOYER
JURISDICTION FILE NUMBER) IDENTIFICATION NO.)
OF INCORPORATION)
2407 RANGELINE ST., COLUMBIA, MISSOURI 65202
(ADDRESS OF PRINCIPAL EXECUTIVE (ZIP CODE)
OFFICES)
(573) 499-4799
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE
NOT APPLICABLE
(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibits.
See Index to Exhibits, which is hereby incorporated by reference herein.
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THE
REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED HEREUNTO DULY AUTHORIZED.
Storage Trust Realty
By: /s/ Michael G. Burnam
-------------------------------
Name: Michael G. Burnam
Title:Chief Executive Officer
Date: June 25, 1996
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NO. DOCUMENT DESCRIPTION
- ------- --------------------
<S> <C>
1.1 Form of Purchase Agreement, dated June , 1996, between Merrill Lynch & Co. and Storage
Trust Realty and Storage Trust Properties, L.P.
</TABLE>
<PAGE>
3,600,000 SHARES
STORAGE TRUST REALTY
(A MARYLAND REAL ESTATE INVESTMENT TRUST)
COMMON SHARES OF BENEFICIAL INTEREST
(PAR VALUE $.01 PER SHARE)
PURCHASE AGREEMENT
June , 1996
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
as Representatives of the several Underwriters
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
North Tower
World Financial Center
New York, New York 10281-1305
Ladies and Gentlemen:
Storage Trust Realty, a Maryland real estate investment trust (the
"Company"), may from time to time offer and sell (i) common shares of
beneficial interest, $.01 par value per share, of the Company (the "Common
Shares") and (ii) in one or more series, warrants to purchase Common Shares
("Common Share Warrants"), with an aggregate public offering price of up to
$75,000,000 ($90,000,000 with respect to the Common Shares) (or its equivalent
in another currency based on the exchange rate at the time of sale). The
Common Shares and Common Share Warrants (collectively, the "Securities") may
be offered, separately or together, in separate series, in amounts, at prices
and on terms to be set forth in one or more Prospectus Supplements (as
hereinafter defined). As used herein, "the Representatives," unless the
context otherwise requires, shall mean the parties to whom this Agreement is
addressed together with the other parties, if any, identified in the
applicable Terms Agreement (as hereinafter defined) as additional co-managers
with respect to Underwritten Securities (as hereinafter defined) purchased
pursuant thereto.
Whenever the Company determines to make an offering of Securities pursuant
to this Agreement through the Representatives or through an underwriting
syndicate managed by the Representatives, the Company will enter into an
agreement (the "Terms Agreement") providing for the sale of such Securities
(the "Underwritten Securities") to, and the purchase and offering thereof by,
the Representatives and such other underwriters, if any, selected by the
Representatives, as have authorized the Representatives to enter into such
Terms Agreement on their behalf (the "Underwriters," which term shall include
the Representatives whether acting alone in the sale of the Underwritten
Securities or as a member of an underwriting syndicate and any Underwriter
substituted pursuant to Section 10 hereof); provided, however, that nothing in
this Agreement shall obligate the Company to make any offering of Securities
through the Representatives or though an underwriting syndicate managed by the
Representatives whether under the Registration Statement (as defined below) or
otherwise. The Terms Agreement relating to the offering of Underwritten
Securities shall specify the amount of Underwritten Securities to be initially
issued (the "Initial Underwritten Securities"), the names of the Underwriters
participating in such offering (subject to substitution as provided in Section
10 hereof), the amount of Initial Underwritten Securities which each such
Underwriter severally agrees to purchase, the names of such of the
Representatives or such other Underwriters acting as co-managers, if any, in
connection with such offering, the price at which the Initial Underwritten
Securities are to be purchased by the Underwriters from the Company, the
initial public offering price, if any, of the Initial Underwritten Securities,
the time and place of delivery and payment, any delayed delivery arrangements
and any other variable terms of the Initial Underwritten Securities
(including, but not
<PAGE>
limited to, duration, offering price, exercise price, detachability, current
ratings, along with any other relevant, specific terms applicable to the
Initial Underwritten Securities). In addition, each Terms Agreement shall
specify whether the Underwriters will be granted an option to purchase
additional Underwritten Securities to cover over-allotments, if any, and the
aggregate amount of Underwritten Securities subject to such option (the "Option
Securities"). As used herein, the term "Underwritten Securities" shall include
the Initial Underwritten Securities and all or any portion of the Option
Securities agreed to be purchased by the Underwriters as provided herein, if
any. The Terms Agreement, which shall be substantially in the form of Exhibit A
hereto, may take the form of an exchange of any standard form of written
telecommunication between the Representatives and the Company.
The Company has filed with the Securities and Exchange Commission (the
"Commission") (i) a registration statement on Form S-3 (File No. 333-1567) and
(ii) a registration statement on Form S-3 (File No. 333-5363), filed pursuant
to Rule 462(b) and relating to the registration statement on Form S-3 (File No.
333-1567) (the "Rule 462(b) Registration Statement") covering the registration
of the Securities under the Securities Act of 1933, as amended (the "1933
Act"), and the offering thereof from time to time in accordance with Rule 424
and Rule 415 of the rules and regulations of the Commission under the 1933 Act
(the "1933 Act Regulations"), and the Company has filed such amendments thereto
as may have been required prior to the execution of the applicable Terms
Agreement. Such registration statements (as amended, if applicable) have been
declared effective by the Commission. Such registration statements and the
prospectus constituting a part thereof and each prospectus supplement (the
"Prospectus Supplement") relating to the offering of Underwritten Securities
pursuant to Rule 415 of the 1933 Act Regulations (the "Prospectus"), including
all documents incorporated therein by reference and as from time to time
amended or supplemented pursuant to the 1933 Act, the Securities Exchange Act
of 1934, as amended (the "1934 Act"), or otherwise, are collectively referred
to herein as the "Registration Statement"; provided, that, if any revised
prospectus shall be provided to the Representatives by the Company for use in
connection with the offering of Underwritten Securities which differs from the
Prospectus on file at the Commission at the time the Registration Statement
becomes effective (whether or not such revised prospectus is required to be
filed by the Company pursuant to Rule 424(b) of the 1933 Act Regulations), the
term "Prospectus" shall refer to each such revised prospectus from and after
the time it is first provided to the Representatives for such use; provided,
further, that a Prospectus Supplement shall be deemed to have supplemented the
Prospectus, and be part of the Prospectus and the Registration Statement, only
with respect to the offering of Underwritten Securities to which it relates.
The Rule 462(b) Registration Statement shall be deemed to be part of the
Registration Statement. Any prospectus (including any amendment or supplement
thereto or information which is deemed part thereof) included in the Rule
462(b) Registration Statement and/or any term sheet as contemplated by Rule 434
of the 1933 Act Regulations (a "Term Sheet"), if any, shall be deemed to be
part of the Prospectus. Except as otherwise provided, all references in this
Agreement to financial statements and schedules and other information which is
"contained," "included," "stated," "described," or "disclosed" in the
Registration Statement or the Prospectus (and all other references of like
import) shall be deemed to mean and include all such financial statements and
schedules and other information which is or is deemed to be incorporated by
reference into the Registration Statement or the Prospectus, as the case may
be; and all references in this Agreement to amendments or supplements to the
Registration Statement or the Prospectus shall be deemed to mean and include
the filing of any document under the 1934 Act which is or is deemed to be
incorporated by reference into the Registration Statement or the Prospectus, as
the case may be. Capitalized terms used but not otherwise defined herein shall
have the meanings given to those terms in the Registration Statement.
The term "subsidiary" means a corporation or a partnership a majority of the
outstanding voting stock or partnership interests, as the case may be, of which
is owned or controlled, directly or indirectly, by the Company or the Operating
Partnership (as hereinafter defined), as the case may be, or by one or more
other subsidiaries of the Company or the Operating Partnership.
The Company and Storage Trust Properties, L.P., a Delaware limited
partnership (the "Operating Partnership," and together with the Company, the
"Primary Entities") understand that the Underwriters propose
2
<PAGE>
to make a public offering of the Underwritten Securities as soon as the
Representatives deem advisable after this Agreement and the applicable Terms
Agreement has been executed and delivered.
Section 1. Representations and Warranties of the Primary Entities.
(a) Each of the Primary Entities represents and warrants, jointly and
severally, to the Representatives, as of the date hereof, and to the
Representatives and each other Underwriter named in the applicable Terms
Agreement, as of the date thereof (in each case, a "Representation Date"), as
follows:
(i) The Registration Statement and the Prospectus, at the time the
Registration Statement became effective, complied, and as of each
Representation Date will comply, in all Material (as hereinafter defined)
respects with the requirements of the 1933 Act and the 1933 Act
Regulations. The Registration Statement, at the time the Registration
Statement became effective, did not, and as of each Representation Date,
will not, contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading. The Prospectus, as of the date hereof
does not, and as of each Representation Date (unless the term "Prospectus"
refers to a prospectus which has been provided to you by the Company for
use in connection with an offering of Underwritten Securities which differs
from the Prospectus on file at the Commission at the time the Registration
Statement becomes effective, in which case at the time it is first provided
to you for such use) and at the Closing Time (as hereinafter defined), will
not include an untrue statement of a material fact or omit to state a
material fact, necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
provided, however, that the representations and warranties in this
subsection shall not apply to statements in or omissions from the
Registration Statement or Prospectus made in reliance upon and in
conformity with information furnished to the Company in writing by any
Underwriter through the Representatives expressly for use in the
Registration Statement or Prospectus. The Company has complied with the
requirements of Rule 111 under the 1933 Act Regulations relating to the
payment of filing fees in connection with the Rule 462(b) Registration
Statement.
(ii) Each preliminary prospectus, Prospectus, preliminary prospectus
supplement and Prospectus Supplement, which preliminary prospectus,
Prospectus, preliminary prospectus supplement or Prospectus Supplement
relates to the applicable Underwritten Securities, filed as part of the
Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the 1933 Act, or any Term
Sheet filed pursuant to Rule 434 of the 1933 Act, complied or will comply
when so filed in all Material respects with the 1933 Act and the 1933 Act
Regulations.
(iii) The documents incorporated or deemed to be incorporated by
reference into the Prospectus pursuant to Item 12 of Form S-3 under the
1933 Act, at the time they were filed with the Commission, complied in all
material respects with the requirements of the 1934 Act and the rules and
regulations of the Commission under the 1934 Act (the "1934 Act
Regulations"), and, when read together with the other information in the
Prospectus, at the time the Registration Statement became effective and as
of the applicable Representation Date, the Closing Time or during the
period specified in Section 3(f), did not and will not include an untrue
statement of a material fact or omit to state a material fact necessary to
make the statements therein, in the light of the circumstances under which
they were made, not misleading.
(iv) Ernst & Young LLP, the accounting firm that audited the financial
statements and supporting schedules included in, or incorporated by
reference into, the Registration Statement and Prospectus, are independent
public accountants as required by the 1933 Act and the 1933 Act
Regulations.
(v) The financial statements (including the notes and schedules thereto)
included in, or incorporated by reference into, the Registration Statement
and the Prospectus present fairly the financial position of the respective
entity or entities or group presented therein at the respective dates
indicated and the results of their operations for the respective periods
specified; except as otherwise stated in the Registration Statement and
Prospectus, said financial statements have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis; the
supporting schedules included or incorporated by reference in the
Registration Statement and the Prospectus present fairly the information
required to be
3
<PAGE>
stated therein. The financial information and data included in, or
incorporated by reference into, the Registration Statement and the
Prospectus present fairly the information included or incorporated therein
and have been prepared on a basis consistent, except as may be noted
therein, with that of the financial statements included in, or incorporated
by reference into, the Registration Statement and the Prospectus and the
books and records of the respective entities presented therein. Pro forma
financial information included in or incorporated by reference into the
Registration Statement and the Prospectus has been prepared in accordance
with the applicable requirements of the 1933 Act, the 1933 Act Regulations
and guidelines of the American Institute of Certified Public Accountants
(the "AICPA") with respect to pro forma financial information and includes
all adjustments necessary to present fairly the pro forma financial
position of the Company at the respective dates indicated and the results
of operations for the respective periods specified. All financial
statements that are required under the 1933 Act, the 1933 Act Regulations,
the 1934 Act or the 1934 Act Regulations to be included in, or incorporated
by reference into the Registrations Statement and the Prospectus are
included in, or incorporated by reference, into the Registration Statement
and the Prospectus.
(vi) No stop order suspending the effectiveness of the Registration
Statement or any part thereof has been issued and no proceeding for that
purpose has been instituted or, to the knowledge of the Primary Entities,
threatened by the Commission or by the state securities authority of any
jurisdiction. No order preventing or suspending the use of the Prospectus
has been issued and no proceeding for that purpose has been instituted or,
to the knowledge of the Primary Entities, threatened by the Commission or
by the state securities authority of any jurisdiction.
(vii) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, except as otherwise stated
therein, (A) there has been no material adverse change in the financial
condition, or in the earnings, assets, business affairs or business
prospects of the Primary Entities, Storage Realty Management Co., a
Delaware corporation (the "Management Company") or any other subsidiary of
the Company (the "Subsidiary Companies") (the Primary Entities, the
Management Company, the Subsidiary Companies or any entity through which
the Primary Entities own a joint venture interest in any Facility (the
"Joint Venture Entities") being sometimes hereinafter collectively referred
to as the "Transaction Entities" and individually as a "Transaction
Entity"), or any Facility, whether or not arising in the ordinary course of
business, which would be material to the Company, the Operating
Partnership, the Subsidiary Companies and the Management Company considered
as one enterprise (any such adverse change which would be material to the
Company, the Operating Partnership, the Subsidiary Companies and the
Management Company, considered as one enterprise, being hereinafter
referred to as a "Material Adverse Change"); (B) no casualty loss or
condemnation or other adverse event with respect to any of the Facilities
has occurred which would be material to the Company, the Operating
Partnership, the Subsidiary Companies and the Management Company,
considered as one enterprise (anything which would be material to the
Company, the Operating Partnership, the Subsidiary Companies and the
Management Company, considered as one enterprise, being hereinafter
referred to as "Material"); (C) there have been no transactions or
acquisitions entered into by the Transaction Entities, other than those in
the ordinary course of business, which would be Material; (D) none of the
Transaction Entities has incurred any obligation or liability, direct,
contingent or otherwise which is Material; (E) there has been no Material
change in the short-term debt or long-term debt of the Transaction
Entities; (F) except for regular quarterly distributions on Common Shares
in amounts per share described in the Prospectus, there has been no
dividend or distribution of any kind declared, paid or made by the Company,
on any class of its capital shares; and (G) except for transactions in
connection with the Storage Trust Realty 1994 Share Option Plan, as
amended, and the Storage Trust Realty Retirement Savings Plan (the "Share
Option Plans") and issuances by the Company of Common Shares and/or by the
Operating Partnership of partnership interests in the Operating Partnership
(the "Units") in connection with the acquisition of real property or direct
or indirect interests in real property if the recipient of such Common
Shares and/or Units in connection with an acquisition agrees in writing to
not, without the prior written consent of Merrill Lynch and the Company,
directly or indirectly, offer, sell, contract to sell, grant any options
for the sale of, or otherwise dispose of any of such Common Shares and/or
Units until the expiration of a 90-day period from the date of a Closing
Time (as
4
<PAGE>
hereinafter defined) of the offering of any Underwritten Securities,
pursuant to this Agreement and a related Terms Agreement, which Closing
Time occurred prior to the date of such issuance (the "Lock-Up Period"),
there has been no change in the capital shares of the Company or the
Management Company, or the Units of the Operating Partnership.
(viii) The Company has been duly organized and is validly existing as a
real estate investment trust in good standing under and by virtue of the
laws of the State of Maryland, with power and authority to own, lease and
operate its properties and to conduct the business in which it is engaged
or proposes to engage, as described in the Registration Statement and the
Prospectus, and to enter into and perform its obligations under this
Agreement, the Terms Agreement and the other Company Documents (as
hereinafter defined) to which it is a party; and the Company is duly
qualified or registered to transact business and is in good standing in
each jurisdiction in which such qualification or registration is required,
whether by reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify or register would not
result in a Material Adverse Change.
(ix) The Operating Partnership has been duly organized and is validly
existing as a limited partnership in good standing under and by virtue of
the laws of the State of Delaware, with partnership power and authority to
own, lease and operate its properties, to conduct the business in which it
is engaged and proposes to engage, in each case as described in the
Registration Statement and the Prospectus, and to enter into and perform
its obligations under this Agreement and the other Company Documents to
which it is a party. The Operating Partnership is duly qualified or
registered as a foreign partnership and is in good standing in each
jurisdiction in which such qualification or registration is required,
whether by reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify or register would not
result in a Material Adverse Change. The Company is the sole general
partner of the Operating Partnership. The Amended and Restated Limited
Partnership Agreement of the Operating Partnership (the "Operating
Partnership Agreement") is in full force and effect in the form, except
with respect to Exhibit A thereto, in which it was incorporated by
reference as an exhibit in the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1995 (the "10-K"), and the aggregate
percentage interests of the general partner and the limited partners in the
Operating Partnership are as set forth therein or in any amended Exhibit A
thereto.
(x) The Management Company has been duly incorporated and is validly
existing as a corporation in good standing under and by virtue of the laws
of the State of Delaware with corporate power and authority to own, lease
and operate its properties, to conduct the business in which it is engaged
or proposes to engage as described in the Registration Statement and the
Prospectus, and to enter into and perform its obligations under the Company
Documents to which it is a party. The Management Company is duly qualified
or registered as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify or register would not
result in a Material Adverse Change. All of the issued and outstanding
capital stock of the Management Company is duly authorized, validly issued,
fully paid and non-assessable, and has been offered and sold in compliance
with all applicable laws (including, without limitation, federal or state
securities laws) and, except as disclosed in the Prospectus, the capital
stock which is owned by the Operating Partnership (5% of the common stock
and 100% of the preferred stock) is free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim, restriction or
equities. No shares of capital stock of the Management Company are reserved
for any purpose, and there are no outstanding securities convertible into
or exchangeable for any capital stock of the Management Company and no
outstanding options, rights (preemptive or otherwise) or warrants to
purchase or to subscribe for shares of such capital stock or any other
securities of the Management Company, except as disclosed in the
Prospectus.
(xi) Each of the Subsidiary Companies has been duly organized and is
validly existing as a corporation or limited partnership, as the case may
be, in good standing under and by virtue of the laws of its state of
organization with the requisite power and authority to own, lease and
operate its properties, to conduct the business in which it is engaged or
proposes to engage, and to enter into and perform its obligations under
5
<PAGE>
the Company Documents to which it is a party, if any. Each of the
Subsidiary Companies is duly qualified or registered as a foreign
corporation or limited partnership, as the case may be, to transact
business and is in good standing in each jurisdiction in which such
qualification or registration is required, whether by reason of the
ownership or leasing of property or the conduct of business, except where
the failure to so qualify or register would not result in a Material
Adverse Change. All of the issued and outstanding capital stock or units of
limited partnership, as the case may be, of each of the Subsidiary
Companies is duly authorized, validly issued, fully paid and, in the case
of capital stock, non-assessable, and has been offered and sold in
compliance with all applicable laws (including, without limitation, federal
or state securities laws) and, except as disclosed in the Prospectus, the
capital stock or units of limited partnership, as the case may be, are
owned by the Company or its subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim, restriction or
equities. No shares of capital stock or units of limited partnership, as
the case may be, of any of the Subsidiary Companies are reserved for any
purpose, and there are no outstanding securities convertible into or
exchangeable for any capital stock or units of limited partnership, as the
case may be, of any Subsidiary Company and no outstanding options, rights
(preemptive or otherwise) or warrants to purchase or to subscribe for
shares of such capital stock or units of limited partnership, as the case
may be, or any other securities of such Subsidiary Company, except as
disclosed in the Prospectus.
(xii) The capital shares of the Company as of the date specified therein
are or would have been as set forth in the applicable Prospectus Supplement
under "Capitalization," (except for subsequent issuances, if any, pursuant
to this Agreement or the Share Option Plans). All the issued and
outstanding Common Shares of the Company have been duly authorized and are
validly issued, fully paid and, except as described in the Prospectus, non-
assessable and have been offered and sold in compliance, in all Material
respects, with all applicable laws (including, without limitation, federal
or state securities laws). Except for Common Shares issuable (1) upon the
exercise of options granted under the Share Option Plans, (2) upon the
exchange of the Units, (3) as described in the Prospectus, and (4) in
connection with the acquisition of real property or direct or indirect
interests in real property, if the recipient of such Common Shares or Units
agrees in writing to not, without the prior written consent of Merrill
Lynch and the Company, directly or indirectly, offer, sell, contract to
sell, grant any options for the sale of, or otherwise dispose of any of
such Common Shares or Units until the expiration of the Lock-Up Period, no
capital shares of the Company are reserved for any purpose, and there are
no outstanding securities convertible into or exchangeable for any capital
shares of the Company and, except as granted under this Agreement, there
are no outstanding options, rights (preemptive or otherwise) or warrants to
purchase or to subscribe for such capital shares or any other securities of
the Company.
(xiii) The applicable Underwritten Securities have been duly authorized
for issuance and sale to the Underwriters pursuant to this Agreement, and,
when issued and delivered by the Company pursuant to this Agreement and the
applicable Terms Agreement against payment of the consideration set forth
in the applicable Terms Agreement, will be validly issued, fully paid and,
except as described in the Prospectus, non-assessable. Upon payment of the
purchase price and delivery of the applicable Underwritten Securities in
accordance herewith, each of the Underwriters will receive the applicable
Underwritten Securities, free and clear of all security interests and liens
if the Underwriters acquire such Securities in good faith and without
notice of any such security interests or liens. The terms of such
applicable Underwritten Securities conform in substance, in all Material
respects, to all statements and descriptions related thereto contained in
the Prospectus. The form of share certificates to be used to evidence such
applicable Underwritten Securities will be in due and proper form and will
comply, in all Material respects, with all applicable legal requirements.
The issuance of such applicable Underwritten Securities is not subject to
any preemptive or other similar rights.
(xiv) All the issued and outstanding Units have been duly authorized and
are validly issued and fully paid and have been offered and sold or
exchanged in compliance, in all Material respects, with all applicable laws
(including, without limitation, federal and state securities laws). Except
(1) pursuant to the Share Option Plans, (2) and as described in the
Prospectus and (3) in connection with the acquisition of real property or
direct or indirect interests in real property, if the recipient of Units in
connection with any such
6
<PAGE>
acquisition agrees in writing to not, without the prior written consent of
Merrill Lynch and the Company, directly or indirectly, offer, sell,
contract to sell, grant any options for the sale of, or otherwise dispose
of any of such Units until the expiration of the Lock-Up Period, there are
no outstanding securities convertible or exchangeable for any Units and no
outstanding options, rights (preemptive or otherwise) or warrants to
purchase or to subscribe for Units.
(xv) The Common Shares issuable upon exchange of any of the outstanding
Units and outstanding Common Share Warrants, if any, (as defined in the
Prospectus) are duly and validly authorized by all necessary action and
such shares, when issued upon such exchange, will be duly and validly
issued, fully paid and, except as described in the Prospectus, non-
assessable, and the issuance of such shares upon such exchange will not be
subject to preemptive or other similar rights; the Common Shares so
issuable conform in all Material respects to all statements relating
thereto contained in the Prospectus.
(xvi) None of the Transaction Entities is, and at the Closing Time none
of the Transaction Entities will be, in violation of its charter,
declaration of trust, by-laws, certificate of limited partnership,
agreement of limited partnership or other governing document, as the case
may be, and none of the Transaction Entities is, and at the Closing Time
none of the Transaction Entities will be, in default in the performance or
observance of any obligation, agreement, covenant or condition contained in
any contract, indenture, mortgage, loan agreement, note, lease or other
instrument or of any applicable law, rule, order, administrative regulation
or administrative or court decree, to which such entity is a party or by
which such entity may be bound, or to which any of its property or assets
or any Facility may be bound or subject, except for such violations and
defaults that would not, individually or in the aggregate, result in a
Material Adverse Change.
(xvii) (A) This Agreement has been duly and validly authorized, executed
and delivered by each of the Primary Entities and, assuming due
authorization, execution and delivery by the Representatives, is a valid
and binding agreement of each of the Primary Entities, enforceable against
the Primary Entities in accordance with its terms, except as such
enforceability may be subject to (1) bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or transfer or similar
laws affecting creditors' rights generally and (2) general principles of
equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law), and except as enforceability of any
applicable indemnification provisions may be limited under federal or state
securities laws; (B) at the applicable Representation Date, the applicable
Terms Agreement will have been duly and validly authorized, executed and
delivered by the Company, and assuming due authorization, execution and
delivery by the Representatives, will be a valid and binding agreement of
the Company, enforceable against the Company in accordance with its terms,
except as such enforceability may be subject to (1) bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or transfer or similar
laws affecting creditors' rights generally and (2) general principles of
equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law), and except as enforceability of any
applicable indemnification provisions may be limited under federal or state
securities laws; (C) each agreement filed, pursuant to Item 601(b)(10) of
Regulation S-K, as an exhibit to the Registration Statement, the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 1995 (the
"10-K") or any report filed subsequently by the Company which is
incorporated by reference into the Registration Statement (each a "Material
Agreement") has been duly and validly authorized, executed and delivered by
the Transaction Entities which are parties thereto and is a valid and
binding agreement, enforceable against the Transaction Entities which are
parties thereto in accordance with its terms except as such enforceability
may be subject to (1) bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance or transfer or similar laws affecting creditors'
rights generally and (2) general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at
law), and except as enforceability of any applicable indemnification
provisions may be limited under federal or state securities laws. This
Agreement, the applicable Terms Agreement, the Operating Partnership
Agreement and any Material Agreement are sometimes hereinafter collectively
called the "Company Documents."
(xviii) The execution and delivery of this Agreement, the applicable
Terms Agreement, the Company Documents and the applicable Underwritten
Securities, the performance of the obligations set forth herein
7
<PAGE>
or therein and the consummation of the transactions contemplated hereby and
thereby or in the Prospectus by the Transaction Entities will not conflict
with or constitute a breach or violation by such parties of, or default
under or result in the creation or imposition of any lien, charge or
encumbrance upon any Facility, or any other property or asset of a
Transaction Entity under or pursuant to, (A) any of the other Company
Documents or (B) any contract, indenture, mortgage, loan agreement, note,
lease, joint venture or partnership agreement or other instrument or
agreement to which any Transaction Entity is a party or by which they, any
of them, any of their respective properties or other assets or any Facility
may be bound or subject; nor will such action conflict with or constitute a
breach or violation by the Transaction Entities of, or default under, (X)
the charter, declaration of trust, by-laws, certificate of limited
partnership, partnership agreement or other governing documents, as the
case may be, of any Transaction Entity or (Y) any applicable law, rule,
order, administrative regulation or administrative or court decree; except
in each case for conflicts, breaches, violations or defaults that would not
result in a Material Adverse Change.
(xix) (a) No labor dispute with the employees of either of the Primary
Entities or the Management Company exists or is imminent, and (b) no
Primary Entity is aware of any existing or imminent labor disturbance by
the employees of any of the Transaction Entities' principal suppliers,
manufacturers or contractors, which, in the case of either (a) or (b),
might be expected to result in any Material Adverse Change.
(xx) There is no action, suit or proceeding before or by any court or
governmental agency or body, domestic or foreign, now pending, or, to the
knowledge of the Primary Entities, after due inquiry, threatened against or
affecting any Transaction Entity, Facility or officer or trustee of the
Company, which is required to be disclosed in the Registration Statement or
the Prospectus (other than as disclosed therein), or that, if determined
adversely to any Transaction Entity, Facility, or such officer or trustee,
will or could reasonably be expected to result in a Material Adverse
Change. There are no pending legal or governmental proceedings to which any
Transaction Entity is a party or of which they or any of their respective
properties or assets or any Facility is the subject, including ordinary
routine litigation incidental to the business, that, considered in the
aggregate, could reasonably be expected to result in a Material Adverse
Change. There are no contracts or documents of any Transaction Entity which
are required to be filed as exhibits to the Registration Statement by the
1933 Act or the 1933 Act Regulations, which have not been so filed, or
which are required to be incorporated by reference into the Prospectus by
the 1933 Act, the 1933 Act Regulations, the 1934 Act or the 1934 Act
Regulations which have not been so incorporated.
(xxi) At all times since November 8, 1994, the Company (including as a
result of its investments in the Operating Partnership and the Management
Company) has been, and upon the sale of the applicable Underwritten
Securities, the Company will continue to be, organized and operated in
conformity with the requirements for qualification as a real estate
investment trust under the Internal Revenue Code of 1986, as amended (the
"Code"), and its proposed method of operation will enable it to continue to
meet the requirements for taxation as a real estate investment trust under
the Code.
(xxii) Each of the Transaction Entities has filed all federal, state,
local and foreign income tax returns which have been required to be filed
(except in any case in which the failure to so file would not result in a
Material Adverse Change) and has paid all taxes required to be paid and any
other assessment, fine or penalty levied against it, to the extent that any
of the foregoing is due and payable, except, in all cases, for any such
tax, assessment, fine or penalty that is being contested in good faith and
except in any case in which the failure to so pay would not result in a
Material Adverse Change.
(xxiii) At all times since November 8, 1994, the Operating Partnership
has been, and upon the sale of the applicable Underwritten Securities, will
continue to be classified as a partnership for Federal income tax purposes.
(xxiv) None of the Transaction Entities is, and at the Closing Time none
of the Transaction Entities will be, required to be registered under the
Investment Company Act of 1940, as amended (the "1940 Act").
(xxv) To the knowledge of the Primary Entities, none of the Transaction
Entities is, and at the Closing Time will not be, required to own or
possess or to obtain the consent of any holder of any trademarks,
8
<PAGE>
service marks, trade names or copyrights not now lawfully owned or
possessed in order to conduct the business proposed to be operated by the
Transaction Entities.
(xxvi) No Material authorization, approval, consent or order of any court
or governmental authority or agency or other entity or person is necessary
in connection with the offering, issuance or sale of the applicable
Underwritten Securities hereunder, except such as may be required under the
1933 Act or the 1933 Act Regulations or state securities, real estate
syndication or blue sky laws or the by-laws and rules of the National
Association of Securities Dealers, Inc. (the "NASD") or the listing
requirements of the New York Stock Exchange ("NYSE") or such as have been
received prior to the date of the applicable Terms Agreement.
(xxvii) Each of the Transaction Entities possesses, and at the Closing
Time will possess, such certificates, authorizations or permits issued by
the appropriate local, state, federal or foreign regulatory agencies or
bodies necessary to conduct the business now operated by it, or proposed to
be conducted by it, except for such certificates, authorizations and
permits, the failure to obtain, maintain or possess which by any of the
Transaction Entities would not result in a Material Adverse Change, and
none of the Transaction Entities has received any notice of proceedings
relating to the revocation or modification of any such certificate,
authority or permit which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result in a Material Adverse
Change.
(xxviii) Except as disclosed in the Prospectus, there are no persons with
registration or other similar rights to have any securities registered
pursuant to the Registration Statement.
(xxix) The outstanding Common Shares are listed on the NYSE and the
applicable Underwritten Securities will be listed on the NYSE, subject to
official notice of issuance.
(xxx) Except for each instance which would not result in a Material
Adverse Change, (A) at the Closing Time, the Operating Partnership, one of
the Subsidiary Companies or one of the Joint Venture Entities will have
good and marketable title (or, with respect to any Facilities located in
Texas, good and indefeasible fee simple title, or such substantially
equivalent quality of title as provided by the applicable title insurance
policy) to each of the Facilities and all other item of real property (and
improvements therein), in each case free and clear of all liens,
encumbrances, claims, security interests and defects, other than those (i)
referred to in the Registration Statement or described in any document
incorporated by reference into the Registration Statement or (ii) which are
not Material in amount; (B) all liens, charges, encumbrances, claims or
restrictions on or affecting any of the Facilities and the assets of any
Transaction Entity which are required to be disclosed in the Prospectus are
disclosed therein; (C) except as otherwise described in the Prospectus,
neither Primary Entity nor the Management Company is, and, to the knowledge
of the Primary Entities, no Joint Venture Entity or Subsidiary Company is,
in default under (i) any space or ground leases (as lessor or lessee, as
the case may be) relating to the Facilities, or (ii) any of the mortgages
or other security documents or other agreements encumbering or otherwise
recorded against the Facilities, and no Primary Entity knows, after due
inquiry, of any event which, but for the passage of time or the giving of
notice, or both, would constitute a default under any of such documents or
agreements; (D) except as disclosed in the Prospectus, there are no options
or rights of first refusal to purchase any Facility or any part thereof
(except that the Management Company has an option to purchase, which option
is assignable, with respect to one of the Facilities owned by a third-party
and managed by the Management Company); (E) 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); and (F) no Primary Entity has
knowledge of, after due inquiry, any pending or threatened condemnation
proceeding, zoning change or other proceeding or action that will in any
Material manner affect the size of, use of, improvements on, construction
on or access to the Facilities.
(xxxi) Each of the Facilities has property, title, casualty and liability
insurance in favor of either the Operating Partnership, one of the
Subsidiary Companies or one of the Joint Venture Entities with respect to
the Facilities by insurers of recognized financial responsibility against
such losses and risks and in such amounts as are prudent and customary in
the businesses in which they are engaged; and none of the Operating
Partnership, the Subsidiary Companies or the Joint Venture Entities has any
reason to believe
9
<PAGE>
that they will not be able to renew their existing insurance coverage as
and when such coverage expires or to obtain similar coverage from similar
insurers as may be necessary to continue their businesses at a cost that
would not have a Material Adverse Change, except as described in or
contemplated by the Registration Statement and the Prospectus.
(xxxii) Except as disclosed in the Prospectus, and, except for
activities, conditions, circumstances or matters that would not result in a
Material Adverse Change and except that the following does not apply to
conditions arising from the storage of customer goods in storage units at
the Facilities or any of the Company's properties under management to which
the Company does not have actual knowledge: (A) to the knowledge of the
Primary Entities, after due inquiry, the operations of the Company, the
Operating Partnership and the Management Company are in compliance with all
Environmental Laws (as defined below) and all requirements of applicable
permits, licenses, approvals and other authorizations issued pursuant to
Environmental Laws; (B) to the knowledge of the Primary Entities, after due
inquiry, none of the Transaction Entities has caused or suffered to occur
any Release (as defined below) of any Hazardous Substance (as defined
below) into the Environment (as defined below) on, in, under or from any
Facility or any developed or undeveloped land held by the Operating
Partnership ("Storage Land"), and no condition exists on, in or under any
Facility or Storage Land that could result in the incurrence of liabilities
under, or any violations of, any Environmental Law or give rise to the
imposition of any Lien (as defined below), under any Environmental Law; (C)
none of the Transaction Entities has received any written notice of a claim
under or pursuant to any Environmental Law or under common law pertaining
to Hazardous Substances on, in, under or originating from any Facility or
Storage Land; (D) none of the Transaction Entities has actual knowledge of,
after due inquiry, or received any written notice from any Governmental
Authority (as defined below) or other person claiming, any violation of any
Environmental Law or a determination to undertake and/or request the
investigation, remediation, clean-up or removal of any Hazardous Substance
released into the Environment on, in, under or from any Facility or Storage
Land; and (E) no Facility or Storage Land is included or, to the knowledge
of the Primary Entities, after due inquiry, proposed for inclusion on the
National Priorities List issued pursuant to CERCLA (as defined below) by
the United States Environmental Protection Agency (the "EPA") or on the
Comprehensive Environmental Response, Compensation, and Liability
Information System database maintained by the EPA, and neither of the
Primary Entities has actual knowledge, after due inquiry, that any Facility
or Storage Land has otherwise been identified in a published writing by the
EPA as a potential CERCLA removal, remedial or response site or, to the
knowledge of the Primary Entities, after due inquiry, proposed for
inclusion on any similar list of potentially contaminated sites pursuant to
any other Environmental Law.
As used herein, "Hazardous Substance" shall include any hazardous
substance, hazardous waste, toxic substance, pollutant, hazardous material,
or similarly designated materials including, without limitation, oil,
petroleum or any petroleum-derived substance or waste, asbestos or
asbestos-containing materials, PCBs, pesticides, explosives, radioactive
materials, dioxins, urea formaldehyde insulation or any constituent of any
such substance, pollutant or waste which is identified, regulated,
prohibited or limited under any Environmental Law (including, without
limitation, materials listed in the United States Department of
Transportation Optional Hazardous Material Table, 49 C.F.R. (S) 172.101, or
in the EPA's List of Hazardous Substances and Reportable Quantities, 40
C.F.R. Part 302) as the same may now or hereafter be amended; "Environment"
shall mean any surface water, drinking water, ground water, land surface,
subsurface strata, river sediment, buildings, structures, and ambient,
workplace and indoor and outdoor air; "Environmental Law" shall mean the
Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended (42 U.S.C. (S) 9601 et seq.) ("CERCLA"), the Resource
Conservation and Recovery Act of 1976, as amended (42 U.S.C. (S) 6901, et
seq.), the Clean Air Act, as amended (42 U.S.C. (S) 7401, et seq.), the
Clean Water Act, as amended (33 U.S.C. (S) 1251, et seq.), the Toxic
Substances Control Act, as amended (15 U.S.C. (S) 2601, et seq.), the
Occupational Safety and Health Act of 1970, as amended (29 U.S.C. (S) 651,
et seq.), the Hazardous Materials Transportation Act, as amended (49 U.S.C.
(S) 1801, et seq.), and all other federal, state and local laws,
ordinances, regulations, rules and orders relating to the protection of the
environment or of human health from environmental effects; "Governmental
Authority" shall mean any federal, state or local governmental office,
agency or authority having the duty or authority to promulgate,
10
<PAGE>
implement or enforce any Environmental Law; "Lien" shall mean, with respect
to any Facility, any mortgage, deed of trust, pledge, security interest,
lien, encumbrance, penalty, fine, charge, assessment, judgment or other
liability in, on or affecting such Facility; and "Release" shall mean any
spilling, leaking, pumping, pouring, emitting, emptying, discharging,
injecting, escaping, leaching, dumping, emanating or disposing of any
Hazardous Substance into the Environment, including, without limitation,
the abandonment or discard of barrels, containers, tanks (including,
without limitation, underground storage tanks) or other receptacles
containing or previously containing any Hazardous Substance or any release,
emission, discharge or similar term, as those terms are defined or used in
any Environmental Law.
(xxxiii) To the knowledge of the Primary Entities, none of the
environmental consultants which prepared environmental and asbestos
inspection reports with respect to any of the Facilities was employed for
such purpose on a contingent basis or has any substantial interest in any
Transaction Entity, and none of them nor any of their directors, officers
or employees is connected with any Transaction Entity as a promoter,
selling agent, voting trustee, director, officer or employee.
(b) Any certificate signed by any officer or authorized representative of any
Primary Entity or any Company Document signed by any officer or authorized
representative of any Primary Entity, and delivered to the Representatives or
to counsel for the Underwriters shall be deemed a representation and warranty
by such entity or person, as the case may be, to each Underwriter as to the
matters covered thereby.
Section 2. Sale and Delivery to Underwriters; Closing.
(a) The several commitments of the Underwriters to purchase the Underwritten
Securities pursuant to the applicable Terms Agreement shall be deemed to have
been made on the basis of the representations and warranties herein contained
and shall be subject to the terms and conditions set forth herein or in the
applicable Terms Agreement.
(b) In addition, on the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Company
may grant, if so provided in the applicable Terms Agreement relating to the
Initial Underwritten Securities, an option to the Underwriters named in such
Terms Agreement, severally and not jointly, to purchase up to the number of
Option Securities set forth therein at the same price per Option Security as is
applicable to the Initial Underwritten Securities. Such option, if granted,
will expire 30 days (or such lesser number of days as may be specified in the
applicable Terms Agreement) after the date of the Terms Agreement relating to
the Initial Underwritten Securities, provided that if such thirtieth day is not
a NYSE trading day, the thirtieth day will be the next succeeding NYSE trading
day, and may be exercised in whole or in part from time to time during such 30-
day period only for the purpose of covering over-allotments which may be made
in connection with the offering and distribution of the Initial Underwritten
Securities upon notice by the Representatives to the Company, setting forth the
number of Option Securities as to which the several Underwriters are then
exercising the option and the time and date of payment and delivery for such
Option Securities. Any such time and date of delivery (a "Date of Delivery")
shall be determined by the Representatives, but shall not be later than seven
full business days nor earlier than two full business days after the exercise
of said option, nor in any event prior to the Closing Time, unless otherwise
agreed upon by the Representatives and the Company. If the option is exercised
as to all or any portion of the Option Securities, each of the Underwriters,
acting severally and not jointly, shall purchase that proportion of the total
number of Option Securities then being purchased which the number of Initial
Underwritten Securities each such Underwriter has severally agreed to purchase
as set forth in the applicable Terms Agreement bears to the total number of
Initial Underwritten Securities (except as otherwise provided in the applicable
Terms Agreement), subject to such adjustments as the Representatives in their
discretion shall make to eliminate any sales or purchases of fractional
Underwritten Securities.
(c) Payment of the purchase price for, and delivery of certificates for, the
Initial Underwritten Securities to be purchased by the Underwriters shall be
made at the offices of Rogers & Wells, 200 Park Avenue, New York, New York
10166, or at such other place as shall be agreed upon by the Representatives
and the Company at 10:00 A.M. on the fourth business day (or the third business
day if required under Rule 15c6-1 of the 1934 Act,
11
<PAGE>
or unless postponed in accordance with the provisions of Section 10) following
the date of the applicable Terms Agreement or at such other time as shall be
agreed upon by the Representatives and the Company (each referred to herein as
the "Closing Time"). In addition, in the event that any or all of the Option
Securities are purchased by the Underwriters, payment of the purchase price
for, and delivery of certificates for, such Option Securities shall be made at
the above-mentioned offices of Rogers & Wells, or at such other place as shall
be agreed upon by the Representatives and the Company, on each Date of Delivery
as specified in the notice from the Representatives to the Company. Payment
shall be made to the Company by intra-bank transfer or wire transfer of New
York Clearing House funds or similar next day funds to such accounts as may be
designated by the Company at least two business days prior to the Closing Time;
or in such other manner as shall be agreed upon by the Representatives and the
Company, payable to the order of the Company against delivery to the
Representatives for the respective accounts of the Underwriters of certificates
for the applicable Underwritten Securities to be purchased by them.
Certificates for the Initial Underwritten Securities and the Option Securities,
if any, shall be in such denominations and registered in such names as the
Representatives may request in writing at least two business days before the
Closing Time or the relevant Date of Delivery, as the case may be. It is
understood that each Underwriter has authorized the Representatives, for its
account, to accept delivery of, receipt for, and make payment of the purchase
price for, the Initial Underwritten Securities and the Option Securities, if
any, which it has agreed to purchase. The Representatives, individually and not
as representatives of the Underwriters, may (but shall not be obligated to)
make payment of the purchase price for the Initial Underwritten Securities or
the Option Securities, if any, to be purchased by any Underwriter whose check
has not been received by the Closing Time or the relevant Date of Delivery, as
the case may be, but any such payment shall not relieve such Underwriter from
its obligations hereunder. The certificates for the Initial Underwritten
Securities and the Option Securities, if any, will be made available for
examination and packaging by the Representatives not later than 10:00 A.M. on
the last business day prior to the Closing Time or the relevant Date of
Delivery, as the case may be, in New York, New York.
Section 3. Covenants of the Company and the Operating Partnership. Each of
the Company and the Operating Partnership covenants with the Representatives,
and with each Underwriter participating in the offering of the applicable
Underwritten Securities, as follows:
(a) In respect to each offering of Underwritten Securities, the Company
will prepare a Prospectus Supplement setting forth the number of
Underwritten Securities covered thereby and their terms not otherwise
specified in the Prospectus pursuant to which the Underwritten Securities
are being offered, the names of the Underwriters participating in the
offering and the number of Underwritten Securities which each severally has
agreed to purchase, the names of the Underwriters acting as co-managers in
connection with the offering, the price at which the Underwritten
Securities are to be purchased by the Underwriters from the Company, the
initial public offering price, if any, the selling concession and
reallowance, if any, and such other information as the Representatives and
the Company deem appropriate in connection with the offering of the
Underwritten Securities; and the Company will transmit copies of the
Prospectus Supplement to the Commission for filing pursuant to Rule 424(b),
to the extent and within the period required by Rule 424(b) under the 1933
Act Regulations, and will furnish to the Underwriters named therein as many
copies of the Prospectus (including such Prospectus Supplement) as the
Representatives shall reasonably request.
(b) If, at the time the preliminary prospectus supplement was filed with
the Commission pursuant to Rule 424(b) under the 1933 Act Regulations, any
information shall have been omitted therefrom, then immediately following
the execution of the applicable Terms Agreement, the Company will prepare,
and file or transmit for filing with the Commission in accordance with Rule
424(b) under the 1933 Act Regulations, a copy of a final Prospectus
Supplement, containing all information so omitted. The Company shall make
payment of, or arrange for payment of, the additional registration fee
owing to the Commission required by Rule 111 under the 1933 Act Regulations
in connection with any registration statement filed in the future pursuant
to Rule 462(b) under the 1933 Act Regulations.
(c) For a period of three months following any sale of Underwritten
Securities, the Company will notify the Representatives immediately, and
confirm such notice in writing, of (i) the effectiveness of any
12
<PAGE>
amendment to the Registration Statement, (ii) the transmittal to the
Commission for filing of any Prospectus Supplement or other supplement or
amendment to the Prospectus to be filed pursuant to the 1933 Act, (iii) the
receipt of any comments from the Commission, (iv) any request by the
Commission for any amendment to the Registration Statement or any amendment
or supplement to the Prospectus or for additional information, and (v) the
issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement or the initiation of any proceedings for that
purpose; and the Company will make every reasonable effort to prevent the
issuance of any such stop order and, if any stop order is issued, to obtain
the lifting thereof at the earliest possible moment.
(d) At any time when the Prospectus is required to be delivered under the
1933 Act or the 1934 Act in connection with sales of the Underwritten
Securities, the Company will give the Representatives notice of its
intention to file or prepare any amendment to the Registration Statement or
any amendment or supplement to the Prospectus, whether pursuant to the 1933
Act, 1934 Act or otherwise, will furnish the Representatives with copies of
any such amendment or supplement a reasonable amount of time prior to such
proposed filing and, unless required by law, will not file or use any such
amendment or supplement or other documents in a form to which the
Representatives or counsel for the Underwriters shall reasonably object.
(e) The Company will, to the extent it has not already done so, deliver
to the Representatives as soon as possible one signed copy of the
Registration Statement as originally filed and of each amendment (with
respect to documents filed pursuant to the 1934 Act, conformed copies will
suffice) thereto (including conformed copies of exhibits filed therewith or
incorporated by reference therein and documents incorporated by reference
therein) and will also deliver to the Representatives as many conformed
copies of the Registration Statement as originally filed and of each
amendment thereto or to the Prospectus, including documents incorporated by
reference into the Prospectus, as the Representatives may reasonably
request.
(f) The Company will furnish to each Underwriter, from time to time
during the period when the Prospectus is required to be delivered under the
1933 Act or the 1934 Act, such number of copies of the Prospectus (as
amended or supplemented) as such Underwriter may reasonably request for the
purposes contemplated by the 1933 Act or the 1934 Act or the respective
applicable rules and regulations of the Commission thereunder.
(g) If any event shall occur as a result of which it is necessary, in the
reasonable opinion of counsel for the Underwriters, to amend or supplement
the Prospectus in order to comply with the 1933 Act or the 1934 Act or the
respective applicable rules and regulations of the Commission thereunder or
to make the Prospectus not misleading in the light of the circumstances
existing at the time it is delivered to a purchaser, the Company will
forthwith amend or supplement the Prospectus (in form and substance
reasonably satisfactory to counsel for the Underwriters) so that, as so
amended or supplemented, the Prospectus will not include an untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances
existing at the time it is delivered to a purchaser, not misleading.
(h) The Company will endeavor, in cooperation with the Underwriters, to
qualify or register the applicable Underwritten Securities for offering and
sale under the applicable securities laws and real estate syndication laws
of such states and other jurisdictions as the Representatives may
reasonably designate; provided, however, the Company will not be required
to qualify or to register as a foreign corporation, file a general consent
to service of process in any such jurisdiction, subject itself to taxation
in respect of doing business in any jurisdiction in which it is not
otherwise so subject, or provide any undertaking or make any change in its
charter, declaration of trust, by-laws or other governing document that the
Board of Trustees of the Company reasonably determines to be contrary to
the best interests of the Company and its shareholders. In each
jurisdiction in which the applicable Underwritten Securities have been so
qualified or registered, the Company will file such statements and reports
as may be required by the laws of such jurisdiction to continue such
qualification or registration in effect for so long as may be required for
the distribution of the applicable Underwritten Securities.
(i) With respect to each sale of Underwritten Securities, the Company
will make generally available to its security holders as soon as
practicable, but not later than 60 days after the close of the period
covered
13
<PAGE>
thereby (ninety (90) days in the event that the close of such period is the
close of the Company's fiscal year), an earnings statement (in form
complying with the provisions of Rule 158 of the 1933 Act Regulations)
covering a twelve-month period beginning not later than the first day of
the Company's fiscal quarter next following the "effective date" (as
defined in said Rule 158) of the Registration Statement.
(j) The Company will use the net proceeds received by it from the sale of
the Underwritten Securities in the manner specified in the Prospectus
Supplement under "Use of Proceeds."
(k) The Company, during the period when the Prospectus is required to be
delivered under the 1933 Act or the 1934 Act, will file all documents
required to be filed with the Commission pursuant to Sections 13, 14 or 15
of the 1934 Act within the time periods required by the 1934 Act and the
1934 Act Regulations.
(l) The Company will use its best efforts to maintain the listing of the
Common Shares on the NYSE.
(m) During a period of 90 days from the date of any Closing Time, the
Company, the Operating Partnership and each Trustee and executive officer
of the Company will not, without the prior written consent of Merrill
Lynch, directly or indirectly, offer, sell, contract to sell, grant any
options for the sale of or otherwise dispose of any Common Shares and/or
Units or any security convertible into or exchangeable or exercisable for
Common Shares and/or Units (except for (i) the issuance of Common Shares
and/or Units pursuant to the Share Option Plans and (ii) the exchange of
Units for Common Shares); provided, however, that the Company or the
Operating Partnership, as the case may be, may issue additional Common
Shares and/or Units, or any security convertible into or exchangeable or
exercisable for Common Shares and/or Units in connection with the
acquisition of real property or direct or indirect interests in real
property, if the recipient of such Common Shares and/or Units or any
security convertible into or exchangeable or exercisable for Common Shares
and/or Units, as applicable, agrees in writing to not, without the prior
written consent of Merrill Lynch and the Company, directly or indirectly,
offer sell, contract to sell, grant any options for the sale of, or
otherwise dispose of any of such Common Shares and/or Units until the
expiration of the Lock-Up Period.
(n) The Company will use its reasonable best efforts to continue to meet
the requirements to qualify as a "real estate investment trust" under the
Code.
(o) During the period from the Closing Time until five years after the
Closing Time, the Company will deliver to the Representatives, (i) promptly
upon their being mailed or filed, copies of all current, regular and
periodic reports of the Company mailed to its shareholders or filed with
any securities exchange or with the Commission or any governmental
authority succeeding to any of the Commission's functions, and (ii) such
other information concerning the Company and its subsidiaries and
affiliates as the Representatives may reasonably request.
Section 4. Payment of Expenses. The Company will pay all expenses incident to
the performance of its obligations under this Agreement and the applicable
Terms Agreement, including (i) the printing and filing of the Registration
Statement as originally filed and of each amendment thereto, of each
preliminary prospectus, and of the Prospectus and any amendments and
supplements thereto; (ii) the cost of reproducing and distributing to the
Underwriters copies of this Agreement and the applicable Terms Agreement; (iii)
the preparation, issuance and delivery of the certificates for the Underwritten
Securities to the Underwriters; (iv) the fees and disbursements of the
Company's counsel and accountants; (v) the qualification of the Underwritten
Securities under securities laws and real estate syndication laws in accordance
with the provisions of Section 3(h) hereof, including filing fees and the
reasonable fees and disbursements of counsel for the Underwriters in connection
therewith and in connection with the preparation of the Blue Sky Survey; (vi)
the printing and delivery to the Underwriters of copies of the Registration
Statement as originally filed and of each amendment thereto, of each
preliminary prospectus, and of the Prospectus and any amendments or supplements
thereto; (vii) the cost of reproducing and delivering to the Underwriters
copies of the Blue Sky Survey; (viii) the fee of the NASD, if any; (ix) the
fees and expenses incurred in connection with the listing of the Underwritten
Securities on the NYSE; (x) the cost and charge of any transfer agent or
registrar, and the cost of preparing share certificates; and (xi) any transfer
taxes imposed on the sale of the Underwritten Securities to the several
Underwriters.
If this Agreement is cancelled or terminated by the Representatives in
accordance with the provisions of Section 5 and Section 9(i) hereof, the
Company and the Operating Partnership shall reimburse the Underwriters
14
<PAGE>
for all of their out-of-pocket expenses, including the reasonable fees and
disbursements of counsel for the Underwriters.
Section 5. Conditions of Underwriters' Obligations. The obligations of the
Underwriters hereunder are subject to the accuracy in all Material respects, as
of the date hereof and at Closing Time, of the representations and warranties
of the Primary Entities herein contained, to the performance by the Primary
Entities of their respective obligations hereunder, and to the following
further conditions:
(a) At the Closing Time, (i) no stop order suspending the effectiveness
of the Registration Statement shall have been issued under the 1933 Act or
proceedings therefor initiated or threatened by the Commission; (ii) if the
Company has elected to rely upon Rule 434 of the 1933 Act Regulations, the
public offering price of and other related terms of the Underwritten
Securities, as the case may be, and any price-related information
previously omitted from the effective Registration Statement pursuant to
such Rule 434 shall have been transmitted to the Commission for filing
pursuant to Rule 424(b) and/or Rule 434 under the 1933 Act Regulations
within the prescribed time period, and prior to the applicable Closing
Time, the Company shall have provided evidence satisfactory to the
Representatives of such timely filing, or a post-effective amendment
providing such information shall have been promptly filed and declared
effective in accordance with the requirements of Rule 434 under the 1933
Act Regulations.
(b) At Closing Time the Representatives shall have received:
(1) The favorable opinion in form and substance reasonably
satisfactory to counsel for the Underwriters, dated as of the Closing
Time of Mayer, Brown & Platt, Chicago, Illinois, counsel for each of
the Company, the Operating Partnership and the Management Company with
respect to the matters set forth below:
(i) The Company has been duly organized and is validly existing as
a real estate investment trust in good standing under and by virtue
of the laws of the State of Maryland. The Company has the requisite
power and authority to own, lease and operate its properties and to
conduct the business in which it is engaged or proposes to engage,
as described in the Registration Statement and the Prospectus, and
the Company has the requisite power and authority to enter into and
perform its obligations under this Agreement, the applicable Terms
Agreement, and the other Company Documents to which it is a party.
The Company is duly qualified or registered to transact business and
is in good standing in each jurisdiction in which such qualification
or registration is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the
failure to so qualify or register would not result in a Material
Adverse Change.
(ii) The Operating Partnership has been duly organized and is
validly existing as a limited partnership in good standing under and
by virtue of the laws of the State of Delaware. The Operating
Partnership has all requisite partnership power and authority to
own, lease and operate its properties, to conduct the business in
which it is engaged and proposes to engage, in each case as
described in the Registration Statement and the Prospectus, and to
enter into and perform its obligations under this Agreement and the
other Company Documents to which it is a party. The Operating
Partnership is duly qualified or registered as a foreign partnership
and is in good standing in each jurisdiction in which such
qualification or registration is required, whether by reason of the
ownership or leasing of property or the conduct of business, except
where the failure to so qualify or register would not result in a
Material Adverse Change. The Company is the sole general partner of
the Operating Partnership. All the issued and outstanding Units have
been duly authorized and are validly issued and fully paid and have
been offered and sold in compliance, in all Material respects, with
all applicable laws of the United States. To the knowledge of such
counsel, no Units of the Operating Partnership are reserved for any
purpose, and there are no outstanding securities convertible into or
exchangeable for any Units of the Operating Partnership, and no
outstanding options, rights (preemptive or otherwise) or warrants to
purchase or to subscribe for Units or any other securities of the
Operating Partnership, except (i) as disclosed in
15
<PAGE>
the Prospectus, (ii) Units issuable pursuant to the Share Option
Plans and (iii) to the extent applicable, Units issuable by the
Operating Partnership in connection with the acquisition of real
property or direct or indirect interests in real property in
accordance with this Agreement.
(iii) The Management Company has been duly incorporated and is
validly existing as a corporation in good standing under and by
virtue of the laws of the State of Delaware. The Management Company
has all requisite corporate power and authority to own, lease and
operate its properties and to conduct the business in which it is
engaged or proposes to engage as described in the Registration
Statement and the Prospectus, and the Management Company has the
corporate power and authority to enter into and perform its
obligations under the Company Documents to which it is a party. The
Management Company is duly qualified or registered as a foreign
corporation to transact business and is in good standing in each
jurisdiction in which such qualification or registration is
required, whether by reason of the ownership or leasing of property
or the conduct of business, except where the failure to so qualify
or register would not result in a Material Adverse Change.
(iv) The Company has or will have, as of the Closing Time, duly
authorized capital shares as set forth in the Prospectus under
"Description of Common Shares" and in the Prospectus Supplement
under "Capitalization" (except for subsequent issuances otherwise
permitted under this Agreement). All the issued and outstanding
Common Shares of the Company have been duly authorized and are
validly issued, fully paid and, except as described in the
Prospectus, non-assessable, and have been offered and sold in
compliance, in all Material respects, with all applicable federal
laws of the United States. To the knowledge of such counsel, other
than the Option Securities, no capital shares of the Company are
reserved for any purpose except in connection with the possible
issuance of Common Shares (1) upon the exchange of the Units, (2)
pursuant to the Share Option Plans and (3) to the extent applicable,
in connection with the acquisition of real property or direct or
indirect interests in real property if the recipient of Units in
connection with any such acquisition agrees in writing not to,
without the prior written consent of Merrill Lynch and the Company,
directly or indirectly, offer, sell, grant any options for the sale
of, or otherwise dispose of any such Units until the expiration of
the Lock-Up Period. To the knowledge of such counsel, except for (1)
Units, (2) options issued under the Share Option Plans and (3) to
the extent applicable, Common Shares and/or Units issuable in
connection with the acquisition of real property or direct or
indirect interests in real property if the recipient of such Common
Shares and/or Units agrees in writing not to, without the prior
written consent of Merrill Lynch and the Company, directly or
indirectly, offer, sell, grant any options for the sale of, or
otherwise dispose of any such Common Shares and/or Units until the
expiration of the Lock-Up Period, there are no outstanding
securities convertible into or exchangeable for any capital shares
of the Company and no outstanding options, other than as provided in
this Agreement, rights (preemptive or otherwise) or warrants to
purchase or to subscribe for such shares or any other securities of
the Company.
(v) The applicable Underwritten Securities have been duly
authorized for issuance and sale to the Underwriters pursuant to
this Agreement and the applicable Terms Agreement and, when issued
and delivered by the Company pursuant to this Agreement and the
applicable Terms Agreement against payment of the consideration set
forth in the applicable Terms Agreement, will be validly issued,
fully paid and, except as described in the Prospectus, non-
assessable. The terms of the applicable Underwritten Securities
conform, in all Material respects, to all statements and
descriptions related thereto contained in the Prospectus. The form
of share certificates evidencing the applicable Underwritten
Securities is in due and proper form and complies in all Material
respects with all applicable legal requirements. The issuance of the
Securities is not subject to any preemptive or other similar rights
arising under Maryland General Corporation Law, the Second Amended
and Restated Declaration of Trust or the Amended and Restated By-
laws of the Company, or any agreement of which such counsel is
aware.
16
<PAGE>
(vi) Except in each case for conflicts, breaches, violations or
defaults that, individually or in the aggregate, would not result in
a Material Adverse Change, to the knowledge of such counsel, none of
the Company, the Operating Partnership and the Management Company is
in breach or violation of or default in the performance of any
obligation, agreement, covenant or condition contained in (1) any of
the Company Documents; (2) any contract, indenture, mortgage, loan
agreement, note, lease, joint venture or partnership agreement or
other instrument or agreement to which any such entity is a party or
by which it or any of them or any of their respective properties or
other assets or any Facility may be bound or subject and of which
such counsel is aware; (3) the charter, declaration of trust,
certificate of limited partnership, partnership agreement or other
governing document, as the case may be, of any such entity; (4) any
applicable law, rule or administrative regulation of the United
States or the jurisdiction of its incorporation or formation; or (5)
any order or administrative or court decree of which such counsel is
aware.
(vii) Each of this Agreement, the applicable Terms Agreement, and
the other Company Documents was duly and validly authorized,
executed and delivered by each of the Company, the Operating
Partnership and the Management Company to the extent the foregoing
are parties thereto, and assuming due authorization, execution and
delivery by any other party thereto, each is a valid and binding
agreement of the Company, the Operating Partnership and the
Management Company to the extent the foregoing are parties thereto,
and the Company, the Operating Partnership and the Management
Company, have the power and authority to perform their obligations
hereunder and thereunder.
(viii) Except in each case for conflicts, breaches, violations or
defaults that, individually or in the aggregate, would not result in
a Material Adverse Change, the execution and delivery of this
Agreement, the applicable Terms Agreement and the Company Documents,
the performance of the obligations set forth herein or therein, by
the Company, the Operating Partnership and the Management Company,
to the extent the foregoing are parties thereto, did not, do not and
will not conflict with or constitute a breach or violation of, or
default under (1) any of the Company Documents; (2) any contract,
indenture, mortgage, loan agreement, note, lease, joint venture or
partnership agreement or other instrument or agreement to which any
such entity is a party or by which it or any of them or any of their
respective properties or other assets or any Facility may be bound
or subject and of which such counsel is aware; (3) the charter,
declaration of trust, certificate of limited partnership,
partnership agreement or other governing document, as the case may
be, of any such entity; (4) any applicable law, rule or
administrative regulation of the United States or the jurisdiction
of its incorporation or formation; or (5) any order or
administrative or court decree of which such counsel is aware.
(ix) Since November 8, 1994, the Company has been organized in
conformity with the requirements for qualification and taxation as a
"real estate investment trust" under the Code, and the actual and
proposed method of operation of the Company as described in the
Registration Statement and the Prospectus Supplement has and will
enable the Company to continue to satisfy the requirements for
qualification as a "real estate investment trust" provided that such
counsel's opinion as to this matter may be conditioned upon certain
representations as to factual matters made by the Company to such
counsel as described therein.
(x) None of the Company, the Operating Partnership and the
Management Company is required to be registered under the 1940 Act.
(xi) To the knowledge of such counsel, no authorization, approval,
consent or order of any court or governmental authority or agency or
any other entity is required in connection with the offering,
issuance or sale of the applicable Underwritten Securities hereunder
in each case, except such as may be required under the 1933 Act or
the 1933 Act Regulations, the by-laws and rules of the NASD, the
listing requirements of the NYSE, state securities or real estate
syndication laws or such as have been received prior to the date of
such opinion.
17
<PAGE>
(xii) The Registration Statement is effective under the 1933 Act
and, to the knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement has been issued under
the 1933 Act or proceedings therefor initiated or threatened by the
Commission.
(xiii) At the time the Registration Statement became effective and
at the Representation Date, the Registration Statement and the
Prospectus (other than the financial statements and supporting
schedules and other financial and statistical data included therein,
or incorporated therein by reference, as to which no opinion need be
rendered) complied as to form in all material respects with the
requirements of the 1933 Act, the 1933 Act Regulations, the 1934 Act
and the 1934 Act Regulations.
(xiv) To such counsel's knowledge, there are no legal or
governmental proceedings pending against, threatened against or
affecting the Company, the Operating Partnership or the Management
Company which are required to be disclosed in the Registration
Statement or the Prospectus, other than those disclosed therein.
(xv) The information in the Prospectus under "Description of
Common Shares," "Description of Common Share Warrants," "Certain
Provisions of Maryland Law and of the Company's Declaration of Trust
and By-Laws," "Federal Income Tax Considerations," and the
information in the applicable Prospectus Supplement under,
"Prospectus Supplement Summary," "Use of Proceeds," "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" and "Properties," and the information in the 10-K under,
"Legal Proceedings," "Submission of Matters to a Vote of Security
Holders," "Executive Compensation," "Security Ownership of Certain
Beneficial Owners and Management," and "Certain Relationships and
Related Transactions," to the extent that it constitutes statements
of law, descriptions of statutes, rules or regulations, summaries of
documents or legal conclusions, has been reviewed by such counsel
and is correct in all Material respects and presents fairly the
information required to be disclosed therein.
(xvi) To such counsel's knowledge, there are no contracts,
indentures, mortgages, loan agreements, notes, leases or other
instruments required to be described or referred to in the
Registration Statement or to be filed as exhibits thereto by the
1933 Act Regulations other than those described or referred to
therein or filed as exhibits thereto, and the descriptions thereof
or references thereto are accurate in all material respects.
(xvii) To the best knowledge of such counsel, there are no persons
with registration or other similar rights to have any securities
registered pursuant to the Registration Statement.
(xviii) The Company satisfies all conditions and requirements for
filing the Registration Statement on Form S-3 under the 1933 Act and
1933 Act Regulations.
(xix) The applicable Underwritten Securities have been approved
for listing, subject to official notice of issuance, on the New York
Stock Exchange.
(xx) The Operating Partnership is and will be classified as a
partnership for Federal income tax purposes.
In addition, Mayer, Brown & Platt shall state that they have
participated in conferences with officers and other representatives of
the Company, representatives of the independent public accountants for
the Company and representatives of the Underwriters at which the
contents of the Registration Statement and the Prospectus and related
matters were discussed. On the basis thereof (relying as to materiality
upon the opinions of officers and other representatives of the
Company), but without independent verification by such counsel of, and
without passing upon or assuming any responsibility for, the accuracy,
completeness or fairness of the statements contained in the
Registration Statement or the Prospectus or any amendments or
supplements thereto, no facts have come to the attention of such
counsel that lead them to believe that (i) the Registration Statement,
at the time such Registration Statement or any amendment thereto became
effective, contained any untrue statement of
18
<PAGE>
a material fact or omitted to state any material fact required to be
stated therein or necessary in order to make the statements therein not
misleading or (ii) the Prospectus or any amendment or supplement
thereto, as of its date or at the Closing Time, contained or contains
any untrue statement of a material fact or omitted 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 (it being
understood that such counsel need express no opinion with respect to
the financial statements, schedules and other financial and statistical
data included, or incorporated by reference, in the Registration
Statement or the Prospectus).
This opinion described in paragraph 5(b)(1)(ix) above may be
conditioned upon representations made by the Company as to certain
factual matters relating to the Company's organization and intended or
expected manner of operation, and the opinion in paragraph 5(b)(1)(xxi)
above may be based upon representations of the Company and may assume
that the Operating Partnership will not constitute a "publicly traded
partnership" within the meaning of Section 7704(b) of the Code.
In giving its opinion, such counsel may rely, (A) as to all matters
of fact, upon certificates and written statements of officers,
directors, partners and employees of and accountants for each of the
Transaction Entities, (B) as to matters of Maryland law, on the opinion
of Ballard Spahr Andrews & Ingersoll, Baltimore, Maryland, which
opinion shall be in form and substance reasonably satisfactory to
counsel for the Underwriters, and (C) as to the good standing and
qualification of the Company, the Operating Partnership and the
Management Company to do business in any state or jurisdiction, upon
certificates of appropriate government officials or opinions of counsel
in such jurisdictions. Counsel need express no opinion (i) as to the
enforceability of forum selection clauses in the federal courts, (ii)
with respect to the requirements of, or compliance with, any state
securities, real estate syndication or "Blue Sky" laws.
(2) The favorable opinion, dated as of the Closing Time, of Rogers &
Wells, counsel for the Underwriters, (A) with respect to the matters
set forth in Section 5(b)(1)(i) (with respect to the first sentence
only), Section 5(b)(1)(v), (with respect to the first and last
sentences only) Section 5(b)(1)(vii) (with respect to first clause
only, with respect to the Company only and with respect to this
Agreement and the applicable Terms Agreement only), and Section
5(b)(1)(xiii) and (B) containing a statement similar to the statement
referred to in the second paragraph following 5(b)(1)(xx) and similar
to the statement referred to in the first sentence of the last
paragraph of Section 5(b)(1).
In giving its opinion, Rogers & Wells may rely, (A) as to all matters
of fact, upon certificates and written statements of officers and
employees of and accountants for the Transaction Entities, (B) as to
the good standing and qualification of the Company to do business in
any state or jurisdiction, upon certificates of appropriate government
officials or opinions of counsel in such jurisdictions, which opinions
shall be in form and substance satisfactory to counsel for the
Underwriters, and (C) as to certain matters of law, upon the opinions
given pursuant to Section 5(b)(1) above.
(c) At the Closing Time, (i) the Registration Statement and the
Prospectus shall contain all statements that are required to be stated
therein in accordance with the 1933 Act and the 1933 Act Regulations and in
all Material respects shall conform to the requirements of the 1933 Act and
the 1933 Act Regulations; and the Registration Statement shall not contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein
not misleading; and the Prospectus will not include an untrue statement of
a material fact or omit to state a material fact necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading, (ii) no action, suit or proceeding at law or in
equity shall be pending or, to the knowledge of any Primary Entity, after
due inquiry, threatened against the Transaction Entities or any Facility
which would be required to be set forth in the Prospectus other than as set
forth therein, (iii) there shall not have been, since the date hereof or
since the respective dates as of which information is given in the
Registration Statement and the Prospectus, any Material Adverse Change,
(iv) no proceedings shall be pending or to the knowledge of the Primary
Entities, after due inquiry, threatened against any Transaction Entity or
any Facility before or by any federal, state or other commission, board or
administrative agency wherein an
19
<PAGE>
unfavorable decision, ruling or finding could reasonably be expected to
result in a Material Adverse Change, other than as set forth in the
Prospectus, (v) no stop order suspending the effectiveness of the
Registration Statement or any part thereof shall have been issued and no
proceedings for that purpose shall have been instituted or, to the
knowledge of the Primary Entities, after due inquiry, threatened by the
Commission or by the state securities authority of any jurisdiction, and
(vi) the Representatives shall have received a certificate of the President
or a Vice President and the chief financial or chief accounting officer (or
such officer acting in a similar capacity) of the Company, and as the
holder of such office for the sole general partner of the Operating
Partnership, dated as of the Closing Time, evidencing compliance with the
provisions of this subsection (c) and stating that the representations and
warranties in Section 1 hereof are true and correct, in all Material
respects, with the same force and effect as though expressly made at and as
of Closing Time.
(d) At the time of the execution of the applicable Terms Agreement, the
Representatives shall have received from Ernst & Young LLP a letter dated
such date, in form and substance satisfactory to the Representatives, to
the effect that: (i) they are independent public accountants with respect
to the Company and BHC Properties Group (as defined in the Registration
Statement) as required by the 1933 Act and the 1933 Act Regulations; (ii)
it is their opinion that the financial statements and supporting schedules
included in the Registration Statement and Prospectus or incorporated by
reference therein, and covered by their opinions therein comply as to form
in all material respects with the applicable accounting requirements of the
1933 Act and the 1933 Act Regulations; (iii) based upon limited procedures
set forth in detail in such letter, including a reading of the latest
available interim financial statements of the Company, a reading of the
minute books of the Company, inquiries of officials of the Company
responsible for financial and accounting matters and such other inquiries
and procedures as may be specified in such letter, nothing has come to
their attention which causes them to believe that (A) the unaudited
financial statements and supporting schedules of the Company included in
the Registration Statement and Prospectus, or incorporated by reference
therein, do not comply as to form in all material respects with the
applicable accounting requirements of the 1933 Act and the 1933 Act
Regulations or are not in conformity with generally accepted accounting
principles applied on a basis substantially consistent with that of the
audited financial statements included in, or incorporated by reference
into, the Registration Statement and Prospectus, (B) the operating data and
balance sheet data set forth in the Prospectus under the caption "Selected
Financial Information" were not determined on a basis substantially
consistent with that used in determining the corresponding amounts in the
audited financial statements included in, or incorporated by reference
into, the Registration Statement and Prospectus, (C) the pro forma
financial information included in, or incorporated by reference into, the
Registration Statement and Prospectus was not prepared in accordance with
the applicable requirements of the 1933 Act, the 1933 Act Regulations or
AICPA Guidelines with respect to pro forma financial information or was not
determined on a basis substantially consistent with that of the audited
financial statements included in the Registration Statement and Prospectus
or (D) at a specified date not more than five days prior to the date of
this Agreement, there has been any change in the capital shares of the
Company or partnership units of the Operating Partnership or any increase
in the debt of the Company or its subsidiaries or any decrease in the net
assets of the Company or its subsidiaries as compared with the amounts
shown in the most recent consolidated balance sheet of the Company, the
Operating Partnership and their subsidiaries, included in the Registration
Statement and the Prospectus or incorporated by reference therein, or,
during the period from the date of the most recent consolidated statement
of operations included in the Registration Statement and Prospectus or
incorporated by reference therein to a specified date not more than five
days prior to the date of the applicable Terms Agreement, there were any
decreases, as compared with the corresponding period in the preceding year,
in total revenues, net income or funds from operations of the Company,
except in all instances for changes, increases or decreases which the
Registration Statement and Prospectus disclose have occurred or may occur;
and (iv) in addition to the examination referred to in their opinions and
the limited procedures referred to in clause (iii) above, they have carried
out certain specified procedures, not constituting an audit, with respect
to certain amounts, percentages and financial information which are
included in the Registration Statement and Prospectus and which are
specified by the Representatives, and have found such amounts,
20
<PAGE>
percentages and financial information to be in agreement with the relevant
accounting, financial and other records of the Company or BHC Properties
Group identified in such letter.
(e) At the Closing Time, the Representatives shall have received from
Ernst & Young LLP a letter, dated the Closing Time, to the effect that they
reaffirm the statements made in the letter furnished pursuant to subsection
(d) of this Section, except that the "specified date" referred to shall be
a date not more than five days prior to the Closing Time and, if the
Company has elected to rely on Rule 434 of the 1933 Act Regulations, to the
further effect that they have carried out procedures as specified in clause
(iv) of subsection (d) of this Section with respect to certain amounts,
percentages and financial information specified by the Representatives and
deemed to be a part of the Registration Statement pursuant to Rule 434 and
have found such amounts, percentages and financial information to be in
agreement with the records specified in such clause (iv).
(f) At the Closing Time, the applicable Underwritten Securities shall be
approved for listing, subject to official notice of issuances, on the NYSE.
(g) At the Closing Time and at each Date of Delivery, if any, counsel for
the Underwriters shall have been furnished with such documents and opinions
as they may reasonably require for the purpose of enabling them to pass
upon the issuance and sale of the applicable Underwritten Securities as
herein contemplated and related proceedings, or in order to evidence the
accuracy of any of the representations or warranties, or the fulfillment of
any of the conditions, herein contained; and all proceedings taken by the
Company in connection with the issuance and sale of the applicable
Underwritten Securities as herein contemplated shall be reasonably
satisfactory in form and substance to the Representatives and counsel for
the Underwriters.
(h) At or prior to the Closing Time, the Representatives shall have
received a letter agreement from the Company, the Operating Partnership and
each Trustee and executive officer of the Company, that they will not,
without the prior written consent of Merrill Lynch, directly or indirectly,
offer, sell, contract to sell, grant any options for the sale of, or
otherwise dispose of, any Common Shares and/or Units or any security
convertible into or exchangeable or exercisable for the Common Shares
and/or Units (except for (i) the issuance of Common Shares and/or Units
pursuant to the Share Option Plans and (ii) the exchange of Units for
Common Shares); provided, however, that the Company or the Operating
Partnership, as the case may be, may issue additional Common Shares and/or
Units, or any security convertible into or exchangeable or exercisable for
its Common Shares and/or Units, in connection with the acquisition of real
property or direct or indirect interests in real property, if the recipient
of such Common Shares and/or Units agrees in writing to not, without the
prior written consent of Merrill Lynch and the Company, directly or
indirectly, offer, sell, contract to sell, grant any options for the sale
of, or otherwise dispose of any of such Common Shares and/or Units until
the expiration of the Lock-Up Period.
(i) In the event that the Underwriters exercise their option provided in
Section 2(b) hereof to purchase all or any portion of the Option
Securities, the representations and warranties of the Primary Entities
contained herein and the statements in any certificates furnished by the
Transaction Entities hereunder shall be true and correct in all Material
respects as of each Date of Delivery and, at the relevant Date of Delivery,
the Representatives shall have received:
(1) A certificate, dated such Date of Delivery, of the President or a
Vice President and the chief financial or chief accounting officer of
the Company and as the holder of such office for the sole general
partner of the Operating Partnership confirming that the certificates
delivered at Closing Time pursuant to Section 5(c) hereof remain true
and correct in all Material respects as of such Date of Delivery.
(2) The favorable opinion of (i) Mayer, Brown & Platt and (ii) such
other counsel required to deliver opinions pursuant to Section 5(b)(1)
hereof, each in form and substance reasonably satisfactory to counsel
for the Underwriters, dated such Date of Delivery, relating to the
Option Securities to be purchased on such Date of Delivery and
otherwise to the same effect as the opinion required by Section 5(b)(1)
hereof.
21
<PAGE>
(3) The favorable opinion of Rogers & Wells, counsel for the
Underwriters, dated such Date of Delivery, relating to the Option
Securities to be purchased on such Date of Delivery and otherwise to
the same effect as the opinion required by Section 5(b)(2) hereof.
(4) A letter from Ernst & Young LLP in form and substance reasonably
satisfactory to the Representatives and dated such Date of Delivery, in
substantially the same form and substance as the letter furnished to
the Representatives pursuant to Section 5(d) hereof, except that the
"specified date" in the letter furnished pursuant to this Section
5(i)(4) shall be a date not more than five days prior to such Date of
Delivery.
If any condition specified in this Section shall not have been fulfilled when
and as required to be fulfilled, this Agreement may be terminated by the
Representatives by notice to the Company at any time at or prior to Closing
Time, and such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof.
Section 6. Indemnification.
(a) Each of the Primary Entities agrees, jointly and severally, to indemnify
and hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the 1933 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or any amendment thereto), including the information deemed to be part of
the Registration Statement pursuant to Rule 434 of the 1933 Act
Regulations, if applicable, or the omission or alleged omission therefrom
of a material fact required to be stated therein or necessary to make the
statements therein not misleading or arising out of any untrue statement or
alleged untrue statement of a material fact contained in any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto) or
the omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided, however, that this
indemnity agreement shall not apply to any loss, liability, claim, damage
or expense to the extent arising out of any untrue statement or omission or
alleged untrue statement or omission made in reliance upon and in
conformity with written information furnished to the Company by any
Underwriter through the Representatives expressly for use in the
Registration Statement (or any amendment thereto) or any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto); and
provided, further, that this indemnity agreement with respect to any
preliminary prospectus shall not inure to the benefit of any Underwriter
from whom the person asserting any such losses, liabilities, claims,
damages or expenses purchased the applicable Underwritten Securities, or
any person controlling such Underwriter, if a copy of the Prospectus (as
then amended or supplemented, if the Company shall have furnished any such
amendments or supplements thereto) was not sent or given by or on behalf of
such Underwriter to such person, if such is required by law, at or prior to
the written confirmation of the sale of such Securities to such person and
if the Prospectus (as so amended or supplemented) would have corrected the
defect giving rise to such loss, liability, claim, damage or expense;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever for which indemnification is provided under subsection (i) above
if such settlement is effected with the written consent of the indemnifying
party; and
(iii) against any and all expense whatsoever, as incurred (including,
subject to Section 6(c) hereof, the reasonable fees and disbursements of
counsel chosen by Merrill Lynch), reasonably incurred in investigating,
preparing or defending against any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened, or
any claim whatsoever for which indemnification is provided under subsection
(i) or (ii) above, to the extent that any such expense is not paid under
(i) or (ii) above.
22
<PAGE>
(b) Each Underwriter severally and not jointly agrees to indemnify and hold
harmless the Primary Entities, each of the Company's trustees and each of the
Company's officers who signs the Registration Statement or any amendment
thereto and each person, if any, who controls any Primary Entity within the
meaning of Section 15 of the 1933 Act, against any and all loss, liability,
claim, damage and expense described in the indemnity contained in subsection
(a) of this Section, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Registration
Statement (or any amendment thereto) or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Company by such
Underwriter through the Representatives expressly for use in the Registration
Statement (or any amendment thereto) or such preliminary prospectus or the
Prospectus (or any amendment or supplement thereto).
(c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any claims asserted against or any
action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve
such indemnifying party from any liability which it may have otherwise than on
account of this indemnity agreement except to the extent the indemnifying party
has been prejudiced in any material respect by such failure. An indemnifying
party may participate at its own expense in the defense of any such action. If
it so elects within a reasonable time after receipt of such notice, an
indemnifying party, jointly with any other indemnifying parties receiving such
notice, may assume the defense of such action with counsel chosen by it and
reasonably approved by the indemnified parties defendant in such action, unless
such indemnified parties reasonably object to such assumption on the ground
that there may be legal defenses available to them which are different from or
in addition to those available to such indemnifying party. If an indemnifying
party assumes the defense of such action, the indemnifying parties shall not be
liable for any fees and expenses of counsel for the indemnified parties
incurred thereafter in connection with such action. In no event shall the
indemnifying parties be liable for fees and expenses of more than one counsel
(in addition to any local counsel) separate from their own counsel for all
indemnified parties in connection with any one action or separate but
substantially similar or related actions in the same jurisdiction arising out
of the same general allegations or circumstances. Anything in this Section 6 to
the contrary notwithstanding, an indemnifying party shall not be liable for any
settlement of any claim or action effected without its written consent provided
that such consent was not unreasonably withheld.
Section 7. Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
Section 6 hereof is for any reason held to be unenforceable by the indemnified
parties although applicable in accordance with its terms, the Primary Entities,
on the one hand, and the Underwriters, on the other hand, shall contribute to
the aggregate losses, liabilities, claims, damages and expenses of the nature
contemplated by said indemnity agreement incurred by the Primary Entities, on
the one hand, and the Underwriters, on the other hand, (a) in such proportion
as is appropriate to reflect the relative benefits received by the Primary
Entities, on the one hand, and the Underwriters, on the other, from the
offering of the Underwritten Securities, or (b) if the allocation provided by
clause (a) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (a)
above but also the relative fault (as determined by a court of competent
jurisdiction or a panel of arbitration) of the Primary Entities, on the one
hand, and the Underwriters, on the other, in connection with the statements or
omissions that resulted in such losses, liabilities, claims, damages, and
expenses, as well as any other relevant equitable considerations. The relative
benefits received by the Primary Entities, on the one hand, and the
Underwriters, on the other, shall be deemed to be in the same proportions as
the total gross proceeds from the offering (before deducting expenses) received
by the Company bear to the total underwriting discount received by the
Underwriters. The relative fault of the Primary Entities, on the one hand, and
the Underwriters, on the other, shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission to state a material fact relates to information supplied by the
Primary Entities, on the one hand, or by the Underwriters, on the other, and
the parties' relative intent, knowledge, access to information, and opportunity
to correct or prevent such statement or omission.
The parties agree that it would not be just or equitable if contribution
pursuant to this Section 7 were determined by pro rata allocation or by any
other method of allocation which does not take into account the
23
<PAGE>
equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 7, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Underwritten Securities underwritten by it and distributed
to the public were offered to the public exceeds the amount of any damages
which such Underwriter has otherwise been required to pay in respect of such
losses, liabilities, claims, damages and expenses. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933
Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation.
For purposes of this Section 7, the Primary Entities shall be deemed one
party and jointly and severally liable for any obligations hereunder. For
purposes of this Section 7, each person, if any, who controls an Underwriter
within the meaning of Section 15 of the 1933 Act, and any director, officer,
employee or affiliate of an Underwriter or such controlling person, shall have
the same rights to contribution as such Underwriter, and each person, if any,
who controls the Primary Entities within the meaning of Section 15 of the 1933
Act, or any director, officer, employee or affiliate of the Primary Entities or
such controlling person, shall have the same rights to contribution as the
Primary Entities.
Section 8. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this Agreement or
the applicable Terms Agreement, or contained in certificates of the officers or
authorized representatives of the Primary Entities submitted pursuant hereto,
shall remain operative and in full force and effect, regardless of any
investigation made by or on behalf of any Underwriter or controlling person, or
by or on behalf of the Primary Entities and shall survive delivery of the
applicable Underwritten Securities to the Underwriters.
Section 9. Termination of Agreement. The Representatives may terminate this
Agreement and the applicable Terms Agreement, by notice to the Company, at any
time at or prior to a Closing Time (i) if there has been, since the date of
such Terms Agreement or since the respective dates as of which information is
given in the Prospectus, any Material Adverse Change; or (ii) if there has
occurred any material adverse change in the financial markets in the United
States or any outbreak of hostilities or escalation of existing hostilities or
other calamity or crisis the effect of which on the financial markets of the
United States is such as to make it, in the judgment of the Representatives,
impracticable to market the applicable Underwritten Securities or to enforce
contracts for the sale of the applicable Underwritten Securities; or (iii) if
trading in the Common Shares has been suspended by the Commission or if trading
generally on either the NYSE or the American Stock Exchange, Inc. has been
suspended, or minimum or maximum prices for trading have been fixed, or maximum
ranges for prices for securities have been required, by either of said
Exchanges or by order of the Commission or any other governmental authority, or
if a banking moratorium has been declared by either Federal or New York
authorities.
Section 10. Default by One or More of the Underwriters. If one or more of the
Underwriters shall fail at the Closing Time to purchase the Initial
Underwritten Securities or on a relevant Date of Delivery to purchase the
Option Securities which it or they are obligated to purchase under the
applicable Terms Agreement (the "Defaulted Securities"), the Representatives
shall have the right, within 24 hours thereafter, to make arrangements for one
or more of the non-defaulting Underwriters, or any other underwriters, to
purchase all, but not less than all, of the Defaulted Securities in such
amounts as may be agreed upon and upon the terms herein set forth. If, however,
the Representatives shall not have completed such arrangements within such 24-
hour period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the
Underwritten Securities to be purchased at the Closing Time or on a
relevant Date of Delivery, as applicable, pursuant to such Terms Agreement,
each of the non-defaulting Underwriters named in such Terms Agreement shall
be obligated, severally and not jointly, to purchase the full amount
thereof in the proportions that their respective underwriting obligations
hereunder bear to the underwriting obligations of all non-defaulting
Underwriters, or
24
<PAGE>
(b) if the number of Defaulted Securities exceeds 10% of the Underwritten
Securities to be purchased at the Closing Time or on a relevant Date of
Delivery, as applicable, pursuant to such Terms Agreement, the applicable
Terms Agreement shall terminate without liability on the part of any non-
defaulting Underwriter; provided that if such default occurs with respect
to the Option Securities after the Closing Time, this Agreement will not
terminate as to the Initial Securities.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default under this Agreement and
the applicable Terms Agreement.
In the event of any such default which does not result in a termination of
the applicable Terms Agreement, each of the Representatives or the Company
shall have the right to postpone Closing Time for a period not exceeding seven
days in order to effect any required changes in the Registration Statement or
the Prospectus or in any other documents or arrangements.
Section 11. Notices. All notices and other communications hereunder shall be
in writing and shall be deemed to have been duly given if mailed or transmitted
by any standard form of telecommunication. Notices to the Underwriters shall be
directed to the Representatives at Merrill Lynch & Co., Merrill Lynch, Pierce
Fenner & Smith Incorporated, Merrill Lynch World Headquarters, North Tower,
World Financial Center, New York, N.Y. 10281-1201, attention of Martin J.
Cicco, Managing Director; notices to any Primary Entity shall be directed to it
at 2407 Rangeline Street, Columbia, Missouri 65202, attention of Michael G.
Burnam, with a copy to Mayer, Brown & Platt, 190 South LaSalle Street, Chicago,
Illinois 60603, attention of Edward J. Schneidman, Esq.
Section 12. Parties. This Agreement and the applicable Terms Agreement shall
each inure to the benefit of and be binding upon the parties hereto and their
respective successors. Nothing expressed or mentioned in this Agreement or the
applicable Terms Agreement is intended or shall be construed to give any
person, firm or corporation, other than those referred to in Sections 6 and 7
and their heirs and legal representatives, any legal or equitable right, remedy
or claim under or in respect of this Agreement or the applicable Terms
Agreement or any provision herein or therein contained. This Agreement and the
applicable Terms Agreement and all conditions and provisions hereof and thereof
are intended to be for the sole and exclusive benefit of the parties hereto and
thereto and their respective successors, and said controlling persons and
officers and directors and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of Underwritten
Securities from any Underwriter shall be deemed to be a successor by reason
merely of such purchase.
Section 13. Limitation of Liability of Shareholders and Officers of the
Company. No obligation or liability of the Company which may arise at any time
under this Agreement or the applicable Terms Agreement or any obligation or
liability which may be incurred by it pursuant to any other instrument,
transaction or undertaking contemplated hereby or thereby shall be personally
binding upon, nor shall resort for the enforcement thereof be had to, the
property of any of the Company's shareholders, trustees, officers, employees or
agents solely as a result of their status as, and solely in their capacities
as, shareholders, trustees, officers, employees or agents, as the case may be,
regardless of whether such obligation or liability is in the nature of
contract, tort or otherwise. Nothing contained herein shall act to limit any
liability of the Company's trustees, officers, employees or agents to the
Company or limit the ability of shareholders of the Company to bring a
derivative action on behalf of the Company against its trustees, officers,
employees or agents.
Section 14. Governing Law and Time. This Agreement and the Terms Agreement
shall be governed by and construed in accordance with the laws of the State of
New York applicable to agreements made and to be performed in said State.
Specified times of day refer to New York City time.
25
<PAGE>
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement among
the Underwriters and the Primary Entities in accordance with its terms.
Very truly yours,
Storage Trust Realty
By:
----------------------------------
Name: Michael G. Burnam
Title: Chief Executive Officer
Storage Trust Properties, L.P.
By: Storage Trust Realty
its General Partner
By:
-------------------------------
Name: Michael G. Burnam
Title: Chief Executive Officer
CONFIRMED AND ACCEPTED,
as of the date first above written:
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
By: Merrill, Lynch, Pierce, Fenner & Smith
Incorporated
By:
-------------------------------------
Name:
Title: Authorized Signatory
For themselves and as
Representatives of the other
Underwriters named in the applicable
Terms Agreement.
26
<PAGE>
EXHIBIT A
STORAGE TRUST REALTY
(A MARYLAND REAL ESTATE INVESTMENT TRUST)
[NUMBER AND TITLE OF SECURITIES]
TERMS AGREEMENT
Dated: June , 1996
To: Storage Trust Realty
c/o Storage Trust Realty
2407 Rangeline Street
Columbia, MO 65202
Attention: Chairman of the Board of Trustees
Ladies and Gentlemen:
We (the "Representatives") understand that Storage Trust Realty, a Maryland
real estate investment trust (the "Company"), proposes to issue and sell
[ ] of its [common shares of beneficial interest (the "Common
Shares")] [[ ] warrants to purchase Common Shares (the "Common Share
Warrants")] (such [Common Shares] and/or [Common Share Warrants] being
collectively hereinafter referred to as the "Underwritten Securities"). Subject
to the terms and conditions set forth or incorporated by reference herein, the
underwriters named below (the "Underwriters") offer to purchase, severally and
not jointly, the respective numbers of Initial Underwritten Securities (as
defined in the Purchase Agreement referred to below) set forth below opposite
their respective names, and a proportionate share of Option Securities (as
defined in the Purchase Agreement referred to below) to the extent any are
purchased, at the purchase price set forth below.
<TABLE>
<CAPTION>
[NUMBER OF SHARES]
OF INITIAL
UNDERWRITER UNDERWRITTEN SECURITIES
----------- -----------------------
<S> <C>
-----
Total $
=====
</TABLE>
The Underwritten Securities shall have the following terms:
[COMMON SHARES]
Title of Securities:
Number of Shares:
Public offering price per share: $
Purchase price per share: $
Number of Option Securities, if any, that may be purchased by the Underwriters:
Additional co-managers, if any:
Other terms:
Closing time, date and location:
A-1
<PAGE>
The Underwritten Securities shall have the following terms:
[COMMON SHARE WARRANTS]
Title of Securities:
Duration:
Principal amount to be issued:
Public offering price per Common Share Warrant: $
Purchase price per Common Share Warrant: $
Exercise price per Common Share Warrant: $
Exercise date: $
Detachability:
Number of Option Securities, if any, that may be purchased by the
Underwriters:
Other terms:
Closing date and location:
All the provisions contained in the document attached as Annex A hereto
entitled "Storage Trust Realty Purchase Agreement" are hereby incorporated by
reference in their entirety herein and shall be deemed to be a part of this
Terms Agreement to the same extent as if such provisions had been set forth in
full herein. Terms defined in such document are used herein as therein
defined.
Please accept this offer no later than [ ] o'clock P.M. (New York City
time) on [ ] by signing a copy of this Terms Agreement in the space set
forth below and returning the signed copy to us.
Very truly yours,
Merrill Lynch & Co.
Merrill, Lynch, Pierce, Fenner & Smith
Incorporated
A.G. Edwards & Sons, Inc.
Everen Securities, Inc.
Raymond James & Associates, Inc.
Robertson, Stephens & Company
By: Merrill Lynch, Pierce, Fenner & Smith
Incorporated
By:
---------------------------------------
For themselves and as Representatives
of the other named Underwriters.
Accepted:
Storage Trust Realty
By:
-------------------------------------
Name: Michael G. Burnam
Title: Chief Executive Officer
A-2
