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3,000,000 SHARES
SHURGARD STORAGE CENTERS, INC.
8.75% SERIES D CUMULATIVE REDEEMABLE PREFERRED STOCK
UNDERWRITING AGREEMENT
February 22, 2001
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ INC.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
UBS WARBURG LLC
▇▇▇▇ ▇▇▇▇▇▇▇▇ INCORPORATED
c/o ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ INC.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
Shurgard Storage Centers, Inc., a Washington corporation (the
"Company"), proposes to issue and sell an aggregate of 3,000,000 shares (the
"Firm Shares") of its 8.75% Series D Cumulative Redeemable Preferred Stock,
$0.001 par value per share ("Series D Preferred Stock"), to the several
Underwriters named in Schedule I hereto (the "Underwriters"). The Company also
proposes to sell to the Underwriters, upon the terms and conditions set forth in
Section 2 hereof, up to an additional 450,000 shares (the "Additional Shares")
of Series D Preferred Stock. The Firm Shares and the Additional Shares are
hereinafter collectively referred to as the "Shares."
As used herein, the term "Properties" refers to the properties listed on
Schedule II hereto which represent, as of December 31, 2000, all of the real
property in which the Company, either directly or through its Subsidiaries (as
defined herein) or through ownership of interests in any Joint Venture (as
defined herein), owns an interest.
The Company wishes to confirm as follows its agreement with you (the
"Representatives") and the several Underwriters on whose behalf you are acting
in connection with the several purchases of the Shares by the Underwriters.
1. Registration Statement and Prospectus. The Company has prepared and
filed with the Securities and Exchange Commission (the "Commission") in
accordance with the provisions of the Securities Act of 1933, as amended, and
the rules and regulations (the "Rules and Regulations") of the Commission
thereunder (collectively, the "Act"), a registration statement on Form S-3
(Registration No. 333-21273) under the Act (the "registration statement"),
including a prospectus relating to the Shares; and such amendments to such
registration statement as may have been required prior to the date hereof have
been filed with the Commission, and such amendments have been similarly
prepared. Such registration statement and any post-effective
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amendments thereto have become effective under the Act. The Company also has
filed, or proposes to file, with the Commission pursuant to Rule 424(b) under
the Act, a prospectus supplement relating to the offering of the Shares pursuant
to Rule 415 of the Act.
The term "Registration Statement" as used in this Agreement means the
registration statement (including all financial schedules and exhibits), as
amended at the time it became effective, as supplemented or amended prior to the
execution of this Agreement. If it is contemplated, at the time this Agreement
is executed, that a post-effective amendment to the registration statement will
be filed and must be declared effective before the offering of the Shares may
commence, the term "Registration Statement" as used in this Agreement means the
registration statement as amended by said post-effective amendment. The term
"Prospectus" as used in this Agreement means the prospectus in the form included
in the Registration Statement at the time it was declared effective (the "Base
Prospectus") together with the prospectus supplement relating to the offering of
the Shares under Rule 415 of the Act dated the date hereof in the form first
filed with the Commission on or after the date hereof (the "Prospectus
Supplement"). The term "Prepricing Prospectus Supplement" as used in this
Agreement means the Base Prospectus together with any prospectus supplement
subject to completion included in the registration statement as filed with the
Commission pursuant to Rule 424(b) under the Act, and as such prospectus shall
have been amended from time to time prior to the date of the Prospectus. Any
reference in this Agreement to the Registration Statement, the Base Prospectus,
any Prepricing Prospectus Supplement or the Prospectus shall be deemed to refer
to and include the documents incorporated by reference therein pursuant to Item
12 of Form S-3 under the Act, as of the date of the Registration Statement, such
Prepricing Prospectus Supplement or the Prospectus, as the case may be, and any
reference to any amendment or supplement to the registration statement, the
Registration Statement, any Prepricing Prospectus Supplement or the Prospectus
shall be deemed to refer to and include any documents filed after such date
under the Securities Exchange Act of 1934, as amended (the "Exchange Act")
which, upon filing, are incorporated by reference therein, as required by
paragraph (b) of Item 12 of Form S-3. As used herein, the term "Incorporated
Documents" means the documents which at the time are incorporated by reference
in the registration statement, the Registration Statement, any Prepricing
Prospectus Supplement, the Prospectus, or any amendment or supplement thereto.
2. Agreements to Sell and Purchase. The Company hereby agrees, subject
to all the terms and conditions set forth herein, to issue and sell to each
Underwriter and, upon the basis of the representations, warranties and
agreements of the Company herein contained and subject to all the terms and
conditions set forth herein, each Underwriter agrees, severally and not jointly,
to purchase from the Company, at a purchase price of $24.2125 per Share (the
"purchase price per share"), the number of Firm Shares set forth opposite the
name of such Underwriter in Schedule I hereto.
The Company also agrees, subject to all the terms and conditions set
forth herein, to sell to the Underwriters, and, upon the basis of the
representations, warranties and agreements of the Company contained in this
Agreement and subject to all the terms and conditions set forth in this
Agreement, the Underwriters shall have the right to purchase from the Company,
at the purchase price per share, pursuant to an option (the "Over-allotment
Option") which may be exercised at
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any time and from time to time prior to 9:00 P.M., New York City time, on the
30th day after the date of the Prospectus (or, if such 30th day shall be a
Saturday or Sunday or a holiday, on the next business day thereafter when the
New York Stock Exchange (the "NYSE") is open for trading), up to an aggregate of
450,000 Additional Shares. Additional Shares may be purchased only for the
purpose of covering over-allotments made in connection with the offering of the
Firm Shares. Upon any exercise of the Over-allotment Option, each Underwriter,
severally and not jointly, agrees to purchase from the Company the number of
Additional Shares (subject to such adjustments as you may determine in order to
avoid fractional shares) which bears the same proportion to the number of
Additional Shares to be purchased by the Underwriters as the number of Firm
Shares set forth opposite the name of such Underwriter in Schedule I hereto
bears to the aggregate number of Firm Shares.
3. Terms of Public Offering. The Company has been advised by you that
the Underwriters propose to make a public offering of the their respective
portions of the Shares as soon after this Agreement has become effective as in
your judgment is advisable and initially to offer the Shares upon the terms set
forth in the Prospectus.
4. Delivery of the Shares and Payment Therefor. Delivery to the
Underwriters of and payment for the Firm Shares shall be made at the office of
▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc., ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, at 10:00
A.M., New York City time, on February 27, 2001 (the "Closing Date"). The place
of closing for the Firm Shares and the Closing Date may be varied by agreement
between you and the Company.
Delivery to the Underwriters of and payment for any Additional Shares to
be purchased by the Underwriters shall be made at the office of ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ Inc. mentioned above at such time and on such date (the "Option Closing
Date"), which may be the same as the Closing Date but shall in no event be
earlier than the Closing Date nor earlier than two nor later than ten business
days after the giving of the notice hereinafter referred to, as shall be
specified in a written notice from you on behalf of the Underwriters to the
Company of the Underwriters' determination to purchase a number, specified in
such notice, of Additional Shares. The place of closing for any Additional
Shares and the Option Closing Date for such Additional Shares may be varied by
agreement between you and the Company.
Certificates for the Firm Shares and for any Additional Shares to be
purchased hereunder shall be registered in such names and in such denominations
as you shall request prior to 1:00 P.M., New York City time, on the second
business day preceding the Closing Date or any Option Closing Date, as the case
may be. Such certificates shall be made available to you in New York City for
inspection and packaging not later than 9:30 A.M., New York City time, on the
business day next preceding the Closing Date or any Option Closing Date, as the
case may be. The certificates evidencing the Firm Shares and any Additional
Shares to be purchased hereunder shall be delivered to you on the Closing Date
or the Option Closing Date, as the case may be, against payment of the purchase
price therefor in immediately available funds.
5. Agreements of the Company. The Company agrees with the several
Underwriters as follows:
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(a) If, at the time this Agreement is executed and delivered, it
is necessary for the Registration Statement or a post-effective
amendment thereto to be declared effective before the offering of the
Shares may commence, the Company will endeavor to cause the Registration
Statement or such post-effective amendment to become effective as soon
as possible and will advise you promptly and, if requested by you, will
confirm such advice in writing, when the Registration Statement or such
post-effective amendment has become effective.
(b) The Company will advise you promptly and, if requested by
you, will confirm such advice in writing: (i) of any request by the
Commission for amendment of or a supplement to the Registration
Statement, any Prepricing Prospectus Supplement or the Prospectus or for
additional information; (ii) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement or
of the suspension of qualification of the Shares for offering or sale in
any jurisdiction or the initiation of any proceeding for such purpose;
and (iii) within the period of time referred to in the first sentence of
paragraph (f) below, of any change in the Company's condition (financial
or other), business, prospects, properties, net worth or results of
operations, or of the happening of any event, which makes any statement
of a material fact made in the Registration Statement or the Prospectus
(as then amended or supplemented) untrue or which requires the making of
any additions to or changes in the Registration Statement or the
Prospectus (as then amended or supplemented) in order to state a
material fact required by the Act to be stated therein or necessary in
order to make the statements therein not misleading, or of the necessity
to amend or supplement the Prospectus (as then amended or supplemented)
to comply with the Act or any other law. If at any time the Commission
shall issue any stop order suspending the effectiveness of the
Registration Statement, the Company will make every reasonable effort to
obtain the withdrawal of such order at the earliest possible time.
(c) The Company will furnish to you upon your request, without
charge (i) two copies of the signed registration statement as originally
filed with the Commission and of each amendment thereto, including
financial statements and all exhibits to the registration statement,
(ii) such number of conformed copies of the registration statement as
originally filed and of each amendment thereto, but without exhibits, as
you may reasonably request, (iii) such number of copies of the
Incorporated Documents, without exhibits, as you may reasonably request,
and (iv) two copies of the exhibits to the Incorporated Documents.
(d) Prior to the end of the period of time referred to in the
first sentence in paragraph (f) below, the Company will not file any
amendment to the Registration Statement or make any amendment or
supplement to the Prospectus or file any document which, upon filing
becomes an Incorporated Document, of which you shall not previously have
been advised or to which, after you shall have received a copy of the
document proposed to be filed, you shall reasonably object.
(e) The Company will use its best efforts to meet the
requirements to qualify as a real estate investment trust (a "REIT")
under the Internal Revenue Code of 1986, as
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amended (the "Code") unless the Company's Board of Directors determines
by resolution that it is in the best interests of the Company's
stockholders not to so qualify.
(f) As soon after the execution and delivery of this Agreement as
possible and thereafter from time to time for such period as in the
opinion of counsel for the Underwriters a prospectus is required by the
Act to be delivered in connection with sales by any Underwriter or any
dealer, the Company will expeditiously deliver to each Underwriter and
each dealer, without charge, as many copies of the Prospectus (and of
any amendment or supplement thereto) as you may reasonably request. The
Company consents to the use of the Prospectus (and of any amendment or
supplement thereto) in accordance with the provisions of the Act and
with the securities or Blue Sky laws of the jurisdictions in the United
States in which the Shares are offered by the several Underwriters and
by all dealers to whom Shares may be sold, both in connection with the
offering and sale of the Shares and for such period of time thereafter
as the Prospectus is required by the Act to be delivered in connection
with sales by any Underwriter or dealer. If during such period of time
any event shall occur that in the judgment of the Company or in the
opinion of counsel for the Underwriters is required to be set forth in
the Prospectus (as then amended or supplemented) or should be set forth
therein in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it is
necessary to supplement or amend the Prospectus (or to file under the
Exchange Act any document which, upon filing, becomes an Incorporated
Document) in order to comply with the Act or any other law, the Company
will forthwith prepare and, subject to the provisions of paragraph (d)
above, file with the Commission an appropriate supplement or amendment
thereto (or to such document), and will expeditiously furnish to the
Underwriters and any dealers a reasonable number of copies thereof. In
the event that the Company and you, as representatives for the several
Underwriters, agree that the Prospectus should be amended or
supplemented, the Company, if requested by you, will promptly issue a
press release announcing or disclosing the matters to be covered by the
proposed amendment or supplement.
(g) The Company will cooperate with you and your counsel in
connection with the registration or qualification of the Shares for
offering and sale by the several Underwriters and by any dealers under
the securities or Blue Sky laws of such jurisdictions in the United
States as you may designate and will file such consents to service of
process or other documents necessary or appropriate in order to effect
such registration or qualification; provided that in no event shall the
Company be obligated to qualify to do business in any jurisdiction where
it is not now so qualified or to take any action which would subject it
to service of process in suits, other than those arising out of the
offering or sale of the Shares, in any jurisdiction where it is not now
so subject.
(h) During the period of five years hereafter, the Company will
furnish to you upon request (i) as soon as available, a copy of each
report of the Company mailed to shareholders or filed with the
Commission, and (ii) from time to time such other information concerning
the Company as you may reasonably request.
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(i) If this Agreement shall terminate or shall be terminated
after execution pursuant to any provisions hereof (other than by notice
given by you terminating this Agreement pursuant to Section 10 or
Section 11 hereof) or if this Agreement shall be terminated by the
Underwriters because of any failure or refusal on the part of the
Company to comply with the terms or fulfill any of the conditions of
this Agreement, the Company agrees to reimburse the Representatives for
all out-of-pocket expenses (including reasonable fees and expenses of
your counsel) incurred by you in connection herewith, but the Company
shall not in any event be liable to the Underwriters for damages on
account of loss of anticipated profits from the sale by it of the
Shares.
(j) The Company will apply the net proceeds from the sale of the
Shares substantially in accordance with the description set forth in the
Prospectus Supplement.
(k) The Company will (i) prepare and timely file with the
Commission under Rule 424(b) of the Act a Prospectus Supplement
containing information previously omitted at the time of effectiveness
of the Registration Statement and (ii) file on a timely basis all
reports and any definitive proxy or information statements required to
be filed by the Company with the Commission subsequent to the date of
the Prospectus Supplement and prior to the termination of the offering
of the Shares by the Underwriters.
(l) Except as stated in this Agreement and in the Prospectus, the
Company has not taken, nor will it take, directly or indirectly, any
action designed to or that might reasonably be expected to cause or
result in stabilization or manipulation of the price of the Series D
Preferred Stock to facilitate the sale or resale of the Shares.
(m) The Company will use its best efforts to have the Shares
listed, subject to notice of issuance, on the New York Stock Exchange on
or before the Closing Date, but in no event later than 30 days following
the Closing Date.
(n) The Company will file the Designation of Rights and
Preferences of the ______% Series D Cumulative Redeemable Preferred
Stock (the "Designation of Rights and Preferences") with the Secretary
of State of the State of Washington on or before the Closing Date.
6. Representations and Warranties of the Company. The Company represents
and warrants to each Underwriter that:
(a) The Company and the transactions contemplated by this
Agreement meet the requirements for using Form S-3 under the Act. The
registration statement in the form in which it became or becomes
effective and also in such form as it may be when any post-effective
amendment thereto shall become effective and the Prospectus, the
Prepricing Prospectus Supplement and any supplement or amendment thereto
when filed with the Commission under Rule 424(b) under the Act, complied
or will comply in all material respects with the provisions of the Act
and will not at any such times 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
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misleading, except that this representation and warranty does not apply
to statements in or omissions from the registration statement or the
prospectus made in reliance upon and in conformity with information
relating to any Underwriter furnished to the Company in writing by or on
behalf of any Underwriter through you expressly for use therein.
(b) The Incorporated Documents heretofore filed, when they were
filed (or, if any amendment with respect to any such document was filed,
when such amendment was filed), conformed in all material respects with
the requirements of the Exchange Act and the rules and regulations
thereunder, any further Incorporated Documents so filed will, when they
are filed, conform in all material respects with the requirements of the
Exchange Act and the rules and regulations thereunder; no such document
when it was filed (or, if an amendment with respect to any such document
was filed, when such amendment was filed), contained an untrue statement
of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading;
and no such further document, when it is filed, will contain an untrue
statement of a material fact or will omit to state a material fact
required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were
made, not misleading.
(c) The shares of issued and outstanding capital stock of the
Company have been duly authorized and validly issued and are fully paid
and nonassessable; none of the outstanding shares of capital stock of
the Company was issued in violation of the preemptive or other similar
rights of any security holder of the Company. The Shares have been duly
authorized and, when issued and delivered to the Underwriters against
payment therefor in accordance with the terms hereof, will be validly
issued, fully paid and nonassessable and free of any preemptive or
similar rights; and the capital stock of the Company conforms to the
description thereof in the Registration Statement and the Prospectus.
(d) The Company is a corporation duly organized and validly
existing under the laws of the State of Washington, with corporate power
and authority to own, lease and operate its properties and to conduct
its business as described in the Registration Statement and the
Prospectus, and is duly registered and qualified (or has made
application to become registered and qualified and knows of no reason
why such application should be denied) to conduct its business and is in
good standing in each jurisdiction or place where the nature of its
properties or the conduct of its business requires such registration or
qualification, except where the failure so to register or qualify does
not have a material adverse effect on the condition (financial or
other), business, prospects, properties, net worth or results of
operations of the Company and the Subsidiaries (as hereinafter defined)
taken as a whole.
(e) All the Company's subsidiaries (collectively, the
"Subsidiaries") are listed on Schedule III hereto. Each Subsidiary is a
corporation duly organized, validly existing and, where applicable, in
good standing in the jurisdiction of its incorporation, with full
corporate power and authority to own, lease and operate its properties
and to conduct its
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business as described in the Registration Statement and the Prospectus,
and is duly registered and qualified to conduct its business and is in
good standing in each jurisdiction or place where the nature of its
properties or the conduct of its business requires such registration or
qualification, except where the failure so to register or qualify does
not have a material adverse effect on the condition (financial or
other), business, prospects, properties, net worth or results of
operations of the Company and the Subsidiaries, taken as a whole; except
as set forth on Schedule III, all the outstanding shares of capital
stock of each of the Subsidiaries have been duly authorized and validly
issued and are fully paid and nonassessable. All of the interests owned
or held by the Company, directly or indirectly, in each of the
Subsidiaries are free and clear of any lien, adverse claim, security
interest, equity or other encumbrance, except for such as would not have
a material adverse effect on the condition (financial or other),
business, prospects, properties, net worth or results of operations of
the Company and the Subsidiaries, taken as a whole.
(f) All of the joint ventures in which the Company or any
Subsidiary owns any interest (the "Joint Ventures") are listed on
Schedule IV hereto. The Company's (or Subsidiary's, as the case may be)
ownership interest in such Joint Venture is as set forth on Schedule IV.
Each of the Joint Ventures possesses such certificates, authorizations
or permits issued by the appropriate state, federal or foreign
regulatory agencies or bodies necessary to conduct the business now
being conducted by it, as described or incorporated by reference in the
Prospectus, and none of the Joint Ventures has received notice of any
proceedings relating to the revocation or modification of any such
certificate, authority or permit which singly or in the aggregate, if
the subject of unfavorable ruling or decision, would have a material
adverse effect on the condition (financial or other), business,
prospects, properties, net worth or results of operations of the Company
and the Subsidiaries, taken as a whole; each of the Joint Ventures has
good and marketable title to all of its real property and to any
improvements thereon and all other assets that are used in the operation
of the Joint Venture's business, except where the failure to have such
title would not have a material adverse effect on the condition
(financial or other), business, prospects, properties, net worth or
results of operations of the Company and the Subsidiaries, taken as a
whole.
(g) There are no legal or governmental proceedings pending or, to
the knowledge of the Company, threatened, against the Company or any of
the Subsidiaries, or to which the Company or any of the Subsidiaries, or
to which any of their respective properties is subject, that are
required to be described in the Registration Statement or the Prospectus
but are not described as required, and there are no agreements,
contracts, indentures, leases or other instruments that are required to
be described in the Registration Statement or the Prospectus or to be
filed as an exhibit to the Registration Statement or any Incorporated
Document that are not described or filed as required by the Act or the
Exchange Act.
(h) Neither the Company nor any of the Subsidiaries is in
violation of its certificate or articles of incorporation or by-laws, or
other organizational documents, or of any law, ordinance, administrative
or governmental rule or regulation applicable to the
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Company or any of the Subsidiaries or of any decree of any court or
governmental agency or body having jurisdiction over the Company or any
of the Subsidiaries, or in default in any material respect in the
performance of any obligation, agreement or condition contained in any
bond, debenture, note or any other evidence of indebtedness or in any
material agreement, indenture, lease or other instrument to which the
Company or any of the Subsidiaries is a party or by which any of them or
any of their respective properties may be bound, except where such
violation or default does not have a material adverse effect on the
condition (financial or other), business, prospects, properties, net
worth or results of operations of the Company and the Subsidiaries,
taken as a whole.
(i) Neither the issuance and sale of the Shares, the execution,
delivery or performance of this Agreement by the Company nor the
consummation by the Company of the transactions contemplated hereby (i)
requires any consent, approval, authorization or other order of or
registration or filing with, any court, regulatory body, administrative
agency or other governmental body, agency or official (except such as
may be required for the registration of the Shares under the Act and the
Exchange Act and compliance with the securities or Blue Sky laws of
various jurisdictions, all of which have been or will be effected in
accordance with this Agreement) or conflicts or will conflict with or
constitutes or will constitute a breach of, or a default under, the
certificate or articles of incorporation or bylaws, or other
organizational documents, of the Company or any of the Subsidiaries or
(ii) conflicts or will conflict with or constitutes or will constitute a
breach of, or a default under, any agreement, indenture, lease or other
instrument to which the Company or any of the Subsidiaries is a party or
by which any of them or any of their respective properties may be bound,
or violates or will violate any statute, law, regulation or filing or
judgment, injunction, order or decree applicable to the Company or any
of the Subsidiaries or any of their respective properties, or will
result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or any of the Subsidiaries
pursuant to the terms of any agreement or instrument to which any of
them is a party or by which any of them may be bound or to which any of
the property or assets of any of them is subject.
(j) The accountants, Deloitte & Touche LLP, who have certified or
shall certify the financial statements included or incorporated by
reference in the Registration Statement and the Prospectus (or any
amendment or supplement thereto) are independent public accountants as
required by the Act.
(k) The financial statements, together with related schedules
and notes, included or incorporated by reference in the Registration
Statement and the Prospectus (and any amendment or supplement thereto),
present fairly the consolidated financial position, results of
operations and changes in financial position of the Company and the
consolidated Subsidiaries on the basis stated in the Registration
Statement at the respective dates or for the respective periods to which
they apply; such statements and related schedules and notes have been
prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved, except as
disclosed therein; and the other financial and statistical information
and data included or incorporated by reference in the Registration
Statement and the Prospectus (and any
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amendment or supplement thereto) are fairly presented and prepared on a
basis consistent with such financial statements and the books and
records of the Company and the Subsidiaries.
(l) The execution and delivery of, and the performance by the
Company of its obligations under, this Agreement have been duly and
validly authorized by the Company, and this Agreement has been duly
executed and delivered by the Company and constitutes the valid and
legally binding agreement of the Company, enforceable against the
Company in accordance with its terms, except as rights to indemnity and
contribution hereunder may be limited by federal or state securities
laws.
(m) Except as disclosed in the Registration Statement and the
Prospectus (or any amendment or supplement thereto), subsequent to the
respective dates as of which such information is given in the
Registration Statement and the Prospectus (or any amendment or
supplement thereto), neither the Company nor any of the Subsidiaries has
incurred any liability or obligation, direct or contingent, or entered
into any transaction, not in the ordinary course of business, that is
material to the Company and the Subsidiaries taken as a whole, and there
has not been any change in the capital stock, or material increase in
the short-term debt or long-term debt, of the Company or any of the
Subsidiaries other than as a result of borrowings made by the Company
under its credit facility in the ordinary course of business, or any
material adverse change, or any development involving or which may
reasonably be expected to involve, a prospective material adverse
change, on the condition (financial or other), business, prospects,
properties, net worth or results of operations of the Company and the
Subsidiaries taken as a whole.
(n) (i) The Company has good and marketable title to all of the
properties (including the Properties listed as wholly owned by the
Company or any of the Subsidiaries on Schedule II hereto) and assets
reflected in the financial statements (or as described in or
incorporated by reference into the Registration Statement or Prospectus)
hereinabove described, subject to no lien, mortgage, pledge, charge or
encumbrance of any kind except those reflected in such financial
statements (or as described in or incorporated by reference into the
Registration Statement or Prospectus or on Schedule II hereto) or which
are not material in amount; (ii) the Company occupies its leased
properties under valid and binding leases conforming, to the extent such
leases are described therein, to the descriptions thereof set forth in
or incorporated by reference into the Registration Statement or
Prospectus; (iii) no tenant of any of the Properties is in default under
any of the leases pursuant to which any property is leased (and the
Company does not know 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 leases) other than such defaults that would not have a material
adverse effect on the condition (financial or other), business,
prospects, properties, net worth or results of operations of the Company
and the Subsidiaries, taken as a whole; (iv) no person has an option to
purchase all or any part of any Property or any interest therein other
than the Company and as disclosed in Schedule II hereto; (v) each of the
Properties complies with all applicable codes, laws and regulations
(including, without limitation, building and zoning codes, laws and
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regulations and laws relating to access to the properties) and with all
agreements between the Company and third parties relating to the
ownership or use of any Property by the Company, except if and to the
extent disclosed in the Registration Statement or the Prospectus and
except for such failures to comply that would not have a material
adverse effect on the condition (financial or other), business,
prospects, properties, net worth or results of operations of the Company
and the Subsidiaries, taken as a whole; (vi) there are in effect for the
assets of the Company and the Properties insurance coverages that are
commercially reasonable and that are consistent with the types and
amounts of insurance typically maintained by prudent owners of similar
assets, and the Company has not received from any insurance company
notice of any material defects or deficiencies affecting the
insurability of any such assets; and (vii) the Company does not have any
knowledge of any pending or threatened condemnation proceedings, zoning
change, or other similar proceeding or action that will in any material
respect affect the size of, use of, improvements on, construction on or
access to the Properties, except for such proceedings or actions that
would not have a material adverse effect on the condition (financial or
other), business, prospects, properties, net worth or results of
operations of the Company and the Subsidiaries, taken as a whole.
(o) The Company has title policies in effect or binding
commitments from title insurance companies for the issuance of title
insurance on each of the Properties, except where the failure to have
such title insurance would not have a material adverse effect on the
condition (financial or other), business, prospects, properties, net
worth or results of operations of the Company and the Subsidiaries,
taken as a whole.
(p) The Company has not distributed and, prior to the later to
occur of (i) the Closing Date and (ii) completion of the distribution of
the Shares, will not distribute any offering material in connection with
the offering and sale of the Shares other than the Registration
Statement, the Prepricing Prospectus Supplement, the Prospectus or other
materials, if any, permitted by the Act.
(q) Each of the Company and the Subsidiaries has such permits,
licenses, franchises and authorizations of governmental or regulatory
authorities ("permits") and agreements with third parties relating to
ownership or use of any Property by the Company or any Subsidiary, as
the case may be, as are necessary to own its properties and to conduct
its business in the manner described in the Prospectus, subject to such
qualifications as may be set forth in the Prospectus and except where
the failure to have such permits and agreements would not have a
material adverse effect on the condition (financial or other), business,
prospects, properties, net worth or results of operations of the Company
and the Subsidiaries, taken as a whole; the Company and each of the
Subsidiaries has fulfilled and performed all its material obligations
with respect to such permits and agreements and no event has occurred
which allows, or after notice or lapse of time would allow, revocation
or termination thereof or results in any other material impairment of
the rights of the holder of any such permit or agreement, subject in
each case to such qualification as may be set forth in the Prospectus;
and, except as described in the Prospectus, none of such permits or
agreements contains any restriction that would have a material adverse
effect on the condition (financial or other), business, prospects,
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properties, net worth or results of operations of the Company and the
Subsidiaries, taken as a whole.
(r) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general or
specific authorization; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for
assets; (iii) access to assets is permitted only in accordance with
management's general or specific authorization; and (iv) the recorded
accountability for assets is compared with existing assets at reasonable
intervals and appropriate action is taken with respect to any
differences.
(s) To the Company's knowledge, neither the Company nor any of
its Subsidiaries nor any employee or agent of the Company or any
Subsidiary has made any payment of funds of the Company or any
Subsidiary or received or retained any funds in violation of any law,
rule or regulation, which payment, receipt or retention of funds is of a
character required to be disclosed in the Prospectus.
(t) The Company and each of the Subsidiaries have filed all
federal, state and foreign tax returns required to be filed, which
returns are complete and correct, and neither the Company nor any
Subsidiary is in default in the payment of any taxes which were payable
pursuant to said returns or any assessments with respect thereto, except
where such failure to file or default in payment would not have a
material adverse effect on the condition (financial or other), business,
prospects, properties, net worth or results of operations of the Company
and the Subsidiaries, taken as a whole.
(u) No holder of any security of the Company has any right to
require registration of shares of capital stock or any other security of
the Company because of the filing of the registration statement or
consummation of the transactions contemplated by this Agreement.
(v) The Company and the Subsidiaries own or possess in the United
States all patents, trademarks, trademark registrations, service marks,
service ▇▇▇▇ registrations, trade names, copyrights, licenses,
inventions, trade secrets and rights described in the Prospectus as
being owned by them or any of them or necessary for the conduct of their
respective businesses and the Company is not aware of any claim to the
contrary or any challenge by any other person in the United States or in
any foreign jurisdiction to the rights of the Company and the
Subsidiaries with respect to the foregoing which claim or challenge, if
determined adversely to the Company, would have a material adverse
effect on the condition (financial or other), business, prospects,
properties, net worth or results of operations of the Company and the
Subsidiaries, taken as a whole.
(w) Except as otherwise disclosed in the Prospectus, the Company
has not authorized or conducted and does not have knowledge of the
generation, transportation, storage, presence, use, treatment, disposal,
release, or other handling of any hazardous
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substance, hazardous waste, hazardous material, hazardous constituent,
toxic substance, pollutant, contaminant, asbestos, radon,
polychlorinated biphenyls ("PCBs"), petroleum product or waste
(including crude oil or any fraction thereof), natural gas, liquefied
gas, synthetic gas or other material defined, regulated, controlled or
potentially subject to any remediation requirement under any
environmental law (collectively, "Hazardous Materials"), on, in, under
or affecting any real property currently leased or owned or by any means
controlled by the Company, including the Properties (the "Real
Property") except as in material compliance with applicable laws; to the
knowledge of the Company, the Real Property and the Company's operations
with respect to the Real Property are in compliance with all federal,
state and local laws, ordinances, rules, regulations and other
governmental requirements relating to pollution, control of chemicals,
management of waste, discharges of materials into the environment,
health, safety, natural resources, and the environment (collectively,
"Environmental Laws"), and the Company has, and is in compliance with,
all licenses, permits, registrations and government authorizations
necessary to operate under all applicable Environmental Laws, except
where the failure to have or comply with such license, permit,
registration or authorization would not have a material adverse effect
on the condition (financial or other), business, prospects, properties,
net worth or results of operations of the Company and the Subsidiaries,
taken as a whole. Except as otherwise disclosed in the Prospectus, the
Company has not received any written or oral notice from any
governmental entity or any other person and to the knowledge of the
Company there is no pending or threatened claim, litigation or any
administrative agency proceeding that: alleges a violation of any
Environmental Laws by the Company; alleges that the Company is a liable
party or a potentially responsible party under the Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C.
Section 9601, et seq., or any state superfund law; has resulted in or
could result in the attachment of an environmental lien on any of the
Real Property; or alleges that the Company is liable for any
contamination of the environment, contamination of the Real Property,
damage to natural resources, property damage, or personal injury based
on their activities or the activities of their predecessors or third
parties (whether at the Real Property or elsewhere) involving Hazardous
Materials, whether arising under the Environmental Laws, common law
principles, or other legal standards.
(x) The Company was organized and has operated in conformity with
the requirements for qualification as a real estate investment trust
under Sections 856 through 858 of the Code for each of its taxable years
ended December 31, 1994 through December 31, 2000, and the Company's
current organization and method of operation should enable it to
continue to qualify as a real estate investment trust under the Code.
(y) Neither the Company nor any Subsidiary is or will become as a
result of the transactions contemplated hereby, or will conduct its
business in a manner in which it would become, "an investment company,"
or a company "controlled" by an "investment company," within the meaning
of the Investment Company Act of 1940, as amended.
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(z) The statements set forth in the Prospectus Supplement under
the caption "Federal Income Tax Considerations" fairly and accurately
state the federal income tax considerations that would be material to a
holder of Series D Preferred Stock.
7. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless each of you
and each person, if any, who controls any Underwriter within the meaning
of Section 15 of the Act or Section 20 of the Exchange Act from and
against any and all losses, claims, damages, liabilities and expenses
(including reasonable costs of investigation) arising out of or based
upon any untrue statement or alleged untrue statement of a material fact
contained in any Prepricing Prospectus Supplement or in the Registration
Statement or the Prospectus or in any amendment or supplement thereto,
or arising out of or based upon any omission or alleged omission to
state therein a material fact required to be stated therein or necessary
to make the statements therein in light of the circumstances under which
they were made not misleading, except insofar as such losses, claims,
damages, liabilities or expenses arise out of or are based upon any
untrue statement or omission or alleged untrue statement or omission
which has been made therein or omitted therefrom in reliance upon and in
conformity with the information relating to such Underwriter furnished
in writing to the Company by or on behalf of any Underwriter through you
expressly for use in connection therewith; provided, however, that the
indemnification contained in this paragraph (a) with respect to any
Prepricing Prospectus Supplement shall not inure to the benefit of any
Underwriter (or to the benefit of any person controlling any
Underwriter) on account of any such loss, claim, damage, liability or
expense arising from the sale of the Shares by such Underwriter to any
person if a copy of the Prospectus shall not have been delivered or sent
to such person within the time required by the Act and the regulations
thereunder, and the untrue statement or alleged untrue statement or
omission or alleged omission of a material fact contained in such
Prepricing Prospectus Supplement was corrected in the Prospectus,
provided that the Company has delivered the Prospectus to such
Underwriter in requisite quantity on a timely basis to permit such
delivery or sending. The foregoing indemnity agreement shall be in
addition to any liability which the Company may otherwise have.
(b) If any action, suit or proceeding shall be brought against
any Underwriter or any person controlling any Underwriter in respect of
which indemnity may be sought against the Company, such Underwriter or
such controlling person shall promptly notify the Company and the
Company shall assume the defense thereof, including the employment of
counsel and payment of all fees and expenses. Such Underwriter or any
such controlling person shall have the right to employ separate counsel
in any such action, suit or proceeding and to participate in the defense
thereof, but the fees and expenses of such counsel shall be at the
expense of such Underwriter or such controlling person unless (i) the
Company has agreed in writing to pay such fees and expenses, (ii) the
Company has failed to assume the defense and employ counsel, or (iii)
the named parties to any such action, suit or proceeding (including any
impleaded parties) include both such Underwriter or such controlling
person and the Company and such Underwriter
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or such controlling person shall have been advised by its counsel that
representation of such indemnified party and the Company by the same
counsel would be inappropriate under applicable standards of
professional conduct (whether or not such representation by the same
counsel has been proposed) due to actual or potential differing
interests between them (in which case the Company shall not have the
right to assume the defense of such action, suit or proceeding on behalf
of such Underwriter or such controlling person). It is understood,
however, that the Company shall, in connection with any one such action,
suit or proceeding or separate but substantially similar or related
actions, suits or proceedings in the same jurisdiction arising out of
the same general allegations or circumstances, be liable for the
reasonable fees and expenses of only one separate firm of attorneys (in
addition to any local counsel) at any time for all such Underwriters and
controlling persons not having actual or potential differing interests
with you or among themselves, which firm shall be designated in writing
by ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc., and that all such fees and expenses shall
be reimbursed as they are incurred. The Company shall not be liable for
any settlement of any such action, suit or proceeding effected without
its written consent, but if settled with such written consent, or if
there be a final judgment for the plaintiff in any such action, suit or
proceeding, the Company agrees to indemnify and hold harmless any
Underwriter, to the extent provided in the preceding paragraph, and any
such controlling person from and against any loss, claim, damage,
liability or expense by reason of such settlement or judgment.
(c) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers who
sign the Registration Statement, and any person who controls the Company
within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, to the same extent as the foregoing indemnity from the
Company to each Underwriter, but only with respect to information
relating to the Underwriter furnished in writing by or on behalf of such
Underwriter through you expressly for use in the Registration Statement,
the Prospectus or any Prepricing Prospectus Supplement, or any amendment
or supplement thereto. If any action, suit or proceeding shall be
brought against the Company, any of its directors, any such officer, or
any such controlling person based on the Registration Statement, the
Prospectus or any Prepricing Prospectus Supplement, or any amendment or
supplement thereto, and in respect of which indemnity may be sought
against any Underwriter pursuant to this paragraph (c), such Underwriter
shall have the rights and duties given to the Company by paragraph (b)
above (except that if the Company shall have assumed the defense thereof
such Underwriter shall not be required to do so, but may employ separate
counsel therein and participate in the defense thereof, but the fees and
expenses of such counsel shall be at such Underwriter's expense), and
the Company, its directors, any such officer, and any such controlling
person shall have the rights and duties given to the Underwriters by
paragraph (b) above. The foregoing indemnity agreement shall be in
addition to any liability which the Underwriters may otherwise have.
(d) If the indemnification provided for in this Section 7 is
unavailable to an indemnified party under paragraphs (a) or (c) hereof
in respect of any losses, claims, damages, liabilities or expenses
referred to therein, then an indemnifying party, in lieu of indemnifying
such indemnified party, shall contribute to the amount paid or payable
by
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such indemnified party as a result of such losses, claims, damages,
liabilities or expenses (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company on the one hand
and the Underwriters on the other hand from the offering of the Shares,
or (ii) if the allocation provided by clause (i) above is not permitted
by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the
relative fault of the Company on the one hand and the Underwriters on
the other in connection with the statements or omissions that resulted
in such losses, claims, damages, liabilities or expenses, as well as any
other relevant equitable considerations. The relative benefits received
by the Company on the one hand and the Underwriters on the other shall
be deemed to be in the same proportion as the total net proceeds from
the offering (before deducting expenses) received by the Company bear to
the total underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the cover page
of the Prospectus. The relative fault of the Company on the one hand and
the Underwriters on the other hand shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material
fact relates to information supplied by the Company on the one hand or
by the Underwriters on the other hand and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent
such statement or omission.
(e) The Company and the Underwriters agree that it would not be
just and equitable if contribution pursuant to this Section 7 were
determined by a pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of
allocation that does not take account of the equitable considerations
referred to in paragraph (d) above. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages,
liabilities and expenses referred to in paragraph (d) above shall be
deemed to include, subject to the limitations set forth above, any legal
or other expenses reasonably incurred by such indemnified party in
connection with investigating any claim or defending any such action,
suit or proceeding. 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 of the Shares underwritten by it and
distributed to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue
or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. The Underwriters'
obligations to contribute pursuant to this Section 7 are several in
proportion to the respective number of Firm Shares set forth opposite
their names in Schedule I hereto and not joint.
(f) No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending
or threatened action, suit or proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have
been sought hereunder by such indemnified party, unless such settlement
includes an unconditional release of such indemnified party from all
liability on claims that are the subject matter of such action, suit or
proceeding.
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(g) Any losses, claims, damages, liabilities or expenses for
which an indemnified party is entitled to indemnification or
contribution under this Section 7 shall be paid by the indemnifying
party to the indemnified party as such losses, claims, damages,
liabilities or expenses are incurred. The indemnity and contribution
agreements contained in this Section 7 and the representations and
warranties of the Company set forth in this Agreement shall remain
operative and in full force and effect, regardless of (i) any
investigation made by or on behalf of any Underwriter or any person
controlling any Underwriter, the Company, its directors or officers, or
any person controlling the Company, (ii) acceptance of any Shares and
payment therefor hereunder, and (iii) any termination of this Agreement.
A successor to any Underwriter or any person controlling any
Underwriter, or to the Company, its directors or officers, or any person
controlling the Company, shall be entitled to the benefits of the
indemnity, contribution and reimbursement agreements contained in this
Section 7.
8. Conditions of Underwriters' Obligations. The several obligations of
the Underwriters to purchase the Shares hereunder are subject to the following
conditions:
(a) If, at the time this Agreement is executed and delivered, it
is necessary for a post-effective amendment to the registration
statement to be declared effective before the offering of the Shares may
commence, the registration statement or such post-effective amendment
shall have become effective not later than 5:30 P.M., New York City
time, on the date hereof, or at such later date and time as shall be
consented to in writing by you, and all filings, if any, required by
Rules 424 and 430A under the Act shall have been timely made; no stop
order suspending the effectiveness of the registration statement shall
have been issued and no proceeding for that purpose shall have been
instituted or, to the knowledge of the Company or any Underwriter,
threatened by the Commission, and any request of the Commission for
additional information (to be included in the registration statement or
the prospectus or otherwise) shall have been complied with to your
satisfaction.
(b) Subsequent to the effective date of this Agreement, there
shall not have occurred (i) any change, or any development involving a
prospective change, in or affecting the condition (financial or other),
business, prospects, properties, net worth, or results of operations of
the Company or the Subsidiaries, taken as a whole, not contemplated by
the Prospectus, which in your opinion, as Representatives of the
Underwriters, would materially, adversely affect the market for the
Shares, or (ii) any event or development relating to or involving the
Company or any officer or director of the Company which makes any
statement made in the Prospectus untrue in any material respect or
which, in the opinion of the Company and its counsel or the Underwriters
and their counsel, requires the making of any addition to or change in
the Prospectus in order to state a material fact required by the Act or
any other law to be stated therein or necessary in order to make the
statements therein not misleading, if amending or supplementing the
Prospectus to reflect such event or development would, in your opinion,
as Representatives of the several Underwriters, adversely affect the
market for the Shares.
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(c) You shall have received on the Closing Date or Option Closing
Date, as the case may be, an opinion of ▇▇▇▇▇▇▇ Coie LLP, counsel for
the Company, dated the Closing Date or Option Closing Date, as the case
may be and addressed to you, as Representatives of the Underwriters,
substantially in the form of Annex A hereto. In rendering their opinion
as aforesaid, counsel may rely upon an opinion or opinions, each dated
the Closing Date, of other counsel retained by them or the Company as to
laws of any jurisdiction other than the United States or the State of
Washington, provided that (1) each such local counsel is acceptable to
you, (2) such reliance is expressly authorized by each opinion so relied
upon and a copy of each such opinion is delivered to you and is, in form
and substance satisfactory to them and their counsel, and (3) counsel
shall state in their opinion that they believe that they and the
Underwriters are justified in relying thereon.
(d) You shall have received on the Closing Date or Option Closing
Date, as the case may be, an opinion of King & Spalding, counsel for the
Underwriters, dated the Closing Date or Option Closing Date, as the case
may be, and addressed to you, as Representatives of the several
Underwriters, with respect to the matters referred to in clauses (vi),
(viii), (ix) (second clause only), (xiii) (excluding documents
incorporated by reference) and (xviii) of Annex A hereto and such other
related matters as you may request.
(e) You shall have received letters addressed to you, as
Representatives of the several Underwriters, and dated the date hereof
and the Closing Date or Option Closing Date, as the case may be, from
Deloitte & Touche LLP, independent certified public accountants,
substantially in the forms heretofore approved by you.
(f) (i) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for
that purpose shall have been taken or, to the knowledge of the Company,
shall be contemplated by the Commission at or prior to the Closing Date;
(ii) there shall not have been any material change in the capital stock
of the Company nor any material increase in the short-term or long-term
debt of the Company (other than in the ordinary course of business) from
that set forth or contemplated in the Registration Statement or the
Prospectus (or any amendment or supplement thereto); (iii) there shall
not have been, since the respective dates as of which information is
given in the Registration Statement and the Prospectus (or any amendment
or supplement thereto), except as may otherwise be stated in the
Registration Statement and Prospectus (or any amendment or supplement
thereto), any material adverse change in the condition (financial or
other), business, prospects, properties, net worth or results of
operations of the Company and the Subsidiaries taken as a whole; (iv)
the Company and the Subsidiaries shall not have any liabilities or
obligations, direct or contingent (whether or not in the ordinary course
of business), that are material to the Company and the Subsidiaries,
taken as a whole, other than those reflected in the Registration
Statement or the Prospectus (or any amendment or supplement thereto);
and (v) all the representations and warranties of the Company contained
in this Agreement shall be true and correct on and as of the date hereof
and on and as of the Closing Date or Option Closing Date, as the case
may be as if made on and as of the Closing Date or Option
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Closing Date, as the case may be, and you shall have received a
certificate, dated the Closing Date or Option Closing Date, as the case
may be and signed on behalf of the Company by the chief executive
officer and the chief financial officer of the Company (or such other
officers as are acceptable to you), to the effect set forth in this
Section 8(f) and in Section 8(g) hereof.
(g) The Company shall not have failed at or prior to the Closing
Date to have performed or complied with any of its agreements herein
contained and required to be performed or complied with by it hereunder
at or prior to the Closing Date.
(h) Prior to the Closing Date the Shares shall have been accepted
for listing, subject to notice of issuance, on the New York Stock
Exchange.
(i) Prior to the Closing Date, the Company shall have filed the
Designation of Rights and Preferences with the Secretary of State of the
State of Washington.
(j) The Company shall have furnished or caused to be furnished to
you such further certificates and documents as you shall have requested.
All such opinions, certificates, letters and other documents will be in
compliance with the provisions hereof only if they are satisfactory in form and
substance to you and your counsel.
Any certificate or document signed by any officer of the Company and
delivered to you, as Representatives of the Underwriters, or to counsel for the
Underwriters, shall be deemed a representation and warranty by the Company to
the Underwriters as to the statements made therein.
The several obligations of the Underwriters to purchase Additional
Shares hereunder are subject to the satisfaction on and as of any Option Closing
Date of the conditions set forth in this Section 8, except that, if any Option
Closing Date is other than the Closing Date, the certificates, opinions and
letters referred to in paragraphs (c) through (f) shall be dated the Option
Closing Date in question and the opinions called for by paragraphs (c) and (d)
shall be revised to reflect the sale of Additional Shares.
9. Expenses. The Company agrees to pay the following costs and expenses
and all other costs and expenses incident to the performance by it of its
obligations hereunder: (i) the preparation, printing or reproduction, and filing
with the Commission of the Registration Statement (including financial
statements and exhibits thereto), the Prospectus, the Prospectus Supplement and
each amendment or supplement to any of them; (ii) the printing (or reproduction)
and delivery (including postage, air freight charges and charges for counting
and packaging) of such copies of the Registration Statement, the Prospectus, the
Incorporated Documents, and all amendments or supplements to any of them, as may
be reasonably requested for use in connection with the offering and sale of the
Shares; (iii) the preparation, printing, authentication, issuance and delivery
of certificates for the Shares, including any stamp taxes in connection with the
original issuance and sale of the Shares; (iv) the printing (or reproduction)
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and delivery of this Agreement, the Blue Sky Memorandum and all other agreements
or documents printed (or reproduced) and delivered in connection with the
offering of the Shares; (v) the listing of the Shares on the New York Stock
Exchange; (vi) the registration or qualification of the Shares for offer and
sale under the securities or Blue Sky laws of the several states as provided in
Section 5(g) hereof (including the reasonable fees, expenses and disbursements
of counsel for the Underwriters relating to the preparation, printing or
reproduction, and delivery of the Blue Sky Memorandum and such registration and
qualification); (vii) the filing fees in connection with any filings required to
be made with the National Association of Securities Dealers, Inc.; and (viii)
the fees and expenses of the Company's accountants and the fees and expenses of
counsel (including local and special counsel) for the Company.
10. Effective Date of Agreement. This Agreement shall become effective:
(i) upon the execution and delivery hereof by the parties hereto; or (ii) if, at
the time this Agreement is executed and delivered, it is necessary for a
post-effective amendment to the Registration Statement to be declared effective
before the offering of the Shares may commence, when notification of the
effectiveness of the registration statement or such post-effective amendment has
been released by the Commission. Until such time as this Agreement shall have
become effective, it may be terminated by the Company, by notifying you, or by
you, as Representatives of the several Underwriters, by notifying the Company.
If any one or more of the Underwriters shall fail or refuse to purchase
Shares which it or they are obligated to purchase hereunder on the Closing Date,
and the aggregate number of Shares which such defaulting Underwriter or
Underwriters are obligated but fail or refuse to purchase is not more than
one-tenth of the aggregate number of Shares which the Underwriters are obligated
to purchase on the Closing Date, each non-defaulting Underwriter shall be
obligated, severally, in the proportion which the number of Firm Shares set
forth opposite its name in Schedule I hereto bears to the aggregate number of
Firm Shares set forth opposite the names of all non-defaulting Underwriters in
Schedule I, to purchase the shares which such defaulting Underwriter or
Underwriters are obligated, but fail or refuse, to purchase. If any one or more
of the Underwriters shall fail or refuse to purchase Shares which it or they are
obligated to purchase on the Closing Date and the aggregate number of Shares
with respect to which such default occurs is more than one-tenth of the
aggregate number of Shares which the Underwriters are obligated to purchase on
the Closing Date and arrangements satisfactory to you and the Company for the
purchase of such Shares by one or more non-defaulting Underwriters or other
party or parties approved by you and the Company are not made within 36 hours
after such default, this Agreement will terminate without liability on the part
of any non-defaulting Underwriter or the Company. In any such case which does
not result in termination of this Agreement, either you or the Company shall
have the right to postpone the Closing Date, but in no event for longer than
seven days, in order that the required changes, if any, in the Registration
Statement and the Prospectus or any other documents or arrangements may be
effected. Any action taken under this paragraph shall not relieve any defaulting
Underwriter from liability in respect of any such default of any such
Underwriter under this Agreement. The term "Underwriter" as used in this
Agreement includes, for all purposes of this Agreement, any party not listed in
Schedule I hereto who, with your approval and the approval of the Company,
purchases shares which a defaulting Underwriter is obligated, but fails or
refuses, to purchase.
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Any notice under this Section 10 may be given by telegram, telecopy or
telephone but shall be subsequently confirmed within 24 hours by letter.
11. Termination of Agreement. This Agreement shall be subject to
termination in your absolute discretion, without liability on the part of any
Underwriter to the Company by notice to the Company, if prior to the Closing
Date or any Option Closing Date (if different from the Closing Date and then
only as to the Additional Shares), as the case may be, (i) trading in securities
of the Company or trading in securities generally on the New York Stock
Exchange, the American Stock Exchange or the Nasdaq National Market shall have
been suspended or materially limited, (ii) a general moratorium on commercial
banking activities in the states of New York or Washington shall have been
declared by either federal or state authorities, or (iii) there shall have
occurred any outbreak or escalation of hostilities or other international or
domestic calamity, crisis or change in political, financial or economic
conditions, the effect of which on the financial markets of the United States is
such as to make it, in your judgment, impracticable or inadvisable (x) to
commence or continue the offering of the Shares at the offering price set forth
on the cover page of the Prospectus to the public or (y) to enforce contracts
for the resale of the Shares by the Underwriters. Notice of such termination may
be given to the Company by telegram, telecopy or telephone and shall be
subsequently confirmed by letter.
12. Information Furnished by the Underwriters. The statements set forth
in the last paragraph of the cover page and the table immediately preceding such
paragraph and the statements contained in the third paragraph under the caption
"Underwriting" in the Prospectus Supplement, constitute the only information
furnished by or on behalf of the Underwriters through you as such information is
referred to in Sections 6(b) and 7 hereof.
13. Miscellaneous. Except as otherwise provided in Sections 5, 10 and 11
hereof, notice given pursuant to any provision of this Agreement shall be in
writing and shall be delivered (i) if to the Company, at the office of the
Company at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq., Senior Vice President, General Counsel and Secretary;
or (ii) if to you at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
Manager, Investment Banking Division.
This Agreement has been and is made solely for the benefit of the
several Underwriters, the Company, its directors and officers, and the other
controlling persons referred to in Section 7 hereof and their respective
successors and assigns, to the extent provided herein, and no other person shall
acquire or have any right under or by virtue of this Agreement. Neither the term
"successor" nor the term "successors and assigns" as used in this Agreement
shall include a purchaser from any Underwriter of any of the Shares in his
status as such purchaser.
14. Applicable Law; Counterparts. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed within the State of New York.
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This Agreement may be signed in various counterparts which together
constitute one and the same instrument. If signed in counterparts, this
Agreement shall not become effective unless at least one counterpart hereof
shall have been executed and delivered on behalf of each party hereto.
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Please confirm that the foregoing correctly sets forth the agreement
between the Company and the several Underwriters.
Very truly yours,
SHURGARD STORAGE CENTERS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Senior Vice President,
Chief Financial Officer
and Treasurer
Confirmed as of the date first above mentioned.
▇▇▇▇▇▇▇ ▇▇▇▇▇ BARNEY INC.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
UBS WARBURG LLC
▇▇▇▇ ▇▇▇▇▇▇▇▇ INCORPORATED
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ INC.
By:
-------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Managing Director
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SCHEDULE I
LIST OF UNDERWRITERS
Number of
Underwriters Firm Shares
------------ -----------
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. ....................................... 780,000
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated................................ 775,000
UBS Warburg LLC.................................................. 775,000
▇▇▇▇ ▇▇▇▇▇▇▇▇ Incorporated....................................... 250,000
ABN AMRO Incorporated............................................ 20,000
▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc. ....................................... 20,000
Bank One Capital Markets, Inc. .................................. 20,000
Bank of America Securities LLC................................... 20,000
CIBC World Markets Corp. ........................................ 20,000
▇▇▇▇▇▇▇▇▇▇ & Co. Inc............................................. 20,000
First Union Securities, Inc. .................................... 20,000
Gibraltar Securities Co. ........................................ 20,000
Gruntal & Co., L.L.C. ........................................... 20,000
H & R Block, Inc. ............................................... 20,000
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Inc. .................................... 20,000
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, Incorporated............................. 20,000
McDonald Investments Inc., a Key Corp Company.................... 20,000
Prudential Securities Incorporated............................... 20,000
Quick & ▇▇▇▇▇▇, Inc. ............................................ 20,000
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Associates, Inc. ................................ 20,000
The ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ Company, LLC............................... 20,000
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & Co., Inc. ...................................... 20,000
TD Securities (USA) Inc. ........................................ 20,000
U.S. Bancorp Pipar Jaffray Inc................................... 20,000
Wachovia Securities, Inc. ....................................... 20,000
Total ============
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SCHEDULE II
LIST OF PROPERTIES
S-2
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SCHEDULE III
SUBSIDIARIES OF THE COMPANY
AND OWNERSHIP OF CAPITAL STOCK
S-3
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SCHEDULE IV
JOINT VENTURES AND
OWNERSHIP INTERESTS THEREIN
S-4
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ANNEX A
(i) The Company is a corporation duly incorporated and
validly existing under the laws of the State of
Washington with corporate power and authority to own,
lease and operate its properties and to conduct its
business as described in the Registration Statement and
the Prospectus (and any amendment or supplement
thereto), and is duly registered and qualified (or has
made application to become registered and qualified) to
conduct its business and is in good standing in each
jurisdiction or place where the nature of its properties
or the conduct of its business requires such
registration or qualification, except where the failure
so to register or qualify does not have a material
adverse effect on the condition (financial or other),
business, properties, net worth or results of operations
of the Company and the Subsidiaries, taken as a whole;
(ii) Each of the Subsidiaries that is organized in the United
States is a corporation duly organized and validly
existing and, where applicable, in good standing under
the laws of the jurisdiction of its organization, with
corporate power and authority to own, lease, and operate
its properties and to conduct its business as described
in the Registration Statement and the Prospectus (and
any amendment or supplement thereto); except as
described in Schedule III, all the outstanding shares of
capital stock of each of the Subsidiaries that is
organized in the United States have been duly authorized
and validly issued, are fully paid and nonassessable,
and the Company owns of record the percentage of
outstanding shares of each such Subsidiary set forth in
Schedule III and to such counsel's knowledge, is free
and clear of any lien, adverse claim, security interest,
equity or other encumbrance, except for such as would
not have a material adverse effect on the condition
(financial or other), business, prospects, properties,
net worth or results of operations of the Company and
the Subsidiaries, taken as a whole;
(iii) Each of the general partnership or joint venture
agreements pursuant to which the Joint Ventures were
formed has been duly authorized, executed and delivered
by the Company or its Subsidiaries, as applicable and
the Company's interest in such Joint Venture as
described in Schedule IV is reflected in the agreement
applicable to such Joint Venture;
(iv) The authorized capital stock of the Company is as set
forth under the captions "Description of Common Stock",
"Description of Preferred Stock" and "Restrictions on
Transfers of Capital Stock; Excess Stock" in the Base
Prospectus and under the caption "Description of Series
D Preferred Stock" in the Prospectus Supplement; the
authorized capital stock of the Company conforms in all
material respects as to legal matters to the description
thereof contained in such sections in the Base
Prospectus and the Prospectus Supplement; as of the date
of such
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counsel's opinion, prior to the issuance of the Shares,
there are 29,604,836 shares of Class A Common Stock,
154,604 shares of Class B Common Stock, 2,000,000 shares
of 8.8% Series B Cumulative Redeemable Preferred Stock
and 2,000,000 shares of 8.70% Series C Cumulative
Redeemable Preferred Stock outstanding;
(v) All the shares of capital stock of the Company
outstanding prior to the issuance of the Shares have
been duly authorized and validly issued, and are fully
paid and nonassessable;
(vi) The Shares have been duly authorized and, when issued
and delivered to the Underwriters against payment
therefor in accordance with the terms hereof, will be
validly issued, fully paid and nonassessable and free of
any preemptive, or to the best knowledge of such
counsel, similar rights that entitle or will entitle any
person to acquire any Shares upon the issuance thereof
by the Company;
(vii) The form of certificates for the Shares conforms to the
requirements of the Washington Business Corporation Act;
(viii) The Registration Statement and all post-effective
amendments, if any, have become effective under the Act
and, to the best knowledge of such counsel, no stop
order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that
purpose are pending before or contemplated by the
Commission; and any required filing of the Prospectus
pursuant to Rule 424(b) has been made in accordance with
Rule 424(b);
(ix) The Company has corporate power and authority to enter
into this Agreement and to issue, sell and deliver the
Shares to the Underwriters as provided herein, and this
Agreement has been duly authorized, executed and
delivered by the Company;
(x) To the knowledge of such counsel, neither the Company
nor any of the Subsidiaries is in violation of its
respective certificate or articles of incorporation or
its respective bylaws or other organizational documents,
and, to the best knowledge of such counsel, is not in
default in the performance of any material obligation,
agreement or condition contained in any bond, debenture,
note or other evidence of indebtedness that is listed as
an exhibit to the Registration Statement or to any
Incorporated Document, where such violation or default,
individually or in the aggregate, has had or is likely
to have a material adverse effect on the condition
(financial or other), business, properties, net worth or
results of operations of the Company and the
Subsidiaries, taken as a whole, except as may be
disclosed in the Prospectus;
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30
(xi) Neither the offer, sale or delivery of the Shares, the
execution, delivery or performance of this Agreement,
compliance by the Company with the provisions hereof nor
consummation by the Company of the transactions
contemplated hereby conflicts or will conflict with or
constitutes or will constitute a breach of, or a default
under, the certificate or articles of incorporation or
bylaws, or other organizational documents, of the
Company or any of the Subsidiaries or any agreement,
indenture, lease or other instrument to which the
Company or any of the Subsidiaries is a party or by
which any of them or any of their respective properties
is bound that is an exhibit to the Registration
Statement or to any Incorporated Document, or will
result in the creation or imposition of any lien, charge
or encumbrance upon any property or assets of the
Company or any of the Subsidiaries, nor will any such
action result in any violation of any existing law,
regulation, ruling (assuming compliance with all
applicable state securities and Blue Sky laws),
judgment, injunction, order or decree known to such
counsel, applicable to the Company, the Subsidiaries or
any of their respective properties, except for such
breaches or defaults that have not had and would not
reasonably be expected to have a material adverse effect
on the condition (financial or other), business,
properties, net worth or results of operations of the
Company and the Subsidiaries, taken as a whole;
(xii) No consent, approval, authorization or other order of,
or registration or filing with, any court, regulatory
body, administrative agency or other governmental body,
agency, or official is required on the part of the
Company (except as has been obtained under the Act and
the Exchange Act or such as may be required under state
securities or Blue Sky laws governing the purchase and
distribution of the Shares) for the valid issuance and
sale of the Shares to the Underwriters as contemplated
by this Agreement;
(xiii) The Registration Statement and the Prospectus and any
supplements or amendments thereto (except for the
financial statements and the notes thereto and the
schedules and other financial and statistical data
included therein, as to which such counsel need not
express any opinion) comply as to form in all material
respects with the requirements of the Act; and each of
the Incorporated Documents (except for the financial
statements and the notes thereto and the schedules and
other financial and statistical data included therein,
as to which counsel need not express any opinion)
complies as to form in all material respects with the
Exchange Act and the rules and regulations of the
Commission thereunder;
(xiv) To the knowledge of such counsel, (A) other than as
described or contemplated in the Prospectus (or any
supplement thereto), the Registration Statement or any
Incorporated Document, there are no legal or
governmental proceedings pending or threatened against
the Company
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or any of the Subsidiaries, or to which the Company or
any of the Subsidiaries, or any of their property, is
subject, which are required to be described in the
Registration Statement or Prospectus (or any amendment
or supplement thereto) and (B) there are no agreements,
contracts, indentures, leases or other instruments, that
are required to be described in the Registration
Statement or the Prospectus (or any amendment or
supplement thereto) or to be filed as an exhibit to the
Registration Statement or any Incorporated Document that
are not described or filed as required, as the case may
be;
(xv) The statements in the Registration Statement and Base
Prospectus under the captions "Description of Common
Stock", "Description of Preferred Stock", "Restrictions
on Transfers of Capital Stock; Excess Stock", and the
statements in the Prospectus Supplement under the
caption "Description of Series D Preferred Stock" and
under the subheadings "Real Estate Investment Risks,"
"Risks Relating to Qualification as a REIT" and "Other
Risks--We may issue additional Preferred Stock" under
the heading "Risk Factors", insofar as they are
descriptions of contracts, agreements or other legal
documents, or refer to statements of law or legal
conclusions, are accurate and present fairly the
information required to be shown;
(xvi) Based on certain customary assumptions and
representations (acceptable to ▇▇▇▇▇▇▇ Coie and to
counsel for the Underwriters in their reasonable
discretion) relating to applicable asset composition,
source of income, stockholder diversification
distribution, record keeping tests and other
requirements of the Code necessary for the Company to
qualify as a REIT, the Company was organized and has
operated in conformity with the requirements for
qualification and taxation as a REIT under Sections 856
through 860 of the Code for each of the taxable years
ended December 31, 1994, December 31, 1995, December 31,
1996, December 31, 1997, December 31, 1998, December 31,
1999 and December 31, 2000; the Company's current
organization and method of operations should permit the
Company to continue to qualify as a REIT under the Code.
The discussion in the Prospectus Supplement under the
caption "Certain Federal Income Tax Considerations"
fairly summarizes the federal income tax considerations
that are likely to be material to a holder of Shares;
(xvii) None of the Company nor any Subsidiary is, or solely as
a result of the consummation of the transactions
contemplated hereby, will become, an "investment
company," or a company "controlled" by an "investment
company," within the meaning of the Investment Company
Act of 1940, as amended;
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(xviii) Although such counsel has not undertaken to determine
independently, and does not assume any responsibility
for, the accuracy or completeness of the statements in
the Registration Statement, such counsel has
participated in the preparation of the Registration
Statement and the Prospectus, including review and
discussion of the contents thereof (including review and
discussion of the contents of all Incorporated
Documents), and nothing has come to the attention of
such counsel that has caused them to believe that the
Registration Statement (including the Incorporated
Documents) at the time the Registration Statement became
effective, or the Prospectus, as of its date and as of
the Closing Date or the Option Closing Date contained an
untrue statement of a material fact or omitted to state
a material fact required to be stated therein or
necessary to make the statements therein not misleading
or that any amendment or supplement to the Prospectus,
as of its respective date, and as of the Closing Date or
the Option Closing Date, contained any untrue statement
of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in
the light of the circumstances under which they were
made, not misleading (it being understood that such
counsel need express no opinion with respect to the
financial statements and the notes thereto and the
schedules and other financial and statistical data
included in the Registration Statement or the Prospectus
or any Incorporated Document.) Nothing in this opinion
(xviii) modifies or affects the opinions set forth in
opinions (xv) and (xvi);
(xix) To such counsel's knowledge, except as described in the
Prospectus, there are no outstanding options, warrants
or other rights calling for the issuance of any shares
of capital stock of the Company or any security
convertible into or exchangeable or exercisable for
capital stock of the Company;
(xx) To such counsel's knowledge, no holder of any security
of the Company has any right to require registration of
shares of Series D Preferred Stock or any other security
of the Company because of the filing of the Registration
Statement or consummation of the transactions
contemplated by this Agreement.
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