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EXHIBIT 10.1
SHURGARD STORAGE CENTERS, INC.
$200,000,000
7 3/4 % NOTES DUE 2011
PURCHASE AGREEMENT
February 14, 2001
BANC OF AMERICA SECURITIES LLC
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
BANC ONE CAPITAL MARKETS, INC.
XXXXXX XXXXXXX & CO. INCORPORATED
XXXXXXX XXXXX XXXXXX INC.
U.S. BANCORP XXXXX XXXXXXX, INC.
c/o BANC OF AMERICA SECURITIES LLC
Bank of America Corporate Center
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Ladies and Gentlemen:
Shurgard Storage Centers, Inc., a Washington corporation (the
"Company"), proposes to issue and sell $200,000,000 aggregate principal amount
of its 7 3/4% Notes Due 2011 (the "Securities") to the several purchasers named
in Schedule I hereto (the "Initial Purchasers"). The Securities will be issued
pursuant to an indenture dated as of April 25, 1997, as supplemented on July 11,
1997 (the "Indenture") between the Company and LaSalle National Bank, as trustee
(the "Trustee").
The Securities will be offered without being registered under the
Securities Act of 1933, as amended (the "Act"), to qualified institutional
buyers in compliance with the exemption from registration provided by Rule 144A
under the Act and in offshore transactions in reliance on Regulation S under the
Act ("Regulation S").
The Initial Purchasers and their direct and indirect transferees will be
entitled to the benefits of a Registration Rights Agreement dated the date
hereof between the Company and the Initial Purchasers (the "Registration Rights
Agreement").
In connection with the sale of the Securities, the Company has prepared
a preliminary offering memorandum including or incorporating by reference a
description of the terms of the Securities, the terms of the offering and a
description of the Company (the "Preliminary Memorandum"). In connection with
the sale of the Securities, the Company will prepare a final offering memorandum
(the "Memorandum") including or incorporating by reference a
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description of the terms of the Securities, the terms of the offering and a
description of the Company. As used herein, the term "Memorandum" shall include
the documents incorporated by reference therein. The terms "supplement",
"amendment" and "amend" as used herein with respect to the Memorandum shall
include all documents deemed to be incorporated by reference in the Memorandum
that are filed subsequent to the date of such Memorandum with the Securities and
Exchange Commission (the "Commission") pursuant to the Securities Exchange Act
of 1934, as amended (the "Exchange Act").
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.
1. Agreements to Sell and Purchase. The Company hereby agrees to sell to
the several Initial Purchasers, subject to the terms and conditions herein
contained and based upon the Initial Purchasers' representations and warranties
herein contained, and each Initial Purchaser, upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, agrees, severally and not jointly, to purchase from the
Company the respective principal amounts of Securities set forth opposite such
Initial Purchaser's name on Schedule I hereto at a purchase price of 99.322% of
the principal amount thereof (the "Purchase Price"), plus accrued interest, if
any, from February 14, 2001 to the Closing Date (as defined herein).
2. Terms of Public Offering. The Company has been advised by you that
the Initial Purchasers will make an offering of the Securities purchased by the
Initial Purchasers hereunder on the terms to be set forth in the Memorandum, as
soon as practicable after this Agreement is entered into as in your judgment is
advisable.
3. Delivery of the Securities and Payment Therefor. Payment for the
Securities shall be made to the Company in federal or other funds immediately
available funds against delivery of the Securities for the respective accounts
of the several Initial Purchasers at 10:00 A.M., Eastern time, on February 20,
2001, or at such other time on the same or such other date, not later than March
20, 2001, as shall be designated in writing by you. The time and date of such
payment are hereinafter referred to as the "Closing Date."
Certificates for the Securities shall be in definitive form or global
form, as specified by you, and registered in such names and in such
denominations as you shall request in writing no later than one full business
day prior to the Closing Date. The certificates evidencing the Securities shall
be delivered to you on the Closing Date for the respective accounts of the
several Initial Purchasers, with any transfer taxes payable in connection with
the transfer of the Securities to the Initial Purchasers duly paid, against
payment of the Purchase Price therefor plus accrued interest, if any, to the
date of payment and delivery.
4. Agreements of the Company. The Company agrees with the several
Initial Purchasers as follows:
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(a) The Company will advise you promptly and, if requested by
you, will confirm such advice in writing within the period of time
referred to in the first sentence of Section 4(d) 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
Memorandum (as then amended or supplemented) untrue or which requires
the making of any additions to or changes in the Memorandum (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.
(b) The Company will furnish to you, without charge, prior to
10:00 a.m., Eastern time, on the business day next succeeding the date
of this Agreement and during the period mentioned in Section 4(d), as
many copies of the Memorandum, any documents incorporated by reference
therein and any supplements and amendments thereto as you may reasonably
request.
(c) Before amending or supplementing the Memorandum or the
Preliminary Memorandum, the Company will furnish to you a copy of each
such proposed amendment or supplement and not use any such proposed
amendment or supplement to which you reasonably object.
(d) If, during such period after the date hereof and prior to
the date on which all of the Securities shall have been sold by the
Initial Purchasers, any event shall occur or condition exist as a result
of which it is necessary to amend or supplement the Memorandum in order
to make the statements therein, in the light of the circumstances when
the Memorandum is delivered to a purchaser, not misleading, or if, in
the opinion of counsel for the Initial Purchasers, it is necessary to
amend or supplement the Memorandum to comply with applicable law, the
Company will forthwith prepare and furnish, at its own expense, to the
Initial Purchasers, either amendments or supplements to the Memorandum
so that the statements in the Memorandum as so amended or supplemented
will not, in the light of the circumstances when the Memorandum is
delivered to a purchaser, be misleading or so that the Memorandum, as
amended or supplemented, will comply with applicable law.
(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 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) The Company will cooperate with you and your counsel in
connection with the registration or qualification of the Securities for
offering and sale by the several Initial Purchasers 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
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would subject it to service of process in suits, other than those
arising out of the offering or sale of the Securities, in any
jurisdiction where it is not now so subject.
(g) Neither the Company nor any affiliate (as defined in Rule
501(b) of Regulation D under the Act, an "Affiliate") of the Company
will sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any security (as defined in the Act) which could
be integrated with the sale of the Securities in a manner which would
require the registration under the Act of the Securities.
(h) Neither the Company nor any Affiliate will solicit any offer
to buy or offer or sell the Securities by means of any form of general
solicitation or general advertising (as those terms are used in
Regulation D under the Act) or in any manner involving a public offering
within the meaning of Section 4(2) of the Act.
(i) While any of the Securities remain "restricted securities"
within the meaning of the Act, the Company will make available, upon
request, to any seller of such Securities the information specified in
Rule 144A(d)(4) under the Act, unless the Company is then subject to
Section 13 or 15(d) of the Exchange Act.
(j) None of the Company, its Affiliates or any person acting on
its or their behalf (other than the Initial Purchasers) will engage in
any directed selling efforts (as that term is defined in Regulation S)
with respect to the Securities, and the Company, its Affiliates and each
person acting on its or their behalf (other than the Initial Purchasers)
will comply with the offering restrictions requirement of Regulation S.
(k) During the period of two years after the Closing Date, the
Company will not, and will not permit any of its affiliates (as defined
in Rule 144A under the Act) to resell any of the Securities which
constitute "restricted securities" under Rule 144A that have been
reacquired by any of them.
5. Representations and Warranties of the Company. The Company represents
and warrants to each Initial Purchaser that:
(a) Each document, if any, filed or to be filed pursuant to the
Exchange Act and incorporated by reference in the Memorandum (each, an
"Incorporated Document" and collectively, the "Incorporated Documents"),
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
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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.
(b) The authorized, issued and outstanding capital stock of the
Company is as set forth in the Memorandum in the "Shareholders' equity"
section under the caption "Capitalization" (except for the subsequent
issuances, if any, pursuant to this Agreement, pursuant to reservations,
agreements or employee benefit plans referred to in the Memorandum or
pursuant to the exercise of convertible securities or options referred
to in the Memorandum). The shares of issued and outstanding capital
stock of the Company have been duly authorized and validly issued and
are fully paid and non-assessable; 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 debt
structure of the Company is as set forth in the "Debt" section under the
caption "Capitalization" and elsewhere in the Incorporated Documents
(except for changes in the ordinary course).
(c) 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 Memorandum, 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.
(d) 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 business as described in the Memorandum, 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.
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(e) 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
Memorandum, 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 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.
(f) 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, other than
proceedings that are accurately described in all material respects in
the Memorandum or any Incorporated Document and proceedings 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. There
are no agreements, contracts, indentures, leases or other instruments of
the Company or the Subsidiaries except those that are accurately
described in all material respects in the Memorandum or any Incorporated
Document and those that are not material to the Company and the
Subsidiaries, taken as a whole.
(g) 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 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.
(h) Neither the issuance and sale of the Securities, the
execution, delivery or performance of this Agreement, the Registration
Rights Agreement or the Indenture by the Company nor the consummation by
the Company of the transactions contemplated
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hereby or thereby (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 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 as may be
required for compliance with federal and state securities laws with
respect to the Company's obligations under the Registration Rights
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.
(i) The accountants, Deloitte & Touche LLP, who have certified
or shall certify the financial statements included or incorporated by
reference in the Memorandum (or any amendment or supplement thereto),
are independent public accountants as required by the Act.
(j) The financial statements, together with related schedules
and notes, included or incorporated by reference in the Memorandum (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 Memorandum 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 Memorandum (and any 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.
(k) The execution and delivery of, and the performance by the
Company of its obligations under, this Agreement, the Registration
Rights Agreement and the Indenture have been duly and validly authorized
by the Company. This Agreement has been duly authorized, executed and
delivered by the Company and constitutes a 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. Each of the
Indenture and the Registration Rights Agreement have been duly
authorized, and when executed and delivered will constitute
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the valid and legally binding agreements of the Company, enforceable
against the Company in accordance with their respective terms, subject
to applicable bankruptcy, insolvency or similar laws affecting
creditors' rights generally and general principles of equity, and except
as rights to indemnity and contribution under the Registration Rights
Agreement may be limited by federal or state securities laws.
(l) The Securities have been duly authorized and, when executed
and authenticated in accordance with the provisions of the Indenture and
delivered to and paid for by the Initial Purchasers in accordance with
the terms of this Agreement, will be valid and binding obligations of
the Company, enforceable against the Company in accordance with their
terms, subject to applicable bankruptcy, insolvency or similar laws
affecting creditors' rights generally and general principles of equity,
and will be entitled to the benefits of the Indenture pursuant to which
such Securities are to be issued and the Registration Rights Agreement.
The Securities, the Indenture and the Registration Rights Agreement
conform in all material respects to the descriptions thereof contained
in the Memorandum.
(m) Except as disclosed in the Memorandum (or any amendment or
supplement thereto), subsequent to the respective dates as of which such
information is given in the Memorandum (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 Memorandum) 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 Memorandum 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 Memorandum; (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), on the business, prospects, properties,
net worth or results of operations of the
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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 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 Memorandum 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 is 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) 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 Memorandum, subject to such
qualifications as may be set forth in the Memorandum 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 Memorandum;
and, except as described in the Memorandum, none of such permits or
agreements contains any restriction that 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.
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(q) 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.
(r) 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 Memorandum.
(s) 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.
(t) 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 consummation of the transactions contemplated
by this Agreement or the Registration Rights Agreement.
(u) The Company and the Subsidiaries own or possess in the
United States all patents, trademarks, trademark registrations, service
marks, service mark registrations, trade names, copyrights, licenses,
inventions, trade secrets and rights described in the Memorandum 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.
(v) Except as otherwise disclosed in the Memorandum, 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 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,
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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 Memorandum, 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.
(w) 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.
(x) 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.
(y) The statements set forth in the Memorandum under the caption
"Federal Income Tax Considerations" fairly and accurately state the
federal income tax considerations that would be material to a holder of
the Securities.
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(z) Neither the Company nor any Affiliate of the Company has
directly, or through any agent, (i) sold, offered for sale, solicited
offers to buy or otherwise negotiated in respect of, any security (as
defined in the Act) which is or will be integrated with the sale of the
Securities in a manner that would require the registration under the Act
of the Securities or (ii) engaged in any form of general solicitation or
general advertising in connection with the offering of the Securities
(as those terms are used in Regulation D under the Act) or in any manner
involving a public offering within the meaning of Section 4(2) of the
Act.
(aa) None of the Company, its Affiliates nor any person acting
on their behalf has engaged or will engage in any directed selling
efforts (within the meaning of Regulation S) with respect to the
Securities, and the Company and its Affiliates and any person acting on
their behalf have complied and will comply with the offering
restrictions requirement of Regulation S.
(bb) It is not necessary in connection with the offer, sale and
delivery of the Securities to the Initial Purchasers in the manner
contemplated by this Agreement or in connection with the initial resale
of such Securities by the Initial Purchasers to register the Securities
under the Act or to qualify the Indenture under the Trust Indenture Act
of 1939, as amended.
(cc) The Securities satisfy the requirements set forth in Rule
144A(d)(3) under the Securities Act.
6. Offering of Securities; Restrictions on Transfer.
(a) Each Initial Purchaser, severally and not jointly,
represents and warrants that such Initial Purchaser is a qualified
institutional buyer as defined in Rule 144A under the Act (a "QIB").
Each Initial Purchaser, severally and not jointly, agrees with the
Company that (i) it will not solicit offers for, or offer or sell, such
Securities by any form of general solicitation or general advertising
(as those terms are used in Regulation D under the Act) and (ii) it will
solicit offers for such Securities only from, and will offer such
Securities only to, persons that it reasonably believes to be (A) in the
case of offers inside the United States, QIBs and (B) in the case of
offers outside the United States, to persons other than U.S. persons
("foreign purchasers," which term shall include dealers or other
professional fiduciaries in the United States acting on a discretionary
basis for foreign beneficial owners (other than an estate or trust)) in
reliance upon Regulation S under the Act that, in each case, in
purchasing such Securities are deemed to have represented and agreed as
provided in the Memorandum under the caption "Transfer Restrictions."
(b) Each Initial Purchaser, severally and not jointly,
represents, warrants, and agrees with respect to offers and sales
outside the United States that:
(i) such Initial Purchaser has been informed by the
Company that no action has been or will be taken in any
jurisdiction by the Company that would
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permit a public offering of the Securities, or possession or
distribution of the Memorandum or any other offering or
publicity material relating to the Securities, in any country or
jurisdiction where action for that purpose is required;
(ii) such Initial Purchaser has offered the Securities
and will offer and sell the Securities (A) as part of their
distribution at any time and (B) otherwise until 40 days after
the later of the commencement of the offering and the Closing
Date, only in accordance with Rule 903 of Regulation S or as
otherwise permitted in Section 6(a); accordingly, neither such
Initial Purchaser, its Affiliates nor any persons acting on its
or their behalf have engaged or will engage in any directed
selling efforts (within the meaning of Regulation S) with
respect to the Securities, and any such Initial Purchaser, its
Affiliates and any such persons have complied and will comply
with the offering restrictions requirement of Regulation S;
(iii) such Initial Purchaser has (A) not offered or sold
and, prior to the date six months after the Closing Date, will
not offer or sell any Securities to persons in the United
Kingdom except to persons whose ordinary activities involve them
in acquiring, holding, managing or disposing of investments (as
principal or agent) for the purposes of their businesses or
otherwise in circumstances which have not resulted and will not
result in an offer to the public in the United Kingdom within
the meaning of the Public Offers of Securities Regulations 1995;
(B) complied and will comply with all applicable provisions of
the Financial Services Act 1986 with respect to anything done by
it in relation to the Securities in, from or otherwise involving
the United Kingdom, and (C) only issued or passed on and will
only issue or pass on in the United Kingdom any document
received by it in connection with the issue of the Securities to
a person who is of a kind described in Article 11(3) of the
Financial Services Act 1986 (Investment Advertisements)
(Exemptions) Order 1996 or is a person to whom such document may
otherwise lawfully be issued or passed on;
(iv) such Initial Purchaser understands that the
Securities have not been and will not be registered under the
Securities and Exchange Law of Japan, and represents that it has
not offered or sold, and agrees not to offer or sell, directly
or indirectly, any Securities in Japan or for the account of any
resident thereof except pursuant to any exemption from the
registration requirements of the Securities and Exchange Law of
Japan and otherwise in compliance with applicable provisions of
Japanese law; and
(v) such Initial Purchaser agrees that, at or prior to
confirmation of sales of the Securities, it will have sent to
each distributor, dealer or person receiving a selling
concession, fee or other remuneration that purchases Securities
from it during the restricted period a confirmation or notice to
substantially the following effect:
"The Securities covered hereby have not been
registered under the U.S. Securities Act of 1933 (the
"Act") and may not be offered and sold
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within the United States or to, or for the account or
benefit of, U.S. persons (i) as part of their
distribution at any time or (ii) otherwise until 40 days
after the later of the commencement of the offering and
the closing date, except in either case in accordance
with Regulation S (or Rule 144A if available) under the
Act. Terms used above have the meaning given to them by
Regulation S."
Terms used in this Section 6(b) have the meanings given
to them by Regulation S.
7. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless each of
you and each person, if any, who controls any Initial Purchaser 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 the Memorandum or any Preliminary Memorandum
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 Initial Purchaser furnished in writing to
the Company by or on behalf of any Initial Purchaser through you
expressly for use in connection therewith; provided, however, that the
indemnification contained in this paragraph (a) with respect to any
Preliminary Memorandum shall not inure to the benefit of any Initial
Purchaser (or to the benefit of any person controlling any Initial
Purchaser) on account of any such loss, claim, damage, liability or
expense arising from the sale of the Securities by such Initial
Purchaser to any person if a copy of the Memorandum, excluding
Incorporated Documents shall not have been delivered or sent to such
person where required by applicable law, and the untrue statement or
alleged untrue statement or omission or alleged omission of a material
fact contained in such Preliminary Memorandum was corrected in the
Memorandum, provided that the Company has delivered the Memorandum to
such Initial Purchaser 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 Initial Purchaser or any person controlling any Initial Purchaser in
respect of which indemnity may be sought against the Company, such
Initial Purchaser 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 Initial
Purchaser 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
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fees and expenses of such counsel shall be at the expense of such
Initial Purchaser 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 Initial Purchaser or such controlling person
and the Company and such Initial Purchaser 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 Initial
Purchaser 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 Initial Purchasers and
controlling persons not having actual or potential differing interests
with you or among themselves, which firm shall be designated in writing
by Initial Purchasers, 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
Initial Purchaser, 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 Initial Purchaser agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers,
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 Initial Purchaser, but only
with respect to information relating to the Initial Purchaser furnished
in writing by or on behalf of such Initial Purchaser through you
expressly for use in the Memorandum or any Preliminary Memorandum, 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 Memorandum or any
Preliminary Memorandum, or any amendment or supplement thereto, and in
respect of which indemnity may be sought against any Initial Purchaser
pursuant to this paragraph (c), such Initial Purchaser 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 Initial
Purchaser 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 Initial Purchaser's expense),
and the Company, its directors, any such officer, and any such
controlling person shall have the rights and duties given to the Initial
Purchasers by paragraph (b) above. The foregoing indemnity agreement
shall be in addition to any liability which the Initial Purchasers may
otherwise have.
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(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 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 Initial Purchasers on the other hand from the offering of the
Securities, 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
Initial Purchasers 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
Initial Purchasers 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 Initial Purchasers'
discounts and commissions received by the Initial Purchasers, in each
case as set forth in the table on the cover page of the Memorandum. The
relative fault of the Company on the one hand and the Initial Purchasers
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
Initial Purchasers 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 Initial Purchasers 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 Initial Purchasers
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
Initial Purchaser shall be required to contribute any amount in excess
of the amount by which the total price of the Securities resold by it in
the initial placement of the Securities exceeds the amount of any
damages which such Initial Purchaser 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 Initial Purchasers' obligations to contribute
pursuant to this Section 7 are several in proportion to the respective
number of Securities set forth opposite their names in Schedule I hereto
and not joint.
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(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.
(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 Initial Purchaser or any
person controlling any Initial Purchaser, the Company, its directors or
officers, or any person controlling the Company, (ii) acceptance of any
Securities and payment therefor hereunder, and (iii) any termination of
this Agreement. A successor to any Initial Purchaser or any person
controlling any Initial Purchaser, 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 Initial Purchasers' Obligations. The several
obligations of the Initial Purchasers to purchase the Securities hereunder are
subject to the following conditions:
(a) At the Closing Date, the Securities shall be rated at least
Baa2 by Xxxxx'x and BBB by each of Standard & Poor's and Duff & Xxxxxx,
and the Company shall have delivered to the Initial Purchasers a letter
dated the Closing Date, from each such rating agency, or other evidence
satisfactory to the Initial Purchasers, confirming that the Securities
have such ratings; and since the date of the Agreement, there shall not
have occurred a downgrading in the rating assigned to the Securities or
any of the Company's other securities by any "nationally recognized
statistical rating agency," as that term is defined by the Commission
for purposes of Rule 436 (g)(2) under the Act, and no such organization
shall have publicly announced that it has under surveillance or review
its rating of the Securities or any of the Company's other securities.
(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 Memorandum, which in your opinion, as Initial Purchasers, would
materially, adversely affect the market for the Securities, 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
Memorandum untrue in any material respect or which, in the opinion of
the Company and its counsel or the Initial Purchasers and their counsel,
requires the making of any addition to or change in the Memorandum in
order to state a material fact required by the Act or any other law to
be stated therein or necessary in
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order to make the statements therein not misleading, if amending or
supplementing the Memorandum to reflect such event or development would,
in your opinion, adversely affect the market for the Securities.
(c) You shall have received on the Closing Date an opinion of
Xxxxxxx Coie LLP, counsel for the Company, dated the Closing Date and
addressed to you, as Initial Purchasers, 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 Initial Purchasers are
justified in relying thereon.
(d) You shall have received on the Closing Date an opinion of
King & Spalding, counsel for the Initial Purchasers, dated the Closing
Date and addressed to you, as Initial Purchasers, with respect to the
matters referred to in clause (12) under the captions in the Memorandum
entitled "Description of the Notes," and "Exchange Offer; Registration
Rights"; clauses (4) (second clause only) (5), (6), (15) and (17) of
Xxxxx A hereto and such other related matters as you may request.
(e) You shall have received letters addressed to you, as Initial
Purchasers, and dated the date hereof and the Closing Date from Deloitte
& Touche LLP, independent certified public accountants, substantially in
the forms heretofore approved by you.
(f) (i) 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 Memorandum (or any
amendment or supplement thereto); (ii) there shall not have been, since
the respective dates as of which information is given in the Memorandum
(exclusive of any amendment or supplement thereto), except as may
otherwise be stated in such Memorandum (exclusive of 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; (iii) 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
Memorandum (or any amendment or supplement thereto); and (iv) 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 if made on and as of the Closing Date, and
you shall have received a certificate, dated the Closing Date 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.
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(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) The Company shall have furnished or caused to be furnished
to you such further certificates and documents as you shall have
requested.
(i) You shall have received on the Closing Date, an opinion of
counsel for the Trustee, dated the Closing Date and addressed to you, as
Initial Purchasers, with respect to the matters as you may reasonably
request.
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 Initial Purchasers, or to counsel for the Initial
Purchasers, shall be deemed a representation and warranty by the Company to the
Initial Purchasers as to the statements made therein.
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, of the
Memorandum and the Preliminary Memorandum 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 Memorandum, the Preliminary Memorandum, 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
Securities; (iii) the preparation, printing, authentication, issuance and
delivery of certificates for the Securities, including any stamp taxes in
connection with the original issuance and sale of the Securities; (iv) the
printing (or reproduction) 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 Securities; (v) the fees and
expenses, if any, incurred in connection with the admission of the Securities
for trading in any rating agency or any appropriate market system; (vi) the
registration or qualification of the Securities for offer and sale under the
securities or Blue Sky laws of the several states as provided in Section 4(f)
hereof (including the reasonable fees, expenses and disbursements of counsel for
the Initial Purchasers relating to the preparation, printing or reproduction,
and delivery of the Blue Sky Memorandum and such registration and
qualification); (vii) the costs and charges of the Trustee and any transfer
agent, registrar or depositary; 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
upon the execution and delivery hereof by the parties hereto.
If, on the Closing Date, any one or more of the Initial Purchasers shall
fail or refuse to purchase Securities which it or they are obligated to purchase
hereunder on the Closing Date, and the aggregate number of Securities which such
defaulting Initial Purchaser or Initial Purchasers
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are obligated but fail or refuse to purchase is not more than one-tenth of the
aggregate number of Securities which the Initial Purchasers are obligated to
purchase on the Closing Date, each non-defaulting Initial Purchaser shall be
obligated, severally, in the proportion which the number of Securities set forth
opposite its name in Schedule I hereto bears to the aggregate number of
Securities set forth opposite the names of all non-defaulting Initial Purchasers
in Schedule I, to purchase the Securities which such defaulting Initial
Purchaser or Initial Purchasers are obligated, but fail or refuse, to purchase.
If any one or more of the Initial Purchasers shall fail or refuse to purchase
Securities which it or they are obligated to purchase on the Closing Date and
the aggregate number of Securities with respect to which such default occurs is
more than one-tenth of the aggregate number of Securities which the Initial
Purchasers are obligated to purchase on the Closing Date and arrangements
satisfactory to you and the Company for the purchase of such Securities by one
or more non-defaulting Initial Purchasers 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
Initial Purchaser 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 Memorandum or any other documents or
arrangements may be effected. Any action taken under this paragraph shall not
relieve any defaulting Initial Purchaser from liability in respect of any such
default of any such Initial Purchaser under this Agreement. The term "Initial
Purchaser" 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 Securities which a defaulting Initial
Purchaser is obligated, but fails or refuses, to purchase.
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
Initial Purchaser to the Company by notice to the Company, if prior to the
Closing Date, (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 Securities at the
offering price set forth on the cover page of the Memorandum to the public or
(y) to enforce contracts for the resale of the Securities by the Initial
Purchasers. 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 Initial Purchasers. The statements set
forth in the last paragraph of the cover page and the table following the third
paragraph and the statements contained in the fourth paragraph, fifth paragraph
and third sentence of the seventh paragraph under the caption "Plan of
Distribution" in the Memorandum, constitute the only information
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furnished by or on behalf of the Initial Purchasers through you as such
information is referred to in Section 7 hereof.
13. Miscellaneous. Except as otherwise provided in Sections 4, 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 0000 Xxxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxxxx 00000, Attention:
Xxxxxxxxx X. XxXxx, Esq., Senior Vice President, General Counsel and Secretary;
or (ii) if to the Initial Purchasers, c/o Banc of America Securities LLC, Bank
of America Corporate Center, NC1-007-07-01, 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxx,
Xxxxx Xxxxxxxx 00000, Attention: Capital Markets Services.
This Agreement has been and is made solely for the benefit of the
several Initial Purchasers, 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 Initial Purchaser of any of the Securities 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.
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 Initial Purchasers.
Very truly yours,
SHURGARD STORAGE CENTERS, INC.
By:
--------------------------------
Name:
Title:
Confirmed as of the date first above mentioned.
BANC OF AMERICA SECURITIES LLC
XXXXXXX XXXXX, XXXXXX XXXXXX & XXXXX
INCORPORATED
BANC ONE CAPITAL MARKETS, INC.
XXXXXX XXXXXXX & CO. INCORPORATED
XXXXXXX XXXXX XXXXXX INC.
U.S. BANCORP XXXXX XXXXXXX INC.
By: BANC OF AMERICA SECURITIES LLC
By:
----------------------------------------
Name:
Title:
-22-
23
SCHEDULE I
LIST OF INITIAL PURCHASERS
Principal Amount
of Securities
Initial Purchasers to be Purchased
------------------ ----------------
Banc of America Securities LLC....................................... $ 70,000,000
Xxxxxxx Lynch, Xxxxxx, Xxxxxx & Xxxxx
Incorporated.................................... $ 70,000,000
Banc One Capital Markets, Inc........................................ $ 15,000,000
Xxxxxx Xxxxxxx & Co. Incorporated.................................... $ 15,000,000
Xxxxxxx Xxxxx Xxxxxx Inc............................................. $ 15,000,000
U.S. Bancorp Xxxxx Xxxxxxx Inc....................................... $ 15,000,000
------------
Total $200,000,000
============
24
SCHEDULE II
LIST OF PROPERTIES
25
SCHEDULE III
SUBSIDIARIES OF THE COMPANY
AND OWNERSHIP OF CAPITAL STOCK
26
SCHEDULE IV
JOINT VENTURES AND
OWNERSHIP INTERESTS THEREIN
27
ANNEX A
(1) 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 Memorandum (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;
(2) 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 Memorandum
(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, properties, net
worth or results of operations of the Company and the Subsidiaries,
taken as a whole;
(3) 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 each such Joint Venture as described in Schedule
IV is reflected in the agreement applicable to such Joint Venture;
(4) The Company has corporate power and authority to enter into this
Agreement, the Registration Rights Agreement and the Indenture and to
issue, sell and deliver the Securities to the Initial Purchasers as
provided herein, and this Agreement has been duly authorized, executed
and delivered by the Company;
(5) The Securities have been duly authorized by the Company and, when
executed and authenticated in accordance with the provisions of the
Indenture and delivered to and paid for by the Initial Purchasers in
accordance with the terms of this Agreement, will be valid and binding
obligations of the Company, enforceable against the Company in
accordance with their terms, subject to applicable bankruptcy,
insolvency or similar laws affecting creditors' rights generally and
general principles of equity, and will be entitled to the benefits of
the Indenture
28
pursuant to which such Securities are to be issued and the Registration
Rights Agreement;
(6) Each of the Indenture and the Registration Rights Agreement has been
duly authorized, executed and delivered by, and is a valid and binding
agreement of, the Company, enforceable against the Company in accordance
with its terms, subject to applicable bankruptcy, insolvency or similar
laws affecting creditors' rights generally and general principles of
equity and except as rights to indemnification and contribution under
the Registration Rights Agreement may be limited under applicable law
and public policy considerations;
(7) To the best 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 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 Memorandum;
(8) Neither the offer, sale or delivery of the Securities, the execution,
delivery or performance of this Agreement, the Registration Rights
Agreement and the Indenture, compliance by the Company with the
provisions hereof or thereof nor consummation by the Company of the
transactions contemplated hereby or thereby 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 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, Blue Sky laws and
federal securities laws, except as otherwise addressed in this opinion),
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;
(9) 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 such as may be required under state securities or
Blue Sky laws governing the purchase and
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29
distribution of the Securities) for the valid issuance and sale of the
Securities to the Initial Purchasers as contemplated by this Agreement;
(10) Each of the Incorporated Documents (except for the financial statements
and the notes thereto and the schedules and other financial 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;
(11) To the best knowledge of such counsel, (A) other than as described or
contemplated in the Memorandum or any Incorporated Document, there are
no legal or governmental proceedings pending or threatened against the
Company or any of the Subsidiaries, or to which the Company or any of
the Subsidiaries, or any of their property, is subject, which would be
required to be described in the Memorandum (or any amendment or
supplement thereto) if such Memorandum was a Registration Statement
filed under the Act and (B) there are no agreements, contracts,
indentures, leases or other instruments, that would be required to be
described in the Memorandum (or any amendment or supplement thereto) if
such Memorandum was a Registration Statement filed under the Act or as
required to be filed as an exhibit to any Incorporated Document that are
not so described or filed as the case may be;
(12) The statements in the Memorandum under the captions "Description of the
Notes", "Exchange Offer; Registration Rights", "Transfer Restrictions",
"Federal Income Tax Considerations", the subheadings "Real Estate
Investment Risks" and "Risks Relating to Qualification and Operation as
a REIT" 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;
(13) Based on certain customary assumptions and representations (acceptable
to Perkins Coie and to counsel for the Initial Purchasers 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 Memorandum under the caption "Federal Income Tax
Considerations" fairly summarizes the federal income tax considerations
that are likely to be material to a holder of Securities;
(14) None of the Company nor any Subsidiary is, or solely as a result of the
consummation of the transactions contemplated hereby, will become, an
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30
"investment company," or a company "controlled" by an "investment
company," within the meaning of the Investment Company Act of 1940, as
amended;
(15) 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 Memorandum, such counsel has participated in the
preparation of the Memorandum, 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 Memorandum (including
the Incorporated Documents), as of its date and as of the 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 Memorandum, as of its respective date, and as of the 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 data included in the Memorandum or any
Incorporated Document). Nothing in this opinion (15) modifies or affects
the opinions set forth in opinions (12) and (13);
(16) To such counsel's knowledge, no holder of any security of the Company
has any right to require registration of any security of the Company
because of the consummation of the transactions contemplated by the
Purchase Agreement and the Registration Rights Agreement.
(17) Based upon the representations, warranties and agreements of the Company
in Sections 4(g), 4(h), 4(j), 5(z), 5(aa) and 5(c) of the Purchase
Agreement and of the Initial Purchasers in Section 6 of the Purchase
Agreement, it is not necessary in connection with the offer, sale and
delivery of the Securities to the Initial Purchasers under the Purchase
Agreement or in connection with the initial resale of such Securities by
the Initial Purchasers in accordance with Section 6 of the Purchase
Agreement to register the Securities under the Act or to qualify the
Indenture under the Trust Indenture Act of 1939, it being understood
that no opinion is expressed as to any subsequent resale of any
Securities.
iv
