UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_______
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) July 23, 1999
Sovran Self Storage, Inc.
_________________________________________________________________
(Exact Name of Registrant as Specified in Charter)
Maryland 1-13820 16-1194043
_________________________________________________________________
(State or Other (Commission (IRS Employer
Jurisdiction of File Number) Identification No.)
Incorporation)
5166 Main Street
Williamsville, N.Y. 14221
_________________________________________________________________
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (716) 633-1850
______________
NONE
_________________________________________________________________
(Former Name or Former Address, if Changed Since Last Report)
Item 5. Other Events
Sovran Self Storage, Inc. (the "Company") is filing
this Current Report on Form 8-K in connection with the issuance
of shares of its 9.85% Series B Cumulative Redeemable Preferred
Stock under the Company's shelf registration statement on Form
S-3 (File No. 333-51169), effective July 8, 1998 (the
"Registration Statement"). The exhibits listed below are being
filed herewith in lieu of filing them as exhibits to the
Registration Statement, and, since this Form 8-K filing is
incorporated by reference in the Registration Statement, such
exhibits are set forth in full in the Registration Statement.
Item 7. Financial Statements, Pro Forma Financial Information
and Exhibits
Exhibit No. Description
__________ ___________
1.1 Underwriting Agreement, dated July 23, 1999 among
McDonald Investments, Inc., Morgan Keegan &
Company and J.J.B. Hilliard, W.L. Lyons, Inc., as
representatives of the underwriters, and
Registrant and its operating partnership, Sovran
Acquisition Limited Partnership
4.1 Form of 9.85% Series B Cumulative Redeemable
Preferred Stock Certificate (incorporated by
reference to exhibit 1.5 filed with the
Registrant's Registration Statement on Form 8-A
dated July 29, 1999)
4.2 Articles Supplementary to the Amended and Restated
Articles of Incorporation of the Registrant
classifying and designating the 9.85% Series B
Cumulative Redeemable Preferred Stock
(incorporated by reference to Exhibit 1.6 filed
with the Registrant's Registration Statement on
Form 8-A dated July 29, 1999)
5.1 Opinion of Phillips, Lytle, Hitchcock, Blaine &
Huber LLP as to the legality of the Securities
registered
8.1 Opinion of Phillips, Lytle, Hitchcock, Blaine &
Huber LLP as to certain tax matters
12.1 Calculation of Ratios of Earnings to Fixed Charges
23.1 Consent of Ernst & Young LLP, Independent
Accountants
23.2 Consent of Phillips, Lytle, Hitchcock, Blaine &
Huber LLP
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned hereunto duly authorized.
SOVRAN SELF STORAGE, INC.
_________________________________
(Registrant)
Date: July 30, 1999 By: /s/ David L. Rogers
______________________________
David L. Rogers
Chief Financial Officer
Exhibit Index
Exhibit No. Description
___________ ___________
1.1 Underwriting Agreement, dated July 23, 1999 among
McDonald Investments, Inc., Morgan Keegan &
Company and J.J.B. Hilliard, W.L. Lyons, Inc., as
representatives of the underwriters, and
Registrant and its operating partnership, Sovran
Acquisition Limited Partnership
4.1 Form of 9.85% Series B Cumulative Redeemable
Preferred Stock Certificate (incorporated by
reference to exhibit 1.5 filed with the
Registrant's Registration Statement on Form 8-A
dated July 29, 1999)
4.2 Articles Supplementary to the Amended and Restated
Articles of Incorporation of the Registrant
classifying and designating the 9.85% Series B
Cumulative Redeemable Preferred Stock
(incorporated by reference to Exhibit 1.6 filed
with the Registrant's Registration Statement on
Form 8-A dated July 29, 1999)
5.1 Opinion of Phillips, Lytle, Hitchcock, Blaine &
Huber LLP as to the legality of the Securities
registered
8.1 Opinion of Phillips, Lytle, Hitchcock, Blaine &
Huber LLP as to certain tax matters
12.1 Calculation of Ratios of Earnings to Fixed Charges
23.1 Consent of Ernst & Young LLP, Independent
Accountants
23.2 Consent of Phillips, Lytle, Hitchcock, Blaine &
Huber LLP
Exhibit 1.1
1,200,000 Shares
SOVRAN SELF STORAGE, INC.
9.85% Series B Cumulative Redeemable Preferred Stock*
(Liquidation Preference $25.00 Per Share)
UNDERWRITING AGREEMENT
July 23, 1999
MCDONALD INVESTMENTS INC.
MORGAN KEEGAN & COMPANY, INC.
J.J.B. HILLIARD, W.L. LYONS, INC.
As Representatives of the Several Underwriters
c/o McDonald Investments Inc.
McDonald Investment Center
800 Superior Avenue
Cleveland, Ohio 44114
Dear Sirs:
1. INTRODUCTORY. Sovran Self Storage, Inc., a Maryland
corporation (the "Company"), proposes to issue and sell 1,200,000
shares (the "Series B Preferred Shares") of the Company's Series
B Cumulative Redeemable Preferred Stock, $ .01 par value, which
are authorized but unissued, to the public through the
underwriters named in Schedule A annexed hereto (the
"Underwriters") for whom you are acting as the representatives
(the "Representatives"). The 1,200,000 Series B Preferred Shares
to be purchased from the Company are hereinafter referred to as
the "Firm Stock." The Company also proposes to sell to the
Underwriters, at their option, an aggregate of not more than
180,000 additional Series B Preferred Shares, which are
hereinafter referred to as the "Option Stock." The Firm Stock
and the Option Stock are hereinafter collectively referred to as
the "Stock" and are more fully described in the Registration
Statement and the Prospectus (as hereinafter defined). The
Company hereby confirms its several agreements with you, acting
as the Representatives of the Underwriters.
___________________________
* Plus an option to purchase up to 180,000 additional shares
to cover over-allotments
The public offering price per share for the Stock and
the purchase price per share for the Stock to be paid by the
Underwriters shall be agreed upon by the Company and the
Underwriters and such agreement shall be set forth in a separate
written instrument substantially in the form of Schedule B hereto
(the "Price Determination Agreement"). The Price Determination
Agreement may take the form of an exchange of any standard form
of written telecommunication between the Company and the
Underwriters and shall specify such applicable information as is
indicated in Schedule B hereto. The offering of the Stock will
be governed by this Agreement, as supplemented by the Price
Determination Agreement. From and after the date of the
execution and delivery of the Price Determination Agreement, this
Agreement shall be deemed to incorporate, and, unless the context
otherwise indicates, all references contained herein to "this
Agreement" and to the phrase "herein" shall be deemed to include,
the Price Determination Agreement. Unless otherwise defined
herein, all capitalized terms used herein shall have the
respective meanings ascribed thereto in the Prospectus and any
Prospectus Supplement thereto (as defined below).
As used herein, the term "Properties" refers to the
properties listed in the Prospectus Supplement under the caption
"Properties" which represent all of the self storage facilities
in which the Company, either directly or through its
subsidiaries, owns an interest.
The Company and Sovran Acquisition Limited Partnership,
a Delaware limited partnership of which a subsidiary of the
Company acts as sole general partner and in which the Company
holds a 93.5833% ownership interest (the "Operating
Partnership").
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE
OPERATING PARTNERSHIP. The Company and the Operating
Partnership, jointly and severally represent, warrant and
covenant to each of the Underwriters that:
(a) The Company meets the requirements for use of Form
S-3 and a registration statement (Registration No. 333-51169) on
Form S-3 relating, in part, to the Series B Preferred Shares,
including a prospectus, has been prepared by the Company in
conformity with the requirements of the Securities Act of 1933,
as amended (the "Act"), and the rules and regulations (the "Rules
and Regulations") of the Securities and Exchange Commission (the
"Commission") thereunder, has been filed with the Commission and
has become effective on July 8, 1998 (the "Effective Date"). No
stop order suspending the effectiveness of the registration
statement has been issued, and no proceeding for that purpose has
been instituted or, to the best knowledge after due inquiry of
the Company ("Knowledge"), threatened by the Commission. Copies
of such registration statement and prospectus, any such
amendments or supplements and all documents incorporated by
reference therein that were filed with the Commission on or prior
to the date of this Agreement have been delivered to the
Representatives. A prospectus supplement (the "Prospectus
Supplement") setting forth the terms of the Series B Preferred
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Shares and of their sale and distribution has been or will be so
prepared and will be filed pursuant to Rule 424(b) of the Rules
and Regulations on or before the second business day after the
date hereof (or such earlier time as may be required by the Rules
and Regulations). The registration statement, as it may have
heretofore been amended, is referred to herein as the
"Registration Statement," (including all documents incorporated
by reference thereto and all financial schedules and exhibits)
and the final form of prospectus included in the Registration
Statement, as supplemented by the Prospectus Supplement, is
referred to herein as the "Prospectus." Each form of Prospectus,
or Prospectus and Prospectus Supplement, heretofore made
available for use in offering the Series B Preferred Shares is
referred to herein as a "Preliminary Prospectus." Any reference
herein to the Registration Statement, the Prospectus, any
amendment or supplement thereto or any Preliminary Prospectus
shall be deemed to refer to and include the exhibits thereto (or,
in the case of the Prospectus or Preliminary Prospectus, the
exhibits to the Registration Statement) and the documents
incorporated by reference therein, and any reference herein to
the terms "amend," "amendment" or "supplement" with respect to
the Registration Statement or Prospectus shall be deemed to refer
to and include the filing after the execution hereof of any
document with the Commission deemed to be incorporated by
reference therein.
(b) Each part of the Registration Statement, when such
part became or becomes effective, each Preliminary Prospectus on
the date of filing thereof with the Commission, and the
Prospectus and any amendment or supplement thereto, on the date
of filing thereof with the Commission and at the Closing Date and
Second Closing Date (as hereinafter defined), including the
financial statements included or to be included or incorporated
by reference or to be incorporated by reference into the
Prospectus, conformed or will conform in all material respects
with the requirements of the Act, the Securities Exchange Act of
1934, as amended (the "Exchange Act"), the rules and regulations
thereunder (the "Exchange Act Rules and Regulations") and the
Rules and Regulations and will contain all statements required to
be stated therein in accordance with the Act, the Exchange Act,
the Rules and Regulations and the Exchange Act Rules and
Regulations; each part of the Registration Statement, when such
part became or becomes effective, did not or will not contain any
untrue statement of a material fact or omit to state a material
fact required to be stated therein, in the light of the
circumstances under which they were made, or necessary to make
the statements therein not misleading; the Preliminary Prospectus
on the date of filing thereof with the Commission, and the
Prospectus and any amendment or supplement thereto, on the date
of filing thereof with the Commission and at the Closing Date and
Second Closing Date (as hereinafter defined), did not or will not
include an untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not
misleading. The foregoing representations and warranties in this
Section 2(b) do not apply to any statements or omissions made in
reliance on and in conformity with information relating to any
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Underwriter furnished in writing to the Company by the
Representatives specifically for inclusion in the Registration
Statement or Prospectus or any amendment or supplement thereto.
The Company has not distributed any offering material in
connection with the offering or sale of the Series B Preferred
Shares other than the Registration Statement, the Preliminary
Prospectus and the Prospectus.
(c) The documents incorporated or to be incorporated
by reference in the Registration Statement, the Prospectus, any
amendment or supplement thereto or any Preliminary Prospectus or
from which information is so incorporated by reference, when they
became or become effective or were or are filed with the
Commission, as the case may be, complied or will comply in all
material respects with the requirements of the Act or the
Exchange Act, as applicable, the Rules and Regulations and the
Exchange Act Rules and Regulations.
(d) The only subsidiaries (as defined in the Rules and
Regulations) of the Company are Sovran Holdings, Inc., a Delaware
corporation and wholly-owned subsidiary ("Holdings") whose only
asset is its approximately 1% general partnership interest in the
Operating Partnership, and the Operating Partnership. The
Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of
Maryland with power and authority to own and lease its properties
and conduct its business as described in the Prospectus. Each of
the Company's subsidiaries has been duly incorporated or formed,
as the case may be, and is validly existing as a corporation or
limited partnership in good standing under the laws of its
respective jurisdiction of incorporation or formation, with power
and authority to own and lease its properties and conduct its
respective business. The Company and each of its subsidiaries
are duly licensed and qualified to do business as a foreign
corporation or partnership, as the case may be, and are in good
standing in all jurisdictions (i) in which the conduct of
business, as presently being conducted, requires such
qualification (except for those jurisdictions in which the
failure to so qualify will not have a material adverse effect on
condition (financial or otherwise), or the earnings, assets,
business affairs and business prospect of the Company and its
subsidiaries, taken as a whole) and (ii) in which the Company or
such subsidiary owns or leases real property. As of this date,
and as of the Closing Date and Second Closing Date, except for
the stock of Holdings and a limited partnership interest in the
Operating Partnership held by the Company, the Company will not
own, directly or indirectly, any equity securities or securities
convertible into or exchangeable for equity securities of any
other corporation, partnership, Massachusetts or other business
trust or any other business enterprise. Complete and correct
copies of the organizational documents or partnership agreement,
as the case may be, of the Company, the Operating Partnership and
Holdings, and all amendments thereto, have been delivered to the
Representatives, and no changes therein will be made subsequent
to the date hereof and prior to the Closing Date or, if later,
the Second Closing Date.
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(e) All the issued shares of capital stock or
partnership interests of each subsidiary of the Company have been
duly and validly authorized and issued, are fully paid and non-
assessable, and all the issued shares of capital stock of
Holdings and 93.5833% of the partnership interests of the
Operating Partnership are owned by the Company free and clear of
all liens, encumbrances, equities, security interests, or claims;
and there are no outstanding options, warrants or other rights
calling for the issuance of, and there are no commitments, plans
or arrangements to issue, any shares of capital stock or
partnership interests of any subsidiary or any security
convertible or exchangeable or exercisable for capital stock or
partnership interests of any subsidiary; except (i) as disclosed
in the Registration Statement, (ii) the shares of stock and
partnership interests of each subsidiary owned by the Company,
and (iii) the 49% membership interest in Iskalo Office Holdings,
LLC, a Delaware limited liability company, owned by the Operating
Partnership, neither the Company nor any subsidiary owns,
directly or indirectly, any shares of capital stock of any
corporation or has any equity interest in any firm, partnership,
joint venture, association or other entity.
(f) The Company has a duly authorized and outstanding
capitalization as set forth under "Capitalization" in the
Prospectus; all of the outstanding shares of capital stock of the
Company have been duly authorized and validly issued, are fully
paid and nonassessable, are free of any preemptive rights, rights
of first refusal or similar rights, were issued and sold in
compliance with the applicable Federal and state securities laws,
and conform in all material respects to the description in the
Prospectus; except as described in the Prospectus, there are no
outstanding options, warrants or other rights calling for the
issues of, and there are no commitments, plans or arrangements to
issue any shares of capital stock of the Company or any security
convertible or exchangeable or exercisable for capital stock of
the Company. There are no holders of securities of the Company
who, by reason of the filing of the Registration Statement have
the right (and have not waived such right) to request the Company
to include in the Registration Statement securities owned by
them. The Company has not offered, issued or sold any Series B
Preferred Shares prior to the date hereof.
(g) The Series B Preferred Shares conform in substance
to all statements in relation thereto contained in the
Registration Statement and the Prospectus; the Stock to be sold
by the Company hereunder have been duly authorized and, when
issued, delivered and paid for pursuant to this Agreement, will
be validly issued, fully paid and nonassessable and will conform
to the description thereof contained in the Prospectus. All
corporate action required to be taken for the issuance of the
Stock by the Company has been validly and sufficient taken. No
preemptive rights of security holders of the Company exist with
respect to the issuance and sale of the Stock by the Company
pursuant hereto.
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(h) The consolidated financial statements and
schedules of the Company and its subsidiaries included in the
Registration Statement and the Prospectus fairly present the
consolidated financial position, condition and results of
operations and cash flows of the Company and its subsidiaries at
the respective dates and for the respective periods to which they
apply, and such financial statements have been prepared in
conformity with generally accepted accounting principles
consistently applied throughout the periods involved. No other
financial statements or schedules of the Company and its
subsidiaries are required by the Act or the Rules and Regulations
to be included in the Registration Statement or the Prospectus.
The combined pro forma financial statements of the Company and
its subsidiaries included in the Prospectus and Registration
Statement fairly present the pro forma financial position and
results of operations of the Company and its subsidiaries at the
dates and for the periods to which they apply, and have been
prepared to give effect to certain assumptions and proposed
transactions made on reasonable bases which are fully and
accurately described in the Prospectus, and the pro forma
adjustments have been properly applied on the basis described
therein. The combined pro forma financial statements of the
Company and its subsidiaries included in the Registration
Statement and the Prospectus comply in all material respects with
the applicable requirements of Rule 11-02 of Regulation S-X of
the Commission and the pro forma adjustments have been properly
applied to the historical amounts in the compilation of such
statements.
(i) Ernst & Young LLP (the "Accountants"), who have
examined and expressed their opinion on the consolidated
financial statements of the Company and its subsidiaries
referenced in their opinions set forth in the Prospectus are
independent accountants within the meaning of the Act and the
Rules and Regulations.
(j) The Company together with its subsidiaries
maintains, and will maintain, a system of internal accounting
controls sufficient to meet the broad objectives of internal
accounting control insofar as those objectives pertain to the
prevention or detection of errors or irregularities in amounts
that would be material in relation to the Company's consolidated
financial statements; and, neither the Company nor any of its
subsidiaries nor any of Robert J. Attea, Charles E. Lannon,
Kenneth F. Myszka or David L. Rogers (the "Principal
Shareholders") nor, to the Company's Knowledge, any other
employee or agent of the Company or any subsidiary, has made any
payment of funds of the Company or any of its subsidiaries or
received or retained any funds in violation of any law, rule or
regulation or of a character required to be disclosed in the
Prospectus, and no funds of the Company or any of its
subsidiaries have been set aside to be used for any payment in
violation of any law, rule or regulation, or of a character
required to be disclosed in the Prospectus.
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(k) Subsequent to the respective dates as of which
information is given in the Registration Statement and the
Prospectus, except as set forth or contemplated in the
Prospectus, (i) except in the ordinary course of business and
consistent with past practice, neither the Company, the Operating
Partnership nor any other subsidiary has incurred any material
liabilities or obligations, direct or contingent, nor have any of
them entered into any material transaction; (ii) there has not
been and will not have been any change on a pro forma basis or
otherwise in the capital stock or funded debt of the Company, the
Operating Partnership or any other subsidiary which is material
or any material adverse change in the condition (financial or
otherwise), or the earnings, assets, business affairs and
business prospects of the Company and its subsidiaries; (iii) no
loss or damage (whether or not insured) to the property of the
Company, the Operating Partnership or any other subsidiary has
been sustained which materially and adversely effects the
conditions (financial or otherwise), or the earnings, assets,
business affairs and business prospects of the Company and its
subsidiaries; (iv) there has been no dividend or distribution of
any kind declared, paid or made by the Company on any class of
its capital stock or by the Operating Partnership with respect to
its partnership interests; (v) there has been no change in the
capital stock of the Company or the partnership interests of the
Operating Partnership, and no increase in the indebtedness of the
Company or the Operating Partnership that is material to such
entities; (vi) there has been no material adverse change in the
condition (financial or otherwise), or in the earnings, assets,
business affairs or business prospects of the Company and the
Operating Partnership, considered as one enterprise, whether or
not arising in the ordinary course of business; and (vii) there
has been no acquisitions or other transactions entered into by
the Company, the Operating Partnership, or any other subsidiary,
other than those in the ordinary course of business, which are
material with respect to such entities, considered as one
enterprise, or would result, upon consummation, in any inaccuracy
in the representations contained in Section 2(h) hereof.
(l) Neither the Company, the Operating Partnership nor
any of its other subsidiaries is or intends to conduct its
business in a manner in which it would become an "investment
company" or an "affiliated person" of, or "promotor" or
"principal underwriter" for, an "investment company," as defined
in Section 3(a) of the Investment Company Act of 1940, as
amended.
(m) There are no legal or governmental actions, suits
or proceedings before or by any Federal or state court,
commission, regulatory body, administrative agency or other
governmental body, domestic or foreign, pending or, to the
Knowledge of the Company, threatened to which the Company or any
of its subsidiaries, or any of their respective executive
officers or directors is a party or of which the business or
property (including, without limitation, any of the licenses
referred to in (n) below) of the Company or any of its
subsidiaries or any of the Company's or any of its subsidiaries'
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employees is the subject which would have a material adverse
effect on the condition (financial or otherwise), or the
earnings, assets, business affairs or business prospects of the
Company and its subsidiaries, taken as a whole, except as set
forth in the Prospectus.
(n) The Company, the Operating Partnership and each of
its other subsidiaries has, except where the failure to perform
or where such default or defaults (singly or in the aggregate)
would not involve a material risk to the condition (financial or
otherwise), or in the earnings, assets, business affairs or
business prospects of the Company and its subsidiaries, taken as
a whole, (i) all governmental licenses, permits, consents,
orders, certificates, approvals and other authorization necessary
or required to carry on its business as contemplated in the
Prospectus, and there are no proceedings relating to the
revocation or modification of any such governmental license,
permit, consent, order, certificate, approval or other
authorization, (ii) all such licenses are valid and in full force
and effect, and the Company, the Operating Partnership and each
of its other subsidiaries are operating in compliance with the
terms and provisions of all such licenses, (iii) complied in all
respects with all laws, regulations and orders applicable to it
and its business and (iv) performed all its obligations required
to be performed by it, and is not in default, under any
indenture, mortgage, deed of trust, voting trust agreement, loan
agreement, bond, debenture, note agreement, lease, contract or
other agreement or instrument to which it is a party or by which
any of its Properties is bound or affected. Neither the Company,
the Operating Partnership nor any of its other subsidiaries is in
violation of any provision of its certificate of incorporation or
by-laws or limited partnership agreement, as the case may be.
(o) No consent, approval, authorization or order of,
nor any filing or declaration with, any court or governmental
agency or body is required for the consummation by the Company of
the transactions on its part herein contemplated by this
Agreement, except such as has been obtained under the Act or the
Rules and Regulations and such as may be required under state
securities or blue sky laws or the by-laws and rules of the
National Association of Securities Dealers, Inc. (the "NASD") in
connection with the purchase and distribution of the Stock.
(p) The Company and the Operating Partnership have
full corporate or partnership power and authority to enter into
this Agreement. This Agreement has been duly authorized,
executed and delivered by the Company and the Operating
Partnership and constitutes a valid and binding agreement of the
Company and the Operating Partnership, enforceable against each
in accordance with the terms hereof. The performance of this
Agreement and the consummation of the transactions contemplated
hereby will not conflict with, result in the creation of
imposition of any lien, charge or encumbrance upon any of the
assets of the Company, the Operating Partnership or any of its
other subsidiaries pursuant to the terms or provisions of, or
result in a breach or violation of any of the terms or provisions
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of, or constitute a default under, or give any other party a
right to terminate any of its obligations under, or result in the
acceleration of any obligation under, the organizational
documents of the Company, the Operating Partnership or any of its
other subsidiaries, any contract or other agreement to which the
Company, the Operating Partnership or any of its other
subsidiaries is a party or by which the Company, the Operating
Partnership or any of its other subsidiaries or any of its
properties is bound or affected, or violate or conflict with any
judgment, ruling, decree, order, statute, rule or regulation of
any court or other governmental agency or body applicable to the
business or properties of the Company, the Operating Partnership
or any of its other subsidiaries.
(q) The Operating Partnership has good and marketable
title to all properties and assets used for the Company's
business (including the Properties described in the Prospectus),
in each case free and clear of all liens, encumbrances and
defects other than those set forth or referred to in the
Registration Statement or Prospectus or those which do not
materially affect the value of such property and do not
materially interfere with the use made or proposed to be made of
such property by the Company and its subsidiaries. There are no
mortgages or deeds of trust encumbering any of the Properties
other than those described on Schedule B hereto. To the Knowledge
of the Company and the Operating Partnership (i) the intended use
and occupancy of each of the Properties complies with all
applicable codes and zoning laws and regulations, if any, except
for such failures to comply which would not individually or in
the aggregate have a material adverse effect on the business,
properties, prospects, financial condition or results of
operations of the Company and its subsidiaries taken as a whole,
and (ii) there is no pending or threatened condemnation, zoning
change, environmental or other 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 such
proceedings or actions that would not involve a material risk to
the condition (financial or otherwise), or the earnings, assets,
business affairs or business prospects of the Company and its
subsidiaries taken as a whole. Title insurance in favor of the
mortgagees and the Company are in force with respect to each of
the Properties in an amount at least equal to the fair market
value thereof.
(r) The outstanding debt, the Properties and the
business of the Company and its subsidiaries conform in all
material respects to the description thereof contained in the
Registration Statement and the Prospectus.
(s) There is no document or contract of a character
required to be described in the Registration Statement or the
Prospectus or to be filed as an exhibit to the Registration
Statement which is not described or filed as required. All
contracts to which the Company, the Operating Partnership or any
of its other subsidiaries is a party have been duly authorized,
executed and delivered by such entity, constitute valid and
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binding agreements of such entity and are enforceable against
such entity and are enforceable against the Company, the
Operating Partnership or such subsidiary, as the case may be, in
accordance with the terms thereof.
(t) No statement, representation, warranty or covenant
made by the Company or any of its subsidiaries in this Agreement
or made in any certificate or document required by this Agreement
to be delivered to the Representatives was or will be inaccurate,
untrue, or incorrect.
(u) None of the Company, the Operating Partnership nor
any of their respective officers, directors or affiliates (as
defined in the Act and the Rules and Regulations), has taken or
will take, directly or indirectly, any action designed to
stabilize or manipulate, or which has constituted, or might in
the future reasonably be expected to cause or result in,
stabilization or manipulation of, the prices of any security of
the Company in order to facilitate the sale or resale of the
Series B Preferred Shares or otherwise.
(v) The Series B Preferred Shares have been registered
under Section 12(b) of the Exchange Act and have been duly
authorized for listing, subject to official notice of issuance,
on the New York Stock Exchange.
(w) Neither the Company nor any of its subsidiaries is
involved in any material labor dispute, nor to the Company's
Knowledge, is any such dispute threatened. The Company is not
aware of any existing, threatened or imminent labor disturbance
by the employees of any of its principal suppliers, contractors
or customers that could be expected to materially adversely
affect the condition (financial or otherwise), or the earnings,
assets, business affairs or business prospects of the Company and
the subsidiaries, taken as a whole.
(x) The Company and its subsidiaries own, or are
licensed or otherwise have the full right to use, all material
trademarks and trade names which are used in or necessary for the
conduct of their respective businesses as described in the
Prospectus. Except as disclosed in the Prospectus, no claims
have been asserted by any person to the use of any such
trademarks or trade names or challenging or questioning the
validity or effectiveness of any such trademarks or trade names.
The use in connection with the business and operations of the
Company and its subsidiaries of such trademarks and trade names
does not, to the Company's knowledge, infringe on the rights of
any person.
(y) The Company, the Operating Partnership and each of
its other subsidiaries has and maintains property and casualty
insurance in favor of the Company and its subsidiaries, with
respect to them and each of the Properties, in an amount and on
such terms as is reasonable and customary for businesses
conducted by the Company and its subsidiaries, including, but not
limited to, insurance covering (i) personal injury claims and
(ii) real and personal property owned or leased by the Company
- 10 -
and its subsidiaries against theft, damage, destruction, acts of
vandalism and all other risks customarily insured against, all of
which insurance is in full force and effect. Neither the Company
nor any of its subsidiaries has received from any insurance
company written notice of any material defects or deficiencies
affecting the insurability of such Properties.
(z) (i) Neither the Company, the Operating
Partnership nor any of the Properties is in violation of any
applicable Federal, state or local laws, statutes, rules,
regulations or ordinances relating to public health, safety or
the environment, including, without limitation, relating to
releases, discharges, emissions or disposal to air, water, land
or groundwater, to the withdrawal or use of groundwater, to the
use, handling or disposal of polychlorinated biphenyls (PCBs),
asbestos or area formaldehyde, to the treatment, storage,
disposal or management of hazardous substances (including,
without limitation, petroleum, crude oil or any fraction thereof,
or other hydrocarbons), pollutants or contaminants, to exposure
to toxic, hazardous or other controlled, prohibited or regulated
substances (the "Environmental Laws"), which violation would have
a material adverse effect on the condition (financial or
otherwise), or the earnings, assets, business affairs or business
prospects of the Company and its subsidiaries, taken as a whole,
or which might materially adversely affect the consummation of
the transactions contemplated by this Agreement. In addition,
and irrespective of such compliance, neither the Company, the
Operating Partnership nor any of its other subsidiaries is
subject to any liabilities for environmental remediation or
clean-up, including any liability or class of liability of the
lessee under the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended (42 U.S.C.
Section 9601, et seq.) ("CERCLA"), or the Resource Conservation
and Recovery Act of 1976, as amended (42 U.S.C. Section 9601, et
seq.) ("RCRA"), which liability would have a material adverse
effect on the condition (financial or otherwise), or the
earnings, assets, business affairs, or business prospects of the
Company and its subsidiaries, taken as a whole, or which might
materially and adversely affect the consummation of the
transactions contemplated by this Agreement.
(ii) Each of the Properties and each of the Company,
the Operating Partnership and each of its other subsidiaries has
received all permits, licenses or other approvals required of
them under applicable Environmental Laws to conduct their
respective businesses and is in compliance with all terms and
conditions of such permit, license or other approvals, except
when such noncompliance with the terms and conditions of such
permits, licenses or other approvals would not, singly or in the
aggregate, involve a material risk to the condition (financial or
otherwise), or earnings, assets, business affairs and business
prospects of the Company or its subsidiaries.
(iii) Except as may be specifically disclosed in the
"Phase I" reports provided to the Underwriter prior to the date
hereof, neither the Company, its subsidiaries, nor, to the
Knowledge of the Company, any other party has at any time,
- 11 -
handled, buried, stored, retained, refined, transported,
processed, manufactured, generated, produced, spilled, allowed to
seep, leak, escape or leach, or be pumped, poured, emitted,
emptied, discharged, injected, dumped, transferred or otherwise
disposed of or dealt with, Hazardous Materials (as hereinafter
defined) on, to or from the Properties. The Company does not
intend to use or allow the use of, the Properties or any
subsequently acquired properties described in the Prospectus for
the purpose of handling, burying, storing, retaining, refining,
transporting, processing, manufacturing, generating, producing,
spilling, seeping, leaking, escaping, leaching, pumping, pouring,
emitting, emptying, discharging, injecting, dumping, transferring
or otherwise disposing of or dealing with Hazardous Materials.
(iv) The Company has no Knowledge of any seepage, leak,
escape, leach, discharge, injection, release, emission, spill,
pumping, pouring, emptying or dumping of Hazardous Materials into
waters on or adjacent to the Properties or onto lands from which
such hazardous or toxic waste of substances might seep, flow or
drain into such waters.
(v) The Company and the Operating Partnership have
received no notice of, and has no Knowledge of, any occurrence or
circumstance which, with notice or passage of time or both, would
give rise to, any claim under or pursuant to any Environmental
Law pertaining to hazardous or toxic waste or substances on or
originating from the Properties or arising out of the conduct of
any such party, including, without limitation, pursuant to any
Environmental Law.
As used herein, "Hazardous Material" shall include,
without limitation, any flammable explosives, radioactive
materials, hazardous materials, hazardous wastes, hazardous or
toxic substances or related materials, asbestos or any material
as defined by any Federal, state or local environmental law,
ordinance, rule, or regulation including, without limitation,
Environmental Laws, CERCLA, RCRA, the Hazardous Materials
Transportation Act, as amended (49 U.S.C. Section 1801, et seq.),
and in the regulations adopted and publications promulgated
pursuant to each of the foregoing or by any Federal, state or
local governmental authority having or claiming jurisdiction over
the Properties as described in the Prospectus.
(aa) None of the assets of the Company or any of its
subsidiaries constitute, nor will such assets, as of the Closing
Date or the Second Closing Date, constitute, "plan assets" under
the Employee Retirement Income Security Act of 1974, as amended
("ERISA"). The Company and its subsidiaries are and will be in
compliance in all material respects with all presently applicable
provisions of the ERISA including the regulations and published
interpretations thereunder; no "reportable event" (as defined in
ERISA) has occurred with respect to any "pension plan" (as
defined in ERISA) for which the Company or any of its
subsidiaries would have any liability; neither the Company nor
any of its subsidiaries has incurred or expects to incur
liability under (i) Title IV of ERISA with respect to termination
of, or withdrawal from, any "pension plan" or (ii) Sections 412
- 12 -
or 4971 of the Internal Revenue Code of 1986 (the "Code"), as
amended, including the regulations and published interpretations
thereunder; and each "pension plan" for which the Company or any
of its subsidiaries would have any liability that is intended to
be qualified under Section 401(a) of the Code is so qualified in
all material respects and nothing has occurred, whether by action
or by failure to act, which would cause the loss of such
qualification.
(bb) The Company and its subsidiaries have filed on a
timely basis all necessary federal, state, local and foreign
income and franchise tax returns required to be filed through the
date hereof and have paid all taxes shown as due thereon; and no
tax deficiency has been asserted against the Company or any of
its subsidiaries, nor is there any tax deficiency which is likely
to be asserted against the Company or any of its subsidiaries
which if determined adversely to the Company or such subsidiary
could materially adversely affect the condition (financial or
otherwise), or the earnings, assets, business affairs or business
prospects of the Company and its subsidiaries, taken as a whole.
All tax liabilities are adequately provided for on the books of
the Company.
(cc) The Company has continuously been organized and
operated in conformity with the requirements for qualification as
a "real estate investment trust" ("REIT") under Sections 856
through 860 of the Code for all taxable years commencing with its
taxable year ended December 31, 1995. The Company has filed an
election to be taxable as a REIT for its taxable year ended
December 31, 1995, and such election has not been terminated.
The Company's method of operation will permit it to continue to
meet the requirements for taxation as a REIT under the Code. The
Company intends to continue to operate in a manner which would
permit it to qualify as a REIT under the Code.
3. SALE, PURCHASE AND DELIVERY OF STOCK.
(a) On the basis of the representations, warranties
and agreements of the Company and the Operating Partnership
herein contained, but subject to the terms and conditions herein
set forth, the Company hereby agrees to sell to each Underwriter,
and each Underwriter, severally and not jointly, agrees to
purchase from the Company the respective number of shares of the
Firm Stock set forth opposite the Underwriter's name in
Schedule A hereto at the purchase price per share to be agreed
upon by the Underwriters and the Company and set forth in the
Price Determination Agreement. The public offering price per
share for the Firm Stock and the purchase price per share for the
Firm Stock to be paid by the Underwriters shall be agreed upon
and set forth in the Price Determination Agreement.
(b) The Company will deliver the Firm Stock to you for
the respective accounts of the several Underwriters at the office
of Goodwin, Procter & Hoar LLP, 599 Lexington Avenue, New York,
New York 10022, at 9:00 A.M., New York City time, or to your
designee at a specified place at the same time, against payment
- 13 -
of the purchase price at the place of such Closing, by wire
transfer of immediately available funds to the Company on the
fifth business day following the date of this Agreement, or at
such other time not later than seven full business days after
such initial public offering as you shall determine, such time
and place being herein referred to as the "Closing Date." The
certificates for the Firm Stock so to be delivered will be in
such denominations and registered in such names as you may
specify to the Company at or before 3:00 P.M., New York City
time, on the second full business day prior to the Closing Date.
Such certificates will be made available for checking and
packaging at least 24 hours prior to the Closing Date.
(c) On the basis of the representations and warranties
herein contained, but subject to the terms and conditions herein
set forth, the Company hereby grants an option to the several
Underwriters to purchase, severally and not jointly, up to
180,000 additional Option Stock in the aggregate of the Option
Stock at the purchase price set forth in the Price Determination
Agreement, for use solely in covering any over-allotments made by
the Underwriters in the sale and distributions of the Firm Stock.
The option granted hereunder may be exercised in whole or in part
at any time, and on one or more occasions, within 30 days after
the date of this Agreement, upon written or telegraphic notice by
the Representatives to the Company setting forth the aggregate
number of shares of the Option Stock as to which the Underwriters
are exercising the option and the time and place at which
certificates will be delivered, such time (which, unless
otherwise determined by you and the Company, shall not be earlier
than three nor later than seven full business days after the
exercise of said option) being herein called the "Second Closing
Date." The number of shares of the Option Stock to be sold by
the Company to each Underwriter and purchased by such Underwriter
from the Company shall be the same percentage of the total number
of shares of the Option Stock to be purchased by the several
Underwriters on the Second Closing Date as such Underwriter
purchased of the total number of shares of the Firm Stock, as
adjusted by the Representatives to avoid fractions and to reflect
any adjustment required by Section 9 hereof. The Company will
deliver certificates for the shares of the Option Stock being
purchased by the several Underwriters to you on the Second
Closing Date at the place and time of such Closing, or to your
designee at a specified place at the same time, against payment
of the purchase price at the place of such Closing, by wire
transfer of immediately available funds to the Company. The
certificates for the Option Stock so to be delivered will be in
such denominations and registered in such names as you may
specify to the Company at or before 3:00 P.M., New York time, on
the second full business day prior to the Second Closing Date.
Such certificates will be made available for checking and
packaging at least 24 hours prior to the Second Closing Date.
The option granted hereby may be canceled by you as the
Representatives of the several Underwriters, as to the shares of
Option Stock for which the option is unexercised, at any time
prior to the expiration of the 30-day period, upon notice to the
Company.
- 14 -
The Company will pay and save each Underwriter and any
subsequent holder of the Stock harmless from any and all
liabilities with respect to or resulting from any failure or
delay in paying Federal and state stamp and other transfer taxes,
if any, which may be payable or determined to be payable in
connection with the original issuance or sale to such Underwriter
of the Firm Stock and Option Stock.
4. COVENANTS OF THE COMPANY. The Company and the
Operating Partnership, jointly and severally, covenant and agree
with each of the Underwriters that:
(a) The Company will cause the Prospectus Supplement
to be filed as required by Section 2(a) hereof (but only if you
have not reasonably objected thereto by notice to the Company
after having been furnished a copy a reasonable time prior to
filing) and will notify you promptly of such filing. The Company
will not during such period as the Prospectus is required by law
to be delivered in connection with sales of the Stock by any
Underwriter or dealer, file any amendment or supplement to the
Registration Statement or the Prospectus, unless you have first
received a copy thereof within a reasonable period of time prior
to the filing thereof and you shall not have objected thereto in
good faith.
(b) The Company will notify you promptly, and will
confirm such advice in writing, (1) when any post-effective
amendment to the Registration Statement becomes effective, (2) of
any request by the Commission for amendments or supplements to
the Registration Statement or the Prospectus or for additional
information, (3) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement
or the initiation of any proceedings for that purpose or the
threat thereof, (4) of the happening of any event during the
period in which the Prospectus is required by law to be delivered
in connection with the offering or sale of the Stock that makes
any statement made in the Registration Statement or the
Prospectus untrue or that requires the making of any changes in
the Registration Statement or the Prospectus in order to make the
statements therein not misleading and (5) of receipt by the
Company or any representative or attorney of the Company of any
other communication from the Commission relating to the Company,
the Operating Partnership, the Registration Statement, any
Preliminary Prospectus or the Prospectus. The Company will make
every reasonable effort to prevent the issuance of any stop order
from the Commission, and if at any time the Commission shall
issue any 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
moment.
(c) The Company will comply with the Act so as to
permit the continuance of sales of and dealings in the Stock
under the Act for such period as may be required by the Act;
whenever it is necessary to amend or supplement the Prospectus to
make the statements therein not misleading, the Company will
furnish, without charge to you as Representatives, either
- 15 -
amendments to the Prospectus or supplemental information, so that
the statements in the Prospectus as so amended or supplemented
will not be misleading; and file a post-effective amendment to
the Registration Statement whenever such an amendment may be
required and furnish, without charge to you, a reasonable number
of copies of any such amendment and related Prospectus.
(d) Not later than the 45th day following the end of
the fiscal quarter first occurring after the first anniversary of
the Effective Date, the Company will make generally available to
its security holders and deliver to you an earnings statement
(which need not be audited) covering a period of at least 12
months beginning after the date upon which the Prospectus
Supplement is filed pursuant to Rule 424(b) under the Act which
shall satisfy the provisions of Section 11(a) of the Act.
(e) The Company will furnish to you, without charge,
copies of the Registration Statement (two of which will be signed
and will include financial statements, schedules, and all
exhibits thereto), each Preliminary Prospectus, the Prospectus,
all amendments of and supplements to such documents, and all
correspondence between the Commission and the Company or its
counsel or accountants relating thereto, in each case as soon as
available and in such quantities as you may request, and will
furnish to the Representatives, without charge, for transmittal
to each of the other Underwriters, a copy of the Registration
Statement and any post-effective amendment thereto, including
financial statements and schedules.
(f) For a period of five years from the date of the
Prospectus, the Company will deliver to you, upon your request
(i) within 90 days after the end of each fiscal year,
consolidated balance sheets, statements of income, statements of
cash flow and statements of changes in stockholders' equity of
the Company and its subsidiaries as at the end of and for such
year and the last preceding year, all in reasonable detail and
certified by independent accountants, (ii) within 45 days after
the end of each of the first three quarterly periods in each
fiscal year, unaudited consolidated balance sheets and statements
of income, statements of cash flows and statements of changes in
stockholders' equity of the Company and its subsidiaries as at
the end of and for such period, all in reasonable detail,
(iii) as soon as available, all such proxy statements, financial
statements and reports as the Company shall send or make
available to its stockholders or the stockholders of any
subsidiary any of whose stock is owned by any person other than
the Company or any subsidiary, and (iv) copies of all annual or
periodic reports as the Company or any subsidiary shall file with
the Commission as required by the Act, the Exchange Act and any
rules or regulations thereunder, which are available for public
inspection at the Commission, or any material reports filed in
connection with the Company's listing on any stock exchange.
(g) The Company will apply the net proceeds from the
sale of the Stock in the manner set forth in the Prospectus.
- 16 -
(h) The Company will cooperate with you and your
counsel to qualify the Series B Preferred Shares for sale under
the securities or Blue Sky laws of such jurisdictions within the
United States as you designate, including furnishing such
information and executing such instruments as may be required,
and will continue such qualifications in effect for a period of a
least three months from the date hereof; provided, however, the
Company shall not be required to register or qualify as a foreign
corporation or as a dealer in securities nor, except as to
matters and transactions relating to the offer and sale of the
Stock, consent to a service of process in any jurisdiction.
(i) After the Closing Date and Second Closing Date,
the Company and its subsidiaries will be in compliance with the
financial record-keeping requirements and internal accounting
control requirements of Section 13(b)(2) of the Exchange Act.
(j) The Company will not, with respect to the Stock,
invoke the authority granted under Section 7.2.6 of the Articles
of Amendment and Restatement (the "Articles") of the Company to
revoke the exception contained in the Articles under which shares
of capital stock transferred to any Underwriter in a public
offering will not be deemed to be Shares in Trust (as defined in
the Articles), notwithstanding the fact that the shares of
capital stock owned beneficially by the Underwriters may exceed
the Ownership Limit (as defined in the Articles).
5. PAYMENT OF EXPENSES. Whether or not the transactions
contemplated by this Agreement are consummated or this Agreement
is terminated, the Company will pay, or reimburse if paid by the
Underwriters, all costs and expenses incident to the performance
of the obligations of the Company and its subsidiaries including,
but not limited to, (i) the reasonable fees and disbursements of
its counsel; (ii) the reasonable fees, costs and expenses of
preparing, printing and delivering the certificates for the
Stock; (iii) the reasonable fees, costs and expenses of the
transfer agent and registrar for the Series B Preferred Shares;
(iv) the reasonable fees and disbursements of its accountants;
(v) the filing fees and reasonable expenses incurred in
connection with the qualification, registration or exemption of
the Stock under state securities or Blue Sky laws and the
reasonable fees and disbursements of counsel for the Underwriters
in connection with such qualification, registration or exemption
and the preparation and printing of the preliminary and final
Blue Sky Surveys; (vi) the filing fees and reasonable expenses
paid and incurred by the Underwriters, including reasonable fees
and disbursements of counsel for Underwriters, in connection with
the review of the terms of the underwriting arrangements by the
NASD; (vii) the costs and expenses in connection with the
preparation, printing and filing of any Preliminary Prospectus
and the Prospectus and the furnishing to the Underwriters of such
copies of each Preliminary Prospectus and Prospectus as the
Underwriters may reasonably require; (viii) the costs and
expenses in connection with the printing of this Agreement, the
Agreement Among Underwriters, the Selected Dealers Agreement and
other documents distributed to the Underwriters; (ix) fees and
expenses of the listing of the Series B Preferred Shares on the
- 17 -
New York Stock Exchange; (x) the reasonable fees, costs and
expenses of and any surveyors, engineers, appraisers,
photographers, accountants and other professionals engaged by or
on behalf of the Company; (xi) the cost of the preparation of
slides, overheads and other presentation material to be used in
any "road show" or other presentation to potential investors and
the hotel, travel and other expenses of the Company's employees
in connection with any such "road show" or presentation; and
(xii) the cost of original issue tax stamps, if any, in
connection with the issuance and delivery of the Firm Stock and
Option Stock by the Company to the respective Underwriters.
Notwithstanding anything in this Section 5 to the contrary,
regardless of whether the transactions contemplated by this
Agreement are consummated, the Company's payment and
reimbursement obligations to the Underwriters under this Section
5 shall not exceed $150,000.00 in the aggregate for (i) fees,
costs and expenses of their legal counsel, or any surveyors,
engineers, appraisers, photographers, accountants or other
professionals engaged by the Underwriters, and (ii) out-of-pocket
fees and expenses incurred for producing any offering documents
or any other materials (including travel, design, printing,
photograph and written material procurement costs); provided,
however that (A) in the event that the Company or any of its
subsidiaries fails to comply with any of the terms of, to fulfill
any of the conditions to, or to meet any of its respective
obligations under, this Agreement (other than as result of a
default by the Underwriters described in Section 9 or the
occurrence of any of the events described in clauses (i)-(iv) of
the first paragraph of Section 7), then irrespective of the
aforementioned $150,000.00 limitation on expenses, the Company
shall pay and/or reimburse the Underwriters for all of the
expenses, fees and disbursements described in Section 7, and (B)
in the event that the transactions contemplated by this Agreement
are not consummated due to a default by one or more of the
Underwriters as described in Section 9, the Company shall have no
obligation to pay or reimburse the Underwriters for any fees,
expenses or disbursements of any kind or nature; provided further
that notwithstanding the aforementioned $150,000.00 limitation on
expenses, the Underwriters may, so long as this Agreement has not
been terminated by the Underwriters pursuant to Section 9,
request reimbursement for (i) the full amount of their actual,
out-of-pocket costs incurred in procuring original issue tax
stamps, if any, in connection with the issuance and delivery of
the Firm Stock and Option Stock by the Company to the respective
Underwriters, and (ii) the full amount of their actual, out-of-
pocket costs for filing fees and reasonable expenses incurred in
connection with the qualification, registration or exemption of
the Stock under state securities or Blue Sky laws (except that
all fees, expenses and disbursements of legal counsel in
connection with the qualification, registration or exemption of
the Stock under state securities or Blue Sky laws remain subject
to the aforementioned $150,000.00 limitation on expenses).
- 18 -
6. CONDITIONS OF THE OBLIGATION OF THE UNDERWRITERS. In
addition to the execution and delivery of the Price Determination
Agreement, the obligations of the several Underwriters to
purchase and pay for the Firm Stock on the Closing Date and the
Option Stock on the Second Closing Date shall be subject to the
following conditions:
(a) Each of the representations and warranties of the
Company and the Operating Partnership contained herein shall be
true and correct in all material respects as of the date hereof
and as of the Closing Date, and if applicable, Second Closing
Date, and all covenants and agreements herein contained to be
performed on the part of the Company and all conditions herein
contained to be fulfilled or complied with by the Company at or
prior to the Closing Date and, with respect to the Option Stock,
at or prior to the Second Closing Date, shall have been duly
performed, fulfilled or complied with.
(b) The written statements of Company officers made
pursuant to the provisions hereof are true and correct in all
material respects, and the Company and its subsidiaries have
performed their respective obligations hereunder.
(c) The Prospectus shall have been filed as required
by Section 2(a) hereto, and (i) no order suspending the
effectiveness of the Registration Statement or the qualification
or registration of the Stock under the securities or Blue Sky
laws of any jurisdiction shall be in effect and no proceeding for
such purpose shall be pending before or threatened or
contemplated by the Commission or the authorities of any such
jurisdiction, (ii) any request for additional information on the
part of the staff of the Commission or such authorities shall
have been complied with to the satisfaction of the staff of the
Commission or such authorities and (iii) after the date hereof no
amendment or supplement to the Registration Statement or the
Prospectus shall have been filed unless a copy thereof was first
submitted to you and you did not object thereto, and you shall
have received certificates, dated the Closing Date and the Second
Closing Date, as the case may be, and signed by the Chief
Executive Officer or the Chairman of the Board of Directors of
the Company and the Chief Financial Officer of the Company to
effect the clauses (i) and (ii).
(d) The Registration Statement or Prospectus or any
amendment thereof or supplement thereto shall not contain an
untrue statement of fact which, in the opinion of Goodwin,
Procter & Hoar LLP, counsel for the Underwriters, is material, or
omits to state a fact which, in the opinion of such counsel, is
material and is required to be stated therein or is necessary to
make the statements therein not misleading.
(e) Since the respective dates as of which information
is given in the Registration Statement and the Prospectus,
(i) there shall not have been a material adverse change in the
general affairs, business, business prospects, properties,
management, condition (financial or otherwise) or results of
operations of the Company and its subsidiaries respective
- 19 -
subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, in each case
other than as set forth in or contemplated by the Registration
Statement and the Prospectus and (ii) neither the Company nor its
subsidiaries shall have sustained any material loss or
interference with its business or properties from fire,
explosion, flood or other casualty, whether or not covered by
insurance, or from any labor dispute or any court or legislative
or other governmental action, order or decree, which is not set
forth in the Registration Statement and the Prospectus, if in the
Underwriters' reasonable judgment any such development makes it
impracticable or inadvisable to consummate the sale and delivery
of the shares of Stock by the Underwriters at the public offering
price.
(f) Since the respective dates as of which information
is given in the Registration Statement and the Prospectus, there
shall have been no litigation or other proceeding instituted
against the Company or any of its subsidiaries, or any of their
respective officers or directors in their capacities as such,
before or by any Federal, state or local court, commission,
regulatory body, administrative agency or other governmental
body, domestic or foreign, in which litigation or proceeding an
unfavorable ruling, decision or finding would involve a material
adverse risk to the condition (financial or otherwise), or the
earnings, assets, business affairs or business prospects of the
Company and subsidiaries taken as a whole.
(g) Prior to Closing, the Series B Preferred Shares
shall have been duly authorized for listing by the New York Stock
Exchange upon official notice of issuance.
(h) Prior to the Closing Date, the Company shall have
filed the Articles Supplementary of the 9.85% Series B Cumulative
Redeemable Preferred Stock (the "Articles Supplementary") with
the Secretary of State of the State of Maryland.
(i) The Underwriters shall have received as of the
Closing Date and, if applicable, the Option Stock, the Second
Closing Date, satisfactory in form and substance to counsel for
the Underwriters:
(i) An opinion, dated the Closing Date and, if
applicable, the Second Closing Date, in form and substance
satisfactory to counsel for the Underwriters, from Phillips,
Lytle, Hitchcock, Blaine & Huber LLP, counsel to the Company, to
the effect as set forth in Schedule 6(j);
(ii) Such opinion or opinions of Goodwin, Procter
& Hoar LLP, counsel for the Underwriters, dated the Closing Date,
and if applicable, the Second Closing Date, with respect to the
sufficiency of all corporate proceedings and other legal matters
relating to this Agreement, the validity of the Series B
Preferred Shares, the Registration Statement, the Prospectus, and
other related matters as you may reasonably request, and the
Company shall have furnished to such counsel such documents as
they may request for the purpose of enabling them to pass upon
- 20 -
such matters. In connection with such opinions, such counsel may
rely on representations or certificates of officers of the
Company;
(iii) A certificate of the Company executed by
the principal executive officer and the principal financial and
accounting officer of the Company, dated the Closing Date, and if
applicable, the Second Closing Date, to the effect that:
(aa) The representations and warranties of
the Company and the Operating Partnership in Section 2 of
this Agreement are true and correct in all material respects
as of the Closing Date, and if applicable, the Second
Closing Date, and the Company has complied in all material
respects with all the agreements and satisfied all the
conditions on its part to be performed or satisfied at or
prior to the Closing Date and Second Closing Date;
(bb) No stop order suspending the
effectiveness of the Registration Statement has been issued
and no proceedings for that purpose have been instituted or
are pending or, to the Knowledge of the respective signers
of the certificates, are contemplated under the Act; and
(cc) The signers of the certificate have
carefully examined the Registration Statement and the
Prospectus; no facts have come to their attention which
would lead them to believe that either the Registration
Statement at the time it became effective (or any amendment
thereof or supplement thereto made prior to the Closing
Date, and if applicable, the Second Closing Date, as the
case may be, as of the date of such amendment or supplement)
contained an untrue statement of a material fact or omitted
to state any material fact required to be stated therein or
necessary to make the statements therein not misleading or
that the Prospectus as of the date thereof (or any amendment
thereof or supplement thereto made prior to the Closing Date
or the Second Closing Date, as the case may be, as of the
date of such amendment or supplement) contained an untrue
statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to
make the statements therein, in the light of the
circumstances under which they were made, not misleading;
since the latest respective dates as of which information is
given in the Registration Statement, there has been no
material adverse change in the condition (financial or
otherwise), or the earnings, assets, business affairs or
business prospects of the Company and its subsidiaries,
taken as a whole, except as set forth in or contemplated by
the Prospectus; and since the Effective Date of the
Registration Statement there has occurred no event required
to be set forth in an amended or supplemented prospectus
which has not been set forth; and
(iv) Letters from Ernst & Young LLP dated
respectively the date of this Agreement and the Closing Date, and
if applicable, the Second Closing Date, addressed to you and in
- 21 -
form and substance previously approved by you, with respect to
the financial statements and certain financial information
contained in the Registration Statement and the Prospectus.
(j) Prior to the Closing Date, and if applicable, the
Second Closing Date, the Company shall have furnished to you such
further certificates and documents as you may reasonably request.
If any condition of the Underwriters' obligations hereunder
to be satisfied prior to the Closing Date or the Second Closing
Date is not so satisfied, this Agreement may be terminated by you
prior to such Closing Date or Second Closing Date, by notice in
writing or by telegram confirmed in writing to the Company.
All such opinions, certificates, letters and documents
furnished to you pursuant to this Section 6 will be in compliance
with the provisions thereof only if they are in all material
respects satisfactory to you and to Goodwin, Procter & Hoar LLP,
counsel for the Underwriters. The Company will furnish you with
such executed and conformed copies of such opinions,
certificates, letters and documents as you may request.
You, on behalf of the Underwriters, may waive in writing the
compliance by the Company of any one or more of the foregoing
conditions or extend the time for their performance.
7. TERMINATION OF AGREEMENT.
This Agreement may be terminated by you, as the
Representatives of the several Underwriters, on or after the date
of this Agreement and prior to the Closing Date, or if
applicable, the Second Closing Date, by notice of the Company,
without liability on the part of any Underwriter to the Company,
if at any time during such period any of the following has
occurred in your sole judgment: (i) any outbreak of hostilities
or escalation in existing hostilities anywhere in the world or
other national or international calamity or crisis or change in
economic or political conditions, the effect of any of which is
such as to make it, in your sole judgment, impracticable or
inadvisable to market the Stock on the terms and in the manner
contemplated by the Prospectus; (ii) any general suspension of
trading in securities on the New York Stock Exchange or the
American Stock Exchange or the NASDAQ/NM or any general
limitation on prices for such trading or any general restrictions
on the distribution of securities; (iii) trading in any of the
equity securities of the Company shall have been suspended by the
Commission or the New York Stock Exchange; or (iv) a banking
moratorium shall have been declared by either Federal, or New
York State authorities, the effect of which is such as to make
it, in your sole judgment, impracticable or inadvisable to market
the Stock on the terms and in the manner contemplated by the
Prospectus.
This Agreement may also be terminated as provided in
Sections 6 and 9 hereof.
- 22 -
If this Agreement shall be terminated by you because of any
failure on the part of the Company or its subsidiaries to comply
with any of the terms of, to fulfill any of the conditions to, or
to meet any of its respective obligations under, this Agreement
(other than as result of a default by the Underwriters described
in Section 9 or the occurrence of any of the events described in
clauses (i)-(iv) of the first paragraph of Section 7) the Company
shall pay, in addition to the costs and expenses referred to in
Section 5 and without limitation as to amount, all reasonable
out-of-pocket expenses incurred by the Underwriters in
contemplation of the performance by them of their obligations
hereunder, including but not limited to (i) the reasonable fees
and disbursements of counsel for the Underwriters, (ii) the
Underwriters' reasonable printing and traveling expense and
postage, telegraph and telephone charges relating directly to the
offering contemplated by the Prospectus (including, specifically,
the cost of the preparation of slides, overheads and other
presentation material to be used in any "road show" or other
presentation to potential investors and all related hotel, travel
and other expenses of the Underwriters), and (iii) all reasonable
advertising expenses of the Representatives incurred after the
Effective Date of the Registration Statement and so relating; it
being understood that such out-of-pocket expenses shall not
include any compensation, salaries or wages of the officers,
partners or employees of any of the Underwriters. Only such out-
of-pocket expenses as shall be accounted for by the Underwriters
shall be paid to the Underwriters by the Company.
8. INDEMNIFICATION.
(a) The Company and the Operating Partnership, jointly
and severally, will indemnify and hold harmless each Underwriter,
and each person, if any, who controls each Underwriter within the
meaning of the Act, against any losses, claims, damages or
liabilities, joint or several, to which such Underwriter or such
controlling person may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based in
whole or in part of any material inaccuracy in the
representations and warranties of the Company and the Operating
Partnership contained herein or any failure of the Company and
the Operating Partnership to perform its obligations hereunder,
or arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the
Registration Statement, the Prospectus or any amendment thereof
or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, and, subject to the provisions of Section
8(c), will reimburse each Underwriter and each such controlling
person for any legal or other expenses reasonably incurred by
such Underwriter or such controlling person in connection with
investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Company and the
Operating Partnership will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out
of or is based upon any untrue statement or omission or alleged
- 23 -
omission made in the Registration Statement, the Prospectus or
any amendment thereof or supplement thereto in reliance upon or
in conformity with written information furnished to the Company
by an Underwriter specifically for use in the preparation
thereof. This indemnity agreement will be in addition to any
liability which the Company and the Operating Partnership may
otherwise have.
(b) Each Underwriter will severally indemnify and hold
harmless the Company, each person, if any, who controls the
Company within the meaning of the Act, each of its directors and
each of its officers who have signed the Registration Statement
against any losses, claims, damages or liabilities to which the
Company, or any such director or officer may become subject,
under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Registration
Statement, the Prospectus, or any amendment thereof or supplement
thereto, or arise out of or are based upon the omission or the
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent,
that such untrue statement or alleged untrue statement or
omission or alleged omission was made in the Registration
Statement, the Prospectus or any amendment thereof or supplement
thereto in reliance upon or in conformity with written
information furnished to the Company by such Underwriter through
you, as the Representatives of the Underwriters, specifically for
use in the preparation thereof; provided, however, that in no
case shall any Underwriter be liable or responsible for any
amount in excess of the underwriting discounts received by such
Underwriter. This indemnity agreement will be in addition to any
liability which the Underwriters may otherwise have.
(c) Promptly after receipt by an indemnified party
under this Section of notice of the commencement of any action,
such indemnified party will, if a claim in respect thereof is to
be made against any indemnifying party under this Section, notify
each party against whom indemnification is to be sought in
writing of the commencement thereof; but the omission so to
notify an indemnifying party will not relieve it from any
liability which they may have to any indemnified party otherwise
than under this Section. In case any such action is brought
against any indemnified party, and it notifies the indemnifying
party of the commencement thereof, the indemnifying party will be
entitled to participate in, and to the extent that it may wish,
to assume the defense thereof, with counsel approved by such
indemnified party (which approval shall not be unreasonably
withheld), and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense
thereof, the indemnifying party will not be liable to such
indemnified party under this Section for any legal or other
expenses subsequently incurred by such indemnified party in
connection with the defense thereof except as provided below and
except for the reasonable costs of investigation subsequently
incurred by such indemnified party in connection with the defense
- 24 -
thereof. The indemnified party shall have the right to employ
its counsel in any such action, but the fees and expenses of such
counsel shall be at the expense of such indemnified party unless
(i) the employment of counsel by such indemnified party has been
authorized in writing by the indemnifying parties, (ii) the named
parties to any such action include both the indemnifying party
and the indemnified party, and the indemnified party shall have
reasonably concluded that there is an actual or potential
conflict of interest between the indemnifying parties and the
indemnified party in the conduct of the defense of such action
(in which case the indemnifying parties shall not have the right
to direct the defense of such action on behalf of the indemnified
party) or (iii) the indemnifying parties shall not have employed
counsel to assume the defense of such action within a reasonable
time after notice of the commencement thereof, in each of which
cases the fees and expenses of counsel shall be at the expense of
the indemnifying parties.
(d) No indemnifying party shall, without the prior
written consent of the indemnified parties, settle or compromise
or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any
claim whatsoever in respect of which indemnification or
contribution could be sought under this Section 8 hereof (whether
or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i)
includes an unconditional release of each indemnified party from
all liability arising out of such litigation, investigation,
proceeding or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act by or
on behalf of any indemnified party.
(e) If at any time an indemnified party shall have
requested an indemnifying party to reimburse the indemnified
party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement effected
without its written consent if (i) such settlement is entered
into more than 60 days after receipt by such indemnifying party
of the aforesaid request, (ii) such indemnifying party shall have
received notice of the terms of such settlement at least 30 days
prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified
party in accordance with such request prior to the date of such
settlement.
(f) In order to provide for contribution in
circumstances in which the indemnification provided for in this
Section is for any reason held to be unavailable from the Company
and the Operating Partnership, on the one hand, or the
Underwriters, on the other, or is insufficient to hold harmless a
party indemnified hereunder, the Company, the Operating
Partnership and the Underwriters shall contribute to the
aggregate losses, claims, damages, liabilities and expenses of
the nature contemplated by such indemnification provisions
(including any investigation, legal and other expenses incurred
in connection with, and any amount paid in settlement of, any
- 25 -
action, suit or proceeding or any claims asserted, but after
deducting in the case of losses, claims, damages, liabilities and
expenses suffered by the Company and the Operating Partnership,
any contribution received by the Company and the Operating
Partnership from persons, other than the Underwriters, who may
also be liable for contribution, including persons who control
the Company within the meaning of the Act, officers of the
Company who signed the Registration Statement and directors of
the Company) to which the Company and the Operating Partnership,
and one or more of the Underwriters may be subject, in such
proportions as is appropriate to reflect the relative benefits
received by the Company and the Operating Partnership, on the one
hand, and the Underwriters, on the other, from the offering of
the Stock or, if such allocation is not permitted by applicable
law or indemnification is not available as a result of the
indemnifying party not having received notice as provided in this
Section, in such proportion as is appropriate to reflect not only
the relative benefits referred to above but also the relative
fault of the Company and the Operating Partnership, on the one
hand, and the Underwriters, on the other, in connection with the
statements or omissions which resulted in such losses, claims,
damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative benefits received by the
Company, the Operating Partnership and the Underwriters shall be
deemed to be in the same proportion as (x) the total proceeds
from the offering (net of underwriting discounts and commissions
but before deducting expenses) received by the Company and (x)
the underwriting discounts and commissions received by the
Underwriters, respectively, in each case as set forth in the
table on the cover page of the Prospectus. The relative fault of
the Company and the Operating Partnership, on the one hand, and
of the Underwriters, on the other, shall be determined by
reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omissions or alleged
omission to state a material fact relates to information supplied
by the Company or the Underwriters and the parties' relative
intent, Knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company, the
Operating Partnership and the Underwriters agree that it would
not be just or equitable if contribution pursuant to this Section
8(f) were determined by pro rata allocation even if the
Underwriters were treated as one entity for such purpose) or by
any other method of allocation which does not take account of the
equitable considerations referred to above. The Underwriters
shall be severally, and not jointly, liable for the amounts to be
contributed by each of them pursuant to the provisions of this
Section 8(f). Notwithstanding the provisions of this Section
8(f), (i) in no case shall any Underwriter (except as may be
provided in the Agreement Among Underwriters) be liable or
responsible for any amount in excess of the underwriting
discounts and commissions applicable to the shares of Stock
purchased by such Underwriter hereunder and (ii) no person guilty
of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any
person, if any, who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 8(f), each
person, if any, who controls an Underwriter within the meaning of
- 26 -
Section 15 of the Act shall have the same rights to contribution
as such Underwriter, and each person, if any, who controls the
Company within the meaning of Section 15 of the Act, each officer
of the Company who shall have signed the Registration Statement
and each director of the Company shall have the same rights to
contribution as the Company, subject in each case to clauses (i)
and (ii) of this Section 8(f). Any party entitled to
contribution will, promptly after receipt of notice of
commencement of any action, suit or proceeding against such party
in respect of which a claim for contribution may be made against
another party or parties under this Section 8(f), notify such
party or parties from whom contribution may be sought but the
omission to so notify such party or parties shall not relieve the
party or parties from whom contribution may be sought from any
obligation it or they may have under this Section 8(f) or
otherwise. No party shall be liable for contribution for any
settlement of any action or claim effected without its written
consent.
9. DEFAULT OF THE UNDERWRITERS. If any Underwriter
defaults in its obligations to purchase the Stock hereunder and
arrangements satisfactory to you and the Company, evidenced by a
writing or writings signed by you and the Company, for the
purchase of such Stock by other persons are not made within 36
hours after such default, this Agreement will terminate without
liability on the party of any non-defaulting Underwriter and the
Company, provided, however, that if the number of the shares of
the Stock which all such defaulting Underwriters have agreed but
failed to purchase shall not exceed 10% of the number of shares
of Firm Stock or Option Stock, as the case may be, agreed to be
purchased pursuant to this Agreement (other than the shares
agreed to be taken up hereunder which the defaulting Underwriters
failed to purchase) by all non-defaulting Underwriters, the
non-defaulting Underwriters shall be obligated proportionately to
take up and pay for the Firm Stock or the Option Stock which such
defaulting Underwriters failed to purchase.
If any such default occurs, either you or the Company shall
have the right to postpone the Closing Date for not more than
seven business days in order that the necessary changes in the
Registration Statement, Prospectus and any other documents, as
well as any other arrangement, may be effected. As used in this
Agreement, the term "Underwriters" includes any person
substituted for an Underwriter under this Section. Nothing
herein will relieve a defaulting Underwriter from its liability
to the other several Underwriters and the Company for its default
hereunder.
10. REPRESENTATIONS AND INDEMNITIES TO SURVIVE DELIVERY.
The respective indemnities, agreements, representations and
warranties of the Company, the Operating Partnership and the
several Underwriters, set forth in or made pursuant to this
Agreement, will remain in full force and effect, regardless of
any investigation made by or on behalf of any Underwriter, the
Company or any of its officers or directors or any controlling
person, and will survive delivery of and payment for the shares
of Stock and, in the case of the agreements contained in Sections
5, 7 and 8 hereof, will survive any termination of this
Agreement.
- 27 -
11. NOTICES. All communications hereunder will be in
writing and, if sent to the Underwriters, will be mailed,
delivered or telegraphed and confirmed to you at McDonald
Investments, Inc., 575 Fifth Avenue, New York, New York, 10017,
Attention: Michael J. Krupa, with a copy to Goodwin, Procter &
Hoar LLP, Exchange Place, Boston, Massachusetts 02109, Attention:
Gilbert G. Menna, Esq., or if sent to the Company, will be
mailed, delivered or telegraphed and confirmed to the Company at
5166 Main Street, Williamsville, New York 14221, Attention:
Kenneth F. Myszka, President, with a copy to Phillips, Lytle,
Hitchcock, Blaine & Huber LLP, 3400 HSBC Center, Buffalo, New
York, Attention: Frederick G. Attea, Esq. and David J. Murray,
Esq. Any such notice shall be effective only upon receipt. Any
notice under Sections 7 and 8 may be made by telex or telephone,
but if so made shall be subsequently confirmed in writing.
12. SUCCESSORS, GOVERNING LAW. This Agreement will inure
solely to the benefit of and be binding upon the parties hereto
and the officers and directors and controlling persons referred
to in Section 8 hereof and their respective successors, assigns,
heirs, executors and administrator, and no other persons will
have any right or obligation hereunder. This Agreement will be
governed by and construed in accordance with the laws of the
State of New York, without giving effect to the principles of
conflicts of laws thereof.
13. EXECUTION IN COUNTERPARTS. This Agreement may be
executed by any one or more of the partes hereto in any number of
counterparts, each of which shall be deemed to be an original,
but all such counterparts shall together constitute one and the
same instrument.
- 28 -
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us the enclosed copies
hereof, whereupon it will become a binding agreement by and among
the Company, the Operating Partnership and the several
Underwriters in accordance with its terms.
Very truly yours,
SOVRAN SELF STORAGE INC.
By: /s/ David L. Rogers
____________________________
Title: Chief Financial Officer
___________________________
SOVRAN ACQUISITION LIMITED
PARTNERSHIP
By: SOVRAN HOLDINGS, INC.,
its General Partner
By: /s/ David L. Rogers
_____________________________
Title: Chief Financial Officer
___________________________
- 29 -
The foregoing Agreement is hereby confirmed
and accepted by us acting on our own behalf and as the
Representatives of the several Underwriters
named on Schedule A annexed hereto, as of
the date first above written.
McDONALD INVESTMENTS INC.
MORGAN KEEGAN & COMPANY, INC.
J.J.B. HILLIARD, W.L. LYONS, INC.
As Representatives of the Several Underwriters
By: /s/ Michael J. Krupa
_______________________________________
Michael J. Krupa
McDonald Investments Inc.
Managing Director
- 30 -
SCHEDULE A
UNDERWRITERS
Number of Shares to
Underwriter to be Purchased
___________ ___________________
McDonald Investments Inc.. . . . . . . . . . . . . . . . .487,000
J.J.B. Hilliard, W.L. Lyons, Inc.. . . . . . . . . . . . .275,000
Morgan Keegan & Company, Inc.. . . . . . . . . . . . . . .180,000
Prudential Securities Incorporated . . . . . . . . . . . .125,000
J.B. Hanauer & Co. . . . . . . . . . . . . . . . . . . . . 50,000
Goldman, Sachs & Co. . . . . . . . . . . . . . . . . . . . 40,000
Tucker Anthony Incorporated. . . . . . . . . . . . . . . . 13,000
Stifel, Nicolaus & Company, Incorporated . . . . . . . . . 10,000
Gibraltar Securities Co. . . . . . . . . . . . . . . . . . 10,000
Roney Capital Markets. . . . . . . . . . . . . . . . . . . 10,000
_________
Total . . . . . . . . . . . . . . . . . .1,200,000
=========
SOVRAN SELF STORAGE, INC.
PRICE DETERMINATION AGREEMENT
______________________________
July 23, 1999
McDONALD INVESTMENTS INC.
MORGAN KEEGAN & COMPANY, INC.
J.J.B. HILLIARD, W.L. LYONS, INC.
As Representatives of the Several Underwriters
c/o McDonald Investments Inc.
McDonald Investment Center
800 Superior Avenue
Cleveland, Ohio 44114
Dear Sirs:
Reference is made to the Underwriting Agreement, dated
July 23, 1999 (the "Underwriting Agreement"), among Sovran Self
Storage, Inc., a Maryland corporation (the "Company"), Sovran
Acquisition Limited Partnership, a Delaware limited partnership
(the "Operating Partnership"), and McDonald Investments Inc.,
Morgan Keegan & Company, Inc., and J.J.B. Hilliard, W.L. Lyons,
Inc. as representatives (the "Representatives") of the several
underwriters named on Schedule A thereto (the "Underwriters").
The Underwriting Agreement provides for the purchase by the
Underwriters from the Company, subject to the terms and
conditions set forth therein, of an aggregate of 1,200,000 shares
of the Company's 9.85% Series B Cumulative Redeemable Preferred
Stock (the "Firm Stock"), par value $.01 per share. This
Agreement is the Price Determination Agreement referred to in the
Underwriting Agreement.
Pursuant to Section 3 of the Underwriting Agreement, the
undersigned agree with the Underwriters as follows:
1. The public offering price per share for the Firm Stock
shall be $25.00.
2. The purchase price per share for the Firm Stock to be
paid by the Underwriters shall be $24.2125, representing an
amount equal to the public offering price set forth above, less
$0.7875 per share.
Each of the Company and the Operating Partnership represents
and warrants to the Underwriters that the representations and
warranties of the Company and the Operating Partnership set forth
in Section 2 of the Underwriting Agreement are accurate as though
expressly made at and as of the date hereof.
This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
If the foregoing is in accordance with your understanding of
the agreement among the Underwriters, the Company and the
Operating Partnership, please sign and return to the Company a
counterpart hereof, whereupon this instrument along with all
counterparts and together with the Underwriting Agreement shall
be a binding agreement among the Company, the Operating
Partnership and the Underwriters, in accordance with its terms
and the terms of the Underwriting Agreement.
Very truly yours,
SOVRAN SELF STORAGE, INC.
By: /s/ Kenneth F. Myszka
____________________________
Title: President
SOVRAN ACQUISITION LIMITED
PARTNERSHIP
By: SOVRAN HOLDINGS, INC.,
its general partner
By: /s/ Kenneth F. Myszka
__________________________
Title: President
Confirmed as of the date first above mentioned:
McDONALD INVESTMENTS INC.
MORGAN KEEGAN & COMPANY, INC.
J.J.B. HILLIARD, W.L. LYONS, INC.
As Representatives of the Several Underwriters
By: /s/ Michael J. Krupa
___________________________
Michael J. Krupa
Managing Director
Exhibit 5.1
July 30, 1999
Sovran Self Storage, Inc.
5166 Main Street
Williamsville, New York 14221
Ladies and Gentlemen:
This opinion is delivered in our capacity as counsel to
Sovran Self Storage, Inc., a Maryland corporation, (the
"Company") in connection with the 1,200,000 shares of the
Company's 9.85% Series B Cumulative Redeemable Preferred Stock,
$0.01 par value per share, ("Preferred Shares") to be issued in
connection with an underwritten public offering pursuant to the
registration statement on Form S-3 (the "Registration Statement")
filed by the Company with the Securities and Exchange Commission
under the Securities Act of 1933, as amended (File No. 333-
51169), including the prospectus supplement dated July 23, 1999.
In connection with rendering this opinion, we have
examined the Company's Articles of Incorporation, as amended to
the date hereof and on file with the Maryland State Department of
Assessments and Taxation; the By-Laws of the Company as amended
to date; such records of corporate proceedings of the Company as
we deem appropriate for purposes of this opinion; and the
Registration Statement, together with the Prospectus Supplement
thereto.
Based upon the foregoing, we are of the opinion that
the Preferred Shares have been duly authorized and, when issued
and delivered by the Company against payment therefor at the
price determined by the Board or a duly appointed committee
thereof, will be validly issued, fully paid and non-assessable.
Very truly yours,
PHILLIPS, LYTLE, HITCHCOCK, BLAINE & HUBER LLP
Exhibit 8.1
July 30, 1999
Sovran Self Storage, Inc.
5166 Main Street
Williamsville, New York 14221
Ladies and Gentlemen:
This firm has acted as counsel to Sovran Self Storage,
Inc., a Maryland corporation (the "Company"), in connection with
the issuance and sale of 1,200,000 shares of 9.85% Series B
Cumulative Redeemable Preferred Stock of the Company, $.01 par
value per share (the "Shares"). In connection with the issuance
of the Shares, we have been requested by you to render an opinion
regarding certain federal income tax matters relating to the
Company.
For purposes of this opinion letter, we have examined
copies of the following documents:
a. The Company's Registration Statement on Form S-3
(File No. 333-51169) and all amendments thereto.
b. The Company's final prospectus (the "Final
Prospectus"), dated July 9, 1998, filed pursuant
to Rule 424(b) under the Securities Act of 1933,
as amended (the "Act").
c. The Company's final prospectus supplement (the
"Final Prospectus Supplement") relating to the
Shares, dated July 23, 1999, as filed pursuant to
Rule 424(b) under the Act.
d. The Amended and Restated Articles of Incorporation
of the Company as filed with the Maryland
Department of Assessments and Taxation.
e. The Articles Supplementary designating and
classifying the Shares, as filed with the Maryland
Department of Assessments and Taxation on July 28,
1999.
f. The By-laws of the Company.
g. The Articles of Incorporation of Sovran
Holdings, Inc. ("Holdings") as filed with the
Secretary of State of the State of Delaware.
h. The By-laws of Holdings.
i. The Certificate of Limited Partnership of Sovran
Acquisition Limited Partnership (the "Operating
Partnership") as filed with the Secretary of State
of the State of Delaware.
j. The Agreement of Limited Partnership of the
Operating Partnership, as amended.
k. Certain records of the corporate proceedings of
the Company and Holdings.
l. Certain records of the partnership proceedings of
the Operating Partnership.
For purposes of the opinions expressed below, we have
not, except as specifically identified above, made any
independent review or investigation of factual or other matters,
including the organization, existence, good standing, assets,
business or affairs of the Company. In our examination of the
aforesaid documents, we have assumed the genuineness of all
signatures, the legal capacity of all natural persons, the
accuracy, completeness and authenticity of all documents
submitted to us, the conformity with the original documents of
all documents submitted to us as certified, telecopied,
photostatic or reproduced copies, and the authenticity of all
such latter documents. We also have assumed the authenticity,
accuracy and completeness of the foregoing certifications (of
public officials, governmental agencies and departments,
corporate officers and individuals) and statements of fact, on
which we are relying, and have made no independent investigations
thereof. This opinion letter is given, and all statements herein
are made, in the context of the foregoing.
The opinions set forth in this letter are premised on
certain written representations of the Company, the Operating
Partnership, and Holdings contained in a letter to us dated
July 30, 1999. To the extent that the representations of the
Company, the Partnership, and Holdings are with respect to
matters set forth in the Internal Revenue Code of 1986, as
amended (the "Code") or Treasury Regulations thereunder, we have
reviewed with the individuals making such representations the
relevant provisions of the Code, the applicable Treasury
Regulations and published administrative interpretations thereof.
In the course of our representation of the Company as its general
counsel, nothing has come to our attention that would cause us to
doubt the truth or completeness of such representations.
The discussion and conclusions set forth below are
based upon the Code, the Income Tax Regulations and Procedure and
Administration Regulations promulgated thereunder and existing
administrative and judicial interpretations thereof, all of which
are subject to change. No assurance can therefore be given that
the federal income tax consequences described below will not be
altered in the future. For a discussion of the law and the
application of the law to the facts, reference is made to the
"Certain Federal Income Tax Considerations" section in the Final
Prospectus and the "Federal Income Tax Consequences" section in
the Final Prospectus Supplement.
- 2 -
Based upon and subject to the foregoing, and provided
that the Company continues to meet the applicable asset
composition, source of income, shareholder diversification,
distribution, record keeping and other requirements of the Code
necessary for a corporation to qualify as a real estate
investment trust ("REIT") under the Code, we are of the opinion
that:
1. Commencing with the Company's taxable year ended
December 31, 1995, the Company has been organized
in conformity with the requirements for
qualification as a REIT under the Code, and the
Company's method of operation, as described in the
representations referred to above, will enable it
to continue to meet the requirements for
qualification and taxation as a REIT under the
Code.
2. The statements in the Final Prospectus Supplement
set forth under the caption "Federal Income Tax
Consequences," to the extent such information
constitutes matters of law, summaries of legal
matters, or legal conclusions, have been reviewed
by us and are accurate in all material respects,
and the discussion therein fairly summarizes the
federal income tax considerations that are likely
to be material to a purchaser of the Shares.
We express no opinion other than those expressly set
forth herein. You should recognize that our opinions are not
binding on the Internal Revenue Service (the "IRS") and that the
IRS may disagree with the opinions contained herein. Although we
believe that our opinions will be sustained if challenged, there
can be no assurance that this will be the case. Except as
specifically discussed above, the opinions expressed herein are
based upon the law as it currently exists. Consequently, future
changes in the law may cause the federal income tax treatment of
the transactions described herein to be materially and adversely
different from that described above.
Very truly yours,
PHILLIPS, LYTLE, HITCHCOCK, BLAINE & HUBER LLP
- 3 -
Exhibit 12.1
Sovran Self Storage, Inc.
Ratio of Earnings to Fixed Charges
Three
months June 26, 1995
ended to
March 31, Year ended December 31, December 31,
1999 1998 1997 1996 1995
____ ____ ____ ____ ____________
Earnings:
Net income 5,855 23,540 23,119 15,659 6,744
Fixed charges 3,534 9,925 2,743 2,386 323
_______________________________________________________
Earnings (1) 9,389 33,465 25,862 18,045 7,067
Fixed charges:
Interest expense 3,341 9,601 2,166 1,924 131
Amortization
financing fees 193 324 577 462 192
_______________________________________________________
Fixed charges (2) 3,534 9,925 2,743 2,386 323
Preferred dividends
Ratio of earnings
to fixed
charges (1)/(2) 2.66 3.37 9.43 7.56 21.88
Exhibit 23.1
Consent of Independent Auditors
We consent to the reference to our firm under the captions
"Experts" and "Selected Financial Data" in the Registration
Statement (Form S-3, No. 333-51169) and related Prospectus of
Sovran Self Storage, Inc. ("SSS") and Sovran Acquisition Limited
Partnership ("SALP") for the registration of $100,000,000 of SSS
Preferred or Common Stock and $150,000,000 of SALP Debt
Securities.
Ernst & Young LLP
Buffalo, New York
July 7, 1999
Exhibit 23.2
Consent of Phillips, Lytle, Hitchcock, Blaine & Huber LLP
We hereby consent to being named as counsel to Sovran
Self Storage, Inc. (the "Company") in the prospectus supplement
("Prospectus Supplement") to the Company's registration statement
on Form S-3 (File No. 333-51169), to the reference therein to our
firm under the caption "Legal Matters" and to the inclusion of
our opinions as Exhibits 5.1 and 8.1 to this Form 8-K.
Phillips, Lytle, Hitchcock, Blaine & Huber LLP
July 30, 1999