Attached files
file | filename |
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8-K - FORM 8-K - PS BUSINESS PARKS, INC./MD | v57514e8vk.htm |
EX-4.1 - EX-4.1 - PS BUSINESS PARKS, INC./MD | v57514exv4w1.htm |
EX-5.1 - EX-5.1 - PS BUSINESS PARKS, INC./MD | v57514exv5w1.htm |
EX-3.1 - EX-3.1 - PS BUSINESS PARKS, INC./MD | v57514exv3w1.htm |
Exhibit
1.1
PS Business Parks, Inc.
3,000,000 Depositary Shares
Each Representing 1/1,000 of a Share of
6.875 Cumulative Preferred Stock Series R
Liquidation Preference Equivalent to $25.00 Per Depositary Share
Underwriting Agreement
Each Representing 1/1,000 of a Share of
6.875 Cumulative Preferred Stock Series R
Liquidation Preference Equivalent to $25.00 Per Depositary Share
Underwriting Agreement
October 7, 2010
BANC OF AMERICA SECURITIES LLC
WELLS FARGO SECURITIES, LLC
WELLS FARGO SECURITIES, LLC
As Representatives of the Several Underwriters
c/o
|
Banc of America Securities LLC | |
One Bryant Park | ||
New York, NY 10036 | ||
Wells Fargo Securities, LLC | ||
301 S. College Street | ||
Charlotte, NC 28288 |
Ladies and Gentlemen:
PS Business Parks, Inc., a real estate investment trust (REIT) and a California corporation
(the Company), proposes to sell to the several underwriters named in Schedule I hereto (the
Underwriters), for whom you (the Representatives) are acting as representatives, an aggregate
of 3,000,000 shares (the Firm Shares) of its Depositary Shares (the Depositary Shares), each
representing 1/1,000th of a share of 6.875% Cumulative Preferred Stock, Series R, stated value
$25,000 per share (the Preferred Stock). The Company also proposes to sell to the Underwriters,
upon the terms and conditions set forth in Section 1(b) hereof, up to an additional 450,000 shares
(the Additional Shares) of Depositary Shares. The Firm Shares and the Additional Shares are
hereinafter collectively referred to as the Shares.
The shares of Preferred Stock represented by the Shares (the Preferred Shares) will, when
issued, be deposited by the Company against delivery of Depositary Receipts (the Depositary
Receipts) to be issued by American Stock Transfer & Trust Company, as Depositary (the
Depositary), under a Deposit Agreement (the Deposit Agreement) among the Company, the
Depositary, and the holders from time to time of the Depositary Receipts issued thereunder. Each
Depositary Receipt will represent one or more Depositary Shares.
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The Company wishes to confirm as follows its agreement with you and the other several
Underwriters on whose behalf you are acting, in connection with the several purchases of the Shares
by the Underwriters.
The terms which follow, when used in this Agreement, shall have the meanings indicated:
Act shall mean the Securities Act of 1933, as amended, and the rules and regulations of the
Commission promulgated thereunder.
amend, amendment or supplement with respect to the Registration Statement, any
Preliminary Prospectus, the Prospectus or any Issuer Free Writing Prospectus shall be deemed to
refer to and include the filing of any document, any post-effective amendment to the Registration
Statement, any Prospectus Supplement relating to the Shares filed with the Commission pursuant to
Rule 424(b) and any document filed under the Exchange Act on or after the initial effective date of
the Registration Statement, or the issue date of any Preliminary Prospectus, the Prospectus or any
Issuer Free Writing Prospectus, as the case may be, deemed to be incorporated therein by reference.
Applicable Time means 5:30 p.m. (Eastern time) on October 7, 2010, or such other time as
agreed by the Company and the Representatives.
Commission shall mean the United States Securities and Exchange Commission.
Effective Date shall mean each date that the Registration Statement and any post-effective
amendment or amendments thereto became or is deemed to have become effective.
Exchange Act shall mean the Securities Exchange Act of 1934, as amended, and the rules and
regulations of the Commission promulgated thereunder.
Issuer Free Writing Prospectus means any issuer free writing prospectus, as defined in
Rule 433 of the Act, relating to the Shares that (i) is required to be filed with the Commission by
the Company, (ii) is a roadshow that is a written communication within the meaning of Rule
433(d)(8)(i) whether or not required to be filed with the Commission or (iii) is exempt from filing
pursuant to Rule 433(d)(5)(i) because it contains a description of the Shares or of the offering
that does not reflect the final terms, in each case in the form filed or required to be filed with
the Commission or, if not required to be filed, in the form retained by the Companys records
pursuant to Rule 433(g) of the Act.
Issuer General Use Free Writing Prospectus means any Issuer Free Writing Prospectus that is
intended for general distribution to prospective investors, as evidenced by its being specified in
Schedule II hereto.
Preliminary Prospectus shall mean any preliminary prospectus (including any preliminary
prospectus supplement) relating to the Shares and the Preferred Shares, in each case filed pursuant
to Rule 424(b).
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Prospectus shall mean the final prospectus (including the Prospectus Supplement) in the form
first furnished to the Underwriters for use in connection with the offering of Shares and first
filed pursuant to Rule 424(b) after the Applicable Time.
Registration Statement shall mean the Registration Statement referred to in Section 4(a),
including exhibits and financial statements thereto, as amended at the Applicable Time and the
information, if any, deemed pursuant to Rule 430B under the Act to be part of the Registration
Statement at such time.
Rule 424 refers to such rule under the Act.
Rule 430B refers to such rule under the Act.
Statutory Prospectus means the prospectus relating to the Shares contained in the
Registration Statement as amended and supplemented immediately prior to the Applicable Time,
including any document incorporated by reference therein.
Any reference herein to the Registration Statement, a Preliminary Prospectus, the Prospectus
or Statutory Prospectus shall be deemed to refer to and include the documents incorporated by
reference therein either pursuant to the terms of the Registration Statement or pursuant to Item 12
of Form S-3 which were filed under the Exchange Act on or before the Effective Date of the
Registration Statement or the issue date of such Preliminary Prospectus or the Prospectus, as the
case may be (collectively, the Incorporated Documents).
1. Agreements to Sell and Purchase.
(a) On the basis of the representations, warranties and agreements of the Company herein
contained and subject to all the terms and conditions of this Agreement, the Company agrees to sell
to the Underwriters and each Underwriter agrees, severally and not jointly, to purchase from the
Company, at a purchase price of $24.2125 per Share, except for Shares sold by the Underwriters to
institutional investors as agreed by the Company and the Underwriters, for which the purchase price
shall be $24.5000 per share (the purchase price per share), the number of Firm Shares set forth
opposite the name of such Underwriter in Schedule I hereto (or such number of Firm Shares increased
as set forth in Section 9 hereof).
(b) The Company also agrees, subject to all the terms and conditions set forth herein, to sell
to the Underwriters, and, upon the basis of the representations, warranties and agreements of the
Company herein contained and subject to all the terms and conditions set forth herein, the
Underwriters shall have the right to purchase from the Company, at the purchase price per share,
plus accumulated dividends, if any, on an Additional Share to the date of purchase, pursuant to an
option (the over-allotment option) which may be exercised at any time and from time to time prior
to 9:00 P.M., New York City time, on the 30th day after the date of the Prospectus (or, if such
30th day shall be a Saturday or Sunday or a holiday, on the next business day thereafter when the
New York Stock Exchange is open for trading), up to an aggregate of 450,000 Additional Shares.
Additional Shares may be purchased only for the purpose of covering over-allotments made in
connection with the offering of the Firm Shares. Upon any exercise of the over-allotment option,
each Underwriter, severally and not jointly, agrees to purchase from the Company the number of
Additional Shares (subject to such
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adjustments as you may determine in order to avoid fractional shares) which bears the same
proportion to the number of Additional Shares to be purchased by the Underwriters as the number of
Firm Shares set forth opposite the name of such Underwriter in Schedule I hereto (or such number of
Firm Shares increased as set forth in Section 9 hereof) bears to the aggregate number of Firm
Shares.
2. Terms of Public Offering.
The Company has been advised by you that the Underwriters propose to make a public offering of
their respective portions of the Shares as soon after this Agreement has been entered into and the
Registration Statement, and, if necessary, any post-effective amendment to the Registration
Statement, has become effective as in your judgment is advisable and initially to offer the Shares
upon the terms set forth in the Prospectus.
3. Delivery of the Shares and Payment Therefor.
Delivery to the Underwriters of and payment for the Firm Shares shall be made at the office of
Skadden, Arps, Slate, Meagher & Flom LLP, 300 South Grand Avenue, Suite 3400, Los Angeles,
California 90071-3144, at 10:00 A.M., New York City time, on October 15, 2010 (the Closing Date).
The place of closing for the Firm Shares and the Closing Date may be varied by agreement between
you and the Company.
Delivery to the Underwriters of and payment for any Additional Shares to be purchased by the
Underwriters shall be made at the aforementioned office of Skadden, Arps, Slate, Meagher & Flom LLP
at such time on such date (the Option Closing Date), which may be the same as the Closing Date
but shall in no event be earlier than the Closing Date nor earlier than three nor later than ten
business days after the giving of the notice hereinafter referred to, as shall be specified in a
written notice from you on behalf of the Underwriters to the Company of the Underwriters
determination to purchase a number, specified in such notice, of Additional Shares. The place of
closing for any Additional Shares and the Option Closing Date for such Shares may be varied by
agreement between you and the Company.
Certificates for the Firm Shares and for any Additional Shares to be purchased hereunder shall
be registered in such names and in such denominations as you shall request prior to 1:00 P.M., New
York City time, on the second business day preceding the Closing Date or any Option Closing Date,
as the case may be. Such certificates shall be made available to you in New York City for
inspection and packaging not later than 9:30 A.M., New York City time, on the business day
immediately preceding the Closing Date or any Option Closing Date, as the case may be. The
certificates evidencing the Firm Shares and any Additional Shares to be purchased hereunder shall
be delivered to you on the Closing Date or the Option Closing Date, as the case may be, against
payment of the purchase price therefor by wire transfer of immediately available funds to the order
of the Company.
4. Representations, Warranties and Agreements of the Primary Entities.
The Company and PS Business Parks, L.P., a limited partnership under the laws of the state of
California (the Operating Partnership, and together with the Company, the
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Primary Entities), jointly and severally, represent and warrant to and agree with the
Underwriters that:
(a) The Company has filed with the Commission a registration statement, registration number
333-160104, on Form S-3, including the related prospectus included in the Registration Statement,
for the registration under the Act, of the offering and sale of, inter alia, the Shares. The
Company may have filed one or more amendments thereto, including each related prospectus, and one
or more prospectus supplements thereto, each of which has previously been furnished to the
Representatives. The Company has filed with, or transmitted for filing to, or shall promptly
hereafter file with or transmit for filing to, the Commission a prospectus supplement (the
Prospectus Supplement) specifically relating to the Shares pursuant to Rules 415 and 424 under
the Act. The Company has included in such Registration Statement, as amended at the Applicable
Time, and in the Prospectus all information required by the Act and the rules and regulations of
the Commission promulgated thereunder to be included therein with respect to the Shares and the
offering thereof. As filed, such Registration Statement, as so amended, and the Prospectus
contains or will contain all required information with respect to the Shares and the offering
thereof and, except to the extent the Representatives shall agree in writing to a modification,
shall be in all substantive respects in the form furnished to the Underwriters prior to the date
hereof or, to the extent not completed at the Applicable Time, shall contain only such specific
additional information and other changes as the Company has advised the Representatives, prior to
the Applicable Time, will be included or made therein.
(b) At the respective times the Registration Statement and each amendment thereto became
effective, at each deemed effective date pursuant to Rule 430B and on the Closing Date, the
Registration Statement complied and will comply in all material respects with the requirements of
the Act and the rules and regulations of the Commission promulgated thereunder and did not contain
and will not contain any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements therein not misleading;
and, the Prospectus and any amendments or supplements thereto, at the time the Prospectus or any
such amendment or supplement was issued and on the Closing Date, and on the Option Closing Date, if
applicable, complied and will comply in all material respects with the requirements of the Act and
the rules and regulations of the Commission promulgated thereunder and did not and will not include
any untrue statement of a material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were made, not
misleading; provided, however, that the Company makes no representations or warranties as to the
information contained in or omitted from the Registration Statement or the Prospectus (or any
supplement thereto) in reliance upon and in conformity with information furnished in writing to the
Company by or on behalf of any Underwriter through the Representatives specifically for inclusion
in the Registration Statement or the Prospectus (or any supplement thereto).
(c) As of the Applicable Time, the Statutory Prospectus, each Issuer Free Writing Prospectus
listed on Schedule II(a) hereto and the pricing information set forth on Schedule II(b) hereto, all
considered together (collectively, the General Disclosure Package), did not include any untrue
statement of a material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
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made, not misleading; provided, however, that the Company makes no representations or
warranties as to the information contained in or omitted from the General Disclosure Package in
reliance upon and in conformity with information furnished in writing to the Company by or on
behalf of any Underwriter through the Representatives specifically for inclusion therein.
Each Issuer Free Writing Prospectus, as of its issue date and at all subsequent times through
the completion of the public offer and sale of the Shares or until any earlier date that the
Company notified or notifies the Representatives, did not, does not and will not include any
information that conflicted, conflicts or will conflict with any information contained in the
Registration Statement, the Statutory Prospectus or the Prospectus, including any document
incorporated by reference therein and any preliminary or other prospectus deemed to be a part
thereof that has not been superseded or modified.
(d) At (i) the earliest time after the filing of the Registration Statement that the Company
or another offering participant made a bona fide offer (within the meaning of Rule 164(h)(2) of the
Act) of the Shares and (ii) the date hereof, the Company was not and is not an ineligible issuer,
as defined in Rule 405 of the Act, including the Company or any other subsidiary in the preceding
three years not having been convicted of a felony or misdemeanor or having been made the subject of
a judicial or administrative decree or order as described in Rule 405 of the Act.
(e) The documents incorporated or deemed to be incorporated by reference in the Registration
Statement, the Prospectus and the General Disclosure Package, at the time they became or become
effective, or at the time they were or hereafter are filed with the Commission, complied and will
comply in all material respects with the requirements of the Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission thereunder and, when read together with
the other information in the General Disclosure Package, at the Applicable Time, and with the
Prospectus, at the date of the Prospectus, on the Closing Date and on the Option Closing Date, if
applicable, did not and will not include an untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in light of the circumstances, under which
they were made, not misleading.
(f) Ernst & Young LLP, an accounting firm that audited the consolidated financial statements
and supporting schedules of the Company and its subsidiaries included in, or incorporated by
reference into, the Registration Statement, the General Disclosure Package and the Prospectus, are,
and during the periods covered by its related reports were, independent public accountants as
required by the Act and by the rules of the Public Company Accounting Oversight Board.
(g) The financial statements (including the notes and schedules thereto) included in, or
incorporated by reference into, the Registration Statement, the General Disclosure Package and the
Prospectus comply as to form in all material respects with the Act and the rules and regulations of
the Commission promulgated thereunder and present fairly the financial position of the respective
entity or entities or group presented therein at the respective dates indicated and the results of
their operations, cash flows and changes in shareholders equity for the respective periods
specified; except as otherwise stated in the Registration Statement, the General Disclosure Package
and Prospectus, said financial statements have been prepared in
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conformity with generally accepted accounting principles applied on a consistent basis; the
supporting schedules included or incorporated by reference in the Registration Statement, the
General Disclosure Package and the Prospectus present fairly the information included or
incorporated therein and have been prepared on a basis consistent, except as may be noted therein,
with that of the financial statements included in, or incorporated by reference into, the
Registration Statement, the General Disclosure Package and the Prospectus and the books and records
of the respective entities presented therein. The summary and selected financial data included in,
or incorporated by reference into, the Prospectus present fairly the information shown therein as
at the respective dates and for the respective periods specified, and the summary and selected
financial data have been presented on a basis consistent with the financial statements so set forth
in the Prospectus and other financial information. Pro forma financial information included in or
incorporated by reference into the Registration Statement, the General Disclosure Package and the
Prospectus has been prepared in accordance with the applicable requirements of the Act and
guidelines of the American Institute of Certified Public Accountants (the AICPA) with respect to
pro forma financial information and includes all adjustments necessary to present fairly the pro
forma financial position of the Company at the respective dates indicated and the results of
operations for the respective periods specified. All financial statements that are required under
the Act or the Exchange Act to be included in, or incorporated by reference into, the Registration
Statement, the General Disclosure Package and the Prospectus are included in, or incorporated by
reference into, the Registration Statement, the General Disclosure Package and the Prospectus. All
disclosures contained or incorporated by reference in the Registration Statement, the General
Disclosure Package and the Prospectus regarding non-GAAP financial measures (as such term is
defined by the rules and regulations of the Commission) comply with Regulation G of the Exchange
Act and Item 10 of Regulation S-K under the Act, to the extent applicable.
(h) The Registration Statement, and any post-effective amendment thereto, became effective
under the Act, and no stop order suspending the effectiveness of the Registration Statement or any
part thereof has been issued and no proceeding for that purpose has been instituted or, to the
knowledge of the Primary Entities, threatened by the Commission or by the state securities
authority of any jurisdiction. No order preventing or suspending the use of any Preliminary
Prospectus, the Prospectus or any Issuer Free Writing Prospectus has been issued and no proceeding
for that purpose has been instituted or, to the knowledge of the Primary Entities, threatened by
the Commission or by the state securities authority of any jurisdiction, and no notice of objection
of the Commission to the use of the Registration Statement or any post-effective amendment thereto
pursuant to Rule 401(g)(2) under the Act has been received by the Company.
(i) Since the respective dates as of which information is given in the Registration Statement,
the General Disclosure Package and the Prospectus, except as otherwise stated therein, (A) there
has been no adverse change in the condition (financial or otherwise), or in the earnings, assets,
business affairs or business prospects of the Primary Entities or any subsidiary of the Company
(the Primary Entities, such subsidiaries or any entity through which the Primary Entities own a
joint venture interest in any property being sometimes hereinafter collectively referred to as the
Transaction Entities and individually as a Transaction Entity), or any property in which any
Transaction Entity directly or indirectly owns an interest (a Facility), whether or not arising
in the ordinary course of business, which would be material to
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the Transaction Entities, considered as one enterprise (any such adverse change being
hereinafter referred to as a Material Adverse Change); (B) no material casualty loss or
condemnation or other adverse event with respect to any of the Facilities has occurred; (C) there
have been no material transactions or acquisitions entered into by the Transaction Entities, other
than those in the ordinary course of business; (D) none of the Transaction Entities has incurred
any material obligation or liability, direct, contingent or otherwise; (E) there has been no
material change in the short-term debt or long-term debt of the Transaction Entities; (F) except
for regular quarterly distributions in amounts per share described in the Registration Statement,
the General Disclosure Package and the Prospectus, there has been no dividend or distribution of
any kind declared, paid or made by the Company, on any class of its capital shares; and (G) since
June 30, 2010, , and with the exception of the Companys grant of options to purchase, in the
aggregate, none of the shares of common stock of the Company, par value $.01 per share (Common
Stock) and the Companys grant of 5,740 restricted stock units, there has been no change in the
capital shares of the Company or partnership interests in the Operating Partnership (the Units).
(j) The Company has been duly organized and is validly existing as a corporation in good
standing under and by virtue of the laws of the State of California, with power and authority to
own, lease and operate its properties and to conduct the business in which it is engaged or
proposes to engage, as described in the Registration Statement, the General Disclosure Package and
the Prospectus, and to enter into and perform its obligations under this Agreement and the other
Company Documents (as hereinafter defined) to which it is a party; and the Company is duly
qualified or registered to transact business and is in good standing in each jurisdiction in which
such qualification or registration is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure to so qualify or register would not
result in a Material Adverse Change. Other than the Operating Partnership and PSBP Industrial,
LLC, a Delaware limited liability company, none of the subsidiaries of the Company is a
significant subsidiary as such term is defined in Rule 405 under the Act. The Company owns no
direct or indirect equity interest in any entity other than the Transaction Entities and in PSCC,
Inc.
(k) The Operating Partnership has been duly organized and is validly existing as a limited
partnership in good standing under and by virtue of the laws of the State of California, with
partnership power and authority to own, lease and operate its properties, to conduct the business
in which it is engaged and proposes to engage, in each case as described in the Registration
Statement, the General Disclosure Package and the Prospectus, and to enter into and perform its
obligations under this Agreement and the other Company Documents to which it is a party. The
Operating Partnership is duly qualified or registered as a foreign partnership and is in good
standing in each jurisdiction in which such qualification or registration is required, whether by
reason of the ownership or leasing of property or the conduct of business, except where the failure
to so qualify or register would not result in a Material Adverse Change. The Company is the sole
general partner of the Operating Partnership. The Agreement of Limited Partnership of the
Operating Partnership (the Operating Partnership Agreement) is in full force and effect in the
form in which it was filed as an exhibit to the Companys Quarterly Report on Form 10-Q for the
quarter ended June 30, 1998, and as of the date hereof, the aggregate percentage interests of the
Company (in its capacity as both a general partner and a limited partner) and the limited partners
other than the Company in the Operating Partnerships common units are 77.1% and 22.9%,
respectively.
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(l) Each of the Transaction Entities has been duly organized and is validly existing as a
corporation, limited partnership or other legal entity, as the case may be, in good standing under
and by virtue of the laws of its state of organization with the requisite power and authority to
own, lease and operate its properties, to conduct the business in which it is engaged or proposes
to engage, and to enter into and perform its obligations under the Company Documents to which it is
a party, if any. Each of the Transaction Entities is duly qualified or registered as a foreign
corporation, limited partnership or other legal entity, as the case may be, to transact business
and is in good standing in each jurisdiction in which such qualification or registration is
required, whether by reason of the ownership or leasing of a property or the conduct of business,
except where the failure to so qualify or register would not result in a Material Adverse Change.
All of the issued and outstanding capital stock, units of limited partnership or other equity
interest, as the case may be, of each of the Transaction Entities is duly authorized, validly
issued, fully paid and, in the case of capital stock, nonassessable, and has been offered and sold
in compliance with all applicable laws (including, without limitation, federal and state securities
laws) and, except as disclosed in the Registration Statement, the General Disclosure Package and
the Prospectus, the capital stock, units of limited partnership or other equity interest, as the
case may be, are owned by the Company, directly or indirectly, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim, restriction or equities. No shares of
capital stock, units of limited partnership or other equity interest, as the case may be, of any of
the Transaction Entities are reserved for any purpose, and there are no outstanding securities
convertible into or exchangeable for any capital stock, units of limited partnership or other
equity interest, as the case may be, of any of the Transaction Entities and no outstanding options,
rights (preemptive or otherwise) or warrants to purchase or to subscribe for shares of such capital
stock, units of limited partnership or other equity interest, as the case may be, or any other
securities of such Transaction Entities, except as disclosed in the Registration Statement, the
General Disclosure Package and the Prospectus.
(m) The Company has an authorized capitalization as set forth in the Registration Statement,
the General Disclosure Package and the Prospectus (including the Incorporated Documents), and all
of the issued capital stock of the Company has been duly authorized and is validly issued, fully
paid and nonassessable and has been offered and sold in compliance with all applicable laws
(including, without limitation, federal and state securities laws) and conforms to the description
thereof contained in the Registration Statement, the General Disclosure Package and the Prospectus.
Except for Common Stock issuable upon the exercise of options and restricted stock units granted
under the Companys 1997 Stock Option and Incentive Plan, the Companys 2003 Stock Option and
Incentive Plan and the Companys Retirement Plan for Non-Employee Directors, upon exchange of
interests in the Operating Partnership or as described in the Registration Statement, the General
Disclosure Package and the Prospectus, no capital stock of the Company is reserved for any purpose,
and there are (A) no outstanding securities convertible into or exchangeable for any capital stock
of the Company, (B) no options, rights or warrants to purchase or to subscribe for such capital
stock or any other securities of the Company or (C) no outstanding preemptive rights, rights of
first refusal or co-sale, registration or similar rights with respect to capital stock of the
Company, which by their terms are applicable to the offering or sale of the Shares hereunder, which
have not been waived pursuant to binding agreements in connection with the offering and sale of the
Shares hereunder.
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(n) The Shares and the Preferred Shares have been duly authorized and, when issued and
delivered by the Company pursuant to this Agreement and, in the case of the Shares, the Deposit
Agreement, against payment of the consideration therefor, will be validly issued, fully paid and
nonassessable. Upon payment of the purchase price and delivery of the Shares in accordance
herewith, the Underwriters will receive the Shares, free and clear of all security interests and
liens. The terms of such Shares conform in substance to all statements and descriptions related
thereto contained in the General Disclosure Package and the Prospectus. The form of share
certificates to be used to evidence such applicable Shares will be in due and proper form and will
comply with all applicable legal and New York Stock Exchange requirements. The issuance of such
Shares is not subject to any preemptive or other similar rights.
(o) All the issued and outstanding Units have been duly authorized and are validly issued and
fully paid and have been offered and sold or exchanged in compliance with all applicable laws
(including, without limitation, federal and state securities laws). Except as described in the
General Disclosure Package and the Prospectus, there are no outstanding securities convertible or
exchangeable for any Units and no outstanding options, rights (preemptive or otherwise) or warrants
to purchase or to subscribe for Units.
(p) The shares of Common Stock and preferred stock issuable upon exchange of any of the
outstanding Units are duly and validly authorized by all necessary action and such shares, when
issued upon such exchange, will be duly and validly issued, fully paid and nonassessable, and the
issuance of such shares upon such exchange will not be subject to preemptive or other similar
rights; the shares of Common Stock and preferred stock so issuable conform in all material respects
to all statements relating thereto contained in the General Disclosure Package and the Prospectus.
(q) None of the Transaction Entities is, and at the Closing Date and any later date on which
Additional Shares are to be issued none of the Transaction Entities will be, in violation of its
articles of incorporation, by-laws, certificate of limited partnership, agreement of limited
partnership or other governing documents, as the case may be, and none of the Transaction Entities
is, and at the Closing Date and any later date on which Additional Shares are to be issued none of
the Transaction Entities will be, in default in the performance or observance of any obligation,
agreement, covenant or condition contained in any contract, indenture, mortgage, loan agreement,
note, lease or other instrument or of any applicable law, rule, order, administrative regulation or
administrative or court decree, to which such entity is a party or by which such entity may be
bound, or to which any of its property or assets or any Facility may be bound or subject, except
for such violations and defaults that would not, individually or in the aggregate, result in a
Material Adverse Change.
(r) (i) This Agreement has been duly and validly authorized, executed and delivered by the
Primary Entities; (ii) the Deposit Agreement has been duly and validly authorized, executed and
delivered by the Primary Entities which are parties thereto and is a valid and binding agreement of
each of the Primary Entities which are parties thereto, enforceable against such Primary Entities
in accordance with its terms, except as such enforceability may be subject to (A) bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or transfer or similar laws affecting
creditors rights generally and (B)
10
general principles of equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law); (iii) each agreement filed pursuant to Item 601(b)(10) of
Regulation S-K as an exhibit to the Registration Statement and the Companys Annual Report on Form
10-K for the fiscal year ended December 31, 2009, or any report filed subsequently by the Company
which is incorporated by reference into the Registration Statement (each a Material Agreement)
has been duly and validly authorized, executed and delivered by the Transaction Entities which are
parties thereto and is a valid and binding agreement, enforceable against the Transaction Entities
which are parties thereto in accordance with its terms, except as such enforceability may be
subject to (A) bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or
transfer or similar laws affecting creditors rights generally and (B) general principles of equity
(regardless of whether such enforceability is considered in a proceeding in equity or at law).
This Agreement, the Deposit Agreement, the Operating Partnership Agreement and the Material
Agreements are herein collectively called the Company Documents.
(s) The execution and delivery of this Agreement and the Deposit Agreement, the issuance of
the Preferred Shares, the issuance and sale of the Shares, the performance of the obligations set
forth herein or therein and the consummation of the transactions contemplated hereby and thereby or
in the General Disclosure Package, the Preliminary Prospectus and Prospectus by the Transaction
Entities will not conflict with or constitute a material breach or violation by such parties of, or
default under or result in the creation or imposition of any lien, charge or encumbrance upon any
Facility, or any other property or asset of a Transaction Entity under or pursuant to, (i) any of
the other Company Documents or (ii) any contract, indenture, mortgage, loan agreement, note, lease,
joint venture or partnership agreement or other instrument or agreement to which any Transaction
Entity is a party or by which they, any of them, any of their respective properties or other assets
or any Facility may be bound or subject, nor will such action conflict with or constitute a breach
or violation by the Transaction Entities of, or default under, (X) the articles of incorporation,
by-laws, certificate of limited partnership, partnership agreement or other governing documents, as
the case may be, of any Transaction Entity or (Y) any applicable law, rule, order, administrative
regulation or administrative or court decree.
(t) (i) No labor dispute with employees of any of the Transaction Entities exists or is
imminent, and (ii) no Primary Entity is aware of any existing or imminent labor disturbance by the
employees of any of the Transaction Entities principal suppliers, manufacturers or contractors,
which, in the case of either (i) or (ii), might be expected to result in any Material Adverse
Change. No collective bargaining agreement exists with the employees of any of the Transaction
Entities, and to the best knowledge of either of the Primary Entities, no such agreement is
imminent.
(u) There is no action, suit or proceeding before or by any court or governmental agency or
body, domestic or foreign, now pending, or, to the knowledge of the Primary Entities, after due
inquiry, threatened against or affecting any Transaction Entity, Facility or, to the knowledge of
the Company, any officer or director of the Company, which is required to be disclosed in the
Registration Statement, the General Disclosure Package, the Preliminary Prospectus or the
Prospectus and is not adequately disclosed, or that, if determined adversely to any Transaction
Entity, Facility or such officer or director, will or could reasonably
11
be expected to result in a Material Adverse Change or to prevent consummation of the
transaction contemplated hereby. There are no pending legal or governmental proceedings to which
any Transaction Entity is a party or of which they or any of their respective properties or assets
or any Facility is the subject, including ordinary routine litigation incidental to the business,
that, considered in the aggregate, could reasonably be expected to result in a Material Adverse
Change. There are no contracts or documents of any Transaction Entity of a character required to
be described in the Registration Statement, the General Disclosure Package, the Preliminary
Prospectus and the Prospectus, or to be filed as an exhibit, which is not described or filed as
required.
(v) At all times since its taxable year ended December 31, 1990, the Company has been, and
upon the sale of the Shares the Company will continue to be, organized and operated in conformity
with the requirements for qualification as a real estate investment trust under the Internal
Revenue Code of 1986, as amended (the Code), and its proposed method of operation will enable it
to continue to meet the requirements for taxation as a real estate investment trust under the Code.
(w) Each of the Transaction Entities has filed all federal, state, local and foreign income
tax returns which have been required to be filed and has paid all taxes required to be paid and any
other assessment, fine or penalty levied against it, to the extent that any of the foregoing is due
and payable, except, in all cases, for any such tax assessment, fine or penalty that is being
contested in good faith by appropriate proceedings properly instituted and diligently pursued, and
are fully reserved for in accordance with generally accepted accounting principles on the
consolidated financial statements of the Company and its subsidiaries included in, or incorporated
by reference into, the Registration Statement, the General Disclosure Package and the Prospectus,
and except in any case in which the failure to so pay would not result in a Material Adverse
Change. No deficiencies for any taxes have been asserted in writing, proposed in writing or
assessed in writing against the Transaction Entities that have not been paid or otherwise settled
except for deficiencies that, if finally resolved in a manner adverse to the Transaction Entities,
would not reasonably be expected to result in a Material Adverse Change.
(x) At all times since its formation, the Operating Partnership has been, and upon the sale of
the Shares will continue to be, classified as a partnership for Federal income tax purposes.
(y) None of the Transaction Entities is, and at the Closing Date none of the Transaction
Entities will be, required to be registered under the Investment Company Act of 1940, as amended
(the 1940 Act).
(z) None of the Transaction Entities is, and at the Closing Date none of the Transaction
Entities will be, required to own or possess or to obtain the consent of any holder of any
trademarks, service marks, trade names or copyrights not now lawfully owned or possessed in order
to conduct the business proposed to be operated by the Transaction Entities.
(aa) No authorization, approval, consent or order of any court or governmental authority or
agency or other entity or person is necessary in connection with the offering, the execution and
delivery of this Agreement or the Deposit Agreement, the issuance of
12
the Preferred Shares or the issuance or sale of the Shares hereunder, except such as may be
required under the Act or state securities or blue sky laws, or the listing requirements of the New
York Stock Exchange or such as have been received.
(bb) Each of the Transaction Entities possesses, and at the Closing Date will possess, such
certificates, authorizations or permits issued by the appropriate local, state, federal or foreign
regulatory agencies or bodies necessary to conduct the business now operated by it, or proposed to
be conducted by it, except for such certificates, authorizations and permits, the failure to
obtain, maintain or possess which by any of the Transaction Entities would not result, singly or in
the aggregate, in a Material Adverse Change, and none of the Transaction Entities has received any
notice of proceedings relating to the revocation or modification of any such certificate, authority
or permit which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would result in a Material Adverse Change.
(cc) Except as disclosed in the Registration Statement, the General Disclosure Package, the
Preliminary Prospectus and the Prospectus, there are no persons with registration or other similar
rights to have any securities registered pursuant to the Registration Statement that have not been
waived in connection with the offering and sale of the Shares pursuant to this Agreement.
(dd) The outstanding shares of Common Stock, the Companys Depository Shares Each Representing
1/1000th of a share of 7.000% Cumulative Preferred Stock, Series H (the Series H Stock), the
Companys Depository Shares Each Representing 1/1000th of a share of 6.875% Cumulative Preferred
Stock, Series I (the Series I Stock), the Companys Depositary Shares Each Representing 1/1000th
of a share of 7.60% Cumulative Preferred Stock, Series L (the Series L Stock), the Companys
Depositary Shares Each Representing 1/1000th of a share of 7.20% Cumulative Preferred Stock, Series
M (the Series M Stock), the Companys Depositary Shares Each Representing 1/1000th of a share of
7.375% Cumulative Preferred Stock, Series O (the Series O Stock), and the Companys Depositary
Shares Each Representing 1/1000th of a share of 6.70% Cumulative Preferred Stock, Series P (the
Series P Stock), are listed on the New York Stock Exchange and the Shares will be listed on the
New York Stock Exchange, subject to official notice of issuance.
(ee) The Company has taken no action designed to, or likely to have the effect of, terminating
the registration of the Common Stock, the Series H Stock, the Series I Stock, the Series K Stock,
the Series L Stock, the Series M Stock or the Series O Stock under the Exchange Act or delisting
the Common Stock, the Series F Stock, the Series H Stock, the Series I Stock, the Series K Stock,
the Series L Stock, the Series M Stock, the Series O Stock or the Series P Stock from the New York
Stock Exchange, nor has the Company received any notification that the Commission or the New York
Stock Exchange is contemplating terminating any such registration or listing.
(ff) The Company has not distributed and will not distribute prior to the later of (i) the
Closing Date or any later date on which Additional Shares are to be purchased, as the case may be,
or (ii) completion of the distribution of the Shares, any offering material in connection with the
offering and sale of the Shares other than the Registration Statement, the Prospectus, the General
Disclosure Package or other materials, if any, permitted by the Act.
13
(gg) Neither the Company nor any of its subsidiaries has at any time during the last five (5)
years (i) made any unlawful contribution to any candidate for foreign office or failed to disclose
fully any contribution in violation of law, or (ii) made any payment to any federal or state
governmental officer or official, or other person charged with similar public or quasi-public
duties, other than payments required or permitted by the laws of the United States or any
jurisdiction thereof.
(hh) The Company has not taken and will not take, directly or indirectly, any action designed
to or that might reasonably be expected to cause or result in stabilization or manipulation of the
price of the Common Stock, the Series H Stock, the Series I Stock, the Series K Stock, the Series L
Stock, the Series M Stock, the Series O Stock or the Series P Stock to facilitate the sale or
resale of the Shares in violation of the Act.
(ii) (i) At the Closing Date and any later date on which Additional Shares are to be issued,
the Company, the Operating Partnership or one of the other Transaction Entities will have good and
marketable title (or, with respect to any Facilities located in Texas, good and indefeasible fee
simple title, or such substantially equivalent quality of title as provided by the applicable title
insurance policy) to each of the Facilities and all other items of real property (and improvements
therein), in each case free and clear of all liens, encumbrances, claims, security interests and
defects, other than those (A) referred to in the Registration Statement, the General Disclosure
Package and the Prospectus, (B) which are not material in amount; (ii) all liens, charges,
encumbrances, claims or restrictions on or affecting any of the Facilities and the assets of any
Transaction Entity which are required to be disclosed in the Registration Statement, the General
Disclosure Package and the Prospectus are disclosed therein; (iii) except as otherwise described in
the Registration Statement, the General Disclosure Package and the Prospectus, neither Primary
Entity is, and, to the best knowledge of the Primary Entities, no Transaction Entity is, in default
under (A) any space or ground leases (as lessor or lessee, as the case may be) relating to the
Facilities, or (B) any of the mortgage or other security documents or other agreements encumbering
or otherwise recorded against the Facilities, and no Primary Entity knows, after due inquiry, of
any event which, but for the passage of time or the giving of notice, or both, would constitute a
default under any of such documents or agreements; (iv) each of the Facilities complies with all
applicable codes, laws and regulations (including, without limitation, building and zoning codes,
laws and regulations and laws relating to access to the Facilities); and (v) no Primary Entity has
knowledge of, after due inquiry, any pending or threatened condemnation proceeding, zoning change
or other proceeding or action that will in any manner affect the size of, use of, improvements on,
construction on or access to the Facilities, except in each case for such matters as could not,
individually or in the aggregate, result in a Material Adverse Change.
(jj) Each of the Facilities has property, title, casualty and liability insurance in favor of
either the Company, the Operating Partnership, or one of the Transaction Entities with respect to
the Facilities by insurers of recognized financial responsibility against such losses and risks and
in such amounts as are prudent and customary in the businesses in which they are engaged, provided,
that with respect to certain Facilities, title insurance is held by Public Storage, a California
corporation (PSI), or an affiliate of PSI under policies the benefits of which have been assigned
to the Company or the Operating Partnership pursuant to a binding agreement, or PSI has indemnified
the Company, the Operating Partnership or the respective
14
Transaction Entity against material defects in title to the Facilities pursuant to a binding
agreement; and none of the Company, the Operating Partnership, or the other Transaction Entities
has any reason to believe that they will not be able to renew their existing insurance coverage as
and when such coverage expires or to obtain similar coverage from similar insurers as may be
necessary to continue their businesses at a cost that would not result in a Material Adverse
Change, except as described in or contemplated by the Registration Statement, the General
Disclosure Package and the Prospectus.
(kk) Except as disclosed in the Registration Statement, the Prospectus and the General
Disclosure Package, and, except for activities, conditions, circumstances or matters that (1) would
not result in a Material Adverse Change, or (2) as to which the Transaction Entities have been
indemnified by PSI or another creditworthy entity: (i) the Company and the Operating Partnership
are in compliance with all Environmental Laws (as defined below) and all requirements of applicable
permits, licenses, approvals and other authorizations issued pursuant to Environmental Laws; (ii)
none of the Transaction Entities has caused any Release (as defined below) of any Hazardous
Substance (as defined below) into the Environment (as defined below) on, in, under or from any
Facility or any developed or undeveloped land held by a Transaction Entity (Land), and, to the
knowledge of the Primary Entities, no condition exists on, in or under any Facility or Land that
could result in the incurrence of liabilities under, or any violations of, any Environmental Law or
give rise to the imposition of any Lien (as defined below) against the Land under any Environmental
Law; (iii) none of the Transaction Entities has received any written notice of a claim under or
pursuant to any Environmental Law or under common law pertaining to Hazardous Substances on, in,
under or originating from any Facility or Land; (iv) none of the Transaction Entities has knowledge
of, or has received any written notice of any claim from any Governmental Authority (as defined
below) or other person claiming any violation of any Environmental Law or a determination to
undertake and/or request the investigation, remediation, clean-up or removal of any Hazardous
Substance released into the Environment or in, under or from any Facility or Land; and (v) no
Facility or Land is included or, to the knowledge of the Primary Entities, after due inquiry,
proposed for inclusion on the National Priorities List issued pursuant to CERCLA (as defined below)
by the United States Environmental Protection Agency (the EPA).
As used herein, Hazardous Substance shall include any hazardous substance, hazardous waste,
toxic substance, pollutant, hazardous material, or similarly designated materials including,
without limitation, oil, petroleum-derived substance or waste, asbestos or asbestos-containing
materials, PCBs, pesticides, explosives, radioactive materials, dioxins, urea formaldehyde
insulation or any constituent of any such substance, pollutant or waste which is identified,
regulated, prohibited or limited under any Environmental Law (including, without limitation,
materials listed in the United States Department of Transportation Optional Hazardous Material
Table, 49 C.F.R. § 172.101, or in the EPAs List of Hazardous Substances and Reportable Quantities,
40 C.F.R. Part 302) as the same may now or hereafter be amended; Environment shall mean any
surface water, drinking water, ground water, land surface, subsurface strata, river sediment,
buildings, structures, and ambient workplace and indoor and outdoor air; Environmental Law shall
mean the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended
(42 U.S.C. § 9601, et seq.) (CERCLA), the Resource Conservation and Recovery Act of 1976, as
amended (42 U.S.C. § 6901, et seq.), the Clean Air Act, as amended (42 U.S.C. § 7401, et seq.), the
Clean Water Act, as amended (33
15
U.S.C. § 1251, et seq.), the Toxic Substances Control Act, as amended (29 U.S.C. §2601 et
seq.), the Occupational Safety and Health Act of 1970, as amended (29 U.S.C. § 651, et seq.)(as it
relates to Hazardous Substances), the Hazardous Materials Transportation Act, as amended (49 U.S.C.
§ 1801, et seq.), and all other federal, state and local laws, ordinances, regulations, rules and
orders relating to the protection of the environment or of human health from environmental effects;
Governmental Authority shall mean any federal, state or local governmental office, agency or
authority having the duty or authority to promulgate, implement or enforce any Environmental Law;
Lien shall mean, with respect to any Facility, any lien or similar property encumbrance; and
Release shall mean any spilling, leaking, dumping, emanating or disposing of any Hazardous
Substance in the Environment, including without limitation the abandonment or discard of barrels,
containers or tanks (including without limitation underground storage tanks or other receptacles
containing or previously containing any Hazardous Substance), or any release, emission, discharge
or similar terms, as those terms are defined or used in any Environmental Law.
(ll) To the best knowledge of the Primary Entities, none of the environmental consultants
which prepared environmental and asbestos inspection reports with respect to any of the Facilities
was employed for such purpose on a contingent basis or has any substantial interest in any
Transaction Entity, and none of them nor any of their directors, officers or employees is connected
with any Transaction Entity as a promoter, selling agent, director, officer or employee.
(mm) (i) The Company (A) has been subject to the requirements of Section 12 of the Exchange
Act and has filed all materials required of it to be filed pursuant to Section 13 and 14 of the
Exchange Act since prior to January 1, 1999; and (B) has filed in a timely manner all reports
required of it to be filed with the Commission since January 1, 2001; (ii) none of the Transaction
Entities has, since January 1, 2001 (A) failed to pay any dividend or sinking fund installment on
preferred stock; or (B) defaulted (1) on any installment or installments on indebtedness or
borrowed money, or (2) on any rental on one or more long-term leases, which defaults in the
aggregate were material to the financial position of such entities taken as a whole; and (iii) the
aggregate market value of the voting Common Stock held by non-affiliates (as defined in Rule 405
under the Act) is in excess of $150,000,000.
(nn) Assuming due authorization, execution and delivery of the Deposit Agreement by the
Depositary, each of the Shares will represent an interest in 1/1,000 of a share of a validly
issued, outstanding, fully paid and nonassessable share of Preferred Stock; assuming due execution
and delivery of the Depositary Receipts by the Depositary pursuant to the Deposit Agreement, the
Depositary Receipts will entitle the holders thereof to the benefits provided therein and in the
Deposit Agreement.
(oo) Any certificate signed by any officer or authorized representative of any Primary Entity
or any Company Document signed by any officer or authorized representative of any Primary Entity,
and delivered to the Underwriter or to counsel of the Underwriter shall be deemed a representation
and warranty by such entity or person, as the case may be, to the Underwriter as to the matter
covered thereby.
16
(pp) There are no outstanding shares of the Companys 9 1/4% Cumulative Preferred Stock,
Series A, the Companys 9.500% Cumulative Preferred Stock, Series D, or the Companys 8 3/4%
Cumulative Preferred Stock, Series F, and there are no outstanding 9 1/4% Series A Cumulative
Redeemable Preferred Units, 8 7/8% Series B Cumulative Redeemable Preferred Units of the Operating
Partnership, 8 3/4% Series C Cumulative Redeemable Preferred Units of the Operating Partnership, 9
1/2% Series D Cumulative Redeemable Preferred Units of the Operating Partnership, 9.250% Series E
Cumulative Redeemable Preferred Units of the Operating Partnership, 8 3/4% Series F Cumulative
Redeemable Preferred Units of the Operating Partnership, 8.875% Series X Cumulative Redeemable
Preferred Units of the Operating Partnership, or 8 7/8% Series Y Cumulative Redeemable Preferred
Units of the Operating Partnership.
(qq) The Company maintains a system of internal accounting controls sufficient to provide
reasonable assurances that in all material respects (i) transactions are executed in accordance
with managements general or specific authorization; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally accepted accounting
principles and to maintain accountability for assets; (iii) access to assets is permitted only in
accordance with managements general or specific authorization; and (iv) the recorded
accountability for assets is compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
(rr) Since the date of the latest audited financial statements included or incorporated by
reference in the Registration Statement, the General Disclosure Package and the Prospectus, there
has been no change in the Companys internal control over financial reporting that has materially
affected, or is reasonably likely to materially affect, the Companys internal control over
financial reporting.
(ss) The Company maintains disclosure controls and procedures (as such term is defined in Rule
13a-15(e) under the Exchange Act) that comply with the requirements of the Exchange Act; such
disclosure controls and procedures have been designed to ensure that material information relating
to the Company and its subsidiaries is made known to the Companys principal executive officer and
principal financial officer by others within those entities; and such disclosure controls and
procedures are effective.
(tt) The operations of the Company and its subsidiaries are and have been conducted at all
times in compliance with applicable financial recordkeeping and reporting requirements of the
Currency and Foreign Transactions Reporting Act of 1970, as amended, the money laundering statutes
of all jurisdictions, the rules and regulations thereunder and any related or similar rules,
regulations or guidelines, issued, administered or enforced by any governmental agency
(collectively, the Money Laundering Laws) and no action, suit or proceeding by or before any
court or governmental agency, authority or body or any arbitrator involving the Company or any of
its subsidiaries with respect to the Money Laundering Laws is pending or, to the best knowledge of
the Company, threatened.
(uu) None of the Company, any of its subsidiaries or, to the knowledge of the Company, any
director, officer, agent, employee or Affiliate of the Company or any of its subsidiaries is
currently subject to any U.S. sanctions administered by the Office of Foreign
17
Assets Control of the U.S. Department of the Treasury (OFAC); and the Company will not
directly or indirectly use the proceeds of the offering of the Securities hereunder, or lend,
contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or
other person or entity, for the purpose of financing the activities of any person currently subject
to any U.S. sanctions administered by OFAC.
5. Agreements of the Company. The Company agrees with the Underwriters as follows:
(a) The Company will not, either prior to the Effective Date or thereafter during such period
as the Prospectus is required by law to be delivered in connection with sales of the Shares by any
Underwriter or any dealer (including in circumstances where such requirement may be satisfied
pursuant to Rule 172), file any amendment or supplement to the Registration Statement or the
Prospectus, unless a copy thereof shall first have been submitted to the Representatives within a
reasonable period of time prior to the filing thereof and the Representatives shall not have
objected thereto in good faith.
(b) The Company will notify the Representatives promptly, and will confirm such advice in
writing, (1) when any post-effective amendment to the Registration Statement becomes effective, (2)
of the receipt of any comments from or any request by the Commission for amendments or supplements
to the Registration Statement, any Preliminary Prospectus 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, any notice objecting to its use or the initiation of any proceedings
for that purpose or the threat thereof, (4) of the happening of any event during the period
mentioned in the second sentence of Section 5(e) that in the judgment of the Company makes any
statement made in the Registration Statement, any Preliminary Prospectus or the Prospectus untrue
or that requires the making of any changes in the Registration Statement, any Preliminary
Prospectus or the Prospectus in order to make the statements therein, in light of the circumstances
in which they are made, 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
Registration Statement, any Preliminary Prospectus or the Prospectus. 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 furnish to the Representatives, without charge, four copies of the signed
copies of the Registration Statement and of any post-effective amendment thereto, including
financial statements and schedules, and all exhibits thereto (including any document filed under
the Exchange Act and deemed to be incorporated by reference into the Prospectus) and will furnish
to the Representatives, without charge, for transmittal to each of the other Underwriters, copies
of the Registration Statement and any post-effective amendment thereto, including financial
statements and schedules but without exhibits.
(d) The Company will comply with all the provisions of any undertakings contained in the
Registration Statement.
18
(e) The Company will deliver to each of the Underwriters, without charge, as many copies of
the Prospectus, each Issuer Free Writing Prospectus or any amendment or supplement thereto, as the
Representatives may reasonably request. The Company consents to the use of the Prospectus, each
Issuer Free Writing Prospectus or any amendment or supplement thereto by the several Underwriters
and by all dealers to whom the Shares may be sold, both in connection with the offering or sale of
the Shares and for any period of time thereafter during which the Prospectus is required by law to
be delivered in connection therewith (including in circumstances where such requirement may be
satisfied pursuant to Rule 172 of the Act). If during such period of time any event shall occur
which in the judgment of the Company or counsel to the Underwriters should be set forth in the
Prospectus in order to make any statement therein, in the light of the circumstances under which it
was made, not misleading, or if it is necessary to supplement or amend the Prospectus to comply
with law, subject to the provisions of Section 5(a) hereof, the Company will forthwith prepare and
duly file with the Commission an appropriate supplement or amendment thereto, and will deliver to
the Underwriters, without charge, such number of copies thereof as the Representatives may
reasonably request. The Company shall not file any document under the Exchange Act before the
termination of the offering of the Shares by the Underwriters if such document would be deemed to
be incorporated by reference into the Prospectus which is not approved by the Representatives after
reasonable notice thereof. If there occurs an event or development as a result of which the
General Disclosure Package would include an untrue statement of a material fact or would omit to
state a material fact necessary in order to make the statements therein, in the light of the
circumstances then prevailing, not misleading, the Company will notify promptly the Representatives
so that any use of the General Disclosure Package may cease until it is amended or supplemented.
The Company will prepare a final term sheet (the Final Term Sheet) reflecting the final terms of
the Shares, in form and substance satisfactory to the Representatives, and shall file such Final
Term Sheet as an Issuer Free Writing Prospectus pursuant to Rule 433; provided that the Company
shall provide the Representatives with copies of any such Final Term Sheet a reasonable amount of
time prior to such proposed filing and will not use or file any such document to which the
Representatives or counsel to the Underwriters shall reasonably object.
(f) The Company will cooperate with the Representatives and counsel to the Underwriters in
connection with the registration or qualification of the Shares and the Preferred Shares for offer
and sale under the securities or Blue Sky laws of such jurisdictions as the Representatives may
reasonably request; provided, that in no event shall the Company be obligated to qualify to do
business in any jurisdiction where it is not now so qualified or to take any action which would
subject it to general service of process in any jurisdiction where it is not now so subject.
(g) During the period of five years commencing on the date hereof, the Company will furnish to
each of the Representatives and each other Underwriter who may so request copies of such financial
statements and other periodic and special reports as the Company may from time to time distribute
generally to the holders of any class of its capital stock, and will furnish to each of the
Representatives and each other Underwriter who may so request a copy of each annual or other report
it shall be required to file with the Commission.
19
(h) The Company will make generally available to holders of its securities as soon as may be
practicable but in no event later than the last day of the fifteenth full calendar month following
the calendar quarter in which the Effective Date falls, a consolidated earnings statement (which
need not be audited but shall be in reasonable detail), with respect to the Primary Entities, for a
period of 12 months commencing after the Effective Date, and satisfying the provisions of Section
11(a) of the Act (including Rule 158 thereunder) and will file such earnings statement as an
exhibit to the next periodic report required by Section 13 or 15(d) of the Exchange Act covering
the period when the earnings statement is released.
(i) If this Agreement shall terminate or shall be terminated after execution pursuant to any
provisions hereof (otherwise than pursuant to the second paragraph of Section 9 hereof or by notice
given by you terminating this Agreement pursuant to Section 9 or Section 10 hereof) or if this
Agreement shall be terminated by the Underwriters because of any failure or refusal on the part of
the Company to comply with the terms or fulfill any of the conditions of this Agreement, the
Company agrees to reimburse the Representatives for all out-of-pocket expenses (including fees and
expenses of counsel for the Underwriters) reasonably incurred by you in connection herewith.
(j) The Company will not at any time, directly or indirectly, take any action intended, or
which might reasonably be expected, to cause or result in, or which will constitute, stabilization
of the price of the Shares to facilitate the sale or resale of any of the Shares in violation of
the Act.
(k) The Company will apply the net proceeds from the offering and sale of the Shares in the
manner set forth in the General Disclosure Package and the Prospectus under Use of Proceeds.
(l) The Company will use its best efforts to have the Shares listed, subject to notice of
issuance, on the New York Stock Exchange.
(m) The Company represents and agrees that, unless it obtains the prior written consent of the
Representatives, and each Underwriter, severally and not jointly, represents and agrees with the
Company that, unless it has obtained or will obtain, as the case may be, the prior written consent
of the Company and the Representatives, it has not made and will not make any offer relating to the
Shares that would constitute an Issuer Free Writing Prospectus or that would otherwise constitute a
free writing prospectus (as defined in Rule 405 of the Act) required to be filed by the Company
with the Commission or retained by the Company under Rule 433 of the Act. Any such free writing
prospectus consented to by the Representatives or the Company is hereinafter referred to as a
Permitted Free Writing Prospectus. The Company agrees that (y) it has treated and will treat, as
the case may be, each Permitted Free Writing Prospectus as an Issuer Free Writing Prospectus and
(z) it has complied and will comply, as the case may be, with the requirements of Rules 164 and 433
of the Act applicable to any Permitted Free Writing Prospectus, including in respect of timely
filing with the Commission, legending and record keeping. The Company consents to the use by any
Underwriter of a free writing prospectus that (a) is not an Issuer Free Writing Prospectus as
defined in Rule 433, and (b) contains only (i) information describing the preliminary terms of the
Shares or their offering or (ii) information that describes the final terms of the Shares or their
20
offering and that is included in the Final Term Sheet of the Company contemplated in Section
5(e).
6. Conditions of Underwriters Obligations. The several obligations of the
Underwriters to purchase the Firm Shares hereunder are subject to the following conditions:
(a) All of the representations and warranties of the Company contained in this Agreement shall
be true and correct on the Closing Date with the same force and effect as if made on and as of the
Closing Date.
(b) All filings, if any, required by Rules 424 and 430A under the Act shall have been timely
made; and at the Closing Date no stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall have been instituted or,
to the knowledge of the Company or any Underwriter, contemplated by the Commission, and any request
of the Commission for additional information (to be included in the Registration Statement or the
Prospectus or otherwise) shall have been complied with to the satisfaction of the Representatives.
(c) Subsequent to the effective date of this Agreement, there shall not have occurred (i) any
change, or any development involving a prospective change, in or affecting the condition (financial
or other), business, properties, net worth, or results of operations of the Transaction Entities
not contemplated by the Prospectus, which in your opinion, as Representatives of the several
Underwriters, would materially, adversely affect the market for the Shares, or (ii) any event or
development relating to or involving the Company or any officer or director of the Company which
makes any statement made in the Prospectus untrue in any material respect or which, in the opinion
of the Company and its counsel or the Underwriters and their counsel, requires the making of any
addition to or change in the Prospectus in order to state a material fact required by the Act or
any other law to be stated therein or necessary in order to make the statements therein not
misleading, if amending or supplementing the Prospectus to reflect such event or development would,
in your opinion, as Representatives of the several Underwriters, adversely affect the market for
the Shares. On the Closing Date, the Underwriters shall have received a certificate dated the
Closing Date, signed by each of the President and the Chief Financial Officer of the Company
confirming the matters set forth in Sections 6(a), (b) and (c).
(d) The Underwriters shall have received an opinion, dated the Closing Date and satisfactory
in form and substance to counsel for the Underwriters, from Stephanie Heim, counsel for the
Company, to the effect that:
(i) Each of the Company and the Operating Partnership has been duly organized and is validly
existing (in the case of the Company, as a corporation) in good standing under the laws of the
jurisdiction in which it is organized, with full power and authority to own or lease and occupy its
properties and conduct its business as described in the General Disclosure Package and the
Prospectus, and is duly qualified to do business, and is in good standing, in each jurisdiction
which requires such qualification, except where the failure to so qualify would not, individually
or in the aggregate, result in a Material Adverse Change;
21
(ii) All of the Companys ownership interest in the Operating Partnership is owned free and
clear of any perfected security interest and, to such counsels knowledge, after due inquiry, any
other security interests, claims, liens or encumbrances;
(iii) The Companys authorized equity capitalization is as set forth in the General Disclosure
Package and the Prospectus; the capital stock of the Company conforms to the description thereof
contained in the General Disclosure Package and the Prospectus in all material respects; the
statements in the General Disclosure Package and the Prospectus Supplement under the caption
Description of Preferred Stock and Depositary Shares and in the Prospectus under the captions
Description of Preferred Stock and Description of the Depositary Shares, insofar as such
statements constitute summaries of the documents referred to therein, have been reviewed by such
counsel and fairly summarize the matters referred to therein in all material respects; the
outstanding shares of Common Stock, Series H Stock, the Series I Stock, the Series K Stock, the
Series L Stock, the Series M Stock, the Series O Stock and the Series P Stock have been duly and
validly authorized and issued and are fully paid and nonassessable and the deposit of the Preferred
Shares in accordance with the Deposit Agreement has been duly authorized; the Shares and the
Preferred Shares have been duly and validly authorized, and, when issued and delivered pursuant to
this Agreement and the Deposit Agreement and, in the case of the Shares, paid for by the
Underwriters pursuant to this Agreement, will be fully paid and nonassessable; the Shares have been
duly authorized for listing, subject to official notice of issuance, on the New York Stock
Exchange; the forms of certificates for the Shares are in valid and sufficient form in compliance
with the New York Stock Exchange requirements; and the holders of outstanding shares of capital
stock of the Company are not entitled to preemptive or other rights to subscribe for the Shares or
the Preferred Shares;
(iv) To the best knowledge of such counsel, after due inquiry, there is no pending or
threatened action, suit or proceeding before any court or governmental agency, authority or body or
arbitrator involving the Company or the Operating Partnership of a character required to be
disclosed in the Registration Statement, the General Disclosure Package and the Prospectus which is
not adequately disclosed, and there is no franchise, contract or other document of a character
required to be described in the Registration Statement, the General Disclosure Package and the
Prospectus, or to be filed as an exhibit, which is not described or filed as required; and, to the
best knowledge of such counsel, after due inquiry, the statements in the Companys Quarterly Report
on Form 10-Q for the quarterly period ended June 30, 2010, under Part I, Item 2 Managements
Discussion and Analysis of Financial Condition and Results of Operations Liquidity and Capital
Resources Distributions and the Companys Annual Report on Form 10-K for the fiscal year ended
December 31, 2009, under Part III, Item 13 Certain Relationships and Related Transactions, and
Director Independence fairly summarize the matters therein described in all material respects;
(v) The Registration Statement and the Prospectus and any amendment or supplement thereto
comply as to form in all material respects with the requirements for the use of Form S-3 and the
rules and regulations thereunder, and the Registration Statement and the Prospectus and any
amendment or supplement thereto (other than the financial statements and other financial
information contained therein, as to which such counsel need express no opinion) comply as to form
in all material respects with the requirements of the Act and the rules thereunder and each of the
Incorporated Documents, at the
22
time they became effective or were filed with the Commission, as the case may be, complied as
to form in all material respects with the requirements of the Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission promulgated thereunder (other than the
financial statements and other financial information contained therein, as to which such counsel
need express no opinion);
(vi) The Company has full corporate power and authority to enter into and perform its
obligations under this Agreement and the Deposit Agreement and to issue, sell and deliver the
Shares and to issue and deliver the Preferred Shares; this Agreement and the Deposit Agreement have
been duly authorized, executed and delivered by the Company; the Operating Partnership has full
partnership power and authority to enter into and to perform its obligations under this Agreement;
and this Agreement has been duly authorized, executed and delivered by the Operating Partnership;
(vii) No consent, approval, authorization or order of any court or governmental agency,
authority or body is required for the execution of this Agreement or the Deposit Agreement by the
Primary Entities, the performance by such Primary Entities of their obligations hereunder or
thereunder or the consummation of the transactions contemplated herein or therein, except such as
have been obtained under the Act and the Exchange Act and such as may be required under the Blue
Sky laws of any jurisdiction in connection with the purchase and distribution by the Underwriters
of the Shares;
(viii) The Company and the Operating Partnership have all requisite power and authority, and,
to the best knowledge of such counsel, after due inquiry, all necessary material authorizations,
approvals, orders, licenses, certificates and permits of and from all regulatory or governmental
officials, bodies and tribunals, to own or lease their respective properties and to conduct their
respective businesses as now being conducted and as described in the Prospectus; and, to the best
knowledge of such counsel, after due inquiry, all such authorizations, approvals, licenses,
certificates and permits are in full force and effect, except where the failure to be in full force
and effect would not result in a Material Adverse Change, and the Company and the Operating
Partnership are complying with all applicable laws, the violation of which could result in a
Material Adverse Change;
(ix) The Company is not in violation of its articles of incorporation or by-laws, and the
Operating Partnership is not in violation of its partnership agreement, and to the best knowledge
of such counsel, after due inquiry, neither the Company nor the Operating Partnership is in default
in the performance of any obligation, agreement or condition contained in any loan, note or other
evidence of indebtedness or in any indenture, mortgage, deed of trust or any other material
agreement by which it or its properties are bound, except for such defaults as could not,
individually or in the aggregate, result in a Material Adverse Change;
(x) Neither the issue and sale of the Shares nor the consummation of any of the other
transactions contemplated by this Agreement (including without limitation the execution, delivery
and performance of the Deposit Agreement, the issuance and deposit of the Preferred Shares in
accordance with the Deposit Agreement and the consummation of the transactions contemplated
therein) nor the fulfillment of the terms hereof or
23
thereof will conflict with, result in a breach or violation of, or constitute a default under
any law or the articles of incorporation or by-laws of the Company or the partnership agreement of
the Operating Partnership or the terms of any indenture or other agreement or instrument known to
such counsel and to which the Company or the Operating Partnership is a party or is bound or any
judgment, order or decree known to such counsel to be applicable to the Company or the Operating
Partnership of any court, regulatory body, administrative agency, governmental body or arbitrator
having jurisdiction over the Company or the Operating Partnership;
(xi) No holders of securities of the Company have rights to the registration of such
securities under the Registration Statement, except as provided therein;
(xii) Any required filing of any Preliminary Prospectus or the Prospectus and any supplements
thereto, pursuant to Rule 424(b) has been made in the manner and within the time period required by
Rule 424(b); any required filing of each Issuer Free Writing Prospectus pursuant to Rule 433 of the
Act has been made in the manner and within the time period required by Rule 433(d) of the Act; and,
to the best knowledge of such counsel, no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that purpose have been instituted or
threatened;
(xiii) To the best knowledge of such counsel, after due inquiry, neither the Company nor the
Operating Partnership is in violation of any law, ordinance, administrative or governmental rule or
regulation applicable to the Company or the Operating Partnership or of any decree of any court or
governmental agency or body having jurisdiction over the Company or the Operating Partnership, the
violation of which could result in a Material Adverse Change;
(xiv) The statements in the Registration Statement, the General Disclosure Package and the
Prospectus, insofar as they are descriptions of contracts, agreements or other legal documents, or
refer to statements of law or legal conclusions, are accurate and present fairly the information
required to be shown in all material respects;
(xv) The Company and the Operating Partnership own or have the right to use all patents,
trademarks, trademark registrations, service marks, service mark registrations, trade names,
copyrights, licenses, inventions, trade secrets and rights described in the Prospectus as being
owned by them or any of them or necessary for the conduct of their respective businesses, and,
other than routine proceedings which if adversely determined would not materially affect the
business of the Company and the Operating Partnership taken as a whole as described in the General
Disclosure Package and the Prospectus, to the best knowledge of such counsel, there is no claim to
the contrary or any challenge by any other person to the rights of the Company and the Operating
Partnership with respect to the foregoing;
(xvi) Except as described in the General Disclosure Package and the Prospectus and in Section
4(m) of this Agreement, to the best knowledge of such counsel, after due inquiry, 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 of the Company or any
security convertible into or exchangeable or exercisable for capital stock of the Company;
24
(xvii) Except as described in the General Disclosure Package and the Prospectus, to the best
knowledge of such counsel, after due inquiry, there is no holder of any security of the Company or
any other person who has the right, contractual or otherwise, to cause the Company to sell or
otherwise issue to them, or to permit them to underwrite the sale of, the Shares or the Preferred
Shares or the right to have any Common Stock or other securities of the Company included in the
Registration Statement or the right, as a result of the filing of the Registration Statement, to
require registration under the Act of any shares of Common Stock or other securities of the
Company;
(xviii) Assuming due authorization, execution and delivery by the Depositary, the Deposit
Agreement constitutes the valid and binding agreement of the Company, enforceable against the
Company in accordance with its terms, except to the extent that enforcement thereof may be limited
by (i) bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in
effect relating to creditors rights generally and (ii) general principles of equity and
(regardless of whether a proceeding is considered at law or in equity); and
(xix) When the Shares evidenced by the Depositary Receipts are issued and delivered in
accordance with the terms of the Deposit Agreement against the deposit of duly authorized and
issued, fully paid and nonassessable Preferred Shares, the Depositary Receipts will entitle the
holders thereof to the benefits provided therein and in the Deposit Agreement.
In addition, such counsel shall state that she has participated in conferences with
representatives of the Underwriters, and with officers and other representatives of the Company and
representatives of the independent certified public accountants of the Company, at which
conferences the contents of the Registration Statement, the General Disclosure Package and the
Prospectus and related matters were discussed and, although such counsel does not pass upon and
does not assume any responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement, the General Disclosure Package and the Prospectus, on the
basis of the foregoing (relying as to certain factual matters on the information provided to such
counsel by the Company and not on an independent investigation, but in the absence of information
to the contrary), no facts have come to such counsels attention which leads such counsel to
believe that the Incorporated Documents, when such documents became effective or were filed with
the Commission, as the case may be, contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the statements therein not
misleading, the Registration Statement, when it became effective or was deemed to have become
effective, contained an untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein not misleading, that the
General Disclosure Package, at the Applicable Time, contained an untrue statement of a material
fact or omitted to state a material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading and the Prospectus, as of its date and
as of the Closing Date, contained an untrue statement of a material fact or omitted to state a
material fact necessary to make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided that such counsel need not express any comment with
respect to the financial statements and other
25
financial data included in the Registration Statement, the General Disclosure Package, or the
Prospectus.
(e) The Underwriters shall have received an opinion, dated the Closing Date and satisfactory
in form and substance to counsel for the Underwriters, from Hogan Lovells US LLP, counsel for the
Company, to the effect that:
(i) The Company was organized and has operated in conformity with the requirements for
qualification and taxation as a REIT under the Code for the taxable year ended December 31, 2009,
and the Companys current organization and method of operation (as described in the Prospectus, the
Prospectus Supplement and the management representation letter) will enable it to continue to meet
the requirements for qualification and taxation as a REIT; and
(ii) The statements in the Prospectus under the heading Material U.S. Federal Income Tax
Considerations and Risk Factors We would incur adverse tax consequences if we fail to qualify
as a REIT, read in conjunction with the statements in the Prospectus Supplement under the heading
Additional Material U.S. Federal Income Tax Consequences and in the Companys Quarterly Report on
Form 10-Q for the quarter ended June 30, 2010 under Part II, Item 1A under the headings Risk
Factors We would incur adverse tax consequences if we fail to qualify as a REIT and Risk
Factors Change in taxation of corporate dividends may adversely affect the value of our shares
incorporated by reference in the Prospectus, to the extent they describe matters of federal income
tax law or federal income tax legal conclusions, are correct in all material respects.
(f) The Underwriters shall have received an opinion, dated the Closing Date from Skadden,
Arps, Slate, Meagher & Flom LLP, counsel to the Underwriters, with respect to the Registration
Statement, the General Disclosure Package, the Prospectus and this Agreement, which opinion shall
be satisfactory in all respects to the Representatives, and such counsel shall have been provided
by the Company with such documents and information as they may reasonably request to enable them to
pass on such matters.
(g) You shall have received letters addressed to you, as Representatives of the several
Underwriters, and dated the date hereof and the Closing Date from Ernst & Young LLP, independent
certified public accountants, substantially in the forms heretofore approved by you.
(h) (i) No stop order suspending the effectiveness of the Registration Statement shall have
been issued, no notice objecting to its use shall have been received, and no proceedings for that
purpose shall have been taken or, to the knowledge of the Company, shall be contemplated by the
Commission at or prior to the Closing Date; (ii) there shall not have been any material change in
the capital stock of the Company nor any material increase in the short-term or long-term debt of
the Company (other than in the ordinary course of business) from that set forth or contemplated in
the Registration Statement, the General Disclosure Package and the Prospectus (or any amendment or
supplement thereto); (iii) there shall not have been, since the respective dates as of which
information is given in the Registration Statement, the General Disclosure Package and the
Prospectus (or any amendment or supplement thereto), except as
26
may otherwise be stated in the Registration Statement, the General Disclosure Package and the
Prospectus (or any amendment or supplement thereto), any material adverse change in the condition
(financial or other), business, prospects, properties, net worth or results of operations of the
Primary Entities taken as a whole; (iv) the Primary Entities shall not have any liabilities or
obligations, direct or contingent (whether or not in the ordinary course of business), that are
material to the Primary Entities, taken as a whole, other than those reflected in the Registration
Statement, the General Disclosure Package and the Prospectus (or any amendment or supplement
thereto); and (v) all the representations and warranties of the Primary Entities contained in this
Agreement shall be true and correct in all material respects on and as of the date hereof and on
and as of the Closing Date as if made on and as of the Closing Date, and you shall have received a
certificate, dated the Closing Date and signed by the Chief Executive Officer and the Chief
Financial Officer of the Company (or such other officers as are acceptable to you), to the effect
set forth in this Section 6(h) and in Section 6(i) hereof.
(i) The Company shall not in any material respect have failed at or prior to the Closing Date
to have performed or complied with any of its agreements herein contained or contained in the
Deposit Agreement and required to be performed or complied with by it hereunder or thereunder at or
prior to the Closing Date.
(j) Prior to the Closing Date the Shares shall have been listed, subject to notice of
issuance, on the New York Stock Exchange.
(k) The Company shall have furnished or caused to be furnished to you such further
certificates and documents as you shall have reasonably requested.
(l) Subsequent to the date hereof, (i) there shall not have been any decrease in the rating of
any of the Companys debt securities by any nationally recognized statistical rating organization
(as defined for purposes of Rule 436(g) under the Act) or any notice given of any intended or
potential decrease in any such rating or of a possible change in any such rating that does not
indicate the direction of the possible change and (ii) no such organization shall have publicly
announced that it has under surveillance or review, with possible negative implications, its rating
of any of the Companys debt securities.
All such opinions, certificates, letters and other documents will be in compliance with the
provisions hereof only if they are reasonably satisfactory in form and substance to you and your
counsel.
Any certificate or document signed by any officer of the Company and delivered to you, as
Representatives of the Underwriters, or to counsel for the Underwriters, shall be deemed a
representation and warranty by the Company to each Underwriter as to the statements made therein.
The several obligations of the Underwriters to purchase Additional Shares hereunder are
subject to the satisfaction on and as of any Option Closing Date of the conditions set forth in
this Section 6, except that, if any Option Closing Date is other than the Closing Date, the
certificates, opinions and letters referred to in paragraphs (c) through (h) shall be dated the
27
Option Closing Date in question and the opinions called for by paragraphs (d), (e) and (f)
shall be revised to reflect the sale of Additional Shares.
7. Indemnification and Contribution.
(a) The Primary Entities, jointly and severally, agree to indemnify and hold harmless each of
you and each other Underwriter and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act from and against any and all
losses, claims, damages, liabilities and expenses (including reasonable costs of investigation)
arising out of or based upon any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, any Preliminary Prospectus, the Statutory Prospectus or
the Prospectus or in any amendment or supplement thereto, any Issuer Free Writing Prospectus or any
issuer information filed or required to be filed pursuant to Rule 433(d) under the Act, or
arising out of or based upon any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not misleading, except
insofar as such losses, claims, damages, liabilities or expenses arise out of or are based upon any
untrue statement or omission or alleged untrue statement or omission which has been made therein or
omitted therefrom in reliance upon and in conformity with the information relating to such
Underwriter furnished in writing to the Company by or on behalf of any Underwriter through you
expressly for use in connection therewith. The foregoing indemnity agreement shall be in addition
to any liability which the Company may otherwise have.
(b) If any action, suit or proceeding shall be brought against any Underwriter or any person
controlling any Underwriter in respect of which indemnity may be sought against the Primary
Entities, such Underwriter or such controlling person shall promptly notify the Company (but
failure to so notify the Company shall not relieve the Company from any liability hereunder to the
extent it is not materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity agreement) and the
Company shall assume the defense thereof, including the employment of counsel and payment of all
fees and expenses; provided, however, that if the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party shall have reasonably
concluded that there may be one or more legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the indemnifying party, the
indemnifying party shall not have the right to direct the defense of such action on behalf of such
indemnified party or parties and such indemnified party or parties shall have the right to select
separate counsel to defend such action on behalf of such indemnified party or parties. Such
Underwriter or any such controlling person shall have the right to employ separate counsel in any
such action, suit or proceeding and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such Underwriter or such controlling person
unless (i) the Primary Entities jointly and severally have agreed in writing to pay such fees and
expenses, (ii) the Company has failed promptly to assume the defense and employ counsel, or (iii)
the named parties to any such action, suit or proceeding (including any impleaded parties) include
both such Underwriter or such controlling person and a Primary Entity and such Underwriter or such
controlling person shall have been advised by its counsel that representation of such indemnified
party and a Primary Entity by the same counsel would be inappropriate under applicable standards of
professional conduct (whether or not such representation by the same counsel has been proposed) due
to
28
actual or potential differing interests between them (in which case the Company shall not have
the right to assume the defense of such action, suit or proceeding on behalf of such Underwriter or
such controlling person). It is understood, however, that the Company shall, in connection with
any one such action, suit or proceeding or separate but substantially similar or related actions,
suits or proceedings in the same jurisdiction arising out of the same general allegations or
circumstances, be liable for the reasonable fees and expenses of only one separate firm of
attorneys (in addition to any local counsel) at any time for all such Underwriters and controlling
persons not having actual or potential differing interests with you or among themselves, which firm
shall be designated in writing by the Representatives, and that all such fees and expenses shall be
reimbursed as they are incurred. The Primary Entities shall not be liable for any settlement of
any such action, suit or proceeding effected without the Companys written consent, but if settled
with such written consent, or if there be a final judgment for the plaintiff in any such action,
suit or proceeding, the Primary Entities jointly and severally agree to indemnify and hold harmless
any Underwriter, to the extent provided in the preceding paragraph, and any such controlling person
from and against any loss, claim, damage, liability or expense by reason of such settlement or
judgment.
(c) Each Underwriter agrees, severally and not jointly, to indemnify and hold harmless the
Company, its directors, its officers who sign the Registration Statement, and any person who
controls the Company within the meaning of Section 15 of the Act or Section 20 of the Exchange Act,
to the same extent as the foregoing indemnity from the Company to each Underwriter, but only with
respect to information relating to such Underwriter furnished in writing by or on behalf of such
Underwriter through you expressly for use in the Registration Statement, the Prospectus, any
Preliminary Prospectus or any Issuer Free Writing Prospectus, or any amendment or supplement
thereto. If any action, suit or proceeding shall be brought against the Company, any of its
directors, any such officer, or any such controlling person based on the Registration Statement,
the Prospectus, any Preliminary Prospectus or any Issuer Free Writing Prospectus, or any amendment
or supplement thereto, and in respect of which indemnity may be sought against any Underwriter
pursuant to this paragraph (c), such Underwriter shall have the rights and duties given to the
Company by paragraph (b) above (except that if the Company shall have assumed the defense thereof
such Underwriter shall not be required to do so, but may employ separate counsel therein and
participate in the defense thereof, but the fees and expenses of such counsel shall be at such
Underwriters expense), and the Company, its directors, any such officer, and any such controlling
person shall have the rights and duties given to the Underwriters by paragraph (b) above. The
foregoing indemnity agreement shall be in addition to any liability which the Underwriters may
otherwise have.
(d) If the indemnification provided for in this Section 7 is unavailable to an indemnified
party under paragraph (a) or (c) hereof in respect of any losses, claims, damages, liabilities or
expenses referred to therein, then an indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party as a result of such
losses, claims, damages, liabilities or expenses (i) in such proportion as is appropriate to
reflect the relative benefits received by the Primary Entities on the one hand and the Underwriters
on the other hand from the offering of the Shares, or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate to reflect not only
the relative benefits referred to in clause (i) above but also the relative fault of the Primary
Entities on the one hand and the Underwriters on the other in
29
connection with the statements or omissions that resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations. The relative
benefits received by the Primary Entities on the one hand and the Underwriters on the other shall
be deemed to be in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company bear to the total underwriting discounts and
commissions received by the Underwriters, in each case as set forth in the table on the cover page
of the Prospectus. The relative fault of the Primary Entities on the one hand and the Underwriters
on the other hand shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission to state a material
fact relates to information supplied by the Primary Entities on the one hand or by the Underwriters
on the other hand and the parties relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
(e) The Primary Entities, on the one hand and the Underwriters, on the other hand, agree that
it would not be just and equitable if contribution pursuant to this Section 7 were determined by a
pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by
any other method of allocation that does not take account of the equitable considerations referred
to in paragraph (d) above. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages, liabilities and expenses referred to in paragraph (d) above shall be
deemed to include, subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating any claim or
defending any such action, suit or proceeding. Notwithstanding the provisions of this Section 7,
no Underwriter shall be required to contribute any amount in excess of the amount by which the
total price of the Shares underwritten by it and distributed to the public exceeds the amount of
any damages which such Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent misrepresentation. The
Underwriters obligations to contribute pursuant to this Section 7 are several in proportion to the
respective numbers of Firm Shares set forth opposite their names in Schedule I hereto (or such
number of Firm Shares increased as set forth in Section 9 hereof) and not joint.
(f) No indemnifying party shall, without the prior written consent of the indemnified party,
effect any settlement of any pending or threatened action, suit or proceeding in respect of which
any indemnified party is or could have been a party and indemnity could have been sought hereunder
by such indemnified party, unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter of such action, suit or
proceeding and 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.
(g) 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 of the nature contemplated by Section 7(b) effected
without its written consent if (i) such settlement is entered into more than 45 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
30
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.
Notwithstanding the immediately preceding sentence, if at any time an indemnified party shall have
requested an indemnifying party to reimburse the indemnified party for fees and expenses of
counsel, an indemnifying party shall not be liable for any settlement of the nature contemplated by
Section 7(b) effected without its consent if such indemnifying party (i) reimburses such
indemnified party in accordance with such request to the extent such indemnifying party considers
such request to be reasonable and (ii) provides written notice to the indemnified party
substantiating the unpaid balance as unreasonable, in each case prior to the date of such
settlement.
(h) Any losses, claims, damages, liabilities or expenses for which an indemnified party is
entitled to indemnification or contribution under this Section 7 shall be paid by the indemnifying
party to the indemnified party as such losses, claims, damages, liabilities or expenses are
incurred. The indemnity and contribution agreements contained in this Section 7 and the
representations and warranties of the Company set forth in this Agreement shall remain operative
and in full force and effect, regardless of (i) any investigation made by or on behalf of any
Underwriter or any person controlling any Underwriter, the Company, its directors or officers, or
any person controlling the Company, (ii) acceptance of any Shares and payment therefor hereunder,
and (iii) any termination of this Agreement. A successor to any Underwriter or any person
controlling any Underwriter, or to the Company, its directors or officers, or any person
controlling the Company, shall be entitled to the benefits of the indemnity, contribution and
reimbursement agreements contained in this Section 7.
8. Expenses.
The Company agrees to pay the following costs and expenses and all other costs and expenses
incident to the performance by it of its obligations hereunder: (i) the preparation, printing or
reproduction, and filing with the Commission of the Registration Statement (including financial
statements and exhibits thereto), the Preliminary Prospectus, the Prospectus, any Permitted Free
Writing Prospectus and each amendment or supplement to any of them; (ii) the printing (or
reproduction) and delivery (including postage, air freight charges and charges for counting and
packaging and any costs associated with electronic delivery) of such copies of the Registration
Statement, the Preliminary Prospectus, the Prospectus, any Permitted Free Writing Prospectus, the
Incorporated Documents and all amendments or supplements to any of them, as may be reasonably
requested for use in connection with the offering and sale of the Shares; (iii) the preparation,
printing, authentication, issuance and delivery of certificates for the Shares and the Preferred
Shares, including any stamp taxes in connection with the original issuance and sale of the Shares
and the Preferred Shares; (iv) the printing (or reproduction) and delivery of this Agreement, the
preliminary and supplemental Blue Sky Memoranda, the Deposit Agreement and all other agreements or
documents printed (or reproduced) and delivered in connection with the offering of the Shares and
the Preferred Shares; (v) the fees and expenses of the Depositary, including the fees and
disbursements of counsel for the Depositary, if any; (vi) the registration of the Shares under the
Exchange Act and the listing of the Shares on the New York Stock Exchange; (vii) the registration
or qualification of the Shares and the Preferred Shares for offer and sale under the securities or
Blue Sky laws of the several states as provided in Section 5(f) hereof (including the reasonable
fees, expenses and disbursements of counsel for the
31
Underwriters relating to the preparation, printing or reproduction, and delivery of the
preliminary and supplemental Blue Sky Memoranda and such registration and qualification); (viii)
the filing fees and the fees and expenses of counsel for the Underwriters in connection with any
filings required to be made with the Financial Industry Regulatory Authority, Inc.; (ix) the
transportation and other expenses incurred by or on behalf of Company representatives in connection
with presentations to prospective purchasers of the Shares; (x) the fees and expenses of the
Companys accountants and the fees and expenses of counsel (including local and special counsel)
for the Company; and (xi) the costs and expenses (including without limitation any damages or other
amounts payable in connection with legal or contractual liability) associated with the reforming of
any contracts for sale of the Shares made by the Underwriters caused by a breach of the
representation in Section 4(c).
9. Effective Date of Agreement.
This Agreement shall become effective: (i) upon the execution and delivery hereof by the
parties hereto; or (ii) if, at the time this Agreement is executed and delivered, it is necessary
for a post-effective amendment to the Registration Statement to be declared or become effective
before the offering of the Shares may commence, when notification of the effectiveness of such
post-effective amendment has been released by the Commission. Until such time as this Agreement
shall have become effective, it may be terminated by the Company, by notifying you, or by you, as
Representatives of the several Underwriters, by notifying the Company.
If any one or more of the Underwriters shall fail or refuse to purchase Shares which it or
they are obligated to purchase hereunder on the Closing Date, and the aggregate number of Shares
which such defaulting Underwriter or Underwriters are obligated but fail or refuse to purchase is
not more than one-tenth of the aggregate number of Shares which the Underwriters are obligated to
purchase on the Closing Date, each non-defaulting Underwriter shall be obligated, severally, in the
proportion which the number of Shares set forth opposite its name in Schedule I hereto bears to the
aggregate number of Shares set forth opposite the names of all non-defaulting Underwriters to
purchase the Shares which such defaulting Underwriter or Underwriters are obligated, but fail or
refuse, to purchase. If any one or more of the Underwriters shall fail or refuse to purchase
Shares which it or they are obligated to purchase on the Closing Date and the aggregate number of
Shares with respect to which such default occurs is more than one-tenth of the aggregate number of
Shares which the Underwriters are obligated to purchase on the Closing Date and arrangements
satisfactory to you and the Company for the purchase of such Shares by one or more non-defaulting
Underwriters or other party or parties approved by you and the Company are not made within 36 hours
after such default, this Agreement will terminate without liability on the part of any
non-defaulting Underwriter or the Company. In any such case which does not result in termination
of this Agreement, either you or the Company shall have the right to postpone the Closing Date, but
in no event for longer than seven days, in order that the required changes, if any, in the
Registration Statement and the Prospectus or any other documents or arrangements may be effected.
Any action taken under this paragraph shall not relieve any defaulting Underwriter from liability
in respect of any such default of any such Underwriter under this Agreement. The term
Underwriter as used in this Agreement includes, for all purposes of this Agreement, any party not
listed in Schedule I hereto who, with your approval and the approval of the Company, purchases
Shares which a defaulting Underwriter is obligated, but fails or refuses, to purchase.
32
Any notice under this Section 9 may be given by telegram, telecopy or telephone but shall be
subsequently confirmed by letter.
10. Termination.
This Agreement shall be subject to termination in your absolute discretion, without liability
on the part of any Underwriter to the Company by notice to the Company, if prior to the Closing
Date or any Option Closing Date (if different from the Closing Date and then only as to the
Additional Shares), as the case may be, (i) there has been, since the time of execution of this
Agreement or since the respective dates as of which information is given in the Prospectus or the
General Disclosure Package, any material adverse change, or any development involving a prospective
material adverse change, in the condition, financial or otherwise, or in the business, properties,
net worth or results of operations of the Company or the Operating Partnership, whether or not
arising in the ordinary course of business, (ii) trading in securities generally on the NYSE, the
American Stock Exchange or the Nasdaq Global Market shall have been suspended or materially
limited, (iii) there has been a suspension or material limitation in trading in the Companys
securities on the NYSE, (iv) a general moratorium on commercial banking activities shall have been
declared by either federal or New York or California authorities or a material disruption on
commercial banking or securities settlement or clearance services in the United States, or (v)
there shall have occurred any outbreak or escalation of hostilities or other international or
domestic calamity, crisis or change in political, financial or economic conditions, the effect of
which on the financial markets of the United States is such as to make it, in your judgment,
impracticable or inadvisable to commence or continue the offering of the Shares at the offering
price to the public set forth on the cover page of the Prospectus or to enforce contracts for the
resale of the Shares by the Underwriters. Notice of such termination may be given to the Company
by telegram, telecopy or telephone and shall be subsequently confirmed by letter.
11. Information Furnished by the Underwriters.
The statements set forth in the last paragraph on the cover page and in the seventh and eighth
paragraphs under the caption Underwriting in the Prospectus Supplement constitute the only
information furnished by or on behalf of the Underwriters through you as such information is
referred to in Sections 4(b), 4(c) and 7 hereof.
12. Miscellaneous.
Except as otherwise provided in Sections 3, 9 and 10 hereof, notice given pursuant to any
provision of this Agreement shall be in writing and shall be delivered (i) if to any of the Primary
Entities, at the office of the Company, PS Business Parks, Inc., 701 Western Avenue, 2nd Floor,
Glendale, California 91201-2397, Attention: Legal Department, or (ii) if to you, as Representatives
of the several Underwriters, care of Banc of America Securities LLC, One Bryant Park,
NY1-100-18-03, New York, NY 10036, Attention: High Grade Transaction Management/Legal, and Wells
Fargo Securities, LLC, 301 South College Street, Charlotte, North Carolina 28288, Attention:
General Counsel.
33
This Agreement has been and is made solely for the benefit of the several Underwriters, the
Primary Entities, their respective directors and officers, and the other controlling persons
referred to in Section 7 hereof and their respective successors and assigns, to the extent provided
herein, and no other person shall acquire or have any right under or by virtue of this Agreement.
Neither the term successor nor the term successors and assigns as used in this Agreement shall
include a purchaser from any Underwriter of any of the Shares in his status as such purchaser.
13. Applicable Law; Counterparts.
This agreement shall be governed by and construed in accordance with the laws of the State of
New York, including without limitation Section 5-1401 of the New York General Obligations Law.
This Agreement may be signed in various counterparts which together constitute one and the
same instrument. If signed in counterparts, this Agreement shall not become effective unless at
least one counterpart hereof shall have been executed and delivered on behalf of each party hereto.
14. No Advisory or Fiduciary Relationships.
The Company hereby acknowledges that (a) the purchase and sale of the Shares pursuant to this
Agreement is an arms-length commercial transaction between the Company, on the one hand, and the
Underwriters and any affiliate through which it may be acting, on the other, (b) the Underwriters
are acting as principal and not as an agent or fiduciary of the Company and (c) the Companys
engagement of the Underwriters in connection with the offering and the process leading up to the
offering is as independent contractors and not in any other capacity. Furthermore, the Company
agrees that it is solely responsible for making its own judgments in connection with the offering
of the Shares (irrespective of whether any of the Underwriters has advised or is currently advising
the Company on related or other matters). The Company agrees that it will not claim that the
Underwriters have rendered advisory services of any nature or respect, or owe an agency, fiduciary
or similar duty to the Company, in connection with the offering of the Shares or the process
leading thereto.
[Remainder of page intentionally left blank]
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Please confirm that the foregoing correctly sets forth the agreement among the Primary
Entities and the several Underwriters.
Very truly yours, PS Business Parks, Inc. |
||||
By: | /s/ Edward A. Stokx | |||
Name: | Edward A. Stokx | |||
Title: | Executive Vice President | |||
PS Business Parks L.P. |
||||
By: | PS Business Parks, Inc., | |||
General Partner | ||||
By: | /s/ Edward A. Stokx | |||
Name: | Edward A. Stokx | |||
Title: | Executive Vice President | |||
Confirmed and accepted as of the date first above written on behalf of themselves and the several Underwriters. BANC OF AMERICA SECURITIES LLC |
||||
By: | /s/ Shawn Cepeda | |||
Name: | Shawn Cepeda | |||
Title: | Managing Director | |||
WELLS FARGO SECURITIES, LLC |
||||
By: | /s/ Carolyn Coan Hurley | |||
Name: | Carolyn Coan Hurley | |||
Title: | Director | |||
[Signature page to the Underwriting Agreement]
35
SCHEDULE I
PS BUSINESS PARKS, INC.
3,000,000 Depositary Shares
3,000,000 Depositary Shares
Underwriters | Number of Firm Shares | |||
Banc of America Securities LLC |
1,500,000 | |||
Wells Fargo Securities, LLC |
1,500,000 | |||
Total |
3,000,000 |
36
SCHEDULE II
Issuer Free Writing Prospectus
Filed Pursuant to Rule 433
Registration Statement No. 333-160104
October 7, 2010
Filed Pursuant to Rule 433
Registration Statement No. 333-160104
October 7, 2010
PS BUSINESS PARKS, INC.
3,000,000 DEPOSITARY SHARES
EACH REPRESENTING 1/1000 OF A 6.875% CUMULATIVE
PREFERRED SHARE OF BENEFICIAL INTEREST, SERIES R
3,000,000 DEPOSITARY SHARES
EACH REPRESENTING 1/1000 OF A 6.875% CUMULATIVE
PREFERRED SHARE OF BENEFICIAL INTEREST, SERIES R
Final Term Sheet
Issuer:
|
PS Business Parks, Inc. (PSB) | |
Security:
|
Depositary Shares Each Representing 1/1000 of a 6.875% Cumulative Preferred Share of Beneficial Interest, Series R | |
Size:
|
3,000,000 depositary shares | |
Over-allotment Option:
|
450,000 depositary shares at $25.00 per depositary share | |
Type of Security:
|
SEC Registered Registration Statement No. 333-160104 | |
Public Offering Price:
|
$25.00 per depositary share; $75,000,000 total (not including over-allotment option) | |
Underwriting Discounts and Commissions:
|
$0.7875 per share for Retail Orders; $2,031,750.00 total; and $0.5000 per share for Institutional Orders; $210,000.00 total | |
Proceeds to the Company, before expenses:
|
$72,758,250.00 total | |
Estimated Company Expenses:
|
$150,000, other than underwriting discounts and commissions | |
Bookrunners:
|
Banc of America Securities LLC Wells Fargo Securities, LLC |
Underwriting:
Number of | ||||
Firm Shares | ||||
Banc of America Securities LLC |
1,500,000 | |||
Wells Fargo Securities, LLC |
1,500,000 |
Distribution Rights:
|
6.875% of the liquidation preference per annum; Distributions begin on December 31, 2010 | |
Redemption:
|
The depositary shares may not be redeemed until on or after October 15, 2015, except in order to preserve our status as a real estate investment trust. |
37
Settlement Date:
|
October 15, 2010 (T+5) | |
Delivery Date:
|
October 15, 2010 (T+5) | |
Selling Concession:
|
$0.50/depositary share for Retail Orders; $0.30/depositary share for Institutional Orders | |
Reallowance to other dealers:
|
$0.45/depositary share | |
CUSIP Number:
|
69360J 883 | |
ISIN Number:
|
US69360J8835 |
The Issuer has filed a registration statement (including a prospectus with the SEC) and
prospectus supplement for the offering to which this communication relates. Before you invest, you
should read the prospectus in that registration statement, the prospectus supplement, and other
documents the issuer has filed with the SEC for more complete information about the issuer and this
offering. You may get these documents for free by visiting EDGAR on the SEC Web site at
www.sec.gov. Alternatively, the issuer, any underwriter or any dealer participating in the offering
will arrange to send you the prospectus or prospectus supplement if you request it by calling Banc
of America Securities LLC toll-free 1-800-294-1322 or Wells Fargo Securities LLC toll-free
1-800-326-5897.
Any disclaimers or other notices that may appear below are not applicable to this communication and
should be disregarded. Such disclaimers or other notices were automatically generated as a result
of this communication being sent via Bloomberg or another email system.
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