7,500,000 Shares
LIBERTY PROPERTY TRUST
Common Shares of Beneficial Interest
UNDERWRITING AGREEMENT
----------------------
March 18, 1997
▇▇▇▇▇▇ Brothers Inc.,
As Representative of the several
Underwriters named in Schedule ▇,
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
Liberty Property Trust, a Maryland real estate investment trust (the
"Company"), and Liberty Property Limited Partnership, a Pennsylvania limited
partnership (the "Operating Partnership" and, together with the Company, the
"Transaction Entities"), each wish to confirm as follows its agreement with
▇▇▇▇▇▇ Brothers Inc., ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation, ▇.▇.
▇▇▇▇▇▇▇ & Sons, Inc., Alex. ▇▇▇▇▇ & Sons Incorporated, The ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇
Company, Inc. and Wheat, First Securities, Inc. (the "Underwriters," which term
shall also include any underwriter substituted as hereinafter provided in
Section 9 of this Agreement), with respect to the sale by the Company and the
purchase by the Underwriters, acting severally and not jointly, of an aggregate
of 7,500,000 shares (the "Firm Shares") of the Company's common shares of
beneficial interest, par value $.001 per share (the "Common Shares"). In
addition, the Company proposes to grant to the Underwriters an option to
purchase up to an additional 1,125,000 Common Shares on the terms and for the
purposes set forth in Section 2 (the "Option Shares"). The Firm Shares and the
Option Shares, if purchased, are hereinafter collectively called the "Shares."
Capitalized terms used but not otherwise defined herein shall have the
meanings given to those terms in the Prospectus (as herein defined).
1. Representations, Warranties and Agreements of the Transaction
Entities. Each of the Transaction Entities, jointly and severally, represents,
warrants and agrees that, as of the date hereof:
(a) Registration statements on Form S-3 (Nos. 33-94782 (the "1995
Registration Statement") and 333-22211 (the "1997 Registration
Statement")), and any amendments thereto, with respect to the Shares
have (i) been prepared by the Company in conformity with the
requirements of the United States Securities Act
of 1933, as amended (the "Securities Act") and the rules and
regulations (the "Rules and Regulations") of the United States
Securities and Exchange Commission (the "Commission") thereunder, (ii)
been filed with the Commission under the Securities Act and (iii)
become effective under the Securities Act. Copies of such
registration statements and any amendments thereto have been delivered
by the Company to you. As used in this Agreement, "Effective Time"
means, for each such registration statement, the date and the time as
of which such registration statement, or the most recent post-
effective amendment thereto, if any, was declared effective by the
Commission; "Effective Date" means, for each such registration
statement, the date of the Effective Time; "Preliminary Prospectus"
means each prospectus included in each such registration statement, or
amendments thereto, before it became effective under the Securities
Act and any prospectus filed with the Commission by the Company with
the consent of the Underwriters pursuant to Rule 424(a) of the Rules
and Regulations; "Registration Statement" means both the 1995
Registration Statement and the 1997 Registration Statement, each as
amended at the respective Effective Time, including all information
contained in the final prospectus filed with the Commission pursuant
to Rule 424(b) of the Rules and Regulations and deemed to be a part of
such registration statement as of the respective Effective Time
pursuant to paragraph (b) of Rule 430A of the Rules and Regulations,
and shall include any registration statement filed pursuant to Rule
462(b) of the Rules and Regulations (including the registration
statement on Form S-3 filed with the Commission on March 5, 1997 (No.
333-22831)); and "Prospectus" means such final prospectus, as first
filed with the Commission pursuant to paragraph (1) or (4) of Rule
424(b) of the Rules and Regulations. Any reference herein to the
Registration Statement, the Prospectus or a Preliminary Prospectus
shall be deemed to include the documents incorporated or deemed to be
incorporated by reference therein which were filed under the
Securities and Exchange Act of 1934, as amended (the "Exchange Act").
For purposes of this Agreement, all references to the Registration
Statement, any Preliminary Prospectus or the Prospectus or any
amendment or supplement to any of the foregoing shall be deemed to
include the copy filed with the Commission pursuant to its Electronic
Data Gathering, Analysis and Retrieval system ("▇▇▇▇▇").
(b) Each Preliminary Prospectus included as part of the
Registration Statement as originally filed or as part of any amendment
or supplement thereto, or filed pursuant to Rule 424 under the Rules
and Regulations, complied when so filed in all material respects with
the provisions of the Securities Act, and each Preliminary Prospectus
delivered to the Underwriters for use in connection with this offering
was identical to the electronically transmitted copies thereof filed
with the Commission pursuant to ▇▇▇▇▇, except to the extent permitted
by Regulation S-T.
(c) The Registration Statement conforms in all material respects,
and the Prospectus and any further amendments or supplements to the
Registration Statement or the Prospectus will, when they become
effective or are filed with the Commission, as the case may be,
conform in all material respects to the requirements of the Securities
Act and the Rules and Regulations, and do not and will not, as of the
applicable Effective Date (as to the Registration Statement and any
amendment thereto) and as of the applicable filing date and at the
First Delivery Date (as defined below) (as to the Prospectus and any
amendment or
2
supplement thereto) contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading (with respect
to the Prospectus, in light of the circumstances under which they were
made); provided that no representation or warranty is made as to
information contained in or omitted from the Registration Statement or
the Prospectus in reliance upon and in conformity with written
information furnished to the Company through the Underwriters by or on
behalf of any Underwriter specifically for inclusion therein. The
Prospectus delivered to the Underwriters for use in connection with
this offering was identical to the electronically transmitted copies
thereof filed with the Commission pursuant to ▇▇▇▇▇, except to the
extent permitted by Regulation S-T.
(d) The documents incorporated or deemed to be incorporated by
reference in the Registration Statement as of the applicable Effective
Date, the Prospectus as of its date or any Preliminary Prospectus as
of its date, complied in all material respects with the Exchange Act
and the rules and regulations thereunder, and none of such documents,
at such dates, 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, in the light of the
circumstances under which they were made, not misleading.
(e) 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 either of the Transaction 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 or the
Prospectus has been issued and no proceeding for that purpose has been
instituted or, to the knowledge of either of the Transaction Entities,
after due inquiry of the Commission, threatened by the Commission or
by the state securities authority of any jurisdiction.
(f) The Company has been duly formed and is validly existing as a
real estate investment trust in good standing under the laws of the
State of Maryland, is duly qualified to do business and is in good
standing in each jurisdiction in which its ownership or lease of
property or the conduct of its business requires such qualification,
and has all power and authority necessary to own or hold its
properties, to conduct the business in which it is engaged and to
enter into and perform its obligations under this Agreement. None of
the subsidiaries of the Company (other than the Operating Partnership,
Liberty Property Development Corp. ("Development Corp.") and Liberty
Special Purpose Corp. ("SP Corp.")) is a "significant subsidiary," as
such term is defined in Rule 405 of the Rules and Regulations. Except
as described in the Prospectus and other than the Property Affiliates
(as defined herein) and the Operating Partnership, Development Corp.
and SP Corp., the Company owns no direct or indirect equity interest
in any entity, except for such interests as, in the aggregate, are not
material to the condition, financial or otherwise, or the earnings,
assets, business affairs or business prospects of the Company and its
subsidiaries considered as a single enterprise.
(g) The Company has an authorized capitalization as set forth in
the Prospectus, and all of the issued shares of beneficial interest of
the Company have
3
been duly and validly authorized and issued, are fully paid and non-
assessable and conform to the description thereof contained in the
Prospectus. Except as disclosed in the Prospectus, no shares of
beneficial interest of the Company are reserved for any purpose and
except for the equity interests in the Operating Partnership ("Units")
and the Operating Partnership's Exchangeable Subordinated Debentures
due 2001, there are no outstanding securities convertible into or
exchangeable for any shares of beneficial interest of the Company, and
no outstanding options, rights (preemptive or otherwise) or warrants
to purchase or subscribe for shares of beneficial interest or any
other securities of the Company.
(h) The Operating Partnership has been duly formed and is validly
existing as a limited partnership in good standing under the laws of
the Commonwealth of Pennsylvania, is duly qualified to do business and
is in good standing as a foreign limited partnership in each
jurisdiction in which its ownership or lease of property or the
conduct of its business requires such qualification, and has all
partnership power and authority necessary to own or hold its
properties, to conduct the business in which it is engaged and to
enter into and perform its obligations under this Agreement. The
Company is the sole general partner of the Operating Partnership. The
First Amended and Restated Agreement of Limited Partnership of the
Operating Partnership, as amended (the "Operating Partnership
Agreement") is in full force and effect, and the aggregate percentage
interests of the Company and the limited partners in the Operating
Partnership are as set forth in the Prospectus; provided that to the
extent any portion of the over-allotment option described in Section 2
hereof is exercised at the First Delivery Date, the percentage
interest of such partners in the Operating Partnership will be
adjusted accordingly. Additionally, to the extent any portion of such
over-allotment option is exercised subsequent to the First Delivery
Date, the Company will contribute the proceeds from the sale of the
Option Shares to the Operating Partnership in exchange for a number of
Units equal to the number of Option Shares issued.
(i) Development Corp. has been duly organized and is validly
existing as a corporation in good standing under the laws of the
Commonwealth of Pennsylvania, is duly qualified to do business and is
in good standing in each jurisdiction in which its ownership or lease
of property or the conduct of its business requires such
qualification, and has all corporate power and authority necessary to
own or hold its properties and to conduct the business in which it is
engaged. All of the issued and outstanding capital stock of
Development Corp. has been duly authorized and validly issued and is
fully paid and non-assessable, has been offered and sold in compliance
with all applicable laws (including, without limitation, federal or
state securities laws) and all of the capital stock of Development
Corp. owned by the Operating Partnership, as described in the
Prospectus, is owned free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim, restriction or equities.
No shares of capital stock of Development Corp. are reserved for any
purpose, and there are no outstanding securities convertible into or
exchangeable for any capital stock of Development Corp., and no
outstanding options, rights (preemptive or otherwise) or warrants to
purchase or to subscribe for shares of such capital stock or any other
securities of Development Corp.
4
(j) SP Corp. has been duly organized and is validly existing as a
corporation in good standing under the laws of the Commonwealth of
Pennsylvania, is duly qualified to do business and is in good standing
as a foreign corporation in each jurisdiction in which its ownership
or lease of property or the conduct of its business requires such
qualification, and has all corporate power and authority necessary to
own or hold its properties and to conduct the business in which it is
engaged. All of the issued and outstanding capital stock of SP Corp.
has been duly authorized and validly issued and is fully paid and non-
assessable, has been offered and sold in compliance with all
applicable laws (including, without limitation, federal or state
securities laws) and all of the capital stock of SP Corp. is owned by
the Company free and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim, restriction or equities. No shares of
capital stock of SP Corp. are reserved for any purpose, and there are
no outstanding securities convertible into or exchangeable for any
capital stock of SP Corp. and no outstanding options, rights
(preemptive or otherwise) or warrants to purchase or to subscribe for
shares of such capital stock or any other securities of SP Corp.
(k) Each of those certain partnerships holding title to one or
more of the Properties (the "Property Affiliates") are the only
entities other than the Operating Partnership through which the
Company and the Operating Partnership own interests in the Properties.
Each of the Property Affiliates has been duly organized and is validly
existing as a limited partnership in good standing under the laws of
the Commonwealth of Pennsylvania, is duly qualified to do business and
is in good standing as a foreign limited partnership in each
jurisdiction in which its ownership or lease of property or the
conduct of its business requires such qualification, and has all power
and authority necessary to own or hold its properties and to conduct
the business in which it is engaged. Except as set forth in the
Prospectus, all of the partnership interests of each Property
Affiliate have been duly and validly authorized and issued, are fully
paid and non-assessable and all of the partnership interests owned
directly or indirectly by the Company and the Operating Partnership,
as described in the Prospectus, are owned free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim,
restriction or equities.
(l) The Shares have been duly and validly authorized and, when
issued and delivered against payment therefor as provided herein, will
be duly and validly issued, fully paid and non-assessable. Upon
payment of the purchase price and delivery of the Shares in accordance
herewith, each of the Underwriters will receive good, valid and
marketable title to the Shares, free and clear of all security
interests, mortgages, pledges, liens, encumbrances, claims,
restrictions and equities. The terms of the Shares conform in
substance to all statements and descriptions related thereto contained
in the Prospectus. The form of the certificates to be used to
evidence the Shares will at the First Delivery Date be in due and
proper form and will comply with all applicable legal requirements.
The issuance of the Shares is not subject to any preemptive or other
similar rights.
(m) (A) This Agreement has been duly and validly authorized,
executed and delivered by the each of the Transaction Entities, and
assuming due authorization, execution and delivery by the
Underwriters, is a valid and binding agreement of each of the
Transaction Entities, enforceable against the Transaction
5
Entities in accordance with its terms; and (B) the Operating
Partnership Agreement and the partnership agreement of each Property
Affiliate, has been duly and validly authorized, executed and
delivered by the parties thereto and is a valid and binding agreement
of the parties thereto, enforceable against such parties in accordance
with its terms;
(n) The execution, delivery and performance of this Agreement by
each of the Transaction Entities and the consummation of the
transactions contemplated hereby will not conflict with or result in a
breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which either of the
Transaction Entities is a party or by which either of the Transaction
Entities is bound or to which any of the Properties or other assets of
either of the Transaction Entities is subject, nor will such actions
result in any violation of the provisions of the charter, by-laws,
certificate of limited partnership or agreement of limited partnership
of either of the Transaction Entities, or any statute or any order,
rule or regulation of any court or governmental agency or body having
jurisdiction over either of the Transaction Entities or any of their
properties or assets; and except for the registration of the Shares
under the Securities Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under the Exchange
Act and applicable state securities laws in connection with the
purchase and distribution of the Shares by the Underwriters, no
consent, approval, authorization or order of, or filing or
registration with, any such court or governmental agency or body is
required for the execution, delivery and performance of this Agreement
by the Transaction Entities and the consummation of the transactions
contemplated hereby.
(o) Other than as described in the Prospectus and other than
rights of persons whose securities are already registered under the
Securities Act, there are no contracts, agreements or understandings
between the Company and any person granting such person the right to
require the Company to file a registration statement under the
Securities Act with respect to any securities of the Company owned or
to be owned by such person or to require the Company to include such
securities in the securities registered pursuant to the Registration
Statement or in any securities being registered pursuant to any other
registration statement filed by the Company under the Securities Act.
(p) Except as described or contemplated in the Prospectus,
neither Transaction Entity has sold or issued any securities during
the six-month period preceding the date of the Prospectus, including
any sales pursuant to Rule 144A under, or Regulations D or S of, the
Securities Act.
(q) Neither of the Transaction Entities nor any of the Properties
has sustained, since the date of the latest audited financial
statements included in the Prospectus, any material loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, other than
as set forth or contemplated in the Prospectus; and, since such date,
there has not been any material change in the capital stock or long-
term debt of either of the Transaction Entities or any material
adverse change, or any development involving a prospective material
adverse change, in or affecting any of the Properties or the
6
general affairs, management, financial position, shareholders' equity
or results of operations of either of the Transaction Entities, other
than as set forth or contemplated in the Prospectus.
(r) The financial statements (including the related notes and
supporting schedules) filed as part of, or incorporated by reference
in, the Registration Statement and the Prospectus present fairly the
financial condition and results of operations of the entities
purported to be shown thereby, at the dates and for the periods
indicated, and have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis
throughout the periods involved. The Company's ratios of earnings to
fixed charges (actual and, if any, pro forma) included in the
Prospectus under the captions "Ratios of Earnings to Fixed Charges"
and in Exhibit 12.1 to the Registration Statement have been calculated
in compliance with Item 503(d) of Regulation S-K of the Commission.
Pro forma financial information included in or incorporated by
reference in the Registration Statement and the Prospectus has been
prepared in accordance with the applicable requirements of the
Securities Act, the Rules and Regulations and AICPA guidelines 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.
(s) Ernst & Young LLP, who have certified certain financial
statements of the Company, whose reports appear in the Prospectus and
who have delivered the initial letter referred to in Section 7(f)
hereof, are independent public accountants as required by the
Securities Act and the Rules and Regulations.
(t) (A) The Operating Partnership and the Property Affiliates
have good and marketable title to each of the Properties, free and
clear of all liens, encumbrances, claims, security interests and
defects, other than those referred to in the Prospectus or those which
are not material in amount or those which would not have a material
adverse effect on the business, operations, use or value of any of the
Properties; (B) all liens, charges, encumbrances, claims or
restrictions on or affecting any of the Properties and the assets of
any Transaction Entity which are required to be disclosed in the
Prospectus are disclosed therein; (C) except as otherwise described in
the Prospectus, neither Transaction Entity and, to the knowledge of
the Transaction Entities, no tenant of any of the Properties is in
default under (i) any space leases (as lessor or lessee, as the case
may be) relating to the Properties, or (ii) any of the mortgages or
other security documents or other agreements encumbering or otherwise
recorded against the Properties, in each case which default would have
a material adverse effect on the applicable Property, and neither
Transaction Entity knows of any event which, but for the passage of
time or the giving of notice, or both, would constitute such a default
under any of such documents or agreements; (D) each of the Properties
complies with all applicable codes, laws and regulations (including,
without limitation, building and zoning codes, laws and regulations
and laws relating to access to the Properties), except for such
failures to comply that would not have a material adverse effect on
the business operations, use or value of such Property; and (E)
neither Transaction Entity has knowledge of any pending or threatened
condemnation proceedings, zoning change or other proceeding or action
that will in any material manner
7
adversely affect the size of, use of, improvements on, construction on
or access to the Properties.
(u) The mortgages and deeds of trust which encumber the
Properties are not convertible into equity securities of the entity
owning such Property and said mortgages and deeds of trust are not
cross-defaulted or cross-collateralized with any property other than
other Properties.
(v) The Operating Partnership and the Property Affiliates have
obtained title insurance on the fee or leasehold interests in each of
the Properties, in an amount at least equal to the greater of (A) the
mortgage indebtedness of each such Property or (B) the purchase price
of each such Property.
(w) Except as disclosed in the Prospectus and except such as in
each case would not have a material adverse effect on any Property,
Property Affiliate, or Transaction Entity or any of their
subsidiaries, taken together as a whole; (A) to the knowledge of the
Transaction Entities, after due inquiry, the operations of the
Company, the Operating Partnership, Development Corp., SP Corp., and
the Properties are in compliance with all Environmental Laws (as
defined below) and all requirements of applicable permits, licenses,
approvals and other authorizations issued pursuant to Environmental
Laws; (B) to the knowledge of the Transaction Entities, after due
inquiry, none of the Transaction Entities, the Property Affiliates or
any Property has caused or suffered to occur any Release (as defined
below) of any Hazardous Substance (as defined below) into the
Environment (as defined below) on, in, under or from any Property, and
no condition exists on, in, under or adjacent to any Property that
could result in the incurrence of liabilities under, or any violations
of, any Environmental Law or give rise to the imposition of any Lien
(as defined below), under any Environmental Law; (C) none of the
Transaction Entities or Property Affiliates 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 Property; (D) neither of the Transaction Entities
has actual knowledge of, or received any written notice from any
Governmental Authority (as defined below) claiming, any violation of
any Environmental Law or a determination to undertake and/or request
the investigation, remediation, clean-up or removal of any Hazardous
Substance released into the Environment on, in, under or from any
Property; and (E) no Property is included or, to the knowledge of the
Transaction Entities, after due inquiry, proposed for inclusion on the
National Priorities List issued pursuant to CERCLA (as defined below)
by the United States Environmental Protection Agency (the "EPA") or on
the Comprehensive Environmental Response, Compensation, and Liability
Information System database maintained by the EPA, and neither of the
Transaction Entities has actual knowledge that any Property has
otherwise been identified in a published writing by the EPA as a
potential CERCLA removal, remedial or response site or, to the
knowledge of the Transaction Entities, is included on any similar list
of potentially contaminated sites pursuant to any other Environmental
Law.
As used herein, "Hazardous Substance" shall include any hazardous
substance, hazardous waste, toxic substance, pollutant or hazardous
material, including, without limitation, oil, petroleum or any
petroleum-derived substance or waste, asbestos or asbestos-containing
materials, PCBs, pesticides, explosives, radioactive
8
materials, dioxins, urea formaldehyde insulation or any constituent of
any such substance, pollutant or waste which is subject to regulation
under any Environmental Law (including, without limitation, materials
listed in the United States Department of Transportation Optional
Hazardous Material Table, 49 C.F.R. (S) 172.101, or in the EPA's List
of Hazardous Substances and Reportable Quantities, 40 C.F.R. Part
302); "Environment" shall mean any surface water, drinking water,
ground water, land surface, subsurface strata, river sediment,
buildings, structures, and ambient, workplace and indoor and outdoor
air; "Environmental Law" shall mean the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended (42
U.S.C. (S) 9601 et seq.) ("CERCLA"), the Resource Conservation and
Recovery Act of 1976, as amended (42 U.S.C. (S) 6901, et seq.), the
Clean Air Act, as amended (42 U.S.C. (S) 7401, et seq.), the Clean
Water Act, as amended (33 U.S.C. (S) 1251, et seq.), the Toxic
Substances Control Act, as amended (15 U.S.C. (S) 2601, et seq.), the
Occupational Safety and Health Act of 1970, as amended (29 U.S.C. (S)
651, et seq.), the Hazardous Materials Transportation Act, as amended
(49 U.S.C. (S) 1801, et seq.), and all other federal, state and local
laws, ordinances, regulations, rules and orders relating to the
protection of the Environment or of human health from environmental
effects; "Governmental Authority" shall mean any federal, state or
local governmental office, agency or authority having the duty or
authority to promulgate, implement or enforce any Environmental Law;
"Lien" shall mean, with respect to any Property, any lien,
encumbrance, penalty, fine, charge, assessment, judgment or other
liability in, on or affecting such Property; and "Release" shall mean
any spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, leaching, dumping, emanating or
disposing of any Hazardous Substance into the Environment, including,
without limitation, the abandonment or discard of barrels, containers,
tanks (including, without limitation, underground storage tanks) or
other receptacles containing or previously containing any Hazardous
Substance.
(x) Each Transaction Entity and their subsidiaries, and each
Property carries, or is covered by, insurance in such amounts and
covering such risks as is adequate for the conduct of its business and
the value of such Property and as is customary for companies engaged
in similar businesses in similar industries.
(y) Each Transaction Entity owns or possesses adequate rights to
use all material patents, patent applications, trademarks, service
marks, trade names, trademark registrations, service ▇▇▇▇
registrations, copyrights and licenses necessary for the conduct of
its business and has no reason to believe that the conduct of its
business will conflict with, and has not received any notice of any
claim of conflict with, any such rights of others.
(z) Except as described in the Prospectus, there are no legal or
governmental proceedings pending to which either Transaction Entity or
their subsidiaries is a party or of which any property or assets of
either Transaction Entity or their subsidiaries is the subject which,
if determined adversely to such Transaction Entity or subsidiary,
could reasonably be expected to have a material adverse effect on the
consolidated financial position, shareholders' equity, results of
operations, business or prospects of the Company; and to the best
knowledge of the Transaction Entities, no such proceedings are
threatened or contemplated by governmental authorities or threatened
by others.
9
(aa) There are no contracts or other documents which are required
to be described in the Prospectus or filed as exhibits to the
Registration Statement by the Securities Act or by the Rules and
Regulations which have not been described in the Prospectus or filed
as exhibits to the Registration Statement or incorporated therein by
reference as permitted by the Rules and Regulations.
(ab) No relationship, direct or indirect, exists between or among
either of the Transaction Entities on the one hand, and the trustees,
officers, shareholders, customers or suppliers of the Transaction
Entities on the other hand, that is required to be described in the
Prospectus that is not so described.
(ac) No labor disturbance by the employees of either Transaction
Entity exists or, to the knowledge of the Transaction Entities, is
imminent which might be expected to have a material adverse effect on
the consolidated financial position, shareholders' equity, results of
operations, business or prospects of such Transaction Entity.
(ad) Each Transaction Entity is in compliance in all material
respects with all presently applicable provisions of the Employee
Retirement Income Security Act of 1974, as amended, including the
regulations and published interpretations thereunder ("ERISA"); no
"reportable event" (as defined in ERISA) has occurred with respect to
any "pension plan" (as defined in ERISA) for which either Transaction
Entity would have any liability; neither Transaction Entity has
incurred or expects to incur liability under (i) Title IV of ERISA
with respect to termination of, or withdrawal from, any "pension plan"
or (ii) sections 412 or 4971 of the Internal Revenue Code of 1986, as
amended, including the regulations and published interpretations
thereunder (the "Code"); and each "pension plan" for which either
Transaction Entity would have any liability that is intended to be
qualified under section 401(a) of the Code is so qualified in all
material respects and nothing has occurred, whether by action or by
failure to act, which would cause the loss of such qualification.
(ae) Each Transaction Entity and their subsidiaries has filed all
federal, state and local income and franchise tax returns required to
be filed through the date hereof and has paid all taxes due thereon,
and no material tax deficiency has been determined adversely to either
Transaction Entity or their subsidiaries which has had (nor does
either Transaction Entity have any knowledge of any tax deficiency
which, if determined adversely to it might have) a material adverse
effect on the financial position, shareholders' equity, results of
operations, business or prospects of such Transaction Entity or
subsidiary.
(af) At all times since June 16, 1994, the Company, the Operating
Partnership, Development Corp., and SP Corp. have been and upon the
sale of the Shares will continue to be, organized and operated in
conformity with the requirements for qualification of the Company as a
real estate investment trust under the Code and the proposed method of
operation of the Company, the Operating Partnership, Development Corp.
and SP Corp. will enable the Company to continue to meet the
requirements for qualification and taxation as a real estate
investment trust under the Code.
10
(ag) Since the date as of which information is given in the
Prospectus through the date hereof, and except as may otherwise be
disclosed or contemplated in the Prospectus, neither Transaction
Entity has (i) issued or granted any securities, (ii) incurred any
liability or obligation, direct or contingent, other than liabilities
and obligations which were incurred in the ordinary course of
business, (iii) entered into any transaction not in the ordinary
course of business nor (iv) declared or paid any dividend on its
capital stock (other than regular quarterly dividends).
(ah) Each Transaction Entity and their subsidiaries (i) makes and
keeps accurate books and records and (ii) maintains internal
accounting controls which provide reasonable assurance that (A)
transactions are executed in accordance with management's
authorization, (B) transactions are recorded as necessary to permit
preparation of its financial statements and to maintain accountability
for its assets, (C) access to its assets is permitted only in
accordance with management's authorization and (D) the reported
accountability for its assets is compared with existing assets at
reasonable intervals.
(ai) No Transaction Entity or any of their subsidiaries (i) is in
violation of its charter, by-laws, certificate of limited partnership,
agreement of limited partnership or other similar organizational
document, (ii) is in default in any material respect, and no event has
occurred which, with notice or lapse of time or both, would constitute
such a default, in the due performance or observance of any term,
covenant or condition contained in any material indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to
which it is a party or by which it is bound or to which any of the
Properties or any of its other properties or assets is subject or
(iii) is in violation in any material respect of any law, ordinance,
governmental rule, regulation or court decree to which it or the
Properties or any of its other properties or assets may be subject or
has failed to obtain any material license, permit, certificate,
franchise or other governmental authorization or permit necessary to
the ownership of the Properties or any of its other properties or
assets or to the conduct of its business.
(aj) Neither Transaction Entity, nor any trustee, officer, agent,
employee or other person associated with or acting on behalf of either
Transaction Entity, has used any corporate funds for any unlawful
contribution, gift, entertainment or other unlawful expense relating
to political activity; made any direct or indirect unlawful payment to
any foreign or domestic government official or employee from corporate
funds; violated or is in violation of any provision of the Foreign
Corrupt Practices Act of 1977; or made any bribe, rebate, payoff,
influence payment, kickback or other unlawful payment.
(ak) Neither Transaction Entity or any of their subsidiaries is
an "investment company" within the meaning of such term under the
Investment Company Act of 1940 and the rules and regulations of the
Commission thereunder.
(al) The Shares will be listed on the New York Stock Exchange on
the First Delivery Date.
11
(am) Other than this Agreement and as set forth in the Prospectus
under the heading "Underwriting," there are no contracts, agreements
or understandings between either Transaction Entity and any person
that would give rise to a valid claim against either Transaction
Entity or any Underwriter for a brokerage commission, finder's fee or
other like payment with respect to the consummation of the
transactions contemplated by this Agreement.
(an) Each Transaction Entity has complied with all provisions of
Florida Statutes (S) 517.075, relating to issuers doing business with
Cuba.
2. Purchase of the Shares by the Underwriters. On the basis of the
representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, the Company agrees to sell 7,500,000 Firm Shares,
to the several Underwriters and each of the Underwriters, severally and not
jointly, agrees to purchase the number of Firm Shares set forth opposite that
Underwriter's name in Schedule 1 hereto. The respective purchase obligations of
the Underwriters with respect to the Firm Shares shall be rounded among the
Underwriters to avoid fractional shares, as the Underwriters may determine.
In addition, the Company grants to the Underwriters an option to purchase
up to 1,125,000 Option Shares. Such option is granted solely for the purpose of
covering over-allotments in the sale of Firm Shares and is exercisable as
provided in Section 4 hereof. Option Shares shall be purchased severally for
the account of the Underwriters in proportion to the number of Firm Shares set
forth opposite the names of such Underwriters in Schedule 1 hereto. The
respective purchase obligations of each Underwriter with respect to the Option
Shares shall be adjusted by the Underwriters so that no Underwriter shall be
obligated to purchase Option Shares other than in 100-share amounts. The price
of both the Firm Shares and any Option Shares shall be $23.28 per share.
The Company shall not be obligated to deliver any of the Shares to be
delivered on the First Delivery Date or the Second Delivery Date (as hereinafter
defined), as the case may be, except upon payment for all the Shares to be
purchased on such Delivery Date as provided herein.
3. Offering of Shares by the Underwriters. The several Underwriters
propose to offer the Firm Shares for sale upon the terms and conditions set
forth in the Prospectus.
4. Delivery of and Payment for the Shares. Delivery of and payment
for the Firm Shares shall be made at the office of ▇▇▇▇▇▇ & ▇▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, at 10:00 A.M., New York City time, on the
third full business day following the date of this Agreement or on the fourth
full business day if this Agreement is executed after the daily closing time of
the New York Stock Exchange (unless postponed in accordance with the provisions
of Section 9 hereof), or at such other date or place as shall be determined by
agreement between the Underwriters and the Company. This date and time are
sometimes referred to as the "First Delivery Date." On the First Delivery Date,
the Company shall deliver or cause to be delivered certificates representing the
Firm Shares to the Underwriters for the account of each Underwriter against
payment to or upon the order of the Company of the purchase price by certified
or official bank check or checks payable in same day funds or, at the discretion
of the Company, by wire transfer in same day funds. Time shall be of the
essence, and delivery at the time and place specified pursuant to this Agreement
is a further condition of the obligation of each Underwriter hereunder. Upon
delivery, the Firm Shares shall be registered in such names and in such
denominations as the Underwriters shall request in writing not less
12
than two full business days prior to the First Delivery Date. For the purpose
of expediting the checking and packaging of the certificates for the Firm
Shares, the Company shall make the certificates representing the Firm Shares
available for inspection by the Underwriters in New York, New York, not later
than 2:00 P.M., New York City time, on the business day prior to the First
Delivery Date.
At any time on or before the thirtieth day after the date of this
Agreement, the option granted in Section 2 may be exercised in whole or in part
by written notice being given to the Company by the Underwriters. Such notice
shall set forth the aggregate number of Option Shares as to which the option is
being exercised, the names in which the Option Shares are to be registered, the
denominations in which the Option Shares are to be issued and the date and time,
as determined by the Underwriters, when the Option Shares are to be delivered;
provided, however, that this date and time shall not be earlier than the First
Delivery Date nor earlier than the second business day after the date on which
the option shall have been exercised nor later than the fifth business day after
the date on which the option shall have been exercised. The date and time the
Option Shares are delivered are sometimes referred to as the "Second Delivery
Date" and the First Delivery Date and the Second Delivery Date are sometimes
each referred to as a "Delivery Date."
Delivery of and payment for the Option Shares shall be made at the place
specified in the first sentence of the first paragraph of this Section 4 (or at
such other place as shall be determined by agreement between the Underwriters
and the Company) at 10:00 A.M., New York City time, on the Second Delivery Date.
On the Second Delivery Date, the Company shall deliver or cause to be delivered
the certificates representing the Option Shares to the Underwriter for the
account of each Underwriter against payment to or upon the order of the Company
of the purchase price by certified or official bank check or checks payable in
same day funds or, at the discretion of the Company, by wire transfer in same
day funds. Time shall be of the essence, and delivery at the time and place
specified pursuant to this Agreement is a further condition of the obligation of
each Underwriter hereunder. Upon delivery, the Option Shares shall be
registered in such names and in such denominations as the Underwriters shall
request in the aforesaid written notice. For the purpose of expediting the
checking and packaging of the certificates for the Option Shares, the Company
shall make the certificates representing the Option Shares available for
inspection by the Underwriters in New York, New York, not later than 2:00 P.M.,
New York City time, on the business day prior to the Second Delivery Date.
5. Further Agreements of the Transaction Entities. Each of the
Transaction Entities jointly and severally agrees:
(a) To prepare the Prospectus in a form approved by the
Underwriters and to file such Prospectus pursuant to Rule 424(b) under the
Securities Act not later than the Commission's close of business on the
second business day following the execution and delivery of this Agreement
or, if applicable, such earlier time as may be required by Rule 430A(a)(3)
under the Securities Act; to make no further amendment or any supplement to
the Registration Statement or to the Prospectus except in accordance with
Section 5(e) hereof; to advise the Underwriters, promptly after it receives
notice thereof, of the time when any amendment to the Registration
Statement has been filed or becomes effective or any supplement to the
Prospectus or any amended Prospectus has been filed and to furnish the
Underwriters with copies thereof; to advise the Underwriters, promptly
after it receives notice thereof, of the issuance by the Commission of any
stop order or of any order preventing or suspending the use of any
Preliminary
13
Prospectus or the Prospectus, of the suspension of the qualification of the
Shares for offering or sale in any jurisdiction, of the initiation or
threatening of any proceeding for any such purpose, or of any request by
the Commission for the amending or supplementing of the Registration
Statement or the Prospectus or for additional information; and, in the
event of the issuance of any stop order or of any order preventing or
suspending the use of any Preliminary Prospectus or the Prospectus or
suspending any such qualification, to use promptly its best efforts to
obtain its withdrawal;
(b) To furnish promptly to the Underwriters and to counsel for
the Underwriters such number of conformed copies as the Underwriters shall
reasonably request of the Registration Statement as originally filed with
the Commission, and each amendment thereto filed with the Commission,
including all consents and exhibits filed therewith or incorporated by
reference therein and all documents incorporated by reference therein;
(c) To deliver promptly to the Underwriters such number of the
following documents as the Underwriters shall reasonably request: (i)
conformed copies of the Registration Statement as originally filed with the
Commission and each amendment thereto (in each case excluding exhibits
other than this Agreement) and (ii) each Preliminary Prospectus, the
Prospectus and any amended or supplemented Prospectus; and, if the delivery
of a prospectus is required at any time after the applicable Effective Time
in connection with the offering or sale of the Shares or any other
securities relating thereto and if at such time any events shall have
occurred as a result of which the Prospectus as then amended or
supplemented would include an untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made when
such Prospectus is delivered, not misleading, or, if for any other reason
it shall be necessary to amend or supplement the Prospectus in order to
comply with the Securities Act or the Exchange Act, to notify the
Underwriters and, upon their request, to file such document and to prepare
and furnish without charge to each Underwriter and to any dealer in
securities as many copies as the Underwriters may from time to time
reasonably request of an amended or supplemented Prospectus which will
correct such statement or omission or effect such compliance. The
aforementioned documents furnished to the Underwriters will be identical to
the electronically transmitted copies thereof filed with the Commission
pursuant to ▇▇▇▇▇, except to the extent permitted by Regulation S-T.
(d) To file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the
Prospectus that may, in the judgment of the Company or counsel for the
Underwriters, be required by the Securities Act or requested by the
Commission;
(e) Prior to filing with the Commission any amendment to the
Registration Statement or supplement to the Prospectus or any Prospectus
pursuant to Rule 424 of the Rules and Regulations, to furnish a copy
thereof to the Underwriters and counsel for the Underwriters within a
reasonable period of time prior to the filing thereof, and that filing
thereof shall not occur if the Underwriters shall have objected in good
faith thereto;
14
(f) The Company will make generally available to its security
holders as soon as practicable but no later than 60 days after the close of
the period covered thereby an earnings statement (in form complying with
the provisions of Section 11(a) of the Securities Act and Rule 158 of the
Rules and Regulations), which need not be certified by independent
certified public accountants unless required by the Securities Act or the
Rules and Regulations, covering a twelve-month period commencing after the
"effective date" (as defined in said Rule 158) of the Registration
Statement;
(g) For a period of five years following the applicable Effective
Date, to furnish to the Underwriters copies of all materials furnished by
the Company to its shareholders and all public reports and all reports and
financial statements furnished by the Company to the principal national
securities exchange upon which the Common Shares may be listed pursuant to
requirements of or agreements with such exchange or to the Commission
pursuant to the Exchange Act or any rule or regulation of the Commission
thereunder;
(h) Promptly from time to time to take such action as the
Underwriters may reasonably request to qualify the Shares for offering and
sale under the securities, real estate syndication or Blue Sky laws of such
jurisdictions as the Underwriters may request and to comply with such laws
so as to permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the distribution
of the Shares, except that the Company shall not be required in connection
therewith to qualify as a foreign corporation or to execute a consent to
service of process in any jurisdiction;
(i) For a period of 90 days from the date of the Prospectus, the
Company will not, directly or indirectly, offer for sale, contract to sell,
sell or otherwise dispose of any Common Shares or securities convertible
into or exercisable or exchangeable for Common Shares in an underwritten
offering to the public (other than the Shares and any Units or Common
Shares that may be issued in connection with any acquisition of a
property), or sell or grant options, rights or warrants with respect to any
Common Shares (except pursuant to customary compensation arrangements and
employee benefit plans), without the prior written consent of ▇▇▇▇▇▇
Brothers Inc.; and to cause ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ III, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇, ▇▇., ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, who each own Units
or Common Shares, to furnish to the Underwriters, prior to the First
Delivery Date, a letter or letters, in form and substance satisfactory to
counsel for the Underwriters, pursuant to which each such person shall
agree not to, directly or indirectly, offer for sale, sell, contract to
sell or otherwise dispose of any Units or Common Shares for a period of 90
days from the date of the Prospectus, without the prior written consent of
▇▇▇▇▇▇ Brothers Inc. in each case;
(j) The Company will file with the New York Stock Exchange, Inc.
all documents and notices required by such exchange of companies that have
securities listed on such exchange and will use its best efforts to
maintain the listing of the Common Shares thereon;
15
(k) To apply the net proceeds from the sale of the Shares in
accordance with the description set forth in the Prospectus under the
caption "Use of Proceeds";
(l) To take such steps as shall be necessary to ensure that
neither the Company nor any of its subsidiaries shall become an "investment
company" within the meaning of such term under the Investment Company Act
of 1940 and the rules and regulations of the Commission thereunder;
(m) Except as stated in this Agreement and in the Preliminary
Prospectus and Prospectus, neither Transaction Entity has taken, nor will
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 Shares to facilitate the sale or resale of the
Shares;
(n) The Company will use its best efforts to continue to meet the
requirements to qualify as a "real estate investment trust" under the Code;
and
(o) If this Agreement shall be terminated by the Underwriters
because of any failure or refusal on the part of the Transaction Entities
to comply with the terms or fulfill any of the conditions of this
Agreement, the Transaction Entities jointly and severally agree to
reimburse the Underwriters for all reasonable out-of-pocket expenses
(including fees and expenses of counsel for the Underwriters) incurred by
the Underwriters in connection herewith.
6. Expenses. The Transaction Entities jointly and severally agree
to pay (a) the costs incident to the authorization, issuance, sale and delivery
of the Shares and any taxes payable in that connection; (b) the costs incident
to the preparation, printing and filing under the Securities Act of the
Registration Statement and any amendments and exhibits thereto; (c) the costs of
distributing the Registration Statement as originally filed and each amendment
thereto and any post-effective amendments thereof (including, in each case,
exhibits), any Preliminary Prospectus, the Prospectus and any amendment or
supplement to the Prospectus, all as provided in this Agreement; (d) the costs
of producing and distributing this Agreement and any other related documents in
connection with the offering, purchase, sale and delivery of the Shares; (f) the
filing fees incident to securing any required review by the National Association
of Securities Dealers, Inc. of the terms of sale of the Shares; (g) any
applicable listing or other fees; (h) the fees and expenses of qualifying the
Shares under the securities laws of the several jurisdictions as provided in
Section 5(i) and of preparing, printing and distributing a Blue Sky Memorandum
(including related fees and expenses of counsel to the Underwriters); and (j)
all other costs and expenses incident to the performance of the obligations of
the Transaction Entities under this Agreement; provided that, except as provided
in this Section 6 and in Section 12, the Underwriters shall pay their own costs
and expenses, including the costs and expenses of their counsel, any transfer
taxes on the Shares which they may sell and the expenses of advertising any
offering of the Shares made by the Underwriters.
7. Conditions of Underwriters' Obligations. The respective
obligations of the Underwriters hereunder are subject to the accuracy, when made
and on each Delivery Date, of the representations and warranties of the
Transaction Entities contained herein, to the performance by each Transaction
Entity of its obligations hereunder, and to each of the following additional
terms and conditions:
16
(a) If, at the time this Agreement is executed and delivered, it
is necessary for the Registration Statement or a post-effective amendment
thereto to be declared effective before the offering of the Shares may
commence, the Registration Statement or such post-effective amendment shall
have become *-effective not later than 5:30 P.M., New York City time, on
the date hereof, or at such later date and time as shall be consented to in
writing by you, and all filings, if any, required to have been made by such
time by Rules 424 and 430A under the Rules and Regulations shall have been
timely made; no stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceeding for that purpose shall
have been instituted or, to the knowledge of the Transaction Entities or
any Underwriter, threatened by the Commission, and any request of the
Commission for additional information (to be included in the Registration
Statement or the Prospectus or otherwise) shall have been complied with to
the satisfaction of the Underwriters.
(b) Subsequent to the effective date of this Agreement, there
shall not have occurred (i) any change, or any development involving a
prospective change, in or affecting the condition, financial or otherwise,
business, properties, net worth, or results of operations of either
Transaction Entity or any of their subsidiaries or any Property not
contemplated by the Prospectus, which in the opinion of the Underwriters,
would materially adversely affect the market for the Shares, or (ii) any
event or development relating to or involving either Transaction Entity, or
any partner, officer, director or trustee of either Transaction Entity,
which makes any statement of a material fact made in the Prospectus untrue
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 Securities 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,
materially adversely affect the market for the Shares.
(c) All corporate proceedings and other legal matters incident to
the authorization, form and validity of this Agreement, the Shares, the
Registration Statement and the Prospectus, and all other legal matters
relating to this Agreement and the transactions contemplated hereby shall
be reasonably satisfactory in all material respects to counsel for the
Underwriters, and the Company shall have furnished to such counsel all
documents and information that they may reasonably request to enable them
to pass upon such matters.
(d) (A) Wolf, Block, ▇▇▇▇▇▇ and ▇▇▇▇▇-▇▇▇▇▇ shall have furnished
to the Underwriters its written opinion, as counsel to the Company,
addressed to the Underwriters and dated such Delivery Date, in form and
substance reasonably satisfactory to the Underwriters, to the effect that:
(i) The Company is in good standing as a foreign trust or
corporation in those jurisdictions listed in such opinion.
(ii) The Operating Partnership has been duly formed and
is validly existing as a limited partnership under the laws of
the Commonwealth of Pennsylvania, is duly qualified to do
business as a
17
foreign limited partnership in Delaware, Florida, Maryland, New
Jersey, North Carolina, Tennessee, Texas and Virginia, and has
all partnership power and authority necessary to own or hold its
properties, to conduct the business in which it is engaged as
described in the Registration Statement and the Prospectus, and
to enter into and perform its obligations under this Agreement.
The Company is the sole general partner of the Operating
Partnership. The Operating Partnership Agreement is in full
force and effect, and the aggregate percentage interests of the
Company and the limited partners in the Operating Partnership are
as set forth in the Prospectus.
(iii) Development Corp. has been duly formed and is
validly existing as a corporation in good standing under the laws
of the Commonwealth of Pennsylvania, is duly qualified to do
business and is in good standing as a foreign corporation in
Delaware, Florida, Maryland, New Jersey and North Carolina, and
has all corporate power and authority necessary to own or hold
its properties and to conduct the business in which it is engaged
as described in the Registration Statement and the Prospectus.
All of the issued and outstanding capital stock of Development
Corp. has been duly authorized and validly issued and is fully
paid and non-assessable, has been offered and sold in compliance
with all applicable laws (including, without limitation, federal
or state securities laws) and all of the capital stock of
Development Corp. owned by the Operating Partnership, as
described in the Prospectus, is owned free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim,
restriction or equities.
(iv) SP Corp. has been duly formed and is validly
existing as a corporation in good standing under the laws of the
Commonwealth of Pennsylvania and has all corporate and authority
necessary to own or hold its properties and to conduct the
business in which it is engaged as described in the Registration
Statement and the Prospectus. All of the issued and outstanding
capital stock of SP Corp. has been duly authorized and validly
issued and is fully paid and non-assessable, is owned by the
Company free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim, restriction or equities and has
been offered and sold in compliance with all applicable laws
(including, without limitation, federal or state securities
laws).
(v) Each of the Property Affiliates has been duly
organized and is validly existing as a limited partnership in
good standing under the laws of the Commonwealth of Pennsylvania,
is duly qualified to do business and is in good standing in each
jurisdiction in which its ownership or lease of property or the
conduct of its business requires such qualification, and has all
partnership power and authority necessary to own or hold its
properties and to conduct the business in which it is engaged.
Except as set forth in the Prospectus, all of the partnership
interests of each Property Affiliate have been duly and validly
authorized and issued, are fully paid and non-assessable and all
of the partnership interests owned directly or indirectly by the
Company and the Operating Partnership, as
18
described in the Prospectus, are owned free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim,
restriction or equities.
(vi) (A) This Agreement has been duly and validly
authorized, executed and delivered by the Operating Partnership,
and has been duly and validly executed and delivered by the
Company, and assuming due authorization, execution and delivery
by the Underwriters and due authorization by the Company, is a
valid and binding agreement of the Operating Partnership; and (B)
the Operating Partnership Agreement and the partnership agreement
of each Property Affiliate, have been duly and validly
authorized, executed and delivered by each Transaction Entity
party thereto and are valid and binding agreements of the parties
thereto, enforceable against such parties in accordance with
their terms.
(vii) To the best knowledge of such counsel, the
execution, delivery and performance of this Agreement by each of
the Transaction Entities and the consummation of the transactions
contemplated hereby will not (i) conflict with or result in a
breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which
either of the Transaction Entities or their subsidiaries is a
party or by which either of the Transaction Entities or their
subsidiaries is bound or to which any of the Properties or other
assets of either of the Transaction Entities or their
subsidiaries is subject, or (ii) conflict with or result in any
violation of the provisions of any statute or any order, rule or
regulation of any court or governmental agency or body having
jurisdiction over either of the Transaction Entities or their
subsidiaries or any of their properties or assets; and except for
the registration of the Shares under the Securities Act and such
consents, approvals, authorizations, registrations or
qualifications as may be required under the Exchange Act and
applicable state securities laws in connection with the purchase
and distribution of the Shares by the Underwriters, no consent,
approval, authorization or order of, or filing or registration
with, any such court or governmental agency or body is required
for the execution, delivery and performance of this Agreement by
the Transaction Entities and the consummation of the transactions
contemplated hereby.
(viii) The execution, delivery and performance of this
Agreement by each of the Transaction Entities and the
consummation of the transactions contemplated hereby will not
conflict with or result in any violation of the provisions of the
charter, by-laws, certificate of limited partnership or agreement
of limited partnership of either of the Transaction Entities or
their subsidiaries.
(ix) To the best knowledge of such counsel, other than
as set forth in the Prospectus and other than rights of persons
whose securities are already registered under the Securities Act,
there are no contracts, agreements or understandings between the
Company and any person granting such person the right to require
the Company to file a registration statement under the Securities
Act with respect to any securities of the Company owned or to be
owned by such person or to
19
require the Company to include such securities in the securities
registered pursuant to the Registration Statement or in any
securities being registered pursuant to any other registration
statement filed by the Company under the Securities Act.
(x) To the best knowledge of such counsel, there are no
legal or governmental proceedings pending to which either
Transaction Entity or their subsidiaries is a party or of which
any property or assets of either Transaction Entity or their
subsidiaries is the subject which are not disclosed in the
Prospectus and which, if determined adversely to such Transaction
Entity or subsidiary, might reasonably be expected to have a
material adverse effect on the consolidated financial position,
shareholders' equity, results of operations, business or
prospects of the Company; and to the best knowledge of such
counsel no such proceedings are threatened or contemplated by
governmental authorities or threatened by others.
(xi) To the best knowledge of such counsel, there are no
contracts or other documents which are required to be described
in the Prospectus or filed as exhibits to the Registration
Statement by the Securities Act or by the Rules and Regulations
which have not been described in the Prospectus or filed as
exhibits to the Registration Statement or incorporated therein by
reference as permitted by the Rules and Regulations.
(xii) To the best knowledge of such counsel, no
relationship, direct or indirect, exists between or among either
of the Transaction Entities on the one hand, and the trustees,
officers, shareholders, customers or suppliers of the Transaction
Entities on the other hand, which is required to be described in
the Prospectus which is not so described.
(xiii) To the best knowledge of such counsel, each
Transaction Entity is in compliance in all material respects with
all presently applicable provisions of ERISA; to the best
knowledge of such counsel, no "reportable event" (as defined in
ERISA) has occurred with respect to any "pension plan" (as
defined in ERISA) for which either Transaction Entity would have
any liability; neither Transaction Entity has incurred or to the
best knowledge of such counsel, expects to incur, liability under
(i) Title IV of ERISA with respect to termination of, or
withdrawal from, any "pension plan" or (ii) section 412 or 4971
of the Code; and each "pension plan" for which either Transaction
Entity would have any liability that is intended to be qualified
under section 401(a) of the Code is so qualified in all material
respects and nothing has occurred, whether by action or by
failure to act, which would cause the loss of such qualification.
(xiv) No Transaction Entity or Property Affiliate is in
violation of its charter, by-laws, certificate of limited
partnership, agreement of limited partnership, or other similar
organizational document, or, to the best knowledge of such
counsel, has a default been asserted in any respect, and it has
not been asserted that any event has occurred
20
which, with notice or lapse of time or both, would constitute
such a default, in the due performance or observance of any term,
covenant or condition contained in any material indenture,
mortgage, deed of trust, loan agreement or other material
agreement or instrument to which it is a party or by which it is
bound or to which any of the Properties or any of its other
properties or assets is subject.
(xv) No consent, approval, authorization or other order
of, or registration or filing with, any court, regulatory body,
administrative agency or other governmental body, agency, or
official is required on the part of the Company (except as have
been obtained under the Securities Act and the Exchange Act or
such as may be required under state securities, real estate
syndication or Blue Sky laws governing the purchase and
distribution of the Shares) for the valid issuance and sale of
the Shares to the Underwriters as contemplated by this Agreement.
(xvi) Neither Transaction Entity or their subsidiaries
is an "investment company" within the meaning of such term under
the Investment Company Act of 1940 and the rules and regulations
of the Commission thereunder. The Shares have been approved for
listing on the New York Stock Exchange upon notice of issuance.
(xvii) The documents incorporated or deemed to be
incorporated by reference in the Prospectus pursuant to Item 12
of Form S-3 under the Securities Act (other than the financial
statements and related schedules and financial information and
data included therein, as to which no opinion need be rendered),
at the time they were filed with the Commission, complied and
will comply as to form in all material respects with the
requirements of the Exchange Act and the rules and regulations
thereunder.
(xviii) The Registration Statement was declared
effective under the Securities Act as of the date and time
specified in such opinion, the Prospectus was filed with the
Commission pursuant to the subparagraph of Rule 424(b) of the
Rules and Regulations specified in such opinion on the date
specified therein and, to the best knowledge of such counsel, no
stop order suspending the effectiveness of the Registration
Statement has been issued and, to the best knowledge of such
counsel, no proceeding for that purpose is pending or threatened
by the Commission.
(xix) The Registration Statement and the Prospectus and
any further amendments or supplements thereto made by the Company
prior to such Delivery Date (other than the financial statements
and related schedules and other financial and statistical data
included therein, as to which such counsel need express no
opinion) comply as to form in all material respects with the
requirements of the Securities Act and the Rules and Regulations.
(xx) The statements contained in the Prospectus under the
captions "Risk Factors," "The Properties," "Management," "Federal
Income Tax Considerations for Shareholders," "Description of Debt
Securities,"
21
"Description of Preferred Shares," "Description of Warrants," and
"Federal Income Tax Considerations with Respect to the Trust and
the Operating Partnership," insofar as those statements are
descriptions of contracts, agreements or other legal documents,
or they describe federal statutes, rules and regulations, and
except to the extent such statements are statistics or
calculations constitute a fair summary thereof.
In rendering such opinion, such counsel may (i) state that its opinion is
limited to matters governed by the Federal laws of the United States of America,
the laws of the Commonwealth of Pennsylvania and the laws of the State of
Maryland; (ii) state that its opinion does not address (A) Federal Reserve Board
margin regulations; (B) Federal or state antitrust and unfair competition laws
and regulations; (C) Local Laws (as defined in The Legal Opinion Accord of the
ABA Section of Business Law (1991); (D) compliance with fiduciary duty
requirements; (E) Federal and state racketeering laws and regulations; (F)
Federal and state health and safety laws and regulations; and (G) Federal and
state laws, regulations and policies concerning (x) national and local
emergency, (y) possible judicial deference to acts of foreign states, and (z)
criminal and civil forfeiture laws; and (iii) in giving the opinion referred to
in subclause (B) in Section 7(d)(A)(vi), state that such opinion with respect to
the enforceability of such documents may be limited by bankruptcy, fraudulent
conveyance, insolvency, reorganization, moratorium, and other laws relating to
or affecting creditors' rights generally and by general equitable principles.
Such counsel shall also have furnished to the Underwriters a written statement,
addressed to the Underwriters and dated such Delivery Date, in form and
substance satisfactory to the Underwriters, to the effect that (x) such counsel
has acted as counsel to the Company in connection with the preparation of the
Registration Statement and the Prospectus, and (y) based on the foregoing, no
facts have come to the attention of such counsel which lead it to believe that
the Registration Statement, as of the Effective Date, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein not
misleading, or that the Prospectus contains any untrue statement of a material
fact or omits to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. The foregoing opinion and statement
may be qualified by a statement to the effect that such counsel does not assume
any responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus except to the extent
of the opinion contained in Section 7(d)(A)(ixx), and may state that such
counsel expresses no belief with respect to the financial statements and notes
thereto and other financial and statistical data included or incorporated by
reference in, or omitted from, the Registration Statement or the Prospectus.
(B) ▇▇▇▇▇▇▇▇ & Green LLC shall have furnished to the
Underwriters its written opinion, as Maryland counsel to the Company, addressed
to the Underwriters and dated such Delivery Date, in form and substance
reasonably satisfactory to the Underwriters, to the effect that:
(i) The Company has been duly formed and is validly existing
as a real estate investment trust in good standing under and by virtue
of the laws of the State of Maryland, is in good standing with the
22
State Department of Assessments and Taxation of Maryland and as a
foreign trust or corporation in those jurisdictions listed in
such opinion, and has all trust power and authority necessary to
own or hold its properties and to conduct the business in which
it is engaged as described in the Registration Statement and the
Prospectus, and to enter into and perform its obligations under
this Agreement.
(ii) The Company has an authorized capitalization as set
forth in the Prospectus under the caption "Capitalization," and
all of the issued shares of beneficial interest of the Company
(other than the Shares) have been duly and validly authorized and
issued, are fully paid and non-assessable and conform in all
material respects to the description thereof contained in the
Prospectus.
(iii) The Shares have been duly and validly authorized and,
when issued and delivered against payment therefor as provided
herein, will be duly and validly issued, fully paid and non-
assessable. Upon payment of the purchase price and delivery of
the Shares in accordance herewith, each of the Underwriters will
receive good, valid and, subject to the excess share restrictions
set forth in Article VII of the Company's Declaration of Trust,
marketable title to the Shares, free and clear of all security
interests, mortgages, pledges, liens, encumbrances, claims,
restrictions and equities. The terms of the Shares conform in
all material respects to all statements and descriptions related
thereto contained in the Prospectus. The form of the
certificates to be used to evidence the Shares are in due and
proper form and comply with all applicable legal requirements.
The issuance of the Shares is not subject to any preemptive or
other similar rights arising under the Declaration of Trust or
by-laws of the Company, Title 8 of the Corporations and
Associations Article of the Annotated Code of Maryland, as
amended, or any agreement or other instrument to which the
Company is a party known to such counsel.
(iv) This Agreement has been duly and validly authorized,
executed and delivered by the Company, and assuming due
authorization, execution and delivery by the Underwriters and the
Operating Partnership, is a valid and binding agreement of the
Company.
(v) To the knowledge of such counsel, the execution,
delivery and performance of this Agreement by the Company and the
consummation of the transactions contemplated hereby will not
conflict with or result in any violation of the provisions of any
statute or any order, rule or regulation of any court or
governmental agency or body of the State of Maryland that has
jurisdiction over the Company or any of its properties or assets.
(vi) The execution, delivery and performance of this
Agreement by the Company and the consummation of the transactions
contemplated hereby will not conflict with or result in any
violation of the provisions of the Declaration of Trust or by-
laws of the Company.
23
(vii) To the knowledge of such counsel, there are no legal
or governmental proceedings pending to which the Company is a
party or of which any property or assets of the Company is the
subject which are not disclosed in the Prospectus and which, if
determined adversely to the Company, might reasonably be expected
to have a material adverse effect on the consolidated financial
position, shareholders' equity, results of operations, business
or prospects of the Company; and to the best knowledge of such
counsel no such proceedings are threatened or contemplated by
governmental authorities or threatened by others.
(viii) No consent, approval, authorization or other order
of, or registration or filing with, any court, regulatory body,
administrative agency or other governmental body, agency, or
official in the State of Maryland is required on the part of the
Company (except as may be required under state securities) for
the valid issuance and sale of the Shares to the Underwriters as
contemplated by this Agreement.
Such counsel shall state that ▇▇▇▇▇▇ & ▇▇▇▇▇, counsel for the
Underwriters, may rely on its opinion.
(e) The Underwriters shall have received from ▇▇▇▇▇▇ & ▇▇▇▇▇,
counsel for the Underwriters, such opinion or opinions, dated such
Delivery Date, with respect to the issuance and sale of the Shares,
the Registration Statement, the Prospectus and other related matters
as the Underwriters may reasonably require, and the Company shall have
furnished to such counsel such documents as they reasonably request
for the purpose of enabling them to pass upon such matters.
(f) At the time of execution of this Agreement, the Underwriters
shall have received from Ernst & Young LLP a letter, in form and
substance satisfactory to the Underwriters, addressed to the
Underwriters and dated the date hereof (i) confirming that they are
independent public accountants within the meaning of the Securities
Act and are in compliance with the applicable requirements relating to
the qualification of accountants under Rule 2-01 of Regulation S-X of
the Commission, and (ii) stating, as of the date hereof (or, with
respect to matters involving changes or developments since the
respective dates as of which specified financial information is given
in, or incorporated by reference in, the Prospectus, as of a date not
more than five days prior to the date hereof), the conclusions and
findings of such firm with respect to the financial information and
other matters ordinarily covered by accountants' "comfort letters" to
underwriters in connection with registered public offerings.
(g) With respect to the letter of Ernst & Young LLP referred to
in the preceding paragraph and delivered to the Underwriters
concurrently with the execution of this Agreement (the "initial
letter"), the Company shall have furnished to the Underwriters a
letter (the "bring-down letter") of such accountants, addressed to the
Underwriters and dated such Delivery Date (i) confirming that they are
independent public accountants within the meaning of the Securities
Act and are in compliance with the applicable requirements relating to
the qualification of accountants under Rule 2-01 of Regulation S-X of
the Commission, (ii) stating, as of the date of the bring-down letter
(or, with respect to matters involving changes or developments since
the respective dates as of which specified financial
24
information is given in the Prospectus, as of a date not more than
five days prior to the date of the bring-down letter), the conclusions
and findings of such firm with respect to the financial information
and other matters covered by the initial letter and (iii) confirming
in all material respects the conclusions and findings set forth in the
initial letter.
(h) The Transaction Entities shall have furnished to the
Underwriters a certificate, dated such Delivery Date, of the Chairman
of the Board, Chief Executive Officer, President or a Vice President
of the Company and the chief financial officer of the Company (in each
case, for the Company and for the Company as general partner of the
Operating Partnership) stating that:
(i) The representations, warranties and agreements of the
Transaction Entities in Section 1 are true and correct as of such
Delivery Date; the Transaction Entities complied with all of
their agreements contained herein; and the conditions set forth
in Sections 7(a) and 7(i) have been fulfilled; and
(ii) They have carefully examined the Registration Statement
and the Prospectus and, in their opinion (A) as of the applicable
Effective Date, the Registration Statement and Prospectus did not
include any untrue statement of a material fact and did not omit
to state a material fact required to be stated therein or
necessary to make the statements therein not misleading (with
respect to the Prospectus, in light of the circumstances in which
they were made), and (B) since the applicable Effective Date no
event has occurred which should have been set forth in a
supplement or amendment to the Registration Statement or the
Prospectus.
(i) (i) None of the Transaction Entities or their subsidiaries or
any Property shall have sustained since the date of the latest audited
financial statements included in the Prospectus any loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus or (ii) since such
date there shall not have been any change in the capital stock or
long-term debt of either Transaction Entity or any change, or any
development involving a prospective change, in or affecting any
Property Affiliate or Property or the general affairs, management,
financial position, shareholders' equity or results of operations of
either Transaction Entity, otherwise than as set forth or contemplated
in the Prospectus, the effect of which, in any such case described in
clause (i) or (ii), is, in the judgment of the Underwriters, so
material and adverse as to make it impracticable or inadvisable to
proceed with the public offering or the delivery of the Shares being
delivered on such Delivery Date on the terms and in the manner
contemplated in the Prospectus.
(j) Subsequent to the execution and delivery of this Agreement
there shall not have occurred any of the following: (i) trading in
securities generally on the New York Stock Exchange or the American
Stock Exchange or in the over-the-counter market, or trading in any
securities of the Company on any exchange or in the over-the-counter
market, shall have been suspended or minimum prices
25
shall have been established on any such exchange or such market by the
Commission, by such exchange or by any other regulatory body or
governmental authority having jurisdiction, (ii) a banking moratorium
shall have been declared by Federal or state authorities, (iii) the
United States shall have become engaged in hostilities, there shall
have been an escalation in hostilities involving the United States or
there shall have been a declaration of a national emergency or war by
the United States or (iv) there shall have occurred such a material
adverse change in general economic, political or financial conditions
(or the effect of international conditions on the financial markets in
the United States shall be such) as to make it, in the judgment of a
majority in interest of the several Underwriters, impracticable or
inadvisable to proceed with the public offering or delivery of the
Shares being delivered on such Delivery Date on the terms and in the
manner contemplated in the Prospectus.
(k) The New York Stock Exchange, Inc. shall have approved the
Shares for listing, subject only to official notice of issuance.
(l) The Transaction Entities shall not have failed at or prior to
such Delivery Date to have performed or complied with any of their
agreements herein contained and required to be performed or complied
with by them hereunder at or prior to such Delivery Date.
(m) On the First Delivery Date, counsel for the Underwriters
shall have been furnished with such documents and opinions as they may
require for the purpose of enabling them to pass upon the issuance and
sale of the Shares as herein contemplated and related proceedings, or
in order to evidence the accuracy of any of the representations or
warranties, or the fulfillment of any of the conditions, herein
contained; and all proceedings taken by the Transaction Entities in
connection with the issuance and sale of the Shares as herein
contemplated shall be satisfactory in form and substance to the
Underwriters and counsel for the Underwriters.
(n) You shall have been furnished with the written agreements
referred to in Section 5(j) hereof.
(o) The Company shall have furnished or caused to be furnished to
you such further certificates and documents as the Underwriters shall
have reasonably requested.
(p) In the event that the Underwriters exercise their option
provided in Section 2(b) hereof to purchase all or any portion of the
Option Shares, the representations and warranties of the Transaction
Entities contained herein and the statements in any certificates
furnished by the Transaction Entities hereunder shall be true and
correct as of each Date of Delivery and, at the relevant Date of
Delivery, the Underwriters shall have received:
(i) A certificate, dated such Date of Delivery, of the
Chairman of the Board, Chief Executive Officer, President or a
Vice President of the Company and of the chief financial officer
of the Company (in each case, for the Company and for the Company
as the general partner of the Operating Partnership) confirming
that the certificate delivered on the First
26
Delivery Date pursuant to Section 7(h) hereof remains true and
correct as of such Date of Delivery.
(ii) The favorable opinions of Wolf, Block, ▇▇▇▇▇▇ and
▇▇▇▇▇-▇▇▇▇▇, counsel for the Transaction Entities, and ▇▇▇▇▇▇▇▇ &
Green LLC, Maryland counsel for the Company, in form and
substance satisfactory to counsel for the Underwriters, dated
such Date of Delivery, relating to the Option Shares to be
purchased on such Date of Delivery and otherwise to the same
effect as the opinions required by Section 7(d) hereof.
(iii) The favorable opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇, counsel for
the Underwriters, dated such Date of Delivery, relating to the
Option Shares to be purchased on such Date of Delivery and
otherwise to the same effect as the opinion required by Section
(e) hereof.
(iv) A letter from Ernst & Young LLP, in form and substance
satisfactory to the Underwriters and dated such Date of Delivery,
substantially the same in form and substance as the letters
furnished to the Underwriters pursuant to Section 7(f) hereof.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriters.
Any certificate or document signed by any officer of the Transaction
Entities and delivered to the Underwriters, or to counsel for the Underwriters,
shall be deemed a representation and warranty by the Transaction Entities to
each Underwriter as to the statements made therein.
The several obligations of the Underwriters to purchase Option Shares
hereunder are subject to the satisfaction on and as of any Date of Delivery of
the conditions set forth in this Section 7, except that, if any Date of Delivery
is other than the First Delivery Date, the certificates, opinions and letters
referred to in Sections 7(d) through 7(h) hereof shall be dated the Date of
Delivery in question and the opinions called for by Sections 7(d) and 7(e)
hereof shall be revised to reflect the sale of Option Shares.
8. Effective Date of Agreement. This Agreement shall become
effective: (i) upon the execution hereof by the parties hereto; or (ii) if, at
the time this Agreement is executed and delivered, it is necessary for the
Registration Statement or a post-effective amendment thereto to be declared
effective before the offering of the Shares may commence, when notification of
the effectiveness of the Registration Statement or such post-effective amendment
has been released by the Commission.
9. Default by One or More of the Underwriters. If, on either
Delivery Date, any Underwriter defaults in the performance of its obligations
under this Agreement, the remaining non-defaulting Underwriters shall be
obligated to purchase the Shares which the defaulting Underwriter agreed but
failed to purchase on such Delivery Date in the respective proportions which the
number of Firm Shares set forth opposite the name of each remaining non-
defaulting Underwriter in Schedule 1 hereto bears to the total number of Firm
Shares set forth opposite the names of all the remaining non-defaulting
Underwriters in Schedule 1 hereto; provided, however, that the remaining non-
defaulting Underwriters shall not be obligated to
27
purchase any of the Shares on such Delivery Date if the total number of Shares
which the defaulting Underwriter or Underwriters agreed but failed to purchase
on such date exceeds 9.09% of the total number of Shares to be purchased on such
Delivery Date, and any remaining non-defaulting Underwriter shall not be
obligated to purchase more than 110% of the number of Shares which it agreed to
purchase on such Delivery Date pursuant to the terms of Section 2. If the
foregoing maximums are exceeded, the remaining non-defaulting Underwriters, or
those other underwriters satisfactory to the Underwriters who so agree, shall
have the right, but shall not be obligated, to purchase, in such proportion as
may be agreed upon among them, all the Shares to be purchased on such Delivery
Date. If the remaining Underwriters or other underwriters satisfactory to the
Underwriters do not elect to purchase the Shares which the defaulting
Underwriter or Underwriters agreed but failed to purchase on such Delivery Date,
this Agreement (or, with respect to the Second Delivery Date, the obligation of
the Underwriters to purchase, and of the Company to sell, the Option Shares)
shall terminate without liability on the part of any non-defaulting Underwriter
or the Transaction Entities, except that the Transaction Entities will continue
to be liable for the payment of expenses to the extent set forth in Sections 6
and 12. As used in this Agreement, the term "Underwriter" includes, for all
purposes of this Agreement unless the context requires otherwise, any party not
listed in Schedule 1 hereto who, pursuant to this Section 9, purchases Initial
Shares which a defaulting Underwriter agreed but failed to purchase.
Nothing contained herein shall relieve a defaulting Underwriter of any
liability it may have to the Transaction Entities for damages caused by its
default. If other underwriters are obligated or agree to purchase the Shares of
a defaulting or withdrawing Underwriter, either the Underwriters or the Company
may postpone the Delivery Date for up to seven full business days in order to
effect any changes that in the opinion of counsel for the Company or counsel for
the Underwriters may be necessary in the Registration Statement, the Prospectus
or in any other document or arrangement.
10. Indemnification and Contribution.
(a) The Transaction Entities jointly and severally, shall indemnify and
hold harmless each Underwriter, its officers and employees and each person, if
any, who controls any Underwriter within the meaning of the Securities Act, from
and against any loss, claim, damage or liability, joint or several, or any
action in respect thereof (including, but not limited to, any loss, claim,
damage, liability or action relating to purchases and sales of Shares), to which
that Underwriter, officer, employee or controlling person may become subject,
under the Securities Act or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon, (i) any untrue statement or
alleged untrue statement of a material fact contained (A) in any Preliminary
Prospectus, the Registration Statement or the Prospectus or in any amendment or
supplement thereto or (B) in any blue sky application or other document prepared
or executed by the Company (or based upon any written information furnished by
the Company) specifically for the purpose of qualifying any or all of the Shares
under the securities laws of any state or other jurisdiction (any such
application, document or information being hereinafter called a "Blue Sky
Application"), (ii) the omission or alleged omission to state in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or in any amendment or
supplement thereto, or in any Blue Sky Application any material fact required to
be stated therein or necessary to make the statements therein not misleading
(with respect to the Prospectus, in light of the circumstances under which they
were made), or (iii) any act or failure to act or any alleged act or failure to
act by any Underwriter in connection with, or relating in any manner to, the
Shares or the offering contemplated hereby, and which is included as part of or
referred to in any loss, claim, damage, liability or action arising out of or
based upon matters covered by clause (i) or (ii) above
28
(provided that the Transaction Entities shall not be liable under this clause
(iii) to the extent that it is determined in a final judgment by a court of
competent jurisdiction that such loss, claim, damage, liability or action
resulted directly from any such acts or failures to act undertaken or omitted to
be taken by such Underwriter through its gross negligence or willful
misconduct), and shall reimburse each Underwriter and each such officer,
employee or controlling person for any legal or other expenses reasonably
incurred by that Underwriter, officer, employee or controlling person in
connection with investigating or defending or preparing to defend against any
such loss, claim, damage, liability or action as such expenses are incurred;
provided, however, that the Transaction Entities shall not be liable in any such
case to the extent that any such loss, claim, damage, liability or action arises
out of, or is based upon, any untrue statement or alleged untrue statement or
omission or alleged omission made in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or in any such amendment or
supplement, or in any Blue Sky Application, in reliance upon and in conformity
with written information concerning such Underwriter furnished to the Company
through the Underwriters by or on behalf of any Underwriter specifically for
inclusion therein. The foregoing indemnity agreement is in addition to any
liability which the Transaction Entities may otherwise have to any Underwriter
or to any officer, employee or controlling person of that Underwriter.
(b) Each Underwriter, severally and not jointly, shall indemnify and hold
harmless each Transaction Entity, its officers and employees, each of its
trustees, and each person, if any, who controls each Transaction Entity within
the meaning of the Securities Act, from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof, to which each
Transaction Entity or any such trustee, officer or controlling person may become
subject, under the Securities Act or otherwise, insofar as such loss, claim,
damage, liability or action arises out of, or is based upon, (i) any untrue
statement or alleged untrue statement of a material fact contained (A) in any
Preliminary Prospectus, the Registration Statement or the Prospectus or in any
amendment or supplement thereto, or (B) in any Blue Sky Application or (ii) the
omission or alleged omission to state in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or in any amendment or supplement
thereto, or in any Blue Sky Application any material fact required to be stated
therein or necessary to make the statements therein not misleading, but in each
case only to the extent that the untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity with
written information concerning such Underwriter furnished to the Company through
the Underwriters by or on behalf of that Underwriter specifically for inclusion
therein, and shall reimburse each Transaction Entity and any such trustee,
officer or controlling person for any legal or other expenses reasonably
incurred by each Transaction Entity or any such trustee, officer or controlling
person in connection with investigating or defending or preparing to defend
against any such loss, claim, damage, liability or action as such expenses are
incurred. The foregoing indemnity agreement is in addition to any liability
which any Underwriter may otherwise have to each Transaction Entity or any such
trustee, officer, employee or controlling person.
(c) Promptly after receipt by an indemnified party under this Section 10 of
notice of any claim or the commencement of any action, the indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under this Section 10, notify the indemnifying party in writing of the
claim or the commencement of that action; provided, however, that the failure to
notify the indemnifying party shall not relieve it from any liability which it
may have under this Section 10 except to the extent it has been materially
prejudiced by such failure and, provided further, that the failure to notify the
indemnifying party shall not relieve it from any liability which it may have to
an indemnified party otherwise than under this Section 10. If any such claim or
action shall be brought against an indemnified party, and it shall
29
notify the indemnifying party thereof, the indemnifying party shall be entitled
to participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 10 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that
the indemnified party shall have the right to employ its own counsel, with such
counsel, in the case of the Underwriters, to represent jointly the Underwriters
and their respective officers, employees and controlling persons who may be
subject to liability arising out of any claim in respect of which indemnity may
be sought by the Underwriters against the Transaction Entities under this
Section 10 if, in the reasonable judgment of the Underwriters, it is advisable
for the Underwriters and those officers, employees and controlling persons to be
jointly represented by separate counsel, and in that event the fees and expenses
of such separate counsel shall be paid by the Transaction Entities. No
indemnifying party shall (i) without the prior written consent of the
indemnified parties (which consent shall not be unreasonably withheld), settle
or compromise or consent to the entry of any judgment with respect to any
pending or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action,
suit or proceeding, or (ii) be liable for any settlement of any such action
effected without its written consent (which consent shall not be unreasonably
withheld), but if settled with the consent of the indemnifying party or if there
be a final judgment of the plaintiff in any such action, the indemnifying party
agrees to indemnify and hold harmless any indemnified party from and against any
loss or liability by reason of such settlement or judgment.
(d) If the indemnification provided for in this Section 10 shall for any
reason be unavailable to or insufficient to hold harmless an indemnified party
under Section 10(a) or 10(c) in respect of any loss, claim, damage or liability,
or any action in respect thereof, referred to therein, then each indemnifying
party shall, in lieu of indemnifying such indemnified party, contribute to the
amount paid or payable by such indemnified party as a result of such loss,
claim, damage or liability, or action in respect thereof, (i) in such proportion
as shall be appropriate to reflect the relative benefits received by the
Transaction Entities on the one hand and the Underwriters on the other 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 Transaction Entities on the one hand and the Underwriters
on the other with respect to the statements or omissions which resulted in such
loss, claim, damage or liability, or action in respect thereof, as well as any
other relevant equitable considerations. The relative benefits received by the
Transaction Entities on the one hand and the Underwriters on the other with
respect to such offering shall be deemed to be in the same proportion as the
total net proceeds from the offering of the Shares purchased under this
Agreement (before deducting expenses) received by the Transaction Entities, on
the one hand, and the total underwriting discounts and commissions received by
the Underwriters with respect to the Shares purchased under this Agreement, on
the other hand, bear to the total gross proceeds from the offering of the Shares
under this Agreement, in each case as set forth in the table on the cover page
of the Prospectus. The relative fault shall be determined by reference to
whether the untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by the
Transaction Entities or the Underwriters, the intent of the parties and their
relative knowledge, access to information and opportunity to correct or prevent
such
30
statement or omission. The Transaction Entities and the Underwriters agree that
it would not be just and equitable if contributions pursuant to this Section
were to be determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of allocation
which does not take into account the equitable considerations referred to
herein. The amount paid or payable by an indemnified party as a result of the
loss, claim, damage or liability, or action in respect thereof, referred to
above in this Section shall be deemed to include, for purposes of this Section
10(d), any legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 10(d), no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Shares underwritten by it and distributed to the public was
offered to the public exceeds the amount of any damages which such Underwriter
has otherwise paid or become liable to pay by reason of any 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
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations to
contribute as provided in this Section 10(d) are several in proportion to their
respective underwriting obligations and not joint.
(e) The Underwriters severally confirm and each Transaction Entity
acknowledges that the statements with respect to the public offering of the
Shares by the Underwriters set forth on the cover page of, the legend concerning
stabilization on page S-3 of, the concession and reallowance figures appearing
under the caption "Underwriting" and, pursuant to Item 508 of Regulation S-K of
the Securities Act, the last six paragraphs of the section captioned "Plan of
Distribution" in, the Preliminary Prospectus and the comparable material in the
Prospectus are correct and constitute the only information concerning such
Underwriters furnished in writing to the Company by or on behalf of the
Underwriters specifically for inclusion in the Registration Statement, the
Preliminary Prospectus and the Prospectus.
11. Termination. The obligations of the Underwriters hereunder may
be terminated by the Underwriters by notice given to and received by the Company
prior to delivery of and payment for the Firm Shares if, prior to that time, any
of the events described in Sections 7(i), 7(j) or 7(l), shall have occurred or
if the Underwriters shall decline to purchase the Shares for any reason
permitted under this Agreement.
12. Reimbursement of Underwriters' Expenses. If the Company shall
fail to tender the Shares for delivery to the Underwriters by reason of any
failure, refusal or inability on the part of the Transaction Entities to perform
any agreement on their part to be performed, or because any other condition of
the Underwriters' obligations hereunder required to be fulfilled by the
Transaction Entities is not fulfilled, the Transaction Entities will reimburse
the Underwriters for all reasonable out-of-pocket expenses (including fees and
disbursements of counsel) incurred by the Underwriters in connection with this
Agreement and the proposed purchase of the Shares, and upon demand the
Transaction Entities shall pay the full amount thereof to the Underwriters. If
this Agreement is terminated pursuant to Section 9 by reason of the default of
one or more Underwriters, the Transaction Entities shall not be obligated to
reimburse any defaulting Underwriter on account of those expenses.
13. Notices, etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or sent by mail,
telex or facsimile transmission to ▇▇▇▇▇▇ Brothers Inc., Three World
Financial Center,
31
New York, New York 10285, Attention: Syndicate Department (Fax: 212-526-
6588), with a copy, in the case of any notice pursuant to Section 10(c), to
the Director of Litigation, Office of the General Counsel, ▇▇▇▇▇▇ Brothers
Inc., ▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇;
(b) if to the Transaction Entities shall be delivered or sent by
mail, telex or facsimile transmission to the Company, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: General Counsel (Fax: ▇▇▇-▇▇▇-▇▇▇▇);
provided, however, that any notice to an Underwriter pursuant to Section 10(c)
shall be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its acceptance telex to the
Underwriters, which address will be supplied to any other party hereto by the
Underwriters upon request. Any such statements, requests, notices or agreements
shall take effect at the time of receipt thereof. The Transaction Entities
shall be entitled to act and rely upon any request, consent, notice or agreement
given or made on behalf of the Underwriters by ▇▇▇▇▇▇ Brothers Inc.
14. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the Underwriters, the Transaction
Entities and their respective personal representatives and successors. This
Agreement and the terms and provisions hereof are for the sole benefit of only
those persons, except that (A) the representations, warranties, indemnities and
agreements of the Transaction Entities contained in this Agreement shall also be
deemed to be for the benefit of the person or persons, if any, who control any
Underwriter within the meaning of Section 15 of the Securities Act and (B) the
indemnity agreement of the Underwriters contained in Section 10(b) of this
Agreement shall be deemed to be for the benefit of trustees of the Company,
officers of the Company who have signed the Registration Statement and any
person controlling the Transaction Entities within the meaning of section 15 of
the Securities Act. Nothing in this Agreement is intended or shall be construed
to give any person, other than the persons referred to in this Section 14, any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision contained herein.
15. Survival. The respective indemnities, representations,
warranties and agreements of the Transaction Entities and the Underwriters
contained in this Agreement or made by or on behalf on them, respectively,
pursuant to this Agreement, shall survive the delivery of and payment for the
Shares and shall remain in full force and effect, regardless of any
investigation made by or on behalf of any of them or any person controlling any
of them.
16. Definition of the Terms "Business Day" and "Subsidiary". For
purposes of this Agreement, (a) "business day" means any day on which the New
York Stock Exchange, Inc. is open for trading and (b) "subsidiary" has the
meaning set forth in Rule 405 of the Rules and Regulations.
17. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of New York.
18. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
32
19. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
If the foregoing correctly sets forth the agreement between the Company and
the Underwriters, please indicate your acceptance in the space provided for that
purpose below.
Very truly yours,
LIBERTY PROPERTY TRUST
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ III
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ III
Title: Chairman of the Board and Chief
Executive Officer
LIBERTY PROPERTY LIMITED PARTNERSHIP
By: Liberty Property Trust, its general partner
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ III
------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ III
Title: Chairman of the Board and
Chief Executive Officer
Accepted:
▇▇▇▇▇▇ BROTHERS INC.
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------
Authorized Representative
For itself and as Representative
of the several Underwriters named
in Schedule 1 hereto
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SCHEDULE 1
Number of
Underwriters Shares
------------ ---------
▇▇▇▇▇▇ Brothers Inc.................................... 1,250,000
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation.... 1,250,000
Alex. ▇▇▇▇▇ & Sons Incorporated........................ 1,250,000
▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc............................... 1,250,000
The ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ Company, Inc..................... 1,250,000
Wheat, First Securities, Inc........................... 1,250,000
---------
Total............................................. 7,500,000
=========
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