EXECUTION VERSION
LIBERTY PROPERTY LIMITED PARTNERSHIP
(a Pennsylvania Limited Partnership)
$300,000,000 5.125% SENIOR NOTES DUE 2015
UNDERWRITING AGREEMENT
February 24, 2005
Citigroup Global Markets Inc.
UBS Securities LLC
As Representatives of the several Underwriters
Named in Schedule I hereto,
c/o Citigroup Global Markets Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
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 wishes to confirm as follows its agreement (this
"Agreement") with Citigroup Global Markets Inc. and UBS Securities LLC (the
"Representatives"), as representatives of the Underwriters named in Schedule I
hereto (the "Underwriters"), with respect to the sale by the Operating
Partnership and the purchase by the Underwriters of an aggregate of $300,000,000
principal amount of the 5.125% Senior Notes due 2015 of the Operating
Partnership (the "Securities").
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
and warrants to, and agrees with, each of the Underwriters that:
(a) A registration statement on Form S-3 (No. 333-120692 (the
"2005 Registration Statement")) which also constitutes a post-effective
amendment to a previous registration statement No. 333-65592 (the "2001
Registration Statement") pursuant to Rule 429 of the United States Securities
Act
of 1933, as amended (the "Securities Act"), and any amendments thereto, with
respect to one or more series of debt securities of the Operating Partnership
has (i) been prepared by the Company and the Operating Partnership in conformity
with the requirements of 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; and the
indenture, dated as of October 24, 1997 as supplemented to the date hereof (the
"Indenture"), between the Operating Partnership and ▇.▇. ▇▇▇▇▇▇ Trust Company,
National Association (as successor to Bank One Trust Company, N.A., as successor
to The First National Bank of Chicago), as trustee (the "Trustee") has been
qualified, and the Eighth Supplemental Indenture, to be dated as of the Time of
Delivery, between the Operating Partnership and the Trustee (the "Supplemental
Indenture"), pursuant to which the Securities shall be issued, will be
qualified, under the Trust Indenture Act of 1939 (the "Trust Indenture Act").
Copies of the Registration Statement and any amendments thereto have been
delivered by the Company to you. As used in this Agreement, "Effective Time"
means, for the Registration Statement, the date and the time as of which the
Registration Statement, or the most recent post-effective amendment thereto, if
any, was declared effective by the Commission; "Effective Date" means, for the
Registration Statement, the date of the Effective Time; "Preliminary Prospectus"
means any prospectus included in the Registration Statement, or amendments
thereto, before it became effective under the Securities Act and any prospectus
filed with the Commission by the Company with your consent pursuant to Rule
424(a) of the Rules and Regulations; "Registration Statement" means both the
2005 Registration Statement and the 2001 Registration Statement, together, each
as amended at the Effective Time, including any documents incorporated by
reference therein at such time and 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; and "Prospectus" means such final
prospectus, as supplemented by a final prospectus supplement, 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 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, if any, 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 the rules and regulations thereunder, and each
Preliminary Prospectus, if any, 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) On its Effective Date and on the Effective Date of any
amendment thereto, the Registration Statement conformed in all material
respects, and as of the date of this Agreement, 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
2
filed with the Commission, as the case may be, conform in all material respects
to the requirements of the Securities Act, the Rules and Regulations and the
Trust Indenture Act and the rules and regulations thereunder, 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 and as of
each Time of Delivery (as defined below) (as to the Prospectus and any amendment
or 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 by or on behalf of any Underwriter
specifically for inclusion therein. The Indenture conforms, and the Supplemental
Indenture will conform, in all material respects to the requirements of the
Trust Indenture Act and the rules and regulations thereunder; provided, however,
that no representation or warranty is made as to information contained in or
omitted from that part of the Registration Statement which shall constitute the
Statement of Eligibility and Qualification on Form T-1 under the Trust Indenture
Act of the Trustee under the Indenture. The Prospectus delivered to you 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, when
such incorporated or deemed to be incorporated documents became effective or
were filed with the Commission, as the case may be, complied in all material
respects with the Securities Act and the Rules and Regulations, and the Exchange
Act and the rules and regulations thereunder, as applicable, 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; and any further documents so filed and incorporated
or deemed to be incorporated by reference in the Registration Statement, the
Prospectus or any Preliminary Prospectus, or any further amendment or supplement
thereto, when such documents become effective or are filed with the Commission,
as the case may be, will comply in all material respects with the Securities Act
and the Rules and Regulations, and the Exchange Act and the rules and
regulations thereunder, as applicable, will not 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, 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
3
conduct of its business requires such qualification (each such jurisdiction as
provided in Schedule II), 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) 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), the entities listed in Schedule III and the Operating
Partnership, Development Corp. (as defined herein), Development-II (as defined
herein) and SP Trust (as defined herein), the Company owns no direct or indirect
equity interest in any entity.
(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 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 and with respect to the
Company's Amended and Restated Share Incentive Plan (the "Share Incentive
Plan"), the Company's Employee Stock Purchase Plan and the Company's Dividend
Reinvestment and Share Purchase Plan, 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 options to purchase shares of beneficial
interest issued pursuant to the Share Incentive Plan, there are no outstanding
securities convertible into or exchangeable for any shares of beneficial
interest of the Company, and there are no outstanding options, rights
(preemptive or otherwise) or warrants to purchase or to 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 (each such jurisdiction as provided in Schedule II), 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 limited partnership agreement 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. The owner's equity of the Operating Partnership is as described in
the Prospectus. All of the Units have been duly and validly authorized and
issued, were issued in accordance with the applicable terms of the Operating
Partnership Agreement and the certificate of limited partnership of the
Operating Partnership and, to the extent that such interests are owned by the
Company, are owned by the Company free and clear of all liens, encumbrances,
equities or claims.
(i) Liberty Property Development Corp. ("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 and
validly authorized and issued and is fully paid and non-assessable, and has been
offered and sold in compliance with all applicable laws (including, without
limitation, federal or state securities laws). All of the capital stock of
Development Corp. owned by the Operating Partnership, as described in the
4
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 there are 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.
(j) Liberty Property Development Corp-II ("Development-II")
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-II has been duly and
validly authorized and issued and is fully paid and non-assessable, and has been
offered and sold in compliance with all applicable laws (including, without
limitation, federal or state securities laws). All of the capital stock of
Development-II 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-II are reserved for any purpose, and there are no outstanding
securities convertible into or exchangeable for any capital stock of
Development-II, and there are 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-II.
(k) Liberty Property Special Trust ("SP Trust") has been duly
organized and is validly existing as a business trust 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
trust 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 equity
interests of SP Trust have been duly and validly authorized and issued and are
fully paid and non-assessable, and have been offered and sold in compliance with
all applicable laws (including, without limitation, federal or state securities
laws). All of the equity interests of SP Trust are owned by the Company free and
clear of any security interest, mortgage, pledge, lien, encumbrance, claim,
restriction or equities. No equity interests of SP Trust are reserved for any
purpose, and there are no outstanding securities convertible into or
exchangeable for any equity interests of SP Trust, and there are no outstanding
options, rights (preemptive or otherwise) or warrants to purchase or to
subscribe for such equity interests or any other securities of SP Trust.
(l) Each of those certain partnerships, limited liability
companies or other entities holding title to one or more of the Properties (the
"Property Affiliates") are the only entities other than the Operating
Partnership, SP Trust, Liberty Property Philadelphia Corp., a Pennsylvania
corporation, Liberty Property Philadelphia Trust, a Pennsylvania trust, Liberty
Property Philadelphia Corp-IV East, a Pennsylvania corporation, Liberty Property
Philadelphia Corp-IV West, a Pennsylvania corporation, Liberty Property
Philadelphia Navy Yard Corp., a Pennsylvania corporation, and Liberty Property
Philadelphia Corporation V, a Pennsylvania corporation, 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, limited liability company or other entity, is duly
qualified to do business and is in good standing under the laws of the
jurisdiction in which it was organized, is duly qualified to do business and is
in good standing as a foreign entity in each jurisdiction in which its ownership
or lease of property or the conduct of its business requires such qualification,
and has all
5
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 ownership interests of each Property Affiliate have been duly and validly
authorized and issued and are fully paid and non-assessable. All of such
ownership 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.
(m) The Securities have been duly and validly authorized and,
when duly executed, authenticated, issued and delivered against payment therefor
as provided herein and in the Indenture, will be duly and validly issued and
outstanding, and shall constitute valid and binding obligations on the part of
the Operating Partnership, entitled to the benefits provided in the Indenture,
and enforceable against the Operating Partnership in accordance with their
terms. Upon payment of the purchase price and delivery of the Securities in
accordance herewith, each of the Underwriters will receive good, valid and
marketable title to the Securities, free and clear of all security interests,
mortgages, pledges, liens, encumbrances, claims, restrictions and equities.
(n) The Indenture has been duly and validly authorized,
executed and delivered by the Operating Partnership and, assuming due
authorization, execution and delivery by the Trustee, constitutes a valid and
binding agreement of the Operating Partnership, enforceable against the
Operating Partnership in accordance with its terms; the Supplemental Indenture
has been duly and validly authorized and, when executed and delivered by the
Operating Partnership (assuming due execution and delivery by the Trustee), will
constitute a valid and binding agreement of the Operating Partnership,
enforceable against the Operating Partnership in accordance with its terms; the
Securities, the Indenture and the Supplemental Indenture will conform in all
material respects to the descriptions thereof contained in the Prospectus.
(o) (A) This Agreement has been duly and validly authorized,
executed and delivered by 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 Entities in accordance with its terms; and (B) the Operating
Partnership Agreement and the partnership agreement, limited liability company
operating agreement, and each other similar organizational document of each
Property Affiliate have been duly and validly authorized, executed and delivered
by the parties thereto and are valid and binding agreements of the parties
thereto, enforceable against such parties in accordance with their terms.
(p) The issue and sale of the Securities, the execution,
delivery and performance of this Agreement by each of the Transaction Entities,
the execution, delivery and performance of the Indenture by the Operating
Partnership and the consummation of the transactions contemplated hereby and
thereby 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 or any of their subsidiaries is a party or by which
either of the Transaction Entities or any of their subsidiaries is bound or to
which any of the Properties or other assets of the Company or any of its
subsidiaries is subject, nor will such actions result in any violation of the
provisions of the charter, by-laws, certificate of limited partnership,
agreement of limited partnership, certificate of formation, limited liability
company operating agreement or other similar organizational document of either
of the Transaction Entities or any of their subsidiaries, or any statute or any
order, rule or regulation of any court or governmental agency or body having
jurisdiction over either
6
of the Transaction Entities or any of their subsidiaries or any of their
properties or assets; and except for the registration of the Securities under
the Securities Act and the qualification of the Indenture under the Trust
Indenture Act and such consents, approvals, authorizations, orders, filings,
registrations or qualifications as may be required under state securities laws
in connection with the purchase and distribution of the Securities by the
Underwriters, no consent, approval, authorization or order of, or filing,
registration or qualification with, any such court or governmental agency or
body is required for the execution, delivery and performance of this Agreement
by the Transaction Entities or the Indenture by the Operating Partnership, the
consummation of the transactions contemplated hereby and thereby, and the
issuance and delivery of the Securities.
(q) No event has occurred and is continuing that, had the
Securities been issued, would (whether or not with the giving of notice and/or
the passage of time and/or the fulfillment of any other requirement) constitute
an Event of Default (as defined in the Indenture) under the Indenture.
(r) Other than as described in the Prospectus and other than
rights of certain persons who have contributed Properties to the Partnership in
exchange for Units and persons whose securities are already registered under the
Securities Act, and except with respect to certain persons who may acquire
preferred shares of the Company in exchange for preferred units of partnership
interest in the Operating Partnership, there are no contracts, agreements or
understandings between the Transaction Entities or any of their subsidiaries 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 either of the Transaction Entities or any of their subsidiaries owned or to
be owned by such person or to require either of the Transaction Entities or any
of their subsidiaries 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 Transaction Entities
or any of their subsidiaries under the Securities Act.
(s) Except as described or contemplated in the Prospectus or
pursuant to the Share Incentive Plan, and except for the issuance of common
shares of beneficial interest in exchange for Units, 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 or Regulations D or
S under the Securities Act.
(t) 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 shares 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 the Properties or the 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.
(u) The financial statements (including the related notes and
supporting schedules thereto) 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
7
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 "Certain
Ratios" 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 respective entity or entities presented therein at the respective dates
indicated and the results of operations for the respective periods specified.
(v) ▇▇▇▇▇ & Young LLP, who have certified certain financial
statements of the Operating Partnership, whose reports appear in the Prospectus
or are incorporated by reference therein and who have delivered the initial
letter referred to in Section 7(g) hereof, are independent public accountants as
required by the Securities Act and the Rules and Regulations.
(w) (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, those relating to certain intra-company debt with
respect to Development and Development-II 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, none of the Company, the Operating Partnership or any Property
Affiliate 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 either of the Transaction Entities or affect either Transaction
Entity's ability to perform its obligations hereunder, and neither of the
Transaction Entities 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 of
the Transaction Entities has knowledge of any pending or threatened condemnation
proceedings, zoning change or other proceeding or action that will in any
material manner adversely affect the size of, use of, improvements on,
construction on or access to the Properties.
(x) 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.
(y) The Company, the Operating Partnership and the Property
Affiliates have obtained title insurance on their 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 (exclusive
of improvements) of each such Property.
8
(z) Except as disclosed in the Prospectus and except such
as in each case would not have a material adverse effect on any Property, any
Property Affiliate, the Company, the Operating Partnership 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., Development II, SP Trust 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 would reasonably
be expected to result in the incurrence of liabilities by the Transaction
Entities or any of their subsidiaries under, or any violations of, any
Environmental Law or give rise to the imposition of any Lien (as defined below)
against the Transaction Entities or any of their subsidiaries, under any
Environmental Law; (C) none of the Transaction Entities or the 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 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. Section 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. Section
9601 et seq.) ("CERCLA"), the Resource Conservation and Recovery Act of 1976, as
amended (42 U.S.C. Section 6901, et seq.), the Clean Air Act, as amended (42
U.S.C. Section 7401, et seq.), the Clean Water Act, as amended (33 U.S.C.
Section 1251, et seq.), the Toxic Substances Control Act, as amended (15 U.S.C.
Section 2601, et seq.), the Occupational Safety and Health Act of 1970, as
amended (29 U.S.C. Section 651, et seq.), the Hazardous Materials Transportation
Act, as amended (49 U.S.C. Section 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"
9
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.
(aa) Each Transaction Entity and each of their subsidiaries
carries, or is covered by, insurance in such amounts and covering such risks as
is adequate for the conduct of its business and as is customary for companies
engaged in similar businesses in similar industries; and each Property carries,
or is covered by, insurance covering the value of such Property.
(bb) Each Transaction Entity owns or possesses adequate rights
to use all material patents, patent applications, trademarks, service marks,
trade names, trademark registrations, service mark 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.
(cc) 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 individually or in the aggregate
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 knowledge of the Transaction Entities, no
such proceedings are threatened or contemplated by governmental authorities or
threatened by others.
(dd) 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.
(ee) No relationship, direct or indirect, exists between or
among either of the Transaction Entities or any of their subsidiaries on the one
hand, and the trustees, officers, shareholders, customers or suppliers of the
Transaction Entities or any of their subsidiaries on the other hand, that is
required to be described in the Prospectus that is not so described.
(ff) No labor disturbance by the employees of either
Transaction Entity or any of their subsidiaries 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.
(gg) 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 (as defined below) is (i) so qualified in all material respects and
nothing has occurred, whether by action or by failure to act, which would cause
10
the loss of such qualification and (ii) 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"); to the knowledge of the Transaction
Entities, after due inquiry, 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").
(hh) Each Transaction Entity and each of their subsidiaries
has filed all federal, state, local and foreign income and franchise tax returns
required to be filed through the date hereof and has paid all taxes due thereon
(taking into account any extension that is properly granted under the law), and
no material tax deficiency has been asserted against either Transaction Entity
or any of 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.
(ii) At all times since June 16, 1994, the Company, the
Operating Partnership, Development Corp., Development II and SP Trust have been,
and upon the sale of the Securities will continue to be, organized and operated
in conformity with the requirements for qualification and taxation 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.,
Development II and SP Trust will enable the Company to continue to meet the
requirements for qualification and taxation as a real estate investment trust
under the Code.
(jj) 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 or (iv) declared or paid any dividend on its capital
shares (other than regular quarterly dividends).
(kk) Neither Transaction Entity nor any of their subsidiaries
(i) is in violation of its charter, by-laws, certificate of limited partnership,
agreement of limited partnership, certificate of formation, limited liability
company operating agreement 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
11
(ll) Each Transaction Entity and each of 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.
(mm) Each Transaction Entity has established and maintains
disclosure controls and procedures (as such term is defined in Rule 13a-15 under
the Exchange Act), which (i) are designed to ensure that material information
relating to such Transaction Entity, including its consolidated subsidiaries, is
made known to each of the Transaction Entities' principal executive officer and
principal financial officer by others within those entities; (ii) have been
evaluated for effectiveness as of the end of the period covered by the
Transaction Entities' most recent quarterly report jointly filed with the
Commission; and (iii) were functioning effectively in all material respects as
of the end of such period to provide reasonable assurance that information
required to be disclosed by the Transaction Entities in their reports filed or
submitted under the Exchange Act is recorded, processed, summarized and reported
accurately and within the time periods specified in the Commission's rules and
forms.
(nn) Based on its evaluation of its internal controls over
financial reporting, none of the Transaction Entities is aware of (i) any
significant deficiency or material weakness in the design or operation of
internal control over financial reporting which are reasonably likely to
adversely affect such Transaction Entity's ability to record, process, summarize
and report financial information; or (ii) any fraud, whether or not material,
that involves management or other employees who have a significant role in the
Issuer's internal control over financial reporting.
(oo) The Transaction Entities have prepared a plan to comply
with the requirements of Section 404 of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act on the date by
which they must comply with such requirements. The Transaction Entities are not
aware of any reason they will not comply with the requirements of Section 404 of
the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act on the applicable compliance date.
(pp) 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, as
amended; or made any bribe, rebate, payoff, influence payment, kickback or other
unlawful payment.
(qq) Neither Transaction Entity nor any of their subsidiaries
is, and after giving effect to the offering and sale of the Securities neither
Transaction Entity nor any of their subsidiaries will be, an "investment
company" within the meaning of such term under the Investment Company Act of
1940, as amended, and the rules and regulations of the Commission thereunder.
(rr) 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
12
for a brokerage commission, finder's fee or other like payment with respect to
issue and sale of the Securities and the consummation of the transactions
contemplated by this Agreement.
(ss) Each of the Transaction Entities and their subsidiaries
has complied with all applicable provisions of Florida Statutes Section 517.075,
relating to issuers doing business with Cuba.
2. Purchase of the Securities by the Underwriters. On the basis of the
representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, the Operating Partnership agrees to issue and
sell to each of the Underwriters, and each of the Underwriters agrees, severally
and not jointly, to purchase from the Operating Partnership, at a purchase price
of 98.976% of the principal amount thereof, plus accrued interest, if any, from
March 1, 2005 to the Time of Delivery hereunder, the principal amount of
Securities set forth opposite the name of such Underwriter in Schedule I hereto.
3. Offering of the Securities by the Underwriters. Upon the
authorization by you of the release of the Securities, the several Underwriters
propose to offer the Securities for sale upon the terms and conditions set forth
in the Prospectus.
4. Closing. (a) The Securities to be purchased by each Underwriter
hereunder will be represented by one or more definitive global Securities in
book-entry form which will be deposited by or on behalf of the Company and the
Operating Partnership with The Depository Trust Company ("DTC") or its
designated custodian. The Company and the Operating Partnership will deliver the
Securities to the Representatives, for the account of each Underwriter, against
payment by or on behalf of such Underwriter of the purchase price therefor by
wire transfer of Federal (same-day) funds to the account specified by the
Company and the Operating Partnership to the Representatives at least
forty-eight hours in advance, by causing DTC to credit the Securities to the
account of the Representatives at DTC. The Company and the Operating Partnership
will cause the certificates representing the Securities to be made available to
the Representatives for checking at least twenty-four hours prior to the Time of
Delivery (as defined below) at the office of DTC or its designated custodian
(the "Designated Office"). The time and date of such delivery and payment shall
be 9:30 a.m., New York City time, on March 1, 2005 or such other time and date
as the Representatives and the Company and the Operating Partnership may agree
upon in writing. Such time and date are herein called the "Time of Delivery".
(b) The documents to be delivered at the Time of Delivery by
or on behalf of the parties hereto pursuant to Section 7 hereof, including the
cross-receipt for the Securities and any additional documents requested by the
Underwriters pursuant to Section 7(p) hereof, will be delivered at the offices
of ▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇ (the
"Closing Location"), and the Securities will be delivered at the Designated
Office, all at the Time of Delivery.
5. Further Agreements of the Transaction Entities. Each of the
Transaction Entities jointly and severally agrees with each of the Underwriters:
(a) To prepare the Prospectus in a form approved by the
Underwriters and to file such Prospectus pursuant to Rule 424(b) under the 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 Act; to make no
further amendment or any supplement to the Registration Statement or Prospectus
prior to the Time of Delivery (except in
13
accordance with Section 5(e) hereof) which shall be disapproved by the
Underwriters promptly after reasonable notice thereof; 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 file promptly all reports and
any definitive proxy or information statements required to be filed by the
Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act subsequent to the date of the Prospectus and for so long as the
delivery of a prospectus is required in connection with the offering or sale of
the Securities; 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 Prospectus or prospectus, of
the suspension of the qualification of the Securities 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 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 prospectus or
suspending any such qualification, to promptly use its best efforts to obtain
the withdrawal of such order;
(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) Prior to 5:00 P.M., New York City time, on the New York
Business Day (as defined below) next succeeding the date of this Agreement and
from time to time, to furnish the Underwriters with such number of written and
electronic copies 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 Securities and if
at such time any event 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 or to file under the
Exchange Act any document incorporated by reference in the Prospectus in order
to comply with the Securities Act, the Exchange Act or the Trust Indenture 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 written and electronic 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. As used in this
Agreement, "New York Business Day" shall mean each Monday, Tuesday, Wednesday,
Thursday and Friday which is not a day on which banking institutions in New York
are generally authorized or obligated by law or executive order to close;
14
(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;
(f) The Operating Partnership 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) The Company and the Operating Partnership will file any
reports required to be furnished to the Commission pursuant to the Exchange Act
or any rule or regulation of the Commission thereunder on ▇▇▇▇▇ to the extent
required to be filed via ▇▇▇▇▇;
(h) Promptly from time to time to take such action as the
Underwriters may reasonably request to qualify the Securities for offering and
sale under the securities or real estate syndication 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 Securities, except that the
Operating Partnership shall not be required in connection therewith to qualify
as a foreign entity or to file a general consent to service of process in any
jurisdiction;
(i) During the period beginning from the date hereof and
continuing to and including the later of the Time of Delivery and such earlier
time as the Underwriters may notify the Company, not to offer, sell, contract to
sell, pledge, grant any option to purchase, make any short sale or otherwise
dispose of, except as provided hereunder any securities of the Company that are
substantially similar to the Securities, without your prior written consent;
(j) To apply the net proceeds from the sale of the Securities
pursuant to this Agreement in accordance with the description set forth in the
Prospectus under the caption "Use of Proceeds";
(k) To take such steps as shall be necessary to ensure that
none of the Company, the Operating Partnership or any of their subsidiaries
shall become an "investment company" within the meaning of such term under the
Investment Company Act of 1940, as amended, and the rules and regulations of the
Commission thereunder;
(l) Except as stated in this Agreement and in the Preliminary
Prospectus, if any, and Prospectus, neither Transaction Entity has taken, nor
will take, directly or indirectly, any action designed
15
to or that might reasonably be expected to cause or result in stabilization or
manipulation of the price of the Securities to facilitate the sale or resale of
the Securities;
(m) 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
(n) 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 reasonable 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 Securities and any taxes payable in connection therewith; (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 Securities; (e)
the filing fees incident to securing any required review by the National
Association of Securities Dealers, Inc. of the terms of sale of the Securities;
(f) any applicable listing or other fees; (g) the fees and expenses of
qualifying the Securities under the securities laws of the several jurisdictions
as provided in Section 5(h) and of preparing, printing and distributing a Blue
Sky Memorandum (including related fees and expenses of counsel to the
Underwriters); (h) any fees charged by securities rating services or agencies in
connection with the rating of the Securities; and (i) 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 10, the Underwriters shall pay their own costs and expenses,
including the costs and expenses of their counsel, any transfer taxes on the
Securities which they may sell and the expenses of advertising any offering of
the Securities made by the Underwriters.
7. Conditions of the Underwriters' Obligations. The respective
obligations of the Underwriters hereunder, as to the Securities to be delivered
at the Time of Delivery, are subject to the accuracy, when made and at and as of
the Time of Delivery, 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:
(a) If the Company has elected to rely upon Rule 462(b) and,
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 Securities may commence, the Registration
Statement or such post-effective amendment shall have become effective not later
than 10:00 P.M., Washington, D.C. 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 or any part thereof 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,
16
threatened by the Commission, and any request of the Commission for additional
information (to be included in the Registration Statement or the Prospectus or
otherwise) shall have been complied with to your satisfaction.
(b) Subsequent to the effective date of this Agreement, there
shall not have occurred (i) any change, or any development involving a
prospective change, in or affecting the condition, financial or 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 your reasonable opinion, would materially adversely affect
the market for the Securities, 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 reasonable 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 the reasonable opinion of you or your counsel, materially adversely
affect the market for the Securities.
(c) All trust and partnership proceedings and other legal
matters incident to the authorization, form and validity of this Agreement, the
Indenture, the Securities, the Registration Statement and the Prospectus, and
all other legal matters relating to this Agreement, the Indenture, the
Securities, the Registration Statement and the Prospectus and the transactions
contemplated hereby and thereby shall be reasonably satisfactory in all material
respects to counsel for the Underwriters, and the Transaction Entities 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) ▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP shall have furnished to
the Underwriters its written opinion, as counsel to the Transaction Entities,
addressed to the Underwriters and dated such Time of Delivery, in form and
substance reasonably satisfactory to the Underwriters, to the effect that:
(i) The Company is duly qualified to do business as a
foreign entity in Florida, Kansas, Michigan, New Jersey, Pennsylvania, South
Carolina and Virginia.
(ii) The Operating Partnership is validly existing
and in good standing as a limited partnership under the laws of the Commonwealth
of Pennsylvania, is duly qualified to do business as a foreign limited
partnership in Florida, Kansas, Maryland, Michigan, Minnesota, New Jersey, North
Carolina, South Carolina, Texas, Virginia and Wisconsin, and has the requisite
partnership 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. The Company is the sole general partner of the Operating
Partnership. To the knowledge of such counsel, 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. All of the partnership interests of the Operating
Partnership have been duly and validly authorized and issued, were issued in
accordance with the applicable terms of the Operating Partnership Agreement and
the certificate of limited partnership of the Operating Partnership and, to the
knowledge of such counsel, to the extent that such interests are owned by the
Company, are
17
owned by the Company free and clear of any adverse claims as defined in Section
8-302 of the Uniform Commercial Code.
(iii) Development Corp. is validly existing and
subsisting under the laws of the Commonwealth of Pennsylvania, is duly qualified
to do business and is in good standing as a foreign corporation in Florida,
Maryland, Michigan, Minnesota, New Jersey, North Carolina, Virginia and
Wisconsin, and has the requisite 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.
(iv) Development-II is validly existing and
subsisting under the laws of the Commonwealth of Pennsylvania, is duly qualified
to do business and is in good standing as a foreign corporation in Florida and
Texas, and has the requisite 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.
(v) SP Trust is validly existing as a business trust
and subsisting under the laws of the Commonwealth of Pennsylvania and has the
requisite 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.
(vi) This Agreement has been duly and validly
authorized, executed and delivered by each of the Operating Partnership and the
Company.
(vii) Each of the Indenture and the Supplemental
Indenture has been duly authorized, executed and delivered by the Operating
Partnership and (assuming due execution and delivery by the Trustee) constitutes
a valid and binding agreement on the part of the Operating Partnership,
enforceable against the Operating Partnership in accordance with its terms; each
of the Indenture and the Supplemental Indenture conforms in all material
respects to the descriptions thereof contained in the Prospectus.
(viii) The Indenture has been duly qualified under
the Trust Indenture Act.
(ix) The Securities have been duly authorized,
executed, issued and delivered by the Operating Partnership and, when executed,
issued and authenticated in the manner provided for in the Indenture and
delivered against payment therefore in accordance with the terms of this
Agreement, will be entitled to the benefits of the Indenture, and will
constitute valid and binding obligations of the Operating Partnership,
enforceable against the Operating Partnership in accordance with their terms.
The terms of the Securities conform in all material respects to the description
thereof in the Prospectus.
(x) The execution, delivery and performance of this
Agreement by each of the Transaction Entities, the issue and sale of the
Securities being delivered at such Time of Delivery by the Operating Partnership
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 that is filed as an
exhibit to the Registration Statement or to any exhibit contained in any
document
18
incorporated by reference in the Prospectus and as to which either of the
Transaction Entities or any of their subsidiaries is a party or by which either
of the Transaction Entities or any of their subsidiaries is bound or by which
any of the Properties or other assets of either of the Transaction Entities or
any of their subsidiaries is subject, or (ii) to the knowledge of such counsel,
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 any of their
subsidiaries or any of their properties or other assets, except with respect to
clause (ii), where such conflict, breach or violation would not have a material
adverse effect on the Transaction Entities and their subsidiaries taken as a
whole; and, to the knowledge of such counsel, except for the registration of the
Securities under the Securities Act and the qualification of the Indenture under
the Trust Indenture Act and such consents, approvals, authorizations,
registrations or qualifications as may have been obtained under the Exchange Act
or may be required under applicable state securities laws in connection with the
purchase and distribution of the Securities 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, the Indenture or the Supplemental Indenture by
the Transaction Entities, the consummation of the transactions contemplated
hereby and thereby, and the issuance, sale and delivery of the Securities to the
Underwriters.
(xi) The execution, delivery and performance of this
Agreement by each of the Transaction Entities, the issue and sale of the
Securities being delivered at such Time of Delivery by the Operating Partnership
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, agreement of limited partnership,
certificate of formation or limited liability company operating agreement of
either of the Transaction Entities or any of their subsidiaries.
(xii) Except as set forth in the Prospectus, there
are no statutory or, to the knowledge of such counsel, contractual or other
preemptive or other rights to subscribe for or to purchase, nor any restriction
upon the transfer of the Securities pursuant to the Operating Partnership's
certificate of limited partnership or its agreement of limited partnership, as
amended to the date hereof, or, to the knowledge of such counsel, any agreement
or other instrument to which the Operating Partnership is a party.
(xiii) To the knowledge of such counsel, there are no
contracts, agreements or understandings between the Company and/or the Operating
Partnership, on the one hand, and any person, on the other hand, granting such
person the right (A) to require the Company or the Operating Partnership to file
a registration statement under the Securities Act with respect to any securities
of the Company or the Operating Partnership owned or to be owned by such person
or (B) to require the Company or the Operating Partnership to include such
securities in the securities registered pursuant to the Registration Statement,
other than, in the case of clause (A) above, (i) as set forth in the Prospectus,
(ii) rights of certain persons who have contributed Properties to the
Partnership in exchange for Units, (iii) rights of holders of securities that
already have been registered under the Securities Act, and (iv) rights of
persons who may acquire preferred shares of the Company in exchange for
preferred units of partnership interest in the Operating Partnership.
(xiv) To the knowledge of such counsel, there are no
legal or governmental proceedings pending to which either Transaction Entity or
any of their subsidiaries is a party or by which any property or assets of
either Transaction Entity or any of their subsidiaries is subject, that are
19
required to be described in the Prospectus which have not been described as
required. To the knowledge of such counsel, no such proceedings are threatened
by governmental authorities or others.
(xv) To the 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.
(xvi) Neither Transaction Entity nor any of their
subsidiaries is an "investment company" within the meaning of such term under
the Investment Company Act of 1940, as amended, and the rules and regulations of
the Commission thereunder.
(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 as to form in all material respects with the requirements of the
Exchange Act and the rules and regulations thereunder.
(xviii) Based solely upon the oral advice of a member
of the staff of the Securities and Exchange Commission and, to the knowledge of
such counsel, no stop order suspending the effectiveness of the Registration
Statement has been issued and, to the knowledge of such counsel, no proceeding
for that purpose is pending or threatened by the Commission. The Registration
Statement was declared effective under the Securities Act as of the date and
time specified in such opinion.
(xix) 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.
(xx) The Registration Statement and the Prospectus
and any further amendments or supplements thereto made by the Company prior to
such Time of Delivery (other than the financial statements and related schedules
and other financial information and data included therein, as to which no
opinion need be rendered) comply as to form in all material respects with the
requirements of the Securities Act, and the Trust Indenture Act and the
Indenture conforms in all material respects to the requirements of the Trust
Indenture Act.
(xxi) The statements contained in the Prospectus
under the captions "Risk Factors," "Description of Debt Securities," and
"Description of Notes," insofar as those statements are descriptions of
contracts, agreements or other legal documents, or 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; and (ii) as to matters of Maryland law, state that its opinion is
given solely in reliance upon the opinion of ▇▇▇▇ ▇▇▇▇▇ LLP; and (iii) in giving
the opinions referred to in subclauses
20
(vii) and (ix), state that such opinion with respect to the enforceability of
such documents may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally and by
equitable principles of general applicability. Such counsel shall also have
furnished to the Underwriters a written statement, addressed to the Underwriters
and dated such Time of Delivery, 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 Prospectus and has reviewed
the Registration Statement, 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 Time, 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, as of its date or as of such Time of Delivery, contained or contains
any untrue statement of a material fact or omitted 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, and may state that such counsel
expresses no belief with respect to the financial statements and related
schedules and other financial information and data included or incorporated by
reference in, or omitted from, the Registration Statement or the Prospectus, or
the Statement of Eligibility on Form T-1 of the Trustee.
(B) ▇▇▇▇ ▇▇▇▇▇ LLP shall have furnished to the
Underwriters its written opinion, as Maryland counsel to the Company, addressed
to the Underwriters and dated such Time of Delivery, 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, and has all trust 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.
(ii) The Company has an authorized capitalization as
set forth in the Prospectus.
(iii) This Agreement has been duly and validly
authorized, executed and delivered by the Company.
(iv) 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.
(v) 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.
(vi) To the knowledge of such counsel, there are no
legal or governmental
21
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.
(e) (i) Wolf, Block, ▇▇▇▇▇▇ and ▇▇▇▇▇-▇▇▇▇▇ LLP shall have
furnished to the Underwriters its written opinion, as counsel to the Company,
addressed to the Underwriters and dated such Time of Delivery, with respect to
such tax matters, including, without limitation, the qualification of the
Company as a real estate investment trust and the classification of the
Operating Partnership as a partnership (and not as a corporation) for federal
income tax purposes, as the Underwriters may reasonably require.
(ii) The statements contained in the Prospectus under
the caption "Federal Income Tax Considerations with Respect to the Trust and
Operating Partnership," and in the Prospectus Supplement under the caption
"Certain Federal Income Tax Considerations", 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, are correct in all material respects.
(f) The Underwriters shall have received from ▇▇▇▇▇ & ▇▇▇▇▇▇▇
L.L.P., counsel for the Underwriters, such opinion or opinions, addressed to the
Underwriters and dated such Time of Delivery, with respect to the issuance and
sale of the Securities being delivered at such Time of Delivery by the Operating
Partnership, 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.
(g) At the time of execution of this Agreement, the
Underwriters shall have received from Ernst & Young LLP a letter dated as of the
date of this Agreement, addressed to the Underwriters, in form and substance
reasonably satisfactory to the Underwriters, containing statements to the effect
that they are independent accountants with respect to the Transaction Entities
within the meaning of Rule 101 of the AICPA's Code of Professional Conduct, and
statements and information of the type ordinarily included in accountant's
"comfort letters" to underwriters, delivered according to Statement of Auditing
Standards No. 72 (or any successor bulletin), with respect to the audited and
unaudited financial statements and certain financial information contained in
the Registration Statement and the Prospectus.
(h) With respect to the letter of ▇▇▇▇▇ & Young LLP referred
to in the preceding paragraph and delivered to the Underwriters concurrently
with the execution of this Agreement (the "initial letter"), the Underwriters
shall have received from ▇▇▇▇▇ & Young LLP, on the effective date of any
post-effective amendment to the Registration Statement filed subsequent to the
date of this Agreement and also at the Time of Delivery, a letter (the
"bring-down letter"), in form and substance satisfactory to the Underwriters,
addressed to the Underwriters and dated the effective date of such
post-effective amendment or the date of such Time of Delivery, as applicable,
(i) confirming that they are independent public accountants within the meaning
of the Securities Act and are in compliance with
22
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
information is given in the Prospectus, as of a date not more than five days
prior to the date of such 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.
(i) The Transaction Entities shall have furnished to the
Underwriters at the Time of Delivery a certificate, addressed to the
Underwriters and dated the Time of Delivery, of the Chief Financial Officer of
the Company (for the Company and for the Company as general partner of the
Operating Partnership) in form and substance reasonably acceptable to the
Underwriters. In addition, the Transaction Entities shall have furnished to the
Underwriters at the Time of Delivery a certificate, addressed to the
Underwriters and dated the Time of Delivery, 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 and warranties of the
Transaction Entities in Section 1 are true and correct as of the Time of
Delivery; the Transaction Entities complied with all of their covenants and
agreements contained herein; and the conditions set forth in Sections 7(a), 7(i)
and 7(j) have been fulfilled; and
(ii) They have carefully examined the Registration
Statement and the Prospectus and, in their opinion (A) as of the 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 Effective Date no event has occurred which should have
been set forth in a supplement or amendment to the Registration Statement or the
Prospectus.
(j) (i) None of the Transaction Entities or any of their
subsidiaries or any Property shall have sustained since the date of the latest
audited financial statements included or incorporated by reference 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 shares 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 your judgment, so material and adverse as to make
it impracticable or inadvisable to proceed with the public offering or the
delivery of the Securities being delivered at such Time of Delivery on the terms
and in the manner contemplated in the Prospectus.
(k) 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
23
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 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 New York State authorities or
there shall have occurred a material disruption in commercial banking or
securities settlement or clearance services in the United States, (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 any other calamity or crisis in the United States or
elsewhere resulting in a material disruption in the financial markets in the
United States or 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 your judgment, impracticable or inadvisable to proceed
with the public offering or delivery of the Securities being delivered at such
Time of Delivery on the terms and in the manner contemplated in the Prospectus.
(l) Subsequent to the execution and delivery of this Agreement
(i) no downgrading shall have occurred in the rating accorded the Company's or
the Operating Partnership's debt securities by any "nationally recognized
statistical rating organization," as that term is defined by the Commission for
purposes of Rule 436(g)(2) of the Rules and Regulations and (ii) no such
organization shall have publicly announced that it has under surveillance or
review, with possible negative implications, its rating of any of the Company's
or the Operating Partnership's debt securities.
(m) The Company shall have complied with the provisions of
Section 5(c) hereof with respect to the furnishing of prospectuses on the New
York Business Day next succeeding the date of this Agreement.
(n) The Transaction Entities shall not have failed at or prior
to the Time of Delivery 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 the Time of Delivery.
(o) At the Time of Delivery, 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
Securities 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 Securities being delivered at such Time of Delivery as herein contemplated
shall be satisfactory in form and substance to you and your counsel.
(p) The Transaction Entities shall have furnished or caused to
be furnished to the Underwriters such further certificates and documents as the
Underwriters shall have reasonably requested.
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.
24
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.
8. 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 Securities), to which such Underwriter or
each such 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 in any Preliminary Prospectus, the
Registration Statement or the Prospectus or in any amendment or supplement
thereto, (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, 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 Securities 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 (provided that the Company 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 such Underwriter or such 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, in reliance upon and in conformity with written information
concerning such Underwriter furnished to the Transaction Entities 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 in any Preliminary Prospectus, the Registration Statement or the
Prospectus or in any amendment or supplement thereto, 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 any
material fact required to be stated therein or
25
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 Transaction Entities 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
subsection (a) or (b) of this Section 8 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 such subsection,
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 8 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 subsection (a) or (b) of this Section 8. If any such claim
or action shall be brought against an indemnified party, and it shall 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 such subsection 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 no more than one firm of
its own counsel (in addition to local 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 8 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.
26
(d) If the indemnification provided for in this Section 8
shall for any reason be unavailable to or insufficient to hold harmless an
indemnified party under Section 8(a) or 10(b) 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 Securities or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Transaction Entities, on the one hand,
and the Underwriters, on the other hand, 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 hand, with respect to such offering shall be deemed
to be in the same proportion as the total net proceeds from the offering of the
Securities 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
Securities purchased under this Agreement, on the other hand, bear to the total
gross proceeds from the offering of the Securities 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 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 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 8(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 8(d), no Underwriter shall be required to contribute
any amount in excess of the amount by which the total price at which the
Securities 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.
(e) The Underwriters severally confirm that the
statements on pages S-15 and S-16 of the prospectus supplement to the Prospectus
dated February 24, 2005 in the fourth, seventh, eighth and ninth paragraphs of
the "Underwriting" section, are correct and each Transaction Entity acknowledges
that these statements constitute the only information concerning such
Underwriters furnished in writing to the Transaction Entities by or on behalf of
the Underwriters specifically for inclusion in the Registration Statement, the
Preliminary Prospectus, if any, and the Prospectus.
9. Termination. The obligations of the Underwriters hereunder may be
terminated by you by notice given to and received by the Company prior to
delivery of and payment for the Securities if, prior
27
to that time, any of the events described in Sections 7(i), 7(j), 7(k), 7(l), or
7(m), shall have occurred or if the Underwriters shall decline to purchase the
Securities for any reason permitted under this Agreement.
10. Reimbursement of Underwriters' Expenses. If the Operating
Partnership shall fail to tender the Securities 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 reasonable fees and disbursements of counsel) incurred by the
Underwriters in connection with this Agreement and the proposed purchase of the
Securities, and upon demand the Transaction Entities shall pay the full amount
thereof to the Underwriters.
11. 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 you as the Representative at Citigroup
Global Markets Inc., ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: General Counsel (Fax ▇▇▇-▇▇▇-▇▇▇▇), and at UBS Securities LLC, ▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Fixed Income Syndicate
(Phone ▇▇▇-▇▇▇-▇▇▇▇ and Fax ▇▇▇-▇▇▇-▇▇▇▇); and
(b) if to the Transaction Entities shall be delivered or sent
by mail, telex or facsimile transmission to the Company, at Liberty Property
Trust, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: General Counsel
(Fax: ▇▇▇-▇▇▇-▇▇▇▇).
Any such statements, requests, notices or agreements shall take effect at the
time of receipt thereof.
12. 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 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 8(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 12, any legal or equitable
right, remedy or claim under or in respect of this Agreement or any provision
contained herein.
13. 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 of the Transaction Entities or the
Underwriters pursuant to this Agreement, shall survive the delivery of and
payment for the Securities 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.
28
14. Time of the Essence. Time shall be of the essence of this
Agreement.
15. 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.
16. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
17. 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.
18. 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.
19. Authorization to Disclose Tax Matters. The Underwriters and the
Transaction Entities (and each employee, representative, or other agent of such
party) are authorized, subject to applicable law, to disclose any and all
aspects of this potential transaction that are necessary to support any U.S.
federal income tax benefits expected to be claimed with respect to such
transaction, and all materials of any kind (including tax opinions and other tax
analyses) related to those benefits, without any limitation of any kind.
[SIGNATURES APPEAR ON NEXT PAGE]
29
If the foregoing is in accordance with your understanding, please sign
and return to us four counterparts hereof (one for the Transaction Entities, one
for you, one for the Transaction Entities' counsel and one for your counsel),
and upon the acceptance hereof by you, on behalf of each of the Underwriters,
this letter and such acceptance hereof shall constitute a binding agreement
between each of the Underwriters and the Transaction Entities. It is understood
that your acceptance of this letter on behalf of each of the Underwriters is
pursuant to the authority set forth in a form of Agreement among Underwriters,
the form of which shall be submitted to the Company for examination upon
request, but without warranty on your part as to the authority of the signers
thereof.
Very truly yours,
LIBERTY PROPERTY TRUST
By: ________________________________
Name:
Title:
LIBERTY PROPERTY LIMITED PARTNERSHIP
By: Liberty Property Trust, its general
partner
By: __________________________
Name:
Title:
Accepted:
CITIGROUP GLOBAL MARKETS INC.
-----------------------------------
Name:
Title:
UBS SECURITIES LLC
-----------------------------------
Name:
Title:
On behalf of each of the Underwriters
SCHEDULE I
PRINCIPAL
AMOUNT OF
SECURITIES
TO BE
UNDERWRITER PURCHASED
----------- ---------
Citigroup Global Markets Inc . $118,500,000
UBS Securities LLC ........... $118,500,000
Banc of America Securities LLC $ 10,500,000
Credit Suisse First Boston LLC $ 10,500,000
Greenwich Capital Markets, Inc $ 10,500,000
SunTrust Capital Markets, Inc $ 10,500,000
Wachovia Capital Markets, LLC $ 10,500,000
▇▇▇▇▇ Fargo Securities, LLC .. $ 10,500,000
------------
Total ...... $300,000,000
SCHEDULE II
A. Jurisdictions of Due Qualification and Good Standings for Liberty
Property Trust
Maryland
Florida
Kansas
Michigan
New Jersey
South Carolina
B. Jurisdictions of Due Qualification and Good Standings for Liberty
Property Limited Partnership
Florida
Kansas
Maryland
Michigan
Pennsylvania
Minnesota
New Jersey
North Carolina
South Carolina
Texas
Virginia
Wisconsin.
SCHEDULE III
Liberty Property Philadelphia Corp., a Pennsylvania corporation
Liberty Property Philadelphia Trust, a Pennsylvania trust
Liberty Property Philadelphia Corp-IV East, a Pennsylvania corporation
Liberty Property Philadelphia Corp-IV West, a Pennsylvania corporation
Liberty Property Philadelphia Navy Yard Corp., a Pennsylvania corporation
Liberty Property Philadelphia Corporation V, a Pennsylvania corporation