Exhibit 1.1
LIBERTY PROPERTY LIMITED PARTNERSHIP
(a Pennsylvania Limited Partnership)
$150,000,000 6.375% SENIOR NOTES DUE 2012
UNDERWRITING AGREEMENT
August 19, 2002
▇▇▇▇▇▇ Brothers Inc.,
Banc One Capital Markets, Inc.
Credit Suisse First Boston Corporation
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
Wachovia Securities, Inc.
c/▇ ▇▇▇▇▇▇ Brothers 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 with ▇▇▇▇▇▇ Brothers
Inc., Banc One Capital Markets, Inc., Credit Suisse First Boston Corporation,
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co., ▇.▇. ▇▇▇▇▇▇ Securities Inc., ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. and
Wachovia Securities, Inc. (the "Underwriters," which term shall also include any
underwriter substituted as hereinafter provided in Section 9 of this Agreement),
with respect to the sale by the Operating Partnership and the purchase by the
Underwriters, acting severally and not jointly, of $150,000,000 aggregate
principal amount of its 6.375% Senior Notes due 2012 (the "Notes"), as further
described on Schedule II hereto.
Capitalized terms used but not otherwise defined herein shall
have the meanings given to those terms in the Prospectus (as herein defined).
1. Representations, Warranties and Agreements of the
Transaction Entities. Each of the Transaction Entities, jointly and severally,
represents, warrants and agrees that, as of the date hereof:
(a) A registration statement on Form S-3 (No.
333-39282)(the "Registration statement") 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 United
States Securities Act of 1933, as amended (the "Securities
Act") and the rules and regulations (the "Rules and
Regulations") of the United States Securities and Exchange
Commission (the "Commission") thereunder, (ii) been filed with
the Commission under the Securities Act and (iii) become
effective under the Securities Act; and the indenture, dated
as of October 24, 1997 as supplemented to the date hereof (the
"Indenture"), between the Operating Partnership and Bank One
Trust Company, N.A. (as successor to The First National Bank
of Chicago), as trustee (the "Trustee") has been qualified,
and the Sixth Supplemental Indenture, to be dated as of August
22, 2002, between the Operating Partnership and the Trustee
(the "Supplemental Indenture"), pursuant to which the Notes
shall be issued, will be qualified, under the Trust Indenture
Act of 1939 (the "Trust Indenture Act"). Copies of such
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 the
consent of the Underwriters pursuant to Rule 424(a) of the
Rules and Regulations; "Registration Statement" means the
Registration Statement, 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 first filed
with the Commission pursuant to paragraph (1) or (4) of Rule
424(b) of the Rules and Regulations. Any reference herein to
the Registration Statement, the Prospectus or a Preliminary
Prospectus shall be deemed to include the documents
incorporated or deemed to be incorporated by reference therein
which were filed under the Securities and Exchange Act of
1934, as amended (the "Exchange Act"). For purposes of this
Agreement, all references to the Registration Statement, any
Preliminary Prospectus or the Prospectus or any amendment or
supplement to any of the foregoing shall be deemed to include
the copy filed with the Commission pursuant to its Electronic
Data Gathering, Analysis and Retrieval system ("▇▇▇▇▇").
(b) Each Preliminary Prospectus, 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
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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) The Registration Statement conforms in all
material respects, and the Prospectus and any further
amendments or supplements to the Registration Statement or the
Prospectus will, when they become effective or are filed with
the Commission, as the case may be, conform in all material
respects to the requirements of the Securities Act, 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 the Delivery Date (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 through the Underwriters 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 the Underwriters for use in connection
with this offering was identical to the electronically
transmitted copies thereof filed with the Commission pursuant
to ▇▇▇▇▇, except to the extent permitted by Regulation S-T.
(d) The documents incorporated or deemed to be
incorporated by reference in the Registration Statement as of
the applicable Effective Date, the Prospectus as of its date
or any Preliminary Prospectus as of its date, complied in all
material respects with the Exchange Act and the rules and
regulations thereunder, and none of such documents, at such
dates, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein
or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
(e) No stop order suspending the effectiveness of the
Registration Statement or any part thereof has been issued and
no proceeding for that purpose has been instituted or, to the
knowledge of either of the Transaction Entities, threatened by
the Commission or by the state securities authority of any
jurisdiction. No order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus has been issued and
no proceeding for that purpose
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has been instituted or, to the knowledge of either of the
Transaction Entities, after due inquiry of the Commission,
threatened by the Commission or by the state securities
authority of any jurisdiction.
(f) The Company has been duly formed and is validly
existing as a real estate investment trust in good standing
under the laws of the State of Maryland, is duly qualified to
do business and is in good standing in each jurisdiction in
which its ownership or lease of property or the conduct of its
business requires such qualification, and has all power and
authority necessary to own or hold its properties, to conduct
the business in which it is engaged and to enter into and
perform its obligations under this Agreement. None of the
subsidiaries of the Company (other than the Operating
Partnership) is a "significant subsidiary," as such term is
defined in Rule 405 of the Rules and Regulations. Except as
described in the Prospectus and other than the Property
Affiliates (as defined herein) and the Operating Partnership,
Development Corp. and SP Trust, the Company owns no direct or
indirect equity interest in any entity, except for such
interests as, in the aggregate, are not material to the
condition, financial or otherwise, or the earnings, assets,
business affairs or business prospects of the Company and its
subsidiaries considered as a single enterprise.
(g) 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 Trust'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 no outstanding options, rights
(preemptive or otherwise) or warrants to purchase or subscribe
for shares of beneficial interest or any other securities of
the Company.
(h) The Operating Partnership has been duly formed
and is validly existing as a limited partnership in good
standing under the laws of the Commonwealth of Pennsylvania,
is duly qualified to do business and is in good standing as a
foreign limited partnership in each jurisdiction in which its
ownership or lease of property or the conduct of its business
requires such qualification (each such jurisdiction as
provided in Schedule III), 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
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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, are fully paid 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 authorized and validly issued and is fully paid and
non-assessable, has been offered and sold in compliance with
all applicable laws (including, without limitation, federal or
state securities laws) and all of the capital stock of
Development Corp. owned by the Operating Partnership, as
described in the Prospectus, is owned free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim,
restriction or equities. No shares of capital stock of
Development Corp. are reserved for any purpose, and there are
no outstanding securities convertible into or exchangeable for
any capital stock of Development Corp., and no outstanding
options, rights (preemptive or otherwise) or warrants to
purchase or to subscribe for shares of such capital stock or
any other securities of Development Corp.
(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 authorized and validly issued and is fully paid and
non-assessable, has been offered and sold in compliance with
all applicable laws (including, without limitation, federal or
state securities laws) and all of the capital stock of
Development-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 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 Development Corp.-III
("Development-III") 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
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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-III has been duly
authorized and validly issued and is fully paid and
non-assessable, has been offered and sold in compliance with
all applicable laws (including, without limitation, federal or
state securities laws) and all of the capital stock of
Development-III 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-III are reserved for any purpose, and there are no
outstanding securities convertible into or exchangeable for
any capital stock of Development-III, and no outstanding
options, rights (preemptive or otherwise) or warrants to
purchase or to subscribe for shares of such capital stock or
any other securities of Development-III.
(l) 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 as a foreign corporation in each jurisdiction in
which its ownership or lease of property or the conduct of its
business requires such qualification, and has all corporate
power and authority necessary to own or hold its properties
and to conduct the business in which it is engaged. All of the
issued and outstanding equity interests of SP Trust have been
duly authorized and validly issued and are fully paid and
non-assessable, has been offered and sold in compliance with
all applicable laws (including, without limitation, federal or
state securities laws) and all of the 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 shares of 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 no outstanding options,
rights (preemptive or otherwise) or warrants to purchase or to
subscribe for shares of such equity interests or any other
securities of SP Trust
(m) 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 and Liberty Property Philadelphia Trust, a
Pennsylvania trust, 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 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
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interests of each Property Affiliate have been duly and
validly authorized and issued, are fully paid and
non-assessable and all of the 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.
(n) The Notes 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 of the
Indenture, and enforceable against the Operating Partnership
in accordance with their terms. Upon payment of the purchase
price and delivery of the Notes in accordance herewith, each
of the Underwriters will receive good, valid and marketable
title to the Notes, free and clear of all security interests,
mortgages, pledges, liens, encumbrances, claims, restrictions
and equities.
(o) 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 will be duly and validly authorized
and, when duly 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 Notes, the
Indenture and the Supplemental Indenture conform in all
material respects to the descriptions thereof contained in the
Prospectus.
(p) (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
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.
(q) 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 is a
party or by which either of the Transaction Entities is bound
or to which any of the Properties or other
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assets of either of the Transaction Entities is subject, nor
will such actions result in any violation of the provisions of
the charter, by-laws, certificate of limited partnership or
agreement of limited partnership of either of the Transaction
Entities, or any statute or any order, rule or regulation of
any court or governmental agency or body having jurisdiction
over either of the Transaction Entities or any of their
properties or assets; and except for the registration of the
Notes 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 be required under the Exchange Act and applicable state
securities laws in connection with the purchase and
distribution of the Notes by the Underwriters, no consent,
approval, authorization or order of, or filing or registration
with, any such court or governmental agency or body is
required for the execution, delivery and performance of this
Agreement by the Transaction Entities or the Indenture by the
Operating Partnership, the consummation of the transactions
contemplated hereby and thereby, and the issuance and delivery
of the Notes.
(r) No event has occurred and is continuing that, had
the Notes 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.
(s) Other than as described in the Prospectus, as
disclosed to ▇▇▇▇▇▇ Brothers Inc. 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 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 owned or to be owned by
such person or to require either of the Transaction Entities
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 under the Securities Act.
(t) Except as described or contemplated in the
Prospectus or pursuant to the Share Incentive Plan, and except
for the issuance of common shares 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.
(u) 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
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any labor dispute or court or governmental action, order or
decree, other than as set forth or contemplated in the
Prospectus; and, since such date, there has not been any
material change in the capital stock or long-term debt of
either of the Transaction Entities or any material adverse
change, or any development involving a prospective material
adverse change, in or affecting 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.
(v) 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 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.
(w) ▇▇▇▇▇ & 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(f) hereof, are independent public
accountants as required by the Securities Act and the Rules
and Regulations.
(x) (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, Development-II and
Development III or those which are not material in amount or
those which would not have a material adverse effect on the
business, operations, use or value of any of the Properties;
(B) all liens, charges, encumbrances, claims or restrictions
on or affecting any of the Properties and the assets of any
Transaction Entity which are required to be disclosed in the
Prospectus are disclosed therein; (C) except as otherwise
described in the Prospectus, neither Transaction Entity and,
to the knowledge of the Transaction Entities, no tenant of any
of the Properties is in default under (i) any space leases (as
lessor or lessee, as the case may be) relating to the
Properties, or (ii) any of the mortgages or other security
documents or other agreements encumbering or
9
otherwise recorded against the Properties, in each case which
default would have a material adverse effect on the applicable
Property, and neither Transaction Entity knows of any event
which, but for the passage of time or the giving of notice, or
both, would constitute such a default under any of such
documents or agreements; (D) each of the Properties complies
with all applicable codes, laws and regulations (including,
without limitation, building and zoning codes, laws and
regulations and laws relating to access to the Properties),
except for such failures to comply that would not have a
material adverse effect on the business operations, use or
value of such Property; and (E) neither Transaction Entity has
knowledge of any pending or threatened condemnation
proceedings, zoning change or other proceeding or action that
will in any material manner adversely affect the size of, use
of, improvements on, construction on or access to the
Properties.
(y) 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.
(z) The Operating Partnership and the Property
Affiliates have obtained title insurance on the fee or
leasehold interests in each of the Properties, in an amount at
least equal to the greater of (A) the mortgage indebtedness of
each such Property or (B) the purchase price (exclusive of
improvements) of each such Property.
(aa) Except as disclosed in the Prospectus and except
such as in each case would not have a material adverse effect
on any Property, Property Affiliate, or Transaction Entity or
any of their subsidiaries, taken together as a whole; (A) to
the knowledge of the Transaction Entities, after due inquiry,
(i) the operations of the Company, the Operating Partnership,
Development Corp., Development II, Development III and SP
Trust, and (ii) the Properties are in compliance with all
Environmental Laws (as defined below) and all requirements of
applicable permits, licenses, approvals and other
authorizations issued pursuant to Environmental Laws; (B) to
the knowledge of the Transaction Entities, after due inquiry,
none of the Transaction Entities, the Property Affiliates or
any Property has caused or suffered to occur any Release (as
defined below) of any Hazardous Substance (as defined below)
into the Environment (as defined below) on, in, under or from
any Property, and no condition exists on, in, under or
adjacent to any Property that could result in the incurrence
of liabilities under, or any violations of, any Environmental
Law or give rise to the imposition of any Lien (as defined
below), under any Environmental Law; (C) none of the
Transaction Entities or Property Affiliates has received any
written notice of a claim under or pursuant to any
Environmental Law or under common law pertaining to Hazardous
Substances on, in, under or originating from any Property; (D)
neither of the Transaction Entities has actual knowledge of,
or received any written notice from any Governmental Authority
(as defined below) claiming, any violation of any
Environmental Law or a determination to
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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" 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.
11
(bb) 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.
(cc) 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.
(dd) Except as described in the Prospectus, there are
no legal or governmental proceedings pending to which either
Transaction Entity or their subsidiaries is a party or of
which any property or assets of either Transaction Entity or
their subsidiaries is the subject which, if determined
adversely to such Transaction Entity or subsidiary, could
reasonably be expected to have a material adverse effect on
the consolidated financial position, shareholders' equity,
results of operations, business or prospects of the Company;
and to the knowledge of the Transaction Entities, no such
proceedings are threatened or contemplated by governmental
authorities or threatened by others.
(ee) 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.
(ff) No relationship, direct or indirect, exists
between or among either of the Transaction Entities on the one
hand, and the trustees, officers, shareholders, customers or
suppliers of the Transaction Entities on the other hand, that
is required to be described in the Prospectus that is not so
described.
(gg) No labor disturbance by the employees of either
Transaction Entity exists or, to the knowledge of the
Transaction Entities, is imminent which might be expected to
have a material adverse effect on the consolidated financial
position, shareholders' equity, results of operations,
business or prospects of such Transaction Entity.
(hh) Each "pension plan" for which either Transaction
Entity would have any liability that is intended to be
qualified under section 401(a) of the Code is (i) so qualified
in all material respects and nothing has occurred, whether by
action or by failure to act, which would cause the loss of
such qualification 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
12
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"); and.
(ii) Each Transaction Entity and their subsidiaries
has filed all federal, state and local income and franchise
tax returns required to be filed through the date hereof and
has paid all taxes due thereon, and no material tax deficiency
has been determined adversely to either Transaction Entity or
their subsidiaries which has had (nor does either Transaction
Entity have any knowledge of any tax deficiency which, if
determined adversely to it might have) a material adverse
effect on the financial position, shareholders' equity,
results of operations, business or prospects of such
Transaction Entity or subsidiary.
(jj) At all times since June 16, 1994, the Company,
the Operating Partnership, Development Corp., Development II,
Development III and SP Trust have been, and upon the sale of
the Notes 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, Development III 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.
(kk) Since the date as of which information is given
in the Prospectus through the date hereof, and except as may
otherwise be disclosed or contemplated in the Prospectus,
neither Transaction Entity has (i) issued or granted any
securities, (ii) incurred any liability or obligation, direct
or contingent, other than liabilities and obligations which
were incurred in the ordinary course of business, (iii)
entered into any transaction not in the ordinary course of
business nor (iv) declared or paid any dividend on its capital
stock (other than regular quarterly dividends).
(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.
13
(mm) No Transaction Entity or any of their
subsidiaries (i) is in violation of its charter, by-laws,
certificate of limited partnership, agreement of limited
partnership or other similar organizational document, (ii) is
in default in any material respect, and no event has occurred
which, with notice or lapse of time or both, would constitute
such a default, in the due performance or observance of any
term, covenant or condition contained in any material
indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which it is a party or by which it
is bound or to which any of the Properties or any of its other
properties or assets is subject or (iii) is in violation in
any material respect of any law, ordinance, governmental rule,
regulation or court decree to which it or the Properties or
any of its other properties or assets may be subject or has
failed to obtain any material license, permit, certificate,
franchise or other governmental authorization or permit
necessary to the ownership of the Properties or any of its
other properties or assets or to the conduct of its business.
(nn) Neither Transaction Entity, nor any trustee,
officer, agent, employee or other person associated with or
acting on behalf of either Transaction Entity, has used any
corporate funds for any unlawful contribution, gift,
entertainment or other unlawful expense relating to political
activity; made any direct or indirect unlawful payment to any
foreign or domestic government official or employee from
corporate funds; violated or is in violation of any provision
of the Foreign Corrupt Practices Act of 1977; or made any
bribe, rebate, payoff, influence payment, kickback or other
unlawful payment.
(oo) 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 and the
rules and regulations of the Commission thereunder.
(pp) Other than this Agreement and as set forth in
the Prospectus under the heading "Underwriting," there are no
contracts, agreements or understandings between either
Transaction Entity and any person that would give rise to a
valid claim against either Transaction Entity or any
Underwriter for a brokerage commission, finder's fee or other
like payment with respect to the consummation of the
transactions contemplated by this Agreement.
(qq) Each Transaction Entity has complied with all
applicable provisions of Florida Statutes Section 517.075,
relating to issuers doing business with Cuba.
2. Purchase of the Notes 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 sell to the
several Underwriters, and each of the Underwriters, severally and not jointly,
agrees to purchase from the Operating Partnership, the respective principal
amount of Notes set forth opposite that Underwriter's name in Schedule I hereto
at the purchase price set forth in Schedule II hereto plus accrued interest, if
any, from the date specified in Schedule II hereto to the date of payment and
delivery.
14
3. Offering of Notes by the Underwriters. The several
Underwriters propose to offer the Notes for sale upon the terms and conditions
set forth in the Prospectus.
4. Delivery of and Payment for the Notes. Delivery of and
payment for the Notes shall be made at the office of ▇▇▇▇▇▇▇▇ Chance ▇▇▇▇▇▇ &
▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, at 10:00 A.M., New York
City time, on the third full business day following the date of this Agreement
or on the fourth full business day if this Agreement is executed after the daily
closing time of the New York Stock Exchange (unless postponed in accordance with
the provisions of Section 9 hereof), or at such other date or place as shall be
determined by agreement between the Underwriters and the Operating Partnership.
This date and time are sometimes referred to as the "Delivery Date." On the
Delivery Date, the Operating Partnership shall deliver or cause to be delivered
the Notes to the Underwriters for the account of each Underwriter against
payment to or upon the order of the Operating Partnership of the purchase price
by certified or official bank check or checks payable in same day funds or, at
the discretion of the Operating Partnership, by wire transfer in same day funds.
Time shall be of the essence, and delivery at the time and place specified
pursuant to this Agreement is a further condition of the obligation of each
Underwriter hereunder. Upon delivery, the Notes shall be registered in such
names and in such denominations as the Underwriters shall request in writing not
less than two full business days prior to the Delivery Date. For the purpose of
expediting the checking and packaging of the Notes, the Operating Partnership
shall make the Notes available for inspection by the Underwriters in New York,
New York, not later than 2:00 P.M., New York City time, on the business day
prior to the Delivery Date.
5. Further Agreements of the Transaction Entities. Each of the
Transaction Entities jointly and severally agrees:
(a) To prepare the Prospectus in a form approved by
the Underwriters and to file such Prospectus pursuant to Rule
424(b) under the Securities Act not later than the
Commission's close of business on the second business day
following the execution and delivery of this Agreement or, if
applicable, such earlier time as may be required by Rule
430A(a)(3) under the Securities Act; to make no further
amendment or any supplement to the Registration Statement or
to the Prospectus except in accordance with Section 5(e)
hereof and except for the Form 8-K; to advise the
Underwriters, promptly after it receives notice thereof, of
the time when any amendment to the Registration Statement has
been filed or becomes effective or any supplement to the
Prospectus or any amended Prospectus has been filed and to
furnish the Underwriters with copies thereof; to advise the
Underwriters, promptly after it receives notice thereof, of
the issuance by the Commission of any stop order or of any
order preventing or suspending the use of any Preliminary
Prospectus or the Prospectus, of the suspension of the
qualification of the Notes for offering or sale in any
jurisdiction, of the initiation or threatening of any
proceeding for any such purpose, or of any request by the
Commission for the amending or supplementing of the
Registration Statement or the Prospectus or for additional
information; and, in the event of the issuance of any stop
order or of any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus or suspending any
such qualification, to use promptly its best efforts to obtain
its withdrawal;
15
(b) To furnish promptly to the Underwriters and to
counsel for the Underwriters such number of conformed copies
as the Underwriters shall reasonably request of the
Registration Statement as originally filed with the
Commission, and each amendment thereto filed with the
Commission, including all consents and exhibits filed
therewith or incorporated by reference therein and all
documents incorporated by reference therein;
(c) To deliver promptly to the Underwriters such
number of the following documents as the Underwriters shall
reasonably request: (i) conformed copies of the Registration
Statement as originally filed with the Commission and each
amendment thereto (in each case excluding exhibits other than
this Agreement) and (ii) each Preliminary Prospectus, the
Prospectus and any amended or supplemented Prospectus; and, if
the delivery of a prospectus is required at any time after the
applicable Effective Time in connection with the offering or
sale of the Notes or any other securities relating thereto and
if at such time any events shall have occurred as a result of
which the Prospectus as then amended or supplemented would
include an untrue statement of a material fact or omit to
state any material fact necessary in order to make the
statements therein, in the light of the circumstances under
which they were made when such Prospectus is delivered, not
misleading, or, if for any other reason it shall be necessary
to amend or supplement the Prospectus in order to comply with
the Securities Act or the Exchange Act, to notify the
Underwriters and, upon their request, to file such document
and to prepare and furnish without charge to each Underwriter
and to any dealer in securities as many copies as the
Underwriters may from time to time reasonably request of an
amended or supplemented Prospectus which will correct such
statement or omission or effect such compliance. The
aforementioned documents furnished to the Underwriters will be
identical to the electronically transmitted copies thereof
filed with the Commission pursuant to ▇▇▇▇▇, except to the
extent permitted by Regulation S-T.
(d) To file promptly with the Commission any
amendment to the Registration Statement or the Prospectus or
any supplement to the Prospectus that may, in the judgment of
the Company or counsel for the Underwriters, be required by
the Securities Act or requested by the Commission;
(e) Prior to filing with the Commission any amendment
to the Registration Statement or supplement to the Prospectus
or any Prospectus pursuant to Rule 424 of the Rules and
Regulations, to furnish a copy thereof to the Underwriters and
counsel for the Underwriters within a reasonable period of
time prior to the filing thereof, and that filing thereof
shall not occur if the Underwriters shall have objected in
good faith thereto;
(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
16
Regulations), which need not be certified by independent
certified public accountants unless required by the Securities
Act or the Rules and Regulations, covering a twelve-month
period commencing after the "effective date" (as defined in
said Rule 158) of the Registration Statement;
(g) For a period of five years following the
applicable Effective Date, to furnish to the Underwriters
copies of all materials furnished by the Operating Partnership
to its shareholders and all public reports and all reports and
financial statements furnished by the Operating Partnership to
the Commission pursuant to the Exchange Act or any rule or
regulation of the Commission thereunder;
(h) Promptly from time to time to take such action as
the Underwriters may reasonably request to qualify the Notes
for offering and sale under the securities, real estate
syndication or Blue Sky laws of such jurisdictions as the
Underwriters may request and to comply with such laws so as to
permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the
distribution of the Notes, except that the Operating
Partnership shall not be required in connection therewith to
qualify as a foreign corporation or to execute a consent to
service of process in any jurisdiction;
(i) Until the Delivery Date, neither the Operating
Partnership nor the Company will, directly or indirectly,
offer for sale, contract to sell, sell or otherwise dispose
of, or register for sale under the Securities Act, any debt
securities, or sell or grant options, rights or warrants with
respect to any debt securities, without the prior written
consent of ▇▇▇▇▇▇ Brothers Inc.;
(j) To apply the net proceeds from the sale of the
Notes 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 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 to or that might reasonably be
expected to cause or result in stabilization or manipulation
of the price of the Notes to facilitate the sale or resale of
the Notes;
(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
17
jointly and severally agree to reimburse the Underwriters for
all reasonable out-of-pocket expenses (including fees and
expenses of counsel for the Underwriters) incurred by the
Underwriters in connection herewith.
6. Expenses. The Transaction Entities jointly and severally
agree to pay (a) the costs incident to the authorization, issuance, sale and
delivery of the Notes 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 Notes; (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 Notes; (f) any
applicable listing or other fees; (g) the fees and expenses of qualifying the
Notes 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) the
fees paid to rating agencies in connection with the rating of the Notes; 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 12, the Underwriters shall pay their own costs
and expenses, including the costs and expenses of their counsel, any transfer
taxes on the Notes which they may sell and the expenses of advertising any
offering of the Notes made by the Underwriters.
7. Conditions of Underwriters' Obligations. The respective
obligations of the Underwriters hereunder are subject to the accuracy, when made
and on the Delivery Date, of the representations and warranties of the
Transaction Entities contained herein, to the performance by each Transaction
Entity of its obligations hereunder, and to each of the following additional
terms and conditions:
(a) If, at the time this Agreement is executed and
delivered, it is necessary for the Registration Statement or a
post-effective amendment thereto to be declared effective
before the offering of the Notes may commence, the
Registration Statement or such post-effective amendment shall
have become effective not later than 5:30 P.M., New York City
time, on the date hereof, or at such later date and time as
shall be consented to in writing by you, and all filings, if
any, required to have been made by such time by Rules 424 and
430A under the Rules and Regulations shall have been timely
made; no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no
proceeding for that purpose shall have been instituted or, to
the knowledge of the Transaction Entities or any Underwriter,
threatened by the Commission, and any request of the
Commission for additional information (to be included in the
Registration Statement or the Prospectus or otherwise) shall
have been complied with to the satisfaction of the
Underwriters.
18
(b) Subsequent to the effective date of this
Agreement, there shall not have occurred (i) any change, or
any development involving a prospective change, in or
affecting the condition, financial or otherwise, business,
properties, net worth, or results of operations of either
Transaction Entity or any of their subsidiaries or any
Property not contemplated by the Prospectus, which in the
reasonable opinion of the Underwriters, would materially
adversely affect the market for the Notes, 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 the Underwriters or their counsel, materially
adversely affect the market for the Notes.
(c) All corporate and partnership proceedings and
other legal matters incident to the authorization, form and
validity of this Agreement, the Indenture, the Notes, the
Registration Statement and the Prospectus, and all other legal
matters relating to this Agreement, the Indenture, the Notes,
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 the Delivery Date, in form and substance reasonably
satisfactory to the Underwriters, to the effect that:
(i) The Company is in good standing as a
foreign trust or corporation in those jurisdictions
listed in such opinion.
(ii) The Operating Partnership is validly
existing 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 all partnership power
and authority necessary to own or hold its
properties, to conduct the business in which it is
engaged as described in the Registration Statement
and the Prospectus, and to enter into and perform its
obligations under this Agreement. The Company is the
sole general partner of the Operating Partnership.
The Operating Partnership Agreement is in full force
and effect, and the aggregate percentage interests of
the Company and the
19
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, are fully paid
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.
(iii) Development Corp. is validly existing
as a corporation in good standing under the laws of
the Commonwealth of Pennsylvania, is duly qualified
to do business and is in good standing as a foreign
corporation in Florida, Maryland, Michigan,
Minnesota, New Jersey, North Carolina, Virginia and
Wisconsin, and has all corporate power and authority
necessary to own or hold its properties and to
conduct the business in which it is engaged as
described in the Registration Statement and the
Prospectus. All of the issued and outstanding capital
stock of Development Corp. has been duly authorized
and validly issued and is fully paid and
non-assessable, has been offered and sold in
compliance with all applicable laws (including,
without limitation, federal or state securities laws)
and all of the capital stock of Development Corp.
owned by the Operating Partnership, as described in
the Prospectus, is owned free and clear of any
security interest, mortgage, pledge, lien,
encumbrance, claim, restriction or equities.
(iv) Development-II is validly existing as a
corporation in good standing under the laws of the
Commonwealth of Pennsylvania, is duly qualified to do
business and is in good standing as a foreign
corporation in Florida and Texas, and has all
corporate power and authority necessary to own or
hold its properties and to conduct the business in
which it is engaged as described in the Registration
Statement and the Prospectus. All of the issued and
outstanding capital stock of Development-II has been
duly authorized and validly issued and is fully paid
and non-assessable, has been offered and sold in
compliance with all applicable laws (including,
without limitation, federal or state securities laws)
and all of the capital stock of Development-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.
(v) Development-III is validly existing as a
corporation in good standing under the laws of the
Commonwealth of Pennsylvania and has all corporate
power and authority necessary to own or hold its
properties and to conduct the business in which it is
engaged as described in the Registration Statement
and the Prospectus. All of the issued and outstanding
capital stock of Development-III has been duly
authorized and validly issued and is fully paid and
non-assessable, has been offered and sold in
compliance with all applicable laws (including,
without limitation, federal or state securities laws)
and all of the capital stock of Development-III owned
by the Operating Partnership, as described in the
20
Prospectus, is owned free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim,
restriction or equities.
(vi) SP Trust is validly existing as a
business trust in good standing under the laws of the
Commonwealth of Pennsylvania and has all trust power
and authority necessary to own or hold its properties
and to conduct the business in which it is engaged as
described in the Registration Statement and the
Prospectus. All of the issued and outstanding equity
interests of SP Trust have been duly authorized and
validly issued and are fully paid and non-assessable,
are owned by the Company free and clear of any
security interest, mortgage, pledge, lien,
encumbrance, claim, restriction or equities and have
been offered and sold in compliance with all
applicable laws (including, without limitation,
federal or state securities laws).
(vii) Each of the Property Affiliates is
validly existing as a limited partnership, limited
liability company or other entity in good standing
under the laws of the jurisdiction in which it was
organized, and has all power and authority necessary
to own or hold its properties and to conduct the
business in which it is engaged. Except as set forth
in the Prospectus, all of the partnership interests,
membership interests or other equity interests, as
the case may be, of each Property Affiliate have been
duly and validly authorized and issued, are fully
paid and non-assessable and all such 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.
(viii) (A) This Agreement has been duly and
validly authorized, executed and delivered by the
Operating Partnership, and has been duly and validly
executed and delivered by the Company, and assuming
due authorization, execution and delivery by the
Underwriters and due authorization by the Company, is
a valid and binding agreement of the Operating
Partnership; and (B) the Operating Partnership
Agreement and the partnership agreement, limited
liability company agreement or similar such document
of each Property Affiliate, have been duly and
validly authorized, executed and delivered by each
Transaction Entity party thereto and are valid and
binding agreements of the parties thereto,
enforceable against such parties in accordance with
their terms.
(ix) 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
21
all material respects to the descriptions thereof
contained in the Prospectus.
(x) The Notes have been duly authorized,
executed, issued and delivered by the Operating
Partnership, and constitute valid and binding
obligations of the Operating Partnership entitled to
the benefits of the Indenture and enforceable against
the Operating Partnership in accordance with their
terms. Upon payment of the purchase price and
delivery of the Notes in accordance herewith, each of
the Underwriters will receive good, valid and
marketable title to the Notes, which to such
counsel's knowledge, after due inquiry, are free and
clear of all security interests, mortgages, pledges,
liens, encumbrances, claims, restrictions and
equities. The terms of the Notes conform to all
statements and descriptions related thereto contained
in the Prospectus. The Notes rank and will rank on a
parity with all unsecured indebtedness (other than
subordinated indebtedness of the Operating
Partnership that is outstanding on the date thereof
or that may be incurred thereafter), and senior to
all subordinated indebtedness of the Operating
Partnership that is outstanding on the date thereof
or that may be incurred thereafter, except that the
Notes will be effectively subordinated to the prior
claims of each secured mortgage lender to any
specific Property which secures such lender's
mortgage.
(xi) To the knowledge of such counsel, the
execution, delivery and performance of this Agreement
by each of the Transaction Entities and the
consummation of the transactions contemplated hereby
will not (i) conflict with or result in a breach or
violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage,
deed of trust, loan agreement or other agreement or
instrument to which either of the Transaction
Entities or their subsidiaries is a party or by which
either of the Transaction Entities or their
subsidiaries is bound or to which any of the
Properties or other assets of either of the
Transaction Entities or their subsidiaries is
subject, or (ii) conflict with or result in any
violation of the provisions of any statute or any
order, rule or regulation of any court or
governmental agency or body having jurisdiction over
either of the Transaction Entities or their
subsidiaries or any of their properties or assets;
and except for the registration of the Notes 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 be required under the Exchange
Act and applicable state securities laws in
connection with the purchase and distribution of the
Notes 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
and the consummation of the transactions contemplated
hereby and thereby, and the issuance and delivery of
the Notes.
22
(xii) The issuance and delivery of the Notes by the Operating
Partnership and the compliance by the Operating Partnership with all of
the provisions of this Agreement, and the consummation of the transactions
contemplated hereby, have been duly authorized by all necessary
partnership action. The execution, delivery and performance of this
Agreement by each of the Transaction Entities and the consummation of the
transactions contemplated hereby will not conflict with or result in any
violation of the provisions of the charter, by-laws, certificate of
limited partnership or agreement of limited partnership of either of the
Transaction Entities or their subsidiaries.
(xiii) Except as set forth in the Prospectus, to the knowledge of
such counsel, there are no preemptive or other rights to subscribe for or
to purchase, nor any restriction upon the transfer of the Notes pursuant
to the Operating Partnership's certificate of limited partnership, its
agreement of limited partnership, as amended to the date hereof, or any
agreement or other instrument to which the Operating Partnership is a
party.
(xiv) To the knowledge of such counsel, other than as set forth in
the Prospectus and other than certain persons who have contributed
Properties to the Partnership in exchange for Units and rights of persons
whose securities are already registered under the Securities Act, as well
as 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 Company
and/or the Operating Partnership, on the one hand, and any person, on the
other hand, granting such person the right 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 to require
the Company or the Operating Partnership to include such securities in the
securities registered pursuant to the Registration Statement or in any
securities being registered pursuant to any other registration statement
filed by the Company or the Operating Partnership under the Securities
Act.
(xv) To the knowledge of such counsel, there are no legal or
governmental proceedings pending to which either Transaction Entity or
their subsidiaries is a party or of which any property or assets of either
Transaction Entity or their subsidiaries is the subject which are not
disclosed in the Prospectus and which, if determined adversely to such
Transaction Entity or subsidiary, might reasonably be expected to have a
material adverse effect on the consolidated financial position,
shareholders' equity, results of operations, business or prospects of the
Company; and to the knowledge of such counsel no such proceedings are
threatened or contemplated by governmental authorities or threatened by
others.
23
(xvi) 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.
(xvii) To the knowledge of such counsel, no relationship, direct or
indirect, exists between or among either of the Transaction Entities on
the one hand, and the trustees, officers, shareholders, customers or
suppliers of the Transaction Entities on the other hand, which is required
by Item 404 of Regulation S-K to be described in the Prospectus which is
not so described.
(xviii) To the knowledge of such counsel, each "pension plan"
maintained by either Transaction Entity that is intended to be qualified
under section 401(a) of the Code is (i) so qualified in all material
respects and nothing has occurred, whether by action or by failure to act,
which would cause the loss of such qualification and (ii) in compliance in
all material respects with all presently applicable provisions of ERISA;
to the knowledge of such counsel, no Transaction Entity has received
notification of a "reportable event" (as defined in ERISA) with respect to
any "pension plan" (as defined in ERISA) for which either Transaction
Entity would have any liability; to the knowledge of such counsel, 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) section 412 or 4971 of the Code.
(xix) To the knowledge of such counsel, no Transaction Entity or
Property Affiliate is in violation of its charter, by-laws, certificate of
limited partnership, agreement of limited partnership, or other similar
organizational document, nor, to the knowledge of such counsel, has a
default been asserted in any respect, and it has not been asserted that
any 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 material agreement or instrument to
which it is a party or by which it is bound or to which any of the
Properties or any of its other properties or assets is subject.
(xx) No consent, approval, authorization or other order of, or
registration or filing with, any court, regulatory body, administrative
agency or other governmental body, agency, or official is required on the
part of the Company (except as have been obtained under the Securities Act
and the Exchange Act or such as may be required under state securities,
real estate syndication or Blue Sky laws governing the purchase
24
and distribution of the Notes) for the valid issuance and sale of the
Notes to the Underwriters as contemplated by this Agreement.
(xxi) 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 and the rules and regulations of the Commission
thereunder.
(xxii) The documents incorporated or deemed to be incorporated by
reference in the Prospectus pursuant to Item 12 of Form S-3 under the
Securities Act (other than the financial statements and related schedules
and financial information and data included therein, as to which no
opinion need be rendered), at the time they were filed with the
Commission, complied and will comply as to form in all material respects
with the requirements of the Exchange Act and the rules and regulations
thereunder.
(xxiii) The Registration Statement was declared effective under the
Securities Act and the Indenture was duly qualified under the Trust
Indenture Act as of the date and time specified in such opinion, the
Prospectus was filed with the Commission pursuant to the subparagraph of
Rule 424(b) of the Rules and Regulations specified in such opinion on the
date specified therein and, to the 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.
(xxiv) The Registration Statement and the Prospectus and any further
amendments or supplements thereto made by the Company prior to the
Delivery Date (other than the financial statements and related schedules
and other financial information and data included therein, as to which
such counsel need express no opinion) comply as to form in all material
respects with the requirements of the Securities Act, the Rules and
Regulations and the Trust Indenture Act and the rules and regulations
thereunder, and the Indenture conforms in all material respects to the
requirements of the Trust Indenture Act and the rules and regulations
thereunder.
(xxv) The statements contained in the Prospectus under the captions
"Risk Factors," "Description of Debt Securities," "Description of
Preferred Shares," "Description of Warrants," "Description of Notes," and
"Federal Income Tax Considerations with Respect to the Trust and the
Operating Partnership" together with "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 constitute a fair summary thereof.
25
In rendering such opinion, such counsel may (i) state that its opinion is
limited to matters governed by the Federal laws of the United States of
America, the laws of the Commonwealth of Pennsylvania and the laws of the
State of Maryland; (ii) as to matters of Maryland law, state that its
opinion is given solely in reliance upon the opinion of ▇▇▇▇ ▇▇▇▇▇ LLP;
(iii) state that its opinion does not address (A) Federal Reserve Board
margin regulations; (B) Federal or state antitrust and unfair competition
laws and regulations; (C) Local Laws (as defined in The Legal Opinion
Accord of the ABA Section of Business Law (1991); (D) compliance with
fiduciary duty requirements; (E) Federal and state racketeering laws and
regulations; (F) Federal and state health and safety laws and regulations;
and (G) Federal and state laws, regulations and policies concerning (x)
national and local emergency, (y) possible judicial deference to acts of
foreign states, and (z) criminal and civil forfeiture laws; and (iv) in
giving the opinion referred to in subclause (B) in Section
7(d)(A)(vii)(A), state that such opinion with respect to the
enforceability of such documents may be limited by bankruptcy, fraudulent
conveyance, insolvency, reorganization, moratorium, and other laws
relating to or affecting creditors' rights generally and by general
equitable principles. Such counsel shall also have furnished to the
Underwriters a written statement, addressed to the Underwriters and dated
the Delivery Date, in form and substance satisfactory to the Underwriters,
to the effect that (x) such counsel has acted as counsel to the Company in
connection with the preparation of the Registration Statement and the
Prospectus, and (y) based on the foregoing, no facts have come to the
attention of such counsel which lead it to believe that the Registration
Statement, as of the Effective Date, contained any untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein not
misleading, or that the Prospectus contains any untrue statement of a
material fact or omits to state a material fact required to be stated
therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. The
foregoing opinion and statement may be qualified by a statement to the
effect that such counsel does not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus except to the extent of the
opinion contained in Section 7(d)(A)(xxii), and may state that such
counsel expresses no belief with respect to the financial statements and
notes thereto 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 the Delivery Date, in form and substance reasonably
satisfactory to the Underwriters, to the effect that:
(i) The Company has been duly formed and is validly existing
as a real estate investment trust in good standing under and by
virtue of the laws of the State of Maryland, and has all trust power
and authority necessary to own or hold its properties and to conduct
the business in
26
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) This Agreement has been duly and validly authorized,
executed and delivered by the Company, and assuming due
authorization, execution and delivery by the Underwriters and the
Operating Partnership, is a valid and binding agreement of the
Company except as limited by (a) bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other laws
relating to or affecting the enforcement of creditors' rights or (b)
general equitable principles.
(iii) 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.
(iv) 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.
(v) To the knowledge of such counsel, there are no legal or
governmental proceedings pending to which the Company is a party or
of which any property or assets of the Company is the subject which
are not disclosed in the Prospectus and which, if determined
adversely to the Company, might reasonably be expected to have a
material adverse effect on the consolidated financial position,
shareholders' equity, results of operations, business or prospects
of the Company; and to the best knowledge of such counsel no such
proceedings are threatened or contemplated by governmental
authorities or threatened by others.
Such counsel shall state that ▇▇▇▇▇▇▇▇ Chance ▇▇▇▇▇▇ & ▇▇▇▇▇ LLP, counsel
for the Underwriters, may rely on its opinion.
(e) Wolf, Block, ▇▇▇▇▇▇ and ▇▇▇▇▇-▇▇▇▇▇ LLP shall have furnished to
the Underwriters its written opinion, dated the Delivery Date, 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.
(f) The Underwriters shall have received from ▇▇▇▇▇▇▇▇ Chance ▇▇▇▇▇▇
& ▇▇▇▇▇ LLP, counsel for the Underwriters, such opinion or opinions, dated
the
27
Delivery Date, with respect to the issuance and sale of the Notes, 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, in form and substance
satisfactory to the Underwriters, addressed to the Underwriters and dated
the date hereof (i) confirming that they are independent public
accountants within the meaning of the Securities Act and are in compliance
with the applicable requirements relating to the qualification of
accountants under Rule 2-01 of Regulation S-X of the Commission, and (ii)
stating, as of the date hereof (or, with respect to matters involving
changes or developments since the respective dates as of which specified
financial information is given in, or incorporated by reference in, the
Prospectus, as of a date not more than five days prior to the date
hereof), the conclusions and findings of such firm with respect to the
financial information and other matters ordinarily covered by accountants'
"comfort letters" to underwriters in connection with registered public
offerings.
(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 a letter (the
"bring-down letter"), addressed to the Underwriters and dated the Delivery
Date (i) confirming that they are independent public accountants within
the meaning of the Securities Act and are in compliance with the
applicable requirements relating to the qualification of accountants under
Rule 2-01 of Regulation S-X of the Commission, (ii) stating, as of the
date of the bring-down letter (or, with respect to matters involving
changes or developments since the respective dates as of which specified
financial information is given in the Prospectus, as of a date not more
than five days prior to the date of the bring-down letter), the
conclusions and findings of such firm with respect to the financial
information and other matters covered by the initial letter and (iii)
confirming in all material respects the conclusions and findings set forth
in the initial letter.
(i) The Transaction Entities shall have furnished to the
Underwriters a certificate, dated the Delivery Date, of the Chairman of
the Board, Chief Executive Officer, President or a Vice President of the
Company and the chief financial officer of the Company (in each case, for
the Company and for the Company as general partner of the Operating
Partnership) stating that:
(i) The representations, warranties and agreements of the
Transaction Entities in Section 1 are true and correct as of the
Delivery Date; the Transaction Entities complied with all of their
agreements contained herein; and the conditions set forth in
Sections 7(a) and 7(i) have been fulfilled; and
28
(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 their subsidiaries or
any Property shall have sustained since the date of the latest audited
financial statements included in the Prospectus any loss or interference
with its business from fire, explosion, flood or other calamity, whether
or not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus or (ii) since such date there shall not
have been any change in the capital stock or long-term debt of either
Transaction Entity or any change, or any development involving a
prospective change, in or affecting any Property Affiliate or Property or
the general affairs, management, financial position, shareholders' equity
or results of operations of either Transaction Entity, otherwise than as
set forth or contemplated in the Prospectus, the effect of which, in any
such case described in clause (i) or (ii), is, in the judgment of the
Underwriters, so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Notes being delivered on the Delivery Date 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 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 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 the judgment of a majority in interest of
the several Underwriters, impracticable or inadvisable to proceed with the
public offering or delivery of the
29
Notes being delivered on the Delivery Date 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 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
Operating Partnership's debt securities.
(m) The Transaction Entities shall not have failed at or prior to
the Delivery Date to have performed or complied with any of their
agreements herein contained and required to be performed or complied with
by them hereunder at or prior to the Delivery Date.
(n) On the Delivery Date, counsel for the Underwriters shall have
been furnished with such documents and opinions as they may require for
the purpose of enabling them to pass upon the issuance and sale of the
Notes 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 Notes as herein contemplated shall be
satisfactory in form and substance to the Underwriters and counsel for the
Underwriters.
(o) The Operating Partnership 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.
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. Effective Date of Agreement. This Agreement shall become
effective: (i) upon the execution hereof by the parties hereto; or (ii) if, at
the time this Agreement is executed and delivered, it is necessary for the
Registration Statement or a post-effective amendment thereto to be declared
effective before the offering of the Notes may commence, when notification of
the effectiveness of the Registration Statement or such post-effective amendment
has been released by the Commission.
30
9. Default by One or More of the Underwriters. If, on the Delivery
Date, any Underwriter defaults in the performance of its obligations under this
Agreement, the remaining non-defaulting Underwriters shall be obligated to
purchase the Notes which the defaulting Underwriter agreed but failed to
purchase on the Delivery Date in the respective proportions which the principal
amount of Notes set forth opposite the name of each remaining non-defaulting
Underwriter in Schedule I hereto bears to the total aggregate principal amount
of Notes set forth opposite the names of all the remaining non-defaulting
Underwriters in Schedule I hereto; provided, however, that the remaining
non-defaulting Underwriters shall not be obligated to purchase any of the Notes
on the Delivery Date if the total aggregate principal amount of Notes which the
defaulting Underwriter or Underwriters agreed but failed to purchase on such
date exceeds 9.09% of the total aggregate principal amount of Notes to be
purchased on the Delivery Date, and any remaining non-defaulting Underwriter
shall not be obligated to purchase more than 110% of the aggregate principal
amount of Notes which it agreed to purchase on the Delivery Date pursuant to the
terms of Section 2. If the foregoing maximums are exceeded, the remaining
non-defaulting Underwriters, or those other underwriters satisfactory to the
Underwriters who so agree, shall have the right, but shall not be obligated, to
purchase, in such proportion as may be agreed upon among them, all the Notes to
be purchased on the Delivery Date. If the remaining Underwriters or other
underwriters satisfactory to the Underwriters do not elect to purchase the Notes
which the defaulting Underwriter or Underwriters agreed but failed to purchase
on the Delivery Date, this Agreement shall terminate without liability on the
part of any non-defaulting Underwriter or the Transaction Entities, except that
the Transaction Entities will continue to be liable for the payment of expenses
to the extent set forth in Sections 6 and 12. As used in this Agreement, the
term "Underwriter" includes, for all purposes of this Agreement unless the
context requires otherwise, any party not listed in Schedule I hereto who,
pursuant to this Section 9, purchases Notes which a defaulting Underwriter
agreed but failed to purchase.
Nothing contained herein shall relieve a defaulting Underwriter of
any liability it may have to the Transaction Entities for damages caused by its
default. If other underwriters are obligated or agree to purchase the Notes of a
defaulting or withdrawing Underwriter, either the Underwriters or the Company
may postpone the Delivery Date for up to seven full business days in order to
effect any changes that in the opinion of counsel for the Operating Partnership
or counsel for the Underwriters may be necessary in the Registration Statement,
the Prospectus or in any other document or arrangement.
10. Indemnification and Contribution.
(a) The Transaction Entities jointly and severally, shall indemnify
and hold harmless each Underwriter, its officers and employees and each person,
if any, who controls any Underwriter within the meaning of the Securities Act,
from and against any loss, claim, damage or liability, joint or several, or any
action in respect thereof (including, but not limited to, any loss, claim,
damage, liability or action relating to purchases and sales of Notes), to which
that Underwriter, officer, employee or controlling person may become subject,
under the Securities Act or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon, (i) any untrue statement or
alleged untrue statement of a material fact contained (A) in any Preliminary
Prospectus, the Registration Statement or the Prospectus or in any amendment or
supplement thereto or (B) in any blue sky application or other document prepared
or executed by
31
the Operating Partnership (or based upon any written information furnished by
the Operating Partnership) specifically for the purpose of qualifying any or all
of the Notes under the securities laws of any state or other jurisdiction (any
such application, document or information being hereinafter called a "Blue Sky
Application"), (ii) the omission or alleged omission to state in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or in any amendment or
supplement thereto, or in any Blue Sky Application any material fact required to
be stated therein or necessary to make the statements therein not misleading
(with respect to the Prospectus, in light of the circumstances under which they
were made), or (iii) any act or failure to act or any alleged act or failure to
act by any Underwriter in connection with, or relating in any manner to, the
Notes 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
Transaction Entities shall not be liable under this clause (iii) to the extent
that it is determined in a final judgment by a court of competent jurisdiction
that such loss, claim, damage, liability or action resulted directly from any
such acts or failures to act undertaken or omitted to be taken by such
Underwriter through its gross negligence or willful misconduct), and shall
reimburse each Underwriter and each such officer, employee or controlling person
for any legal or other expenses reasonably incurred by that Underwriter,
officer, employee or controlling person in connection with investigating or
defending or preparing to defend against any such loss, claim, damage, liability
or action as such expenses are incurred; provided, however, that the Transaction
Entities shall not be liable in any such case to the extent that any such loss,
claim, damage, liability or action arises out of, or is based upon, any untrue
statement or alleged untrue statement or omission or alleged omission made in
any Preliminary Prospectus, the Registration Statement or the Prospectus, or in
any such amendment or supplement, or in any Blue Sky Application, in reliance
upon and in conformity with written information concerning such Underwriter
furnished to the Transaction Entities through the Underwriters by or on behalf
of any Underwriter specifically for inclusion therein; provided further, that
the Transaction Entities shall not be liable in any such case to the extent that
any such loss, claim, damage, liability or action to or by any person arises out
of, or is based upon, any untrue statement or omission of material fact made in
any prospectus, to the extent that any such loss, claim, damage or liability or
action to or by such person results from the fact that (i) the Company had
previously furnished copies of the Prospectus to the Underwriters, (ii) delivery
of the Prospectus was required by the Securities Act to be made to such person,
(iii) the untrue statement or omission of a material fact contained in the
prospectus was corrected in the Prospectus, (iv) there was not sent or given to
such person, at or prior to the written confirmation of the sale of such
securities to such person, a copy of the Prospectus and (v) such correction
would have cured the defect giving rise to such loss, damage or liability. The
foregoing indemnity agreement is in addition to any liability which the
Transaction Entities may otherwise have to any Underwriter or to any officer,
employee or controlling person of that Underwriter.
(b) Each Underwriter, severally and not jointly, shall indemnify and
hold harmless each Transaction Entity, its officers and employees, each of its
trustees, and each person, if any, who controls each Transaction Entity within
the meaning of the Securities Act, from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof, to which each
Transaction Entity or any such trustee, officer or controlling person may become
subject, under the Securities Act or otherwise, insofar as such loss, claim,
damage, liability or action arises out of, or is based upon, (i) any untrue
statement or alleged untrue statement of a material fact contained (A) in any
Preliminary Prospectus, the Registration
32
Statement or the Prospectus or in any amendment or supplement thereto, or (B) in
any Blue Sky Application or (ii) the omission or alleged omission to state in
any Preliminary Prospectus, the Registration Statement or the Prospectus, or in
any amendment or supplement thereto, or in any Blue Sky Application any material
fact required to be stated therein or necessary to make the statements therein
not misleading, but in each case only to the extent that the untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information concerning such Underwriter
furnished to the Transaction Entities through the Underwriters by or on behalf
of that Underwriter specifically for inclusion therein, and shall reimburse each
Transaction Entity and any such trustee, officer or controlling person for any
legal or other expenses reasonably incurred by each Transaction Entity or any
such trustee, officer or controlling person in connection with investigating or
defending or preparing to defend against any such loss, claim, damage, liability
or action as such expenses are incurred. The foregoing indemnity agreement is in
addition to any liability which any Underwriter may otherwise have to each
Transaction Entity or any such trustee, officer, employee or controlling person.
(c) Promptly after receipt by an indemnified party under this
Section 10 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 10, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however, that
the failure to notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 10 except to the extent it has
been materially prejudiced by such failure and, provided further, that the
failure to notify the indemnifying party shall not relieve it from any liability
which it may have to an indemnified party otherwise than under this Section 10.
If any such claim or action shall be brought against an indemnified party, and
it shall notify the indemnifying party thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it wishes, jointly with
any other similarly notified indemnifying party, to assume the defense thereof
with counsel reasonably satisfactory to the indemnified party. After notice from
the indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 10 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that
the indemnified party shall have the right to employ its own counsel, with such
counsel, in the case of the Underwriters, to represent jointly the Underwriters
and their respective officers, employees and controlling persons who may be
subject to liability arising out of any claim in respect of which indemnity may
be sought by the Underwriters against the Transaction Entities under this
Section 10 if, in the reasonable judgment of the Underwriters, it is advisable
for the Underwriters and those officers, employees and controlling persons to be
jointly represented by separate counsel, and in that event the fees and expenses
of such separate counsel shall be paid by the Transaction Entities. No
indemnifying party shall (i) without the prior written consent of the
indemnified parties (which consent shall not be unreasonably withheld), settle
or compromise or consent to the entry of any judgment with respect to any
pending or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action,
suit or proceeding, or (ii) be liable for any settlement of any such action
33
effected without its written consent (which consent shall not be unreasonably
withheld), but if settled with the consent of the indemnifying party or if there
be a final judgment of the plaintiff in any such action, the indemnifying party
agrees to indemnify and hold harmless any indemnified party from and against any
loss or liability by reason of such settlement or judgment.
(d) If the indemnification provided for in this Section 10 shall for
any reason be unavailable to or insufficient to hold harmless an indemnified
party under Section 10(a) or 10(c) in respect of any loss, claim, damage or
liability, or any action in respect thereof, referred to therein, then each
indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability, or action in respect thereof, (i) in
such proportion as shall be appropriate to reflect the relative benefits
received by the Transaction Entities on the one hand and the Underwriters on the
other from the offering of the Notes 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
Notes 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 Notes purchased
under this Agreement, on the other hand, bear to the total gross proceeds from
the offering of the Notes 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 (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take into account
the equitable considerations referred to herein. The amount paid or payable by
an indemnified party as a result of the loss, claim, damage or liability, or
action in respect thereof, referred to above in this Section shall be deemed to
include, for purposes of this Section 10(d), any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 10(d), no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Notes underwritten by
it and distributed to the public was offered to the public exceeds the amount of
any damages which such Underwriter has otherwise paid or become liable to pay by
reason of any untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations to contribute as provided in this Section 10(d) are
several in proportion to their respective underwriting obligations and not
joint.
34
(e) The Underwriters severally confirm and each Transaction Entity
acknowledges that the statements on page S-13 of the Prospectus Supplement (i)
with respect to the concession and reallowance figures in the third paragraph
and (ii) in the eighth paragraph, are correct and 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.
11. Termination. The obligations of the Underwriters hereunder may
be terminated by the Underwriters by notice given to and received by the
Operating Partnership prior to delivery of and payment for the Notes if, prior
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
Notes for any reason permitted under this Agreement.
12. Reimbursement of Underwriters' Expenses. If the Operating
Partnership shall fail to tender the Notes for delivery to the Underwriters by
reason of any failure, refusal or inability on the part of the Transaction
Entities to perform any agreement on their part to be performed, or because any
other condition of the Underwriters' obligations hereunder required to be
fulfilled by the Transaction Entities is not fulfilled, the Transaction Entities
will reimburse the Underwriters for all reasonable out-of-pocket expenses
(including fees and disbursements of counsel) incurred by the Underwriters in
connection with this Agreement and the proposed purchase of the Notes, and upon
demand the Transaction Entities shall pay the full amount thereof to the
Underwriters. If this Agreement is terminated pursuant to Section 9 by reason of
the default of one or more Underwriters, the Transaction Entities shall not be
obligated to reimburse any defaulting Underwriter on account of those expenses.
13. Notices, etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or sent by
mail, telex or facsimile transmission to ▇▇▇▇▇▇ Brothers Inc., ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Syndicate
Department (Fax: ▇▇▇-▇▇▇-▇▇▇▇), with a copy, in the case of any
notice pursuant to Section 10(c), to the Director of Litigation,
Office of the General Counsel, ▇▇▇▇▇▇ Brothers Inc., ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇;
(b) if to the Transaction Entities shall be delivered or sent
by mail, telex or facsimile transmission to the Company, ▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: General Counsel (Fax:
▇▇▇-▇▇▇-▇▇▇▇);
provided, however, that any notice to an Underwriter pursuant to Section 10(c)
shall be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its acceptance telex to the
Underwriters, which address will be supplied to any other party hereto by the
Underwriters upon request. Any such statements, requests, notices or agreements
shall take effect at the time of receipt thereof. The Transaction Entities shall
be entitled to act and rely upon any request, consent, notice or agreement given
or made on behalf of the Underwriters by ▇▇▇▇▇▇ Brothers Inc.
35
14. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the Underwriters, the Transaction
Entities and their respective personal representatives and successors. This
Agreement and the terms and provisions hereof are for the sole benefit of only
those persons, except that (A) the representations, warranties, indemnities and
agreements of the Transaction Entities contained in this Agreement shall also be
deemed to be for the benefit of the person or persons, if any, who control any
Underwriter within the meaning of Section 15 of the Securities Act and (B) the
indemnity agreement of the Underwriters contained in Section 10(b) of this
Agreement shall be deemed to be for the benefit of trustees of the Company,
officers of the Company who have signed the Registration Statement and any
person controlling the Transaction Entities within the meaning of section 15 of
the Securities Act. Nothing in this Agreement is intended or shall be construed
to give any person, other than the persons referred to in this Section 14, any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision contained herein.
15. Survival. The respective indemnities, representations,
warranties and agreements of the Transaction Entities and the Underwriters
contained in this Agreement or made by or on behalf on them, respectively,
pursuant to this Agreement, shall survive the delivery of and payment for the
Notes and shall remain in full force and effect, regardless of any investigation
made by or on behalf of any of them or any person controlling any of them.
16. Definition of the Terms "Business Day" and "Subsidiary". For
purposes of this Agreement, (a) "business day" means any day on which the New
York Stock Exchange, Inc. is open for trading and (b) "subsidiary" has the
meaning set forth in Rule 405 of the Rules and Regulations.
17. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of New York.
18. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
19. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
36
If the foregoing correctly sets forth the agreement between the
Company and the Underwriters, please indicate your acceptance in the space
provided for that purpose below.
Very truly yours,
LIBERTY PROPERTY TRUST
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇
----------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ III
Title: Chairman of the Board and Chief
Executive Officer
LIBERTY PROPERTY LIMITED PARTNERSHIP
By: Liberty Property Trust, its general partner
By:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇
----------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ III
Title: Chairman of the Board and Chief
Executive Officer
Accepted:
▇▇▇▇▇▇ BROTHERS INC.
By:/s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
-----------------------------------
Authorized Representative
For itself and on behalf of
the Underwriters
37
SCHEDULE I
PRINCIPAL
UNDERWRITERS AMOUNT OF NOTES
------------ -----------------
▇▇▇▇▇▇ Brothers Inc. $87,000,000.00
Banc One Capital Markets, Inc. $ 10,500,000
Credit Suisse First Boston Corporation $ 10,500,000
Wachovia Securities, Inc. $ 10,500,000
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. $ 10,500,000
▇.▇. ▇▇▇▇▇▇ Securities Inc. $ 10,500,000
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. $ 10,500,000
------------
$150,000,000
============
38
SCHEDULE II
Senior Notes Due 2012
Principal Amount $150,000,000.00
Coupon: 6.375%
Settlement Date: August 22, 2000
Price to Public: 99.558%
Price to Public: $149,337,000
Underwriting Discount: 0.650%
Underwriting Discount: $975,000
Price to Company: 98.908%
Proceeds to the Company (before expenses) $148,362,000
Maturity Date: August 15, 2012
39
SCHEDULE III
Florida, Kansas, Maryland, Michigan, Minnesota, New Jersey, North Carolina,
South Carolina, Texas, Virginia and Wisconsin.
40